How do I Account for two Investments of £500 paid into a linked business bank account? I have tried Miscellaneous Income but then the balance sheet is showing the wrong information. Thank you for any potential help
Where has the £500 come from - e.g. was it a loan or grant from another organisation, is it as a result of selling shares, or has a director put the money into the business bank account?
Partners own savings as an investment, not as a loan. I have created 2 bank accounts for their names under Equity Banking, but it is showing as liabilities
Just to confirm - it’s a partnership rather than a limited company, and each partner have put in their own money into the business?
Hello yes that is correct, thanks
In this case you can just tag it as a transfer between the partner bank account and the current account (or the account the money was deposited to, if different).
The business owes the money to the partner, so it would be a liability.
We are not expecting to pay it back though, just invest. Do we still have to pay it back at some point then?
So how would we pay it back - though profit? How would you do that? Thanks for your help
As you take money from the business you would tag it back to the drawings account and use each account as a way to track how much is owed to each partner.
So you should have a bank account set up on QuickFile to represent each partner. If they put money into the business you tag it as a transfer out of the drawings account and to the current account. If they have money paid back to them, you tag it as a transfer to the drawings account.
Thank you very much indeed for this information, you explain this process excellently, thank you and kind regards
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