Business expesnse paid personally

What are the accounting entries for sole trader who pays for business expense personally

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How do I deal with a business expense that a sole trader has paid for personally? I know that if the business had paid it would be DR Expense CR Bank, I'm not sure that I should use the drawings account for this type of transaction.  Any advice would be great.

I understand that when its a ltd company it would be DR Expense CR Directors loan account.

 

 

 

 

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By mrme89
07th Apr 2017 12:56

... Thud.

I beat you, Kent ;-)

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By SteveHa
07th Apr 2017 13:00

What makes you think a sole trader is a separate entity from the business?

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Replying to SteveHa:
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By Kim P
07th Apr 2017 13:12

That's a very good point!
There is a business bank account, which I want to reconcile so need to keep separate.
I need to record the expense as a business expense but can not do that as one sided!
I do understand that the expenses that are recoverable will be dealt with in the self assessment return.

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By DMGbus
07th Apr 2017 13:15

For small amounts the bookkeeping entries are normally DR expense and CR drawings.

For large amounts (as these could make drawings become a negative figure) the entries would be DR expense and CR capital introduced.

I have seen some allegedly popluar (or well advertised) bookkeeping / online accounting packages be defective in lacking a Capital Introduced nominal account, so this might need creating according to package used.

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Replying to DMGbus:
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By Kim P
07th Apr 2017 13:45

Many thanks for your help

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