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  #1  
Old 12-07-2017, 09:49 AM
Deyson Deyson is offline
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Exclamation Made an accidental personal purchase with business card

Hello and good day.

Going over this years account it seems I made the blunder of making an online small personal purchase with my business account. What is the correct way to fix this or is this something I would ask my accountant to fix?

Thank you for your valuable time and have an excellent day!
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  #2  
Old 12-07-2017, 11:15 AM
Froid Froid is offline
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If you routinely complete a company expense report to get reimbursed for out-of-pocket expenditures (mileage, cash tips, etc.), you could deduct it out of your next expense report submission. Code the expense report negative item to the same account the erroneous charge coded to.

Otherwise, just write a check to pay it back. Your clerk would code the cash receipt to the same account you hit the erroneous charge.
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  #3  
Old 12-07-2017, 11:47 AM
Deyson Deyson is offline
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Quote:
Originally Posted by Froid View Post
If you routinely complete a company expense report to get reimbursed for out-of-pocket expenditures (mileage, cash tips, etc.), you could deduct it out of your next expense report submission. Code the expense report negative item to the same account the erroneous charge coded to.

Otherwise, just write a check to pay it back. Your clerk would code the cash receipt to the same account you hit the erroneous charge.
Thank you, Froid. It is not routine, so I will write a check to myself. Thank you and have an excellent day.
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  #4  
Old 12-07-2017, 01:45 PM
Deyson Deyson is offline
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Froid, how should I categorize this expense in Detail Type? Thank you.
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  #5  
Old 12-07-2017, 03:46 PM
Lorin Browning Lorin Browning is offline
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It is not a company expense. Move the entry from an expense account in the chart of accounts to the equity section in the chart of accounts. In other words, the easy solution would be to recode the credit card entry as a withdrawal to yourself (whether individual, stockholder, or partners, whatever the case may be) from the equity section of the chart of accounts. There is no need to write a check to yourself.

Remember the income tax is determined by the profit and not by the withdrawals.
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  #6  
Old 12-08-2017, 07:17 AM
Deyson Deyson is offline
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Hi, Lorin. Thank you.

There is an equity category in QBO called "Owner's Pay & Personal Expenses".
Is this the one I should use?

Thank you for your valuable time and have an amazing day!
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  #7  
Old 12-08-2017, 11:17 AM
Lorin Browning Lorin Browning is offline
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That's close enough, although I prefer a different account which could be something like Owner's Withdrawal.
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  #8  
Old 12-08-2017, 12:28 PM
Deyson Deyson is offline
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Owner's Withdrawal it is. Do I need to give a lot description for my accountant?

Thank you very much for your wonderful help. Have an excellent day!
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  #9  
Old 12-08-2017, 12:30 PM
Deyson Deyson is offline
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One more question, please. What should I choose for Detail Type? It does not seem to allow me to add my own. Thank you
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  #10  
Old 12-08-2017, 08:28 PM
Lorin Browning Lorin Browning is offline
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Sorry, but I can't help with that since I am not familiar with detail type in QuickBooks. The account type, though, is Equity, which is one of the three major sections of the Balance Sheet.

I did run across one post which referenced an Excel spreadsheet which the poster claimed had all the detail types in QuickBooks. Here is the listing given (which is not all inclusive):
Equity Accumulated Adjustment
Equity Common Stock
Equity Opening Balance Equity
Equity Owner's Equity
Equity Paid-In Capital or Surplus
Equity Partner Contributions
Equity Partner Distributions
Equity Partner's Equity
Equity Preferred Stock
Equity Retained Earnings
Equity Treasury Stock
Assuming you are a sole proprietor, I would recommend the Withdrawals be a subaccount of Owner's Equity. If, by chance, you make other contributions to the company, I would recommend a second subaccount of Owner's Equity called something like Contributions.

That would leave you with the following equity accounts;
Open Balance Equity (which should be this time have a zero balance)
Owner's Equity, with two subaccounts:
Withdrawals from Equity
Contributions to Equity
Retained Earnings
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Last edited by Lorin Browning; 12-08-2017 at 08:44 PM.
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  #11  
Old 12-09-2017, 05:33 AM
Deyson Deyson is offline
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Thank you. I will update it as suggested. Thank you very much and have an amazing day!
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