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Ugur01
Feb 16, 2023 8:11 PM UTC
Solved

Categorization of Money Given to a Friend

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?

 

Rainflurry
RainflurryAnswer
Feb 16, 2023 11:05 PM UTC

@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.

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2 replies

Rainflurry
RainflurryAnswer
Feb 16, 2023 11:05 PM UTC

@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
Feb 27, 2023 11:20 PM UTC

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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