USA Help with owner contributions and expenses paid


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I am stuck - thanks for the help in advance
My boss is a sole prop. and every month she has her soc sec deposited into the business account in which I put the deposit into the business checking under owner contributions Owners Equity. Then she also has sales deposited into the business checking and personal checking accts. She pays personal and business expenses using both accounts. She does not want to give up doing it this way. My questions is - if I deposit the funds in checking and owner contr. acct. when I put an expense in checking and apply it to the correct expense account what happens to the amount in contributions. So if she pays for groceries out of the business account I go to checking and put the store paid to then put it under personal expense account and the amount. But if it comes out of the business checking account how do I show it needs to be paid from the contributions money. The amount cant come out of both the checking and contributions? She also pays business expenses with her own personal checking account. Thanks
 
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kirby

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When she puts say $2,000 personal soc sec money directly into business checking acct:

Dr Business checking acct 2,000
Cr Contributions owners equity. 2,000

When she puts 1,500 Sales cash into her personal acct
Dr Personal Checking Acct. 1,500
Cr Due to Business Acct 1,500
AND ALSO
Dr Due from Personal Acct 1,500
Cr Sales1,500

When she pays ,say, 3,000 out of Business checking acct for personal expense

Dr Due from Personal Acct 3,000
Cr Business Checking Acct 3,000
AND ALSO
Dr Draw Owners Equity 3,000
Cr Due to Business Acct 3,000

The point is, when she uses a personal acct for business, or vice versa, make the additional entry to keep track. Then she should tell you to settle up (payoff) the due to due from accts at some point periodically.
 

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