Credit Card used by Owner

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I have an owner that routinely uses the company credit card for his own use.

The way I have been accounting for this, was whenever I saw an entry that was personal for him, I charged it to a Current Liability account called "Credit Card Owner". A charge produces a negative number in that account, so the net of what the company owes him and this account of his expenses is correct.

The question is this. When he makes a payment, for these expenses he puts the deposit in a bank account of the company. So the addition of this and the company's expenses for the month should be credited to the Credit card account. So how do I clear the entry in the Credit Card Owner account?

Thanks!
 
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If I understand you correctly, the answer is as simple as using the "Credit Card Owner" account when you record the deposit of the cash. As journal entry, that would read as Debit Cash
Credit "Credit Card Owner Liability"
A common method is to call that liability account you're using "Due to / Due From Owner"
Another method (probably slightly more correct) is to use an Equity account, like Owner Draws (use it the same way as the liability account.) Debit it when the owner takes money out or makes personal purchases, Credit it when he puts money in or pays a company debt with personal funds.
 

Samir

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I use the method that qwerty recommends of using equity accounts. Because if the owner doesn't pay it back or if there is an amount at the end of the fiscal period, it will have to be accounted for under owner equity.
 

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