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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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.