Easy Credit Card Question, I Hope!
Q: I am a new user of QuickBooks Pro 2003. Can someone please tell me the easiest way to handle what I think is a very common situation? How do I account for (in the software) the purchase of an expense item (office supplies) that I purchased using a non-business credit card that I did not set up in QuickBooks Pro 2003. In other words, I bought something and want to register the purchase under the appropriate expense category, but I don't know how to recod the purchase because I used a non-business credit card. Any ideas or suggestions would be appreciated.
A: If you spent $10 using a non-business account (cash or credit card, etc) the question is whether you want to be reimbursed. If you do, write a check to your name (or whoever spent the money) and apply it to an Office Expenses type account and that's that. If the person is also an employee and/or an owner use a variation on the name you write the check to, for example: John Smith. (with a period at the end), and classify that name as "Other". If you do not want to be reimbursed right away, then it's like the company has a little loan and it owes that money to whoever bought the supplies - usually the Owner of the company. In that case you create an account of the Other Current Liability type, call it something like Owner's Expenses, and then create a Journal entry where you debit $10 to your Office Expenses account and credit $10 your Owner's Expenses account. Your accountant will see the $10 at the end of the year and tell you how to deal with it. I am not an accountant, so the above may not be complete or even correct.