Accounting & Bookkeeping & Small Business Forum

[mrbill0626]

Can someone tell me how I would enter into QuickBooks a check for Cash for, say, $140 which is partly or mostly used to pay business expenses? The owner makes it out to himself. I thought about debiting Owner's Equity and a credit to cash, but it doesn't seem right to do that. But I guess I need to find out from him what he spent the cash for, right?

Thanks

Bill :)

[stasia2003]

mrbill0626 wrote: Can someone tell me how I would enter into QuickBooks a check for Cash for, say, $140 which is partly or mostly used to pay business expenses? The owner makes it out to himself. I thought about debiting Owner's Equity and a credit to cash, but it doesn't seem right to do that. But I guess I need to find out from him what he spent the cash for, right?

Thanks

Bill :)

Go under "Write Checks" and put in the check number, the payee, the amount, and then go down to the bottom section and categorize the expenses.

For example, if $50 was for advertising and the rest was for the owner, then you would put the $50 in Advertising Expenses and the rest in Owner's Draw.

[mrbill0626]

Problem is , I don't know exactly how the cash was used. Client gives me a bunch of cash register receipts that vary as to what they are are for- anything from gasoline to food to supplies, etc. So I do know he spends some of the cash for those items. I think what he does is he writes a check for cash and then uses the cash to pay these miscellaneouos expenses out of pocket and then gives me the receipts for them. So I record the amounts of the receipts as cash paid for whatever expense they represent. I guess I need to get him to do it differently, like use a daily cash report or something like that. I can't really expect him to list every expense that this or that Cash check that he writes to himself paid for can I?

Thanks

Bill

[stasia2003]

mrbill0626 wrote: Problem is , I don't know exactly how the cash was used. Client gives me a bunch of cash register receipts that vary as to what they are are for- anything from gasoline to food to supplies, etc. So I do know he spends some of the cash for those items. I think what he does is he writes a check for cash and then uses the cash to pay these miscellaneouos expenses out of pocket and then gives me the receipts for them. So I record the amounts of the receipts as cash paid for whatever expense they represent. I guess I need to get him to do it differently, like use a daily cash report or something like that. I can't really expect him to list every expense that this or that Cash check that he writes to himself paid for can I?

Thanks

Bill

Has he ever considered using a debit card for these things? That way, you can go off the bank statement and he gives you the receipts anyway for backup.

Anyhow, if no debit card then just make sure he documents everything on an expense report along with a check number or something.

[YourVirtualAssistant]

Here's how I track cash expense for my clients.

When they write a check or use the ATM I code that check to the Petty Cash account.

From the cash account I deduct any expenses that they have receipts for, coding them to the appropriate expense account. At the end of the month, any balance that is leftover in the Cash account is transferred to the Owner's Draw account bringing the cash balance to zero.

[irsfixer]

YourVirtualAssistant wrote: Here's how I track cash expense for my clients.

When they write a check or use the ATM I code that check to the Petty Cash account.

From the cash account I deduct any expenses that they have receipts for, coding them to the appropriate expense account. At the end of the month, any balance that is leftover in the Cash account is transferred to the Owner's Draw account bringing the cash balance to zero.

Petty cash is an imprest fund and should never be debited unless you are increasing the balance in the fund. It is not a clearing account. The better way to handle it is to debit Officer or Employee Advances and offset it with a expense report containing the actual expenses and receipts. At the end of the year, as you suggested, clear it to Owner Draw.