Business Personal Expenditures Ledger

by Warren
(Anderson, IN USA)

Bookkeeping Expenditures Ledger

Bookkeeping Expenditures Ledger

When an owner buys goods or services with their personal money with the intention of being re-paid later, how is this shown on a general ledger? In addition to the general ledger, are these shown on another ledger(s)?

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Aug 11, 2023
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starstarstarstarstar 		Owner's Capital Ledger
by: BB

When an owner buys goods or services with their personal money intending to be repaid later, this is usually referred to as an "owner's contribution" or "owner's draw," depending on the context. In the general ledger, it's typically shown as:

Debit the expense or asset account relevant to the goods or services purchased.
Credit an equity account, often labeled as "Owner's Capital" or "Owner's Equity."
If the owner intends to be reimbursed, the company might later:

Debit the "Owner's Equity" or "Owner's Draw" account.

Credit the "Cash" or "Bank" account when repayment is made.

In addition to the general ledger, these transactions might also be shown in a subsidiary ledger, especially if the company wants to keep detailed records of transactions between the business and the owner. This can help in tracking all owner-related transactions in one place.
Aug 10, 2023
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starstarstarstarstar 		Personal Money for Business Expenses
by: BB

Personal money used to pay for business expenses is usually journaled by debiting the expense account and credit Owner's Contributions (equity) account.

If the money is indented on being repaid later, you can setup and credit an Owner's Loan (liability) account instead. When the money is repaid, you will credit the bank account and debit the Owner's Loan account.

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General Journal Bookkeeping Question

by Kim
(80601)

General Journal Bookkeeping Question

General Journal Bookkeeping Question

I have been asked to provide a general journal recording a month's worth of transactions. One of the transactions states there is a $300 cash shortage.

How do I report this in the general journal? I am thinking debiting Cash Shortage/Overage expense account and crediting the Cash account? Is this the correct thing to do?

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Aug 11, 2023
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starstarstarstarstar 		Cash Shortage General Journal
by: BB

Yes, you're on the right track! When recording a cash shortage in the general journal, the typical practice is to:

Debit the Cash Shortage/Overage expense account.
Credit the Cash account. This represents that you have a loss (expense) due to the shortage, and you're reducing (crediting) the amount of cash on hand to reflect the actual amount.

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General Ledger

by Jennifer
(Australia)

General Ledger

General Ledger

How is the general ledger used to inform others about the budget?

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Aug 11, 2023
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starstarstarstarstar 		General Ledger Budgeting
by: BB

The general ledger serves as the primary repository for all financial transactions of a business. It provides detailed insights into revenues, expenses, assets, liabilities, and equity, thus forming the basis for financial reporting.

When informing others about the budget, the general ledger offers a historical record that can be used to forecast future income and expenditures. By analyzing the general ledger, stakeholders can understand where money has been spent in the past and make informed decisions about budget allocations for the future.

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General Ledger Acct Misc Fees

by Nita
(Fresno, CA)

Miscellaneous Fees

Miscellaneous Fees

I posted BIT Fees (Biennial Inspection of Terminals) for commercial vehicles to the General Ledger Account - Misc Fees. Should I have posted to General Ledger Account - Tax and Licenses?? Also, when should I use the General Ledger Account - Misc Fees?

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Aug 11, 2023
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starstarstarstarstar 		Miscellaneous Fees Account
by: Stephanie

Hi Nita, Thanks for your question. You were fine to post these fees to your miscellaneous fees account. Taxes and Licenses are usually reserved for business licenses and business taxes. You would use the Miscellaneous fees account any time you have an expense that doesn't fit another category.

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General Ledger Adjustments

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( )

Income Account Adjustments

Income Account Adjustments

How do I increase an income account on the income statement and decrease an Other Current Assets account on the balance sheet?

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Aug 11, 2023
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starstarstarstarstar 		Income Account Adjustments
by: Stephanie

An income account carries a normal credit balance and other current assets hold a normal debit balance. Therefore, in order to increase an income account, you would credit it and in order to increase another current asset account you would debit it.

