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Eve2019
September 13, 2024
Question

shareholder contributions

  • September 13, 2024
  • 1 reply
  • 0 views

A a corporation, two of the owner purchased supplies for the business. No credit card transactions were accepted at this booth. The owners purchased supplies with their personal $ funds. I reimbursed them and wrote them a company check.  How do I record the reimbursement?  Thank you

    1 reply

    FishingForAnswers
    FishingForAnswers
    September 13, 2024

    @Eve2019  I find JEs to be the easiest method when it comes to recording effects on equity, but this one is half and half.

     

    More specifically, to record their original purchase of supplies, you would debit supplies and credit Shareholder Contributions. I suppose you could break it up into the individual owner's purchases, if you're tracking it that finely.

     

    Then, to record the reimbursement, simply create a check with the Write Checks function and, under the Expenses tab at the bottom of the window, select Shareholder Distributions for the account. Do this for each check you wrote to the owners.

     

    At the end, the net effect between Contributions and Distributions should zero out, leaving only the supplies expense and a lower bank account balance, just as if you'd purchased the supplies with the business bank account to begin with.

     

    You could also just have a Shareholder Equity account rather than splitting it into Contributions and Distributions, but I believe that's largely a matter of taste.

    R
    RogelioL
    September 13, 2024

    I would agree with @FishingForAnswers in terms of recording the reimbursement, @Eve2019.

     

    Let me explain the process of writing a check to record the reimbursement:

    1. Bank Account: This is the account from which the money will be taken.
    2. Ending Balance: It's the balance of the bank account on the date of writing the check.
    3. Pay to the Order of: Write the name of the payee or the person the check is issued.
    4. No: In QuickBooks, the check number is assigned based on your preference.
    5. Date: Use the issuance date of the check.
    6. Amount: Write the check amount in numbers, and QuickBooks will automatically convert it into words below the Pay to the Order field.
    7. Address: The payee’s address is filled in automatically from the payee name setup.
    8. Memo: You can leave this field blank, but it's usually used to add additional details like account information, the payment period, and the purpose of the payment.
    9. Print Later or Pay Online: Check the Print Later box if you need to print the check later or the Pay Online box if you will process an online payment.
    10. Expenses or Items tab:
      • Use the Expense = tab for shipping charges, liabilities (for payments related to loans), and other expenses not associated with any QuickBooks item.
      • Use the Item tab to select the appropriate item from the drop-down list. Finally, click Save & Close.

     

    For more detailed information, please refer to this article: Create, modify, and print checks in QuickBooks Desktop.

     

    You can also check this article to learn more about managing your income and expenses effectively and addressing any errors: Learn the reconcile workflow in QuickBooks.

     

    The Community is always open for you if you have further inquiries about recording a reimbursement. Keep safe.

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