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Ugur01
February 16, 2023
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Categorization of Money Given to a Friend

  • February 16, 2023
  • 1 reply
  • 0 views

Hello,

 

A friend of mine needed money. I gave the amount (3000 USD) he needed from the company account to my friend. This is not a donation, nor did I give it as a loan and I will not take it back.

 

How can I categorize this amount?

 

Best answer by Rainflurry

@Ugur01 

 

Whether you're a sole proprietor (SP), partnership, or S-corp, it is a reduction in equity.  If you're a SP, record it as Owner's Capital or Owner's Draw.  If you're a partnership, record it as a Partner Distribution.  If you're an S-corp, record it as a Shareholder Distribution.  If you're a partnership or S-corp, distributions need to be made in accordance with your partnership agreement or shareholder ownership percentage.

1 reply

Rainflurry
RainflurryAnswer
February 16, 2023

@Ugur01 

 

Whether you're a sole proprietor (SP), partnership, or S-corp, it is a reduction in equity.  If you're a SP, record it as Owner's Capital or Owner's Draw.  If you're a partnership, record it as a Partner Distribution.  If you're an S-corp, record it as a Shareholder Distribution.  If you're a partnership or S-corp, distributions need to be made in accordance with your partnership agreement or shareholder ownership percentage.

AlcaeusF
AlcaeusF
February 27, 2023

Hi again, Rainflurry.

 

I appreciate you for always sharing your knowledge about QuickBooks. This will definitely help other users as well in the future. Please keep on posting here in the Community.

 

Keep safe and have a great rest of the day.

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