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General Ledger Posting

General Ledger Posting

General Ledger Posting

For the March period, balance sheet, income statement & trial balnce all balanced, Aged AR = AR GL account, & Aged Ap = AP GL account.

April: trial balance, balance sheet, & income statement balance. Aged AR is $26k > AR GL account, & Aged AP is $6k > AP GL account.

There are no journal entries for anything approaching those amounts for either AR or AP.

I found AR on-account amounts dated for April but posted to June, and vice versa.

Aged AP invoices = invoices not paid as of April 30th in the detail invoice report.

Where else can I look?

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Jul 17, 2023
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starstarstarstarstar 		GL Account Entries
by: Stephanie

Based on the information provided, it appears that there may be discrepancies between the Aged AR (Accounts Receivable) and Aged AP (Accounts Payable) balances and their respective GL (General Ledger) accounts. Since there are no journal entries that would explain the differences, it is important to investigate further. Here are a few areas to consider:

Reconciliation: Review the reconciliation process for both AR and AP accounts. Ensure that all transactions are properly recorded, including any adjustments, allowances, or write-offs. Reconcile the subsidiary ledgers with the GL accounts to identify any discrepancies.

Posting Errors: Check for any posting errors or data entry mistakes that may have occurred during the recording of transactions. Verify that invoices, payments, and adjustments are correctly posted to the appropriate accounts and periods.

Timing Differences: Examine the timing of transactions to ensure they are recorded in the correct accounting periods. Double-check if any transactions related to April were mistakenly posted to other periods, such as June, leading to the differences in Aged AR and Aged AP.

Invoice Reporting: Review the detail invoice report for any missed or incorrectly recorded invoices that could contribute to the discrepancy. Verify if all invoices are accurately reflected in the Aged AP balance.

Communication with Stakeholders: Collaborate with relevant parties involved in the AR and AP processes, such as sales and purchasing departments, to identify any outstanding or pending transactions that may affect the balances.

By thoroughly investigating these areas, you can identify the root cause of the discrepancies between the Aged AR and Aged AP balances and their respective GL accounts and take appropriate actions to rectify the issue.

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General Reserve

by Sarah
(Ireland)

General Reserve Bookkeeping

General Reserve Bookkeeping

How do I prepare the Profit & Loss Account and Balance Sheet concerning the General Reserve Accounts? When incorporating the share capital in the Balance Sheet, should the full amount be entered, or should I subtract the Reserve and regular dividends first?

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Aug 11, 2023
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starstarstarstarstar 		General Reserve Bookkeeping
by: BB

When preparing the Profit & Loss Account and Balance Sheet, the General Reserve Accounts typically reflect retained earnings set aside by the company for various purposes. They are part of the owner's equity section of the balance sheet.

When you record the share capital in the Balance Sheet, you should enter the full share capital amount. The General Reserve and ordinary dividends are separate line items.

You don't deduct them from the share capital. Instead, reserves (like the General Reserve) reduce the Retained Earnings, and dividends, when declared or paid, also reduce the Retained Earnings.

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GJE Adjustment

GL Adjustments

GL Adjustments

1)I have to decrease my customer liability account by $25k due to double billing against same order.
What other account should this affect besides customer deposits when making the adjustment?
All projects shipped and revenue recognized!

2) Per above, I also need to credit only the financial side of last invoice issued to them with a small balance due. Please advise how this can be done without affecting the revenue as mentioned above.

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Aug 11, 2023
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starstarstarstarstar 		Double Billing GL Adjustments
by: BB

1. If you have to decrease the customer liability account by $25k due to a double billing error against the same order, besides affecting the customer deposits, the other account it should typically impact is the "Accounts Receivable" account. You would reduce (credit) your Accounts Receivable by $25k since you initially recorded too much receivable.

2. If you need to credit only the financial side of the last invoice issued without affecting the revenue (since revenue has already been recognized), you can create a credit memo in the "Accounts Receivable" without linking it to the revenue account. This means the credit memo will only decrease the amount owed by the customer, without affecting your recognized revenue.

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