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M
MGElement
April 20, 2022
Question

How I can record personal credit card used for Corporation business purchases (Canadian)

  • April 20, 2022
  • 1 reply
  • 0 views

Hello Team,

I have a corporation type of Canadian incorporation at the very beginning I used my personal credit card for business purchases (I did not have a separate business Credit Card) Now I have one.

 

I got TWO questions:

One: how to reconcile this in QuickBooks as the transactions are mixed between personal use and business use? (I kept using it for business ONLY) I used a Debit visa for personal a real-life situations for personal only.

 

Now I'm reconciling of course I won't reconcile or claim something I used for Grocery or baby diapers etc...

Two:

I need help with categorizing the transactions to match CRA GIFI codes so I can export/import them into
TurboTax Business Inc. 2021 [PC Download] T2 one return.

I'm referring to this CRA Website link 

I use this link to match items/services and chart of accounts Tax line mapping, but I'm stuck at categorizing "The use of personal Credit Card money for online business purchases" as I deposited the generated income sales & services that my business offers into Business account please help.

 

Finding an accountant at this time is hard to talk to as it's tax season and I want to catch up with my corporate fiscal year.

 

Thanks and regards

 

 

1 reply

LeithG
LeithG
April 20, 2022

Hi MGElement

 

It's good that you've got yourself setup with a separate card now that your business is operating.  For those older transactions where you used your personal card, here's how you handle it.

Option 1: Set yourself up as a supplier to your business and enter all the expenses you paid for on your personal credit card as 'bills'; this will make them amounts owing to you as a supplier which you can then immediately pay out and pay off that personal credit card.  On the bill, simply select the expense that makes the most sense; small equipment, advertising, building materials, whatever.  Note that as you create accounts in your chart you'll have to assign it to a GIFI code so that's already taken care of.

 

Option2: When entering the transactions, enter it as a Journal entry instead, recording the expense as your debit, and using 'Owner's Equity' as the credit.  In this way, it registers your personal investment into your business.  You can still pay yourself back from the business later using owners draws.

 

Hope this helps!

Leith

M
MGElementAuthor
April 21, 2022

Thank you very much appreciated,

 

Option 1: Set yourself up as a supplier to your business and enter all the expenses you paid for on your personal credit card as 'bills'; this will make them amounts owing to you as a supplier which you can then immediately pay out and pay off that personal credit card.  On the bill, simply select the expense that makes the most sense; small equipment, advertising, building materials, whatever.  Note that as you create accounts in your chart you'll have to assign it to a GIFI code so that's already taken care of.

 

I have some questions please to clear this thread and mark it solved.

 

 

1- I can do that certainly, but I got a question here for this sentence

"immediately pay out and pay off that personal credit card." 

I paid for these bills long ago using my business account (Business Checking to personal Credit Card Money transfer).

 

2- I have a question here at this sentence 

"Note that as you create accounts in your chart you'll have to assign it to a GIFI code so that's already taken care of." 

What is the GIFI code for credit card account? is it Cash 1000, 1001, 1002? 

 

 

Option2: When entering the transactions, enter it as a Journal entry instead, recording the expense as your debit, and using 'Owner's Equity' as the credit. In this way, it registers your personal investment into your business. You can still pay yourself back from the business later using owners draws.

 

I have a question here please too

Now I'm entering the journal entries I have to select these two? the debit box in QBD would be Credit Card Account and the Credit is the Shareholder Contribution (as it is Corporation)? or I must create an account for Owner Equity?  

What is the correct GIFI to use here for "Shareholder Contribution" Equity type of account ?

 

 

 

Please help me and thank you 

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