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Old 01-16-2004, 05:35 PM
mtnpinz mtnpinz is offline
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Question Owners draw account

After I create the account as an Equity, do I need to put in a beginning balance?

In the tax line, what do I assign it?

What GL code # do I give the owner draw account?
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Old 01-17-2004, 10:58 AM
Joey Joey is offline
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The answer depends on whether your company is incorporated or a sole proprietorship and what kind of tax return the company files. The tax line is only there if you are planning to export the year end balances into the Turbo Tax or Proseries, etc. tax programs. If you're not, then you don't need to use the tax lines at all.
I'm not sure what GL code # you mean but the Owner's Draw account is an equity type account.
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Old 01-17-2004, 06:13 PM
jaydlott jaydlott is offline
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An open balance equity account is just a messy account filled with un-answered questions. The biggest question is where did your money come from? QuickBooks likes to throw any irregularities into this account such as inventory out of balance, checking accounts out of balance, and mainly start up costs that you can't determine where they came from. If you're just a small Sole prop, and you want to track your equity accounts you need to see for your own benefit how much money you put into the company and how much money you took out. Those will be your equity accounts. Set them up as a new gl account (if you used the numbering system, QB Equity accounts are in the 3000, if you don't use the number and just the account name, their are three accounts that you need to create. the first being the main account called Owners Capital, set it up as an equity account. The second account is a sub-account of Owners Capital, called Draws (this is money you took from the company) the third account is Contributions (this is money you gave to the company). If you throw everything into opening balance equity, you will never really know how much is actually equity that you put into the company because it's used for trash when your accounts don't balance, and Joey hit the nail on the head regarding the tax line accounts. They're just their to make you think your missing something unless you know how to import the data to turbo-tax, and that would cause you to throw the computer out the window if one letter is off on your description.
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