USA Multiple bookkeeping questions

[taxesanddeath]

I have personal cards used in my LLC. I use cash basis and am a single-member. I use waveapps for accounting.

1. should all charges on the credit card (for my business) be accounted as DR expense and CR owners equity?

2. if I make a payment towards the card with personal funds, how should this be accounted? Someone told me to not record it. Does this mean in my bookkeeping software where my card statment is, I should "delete" this payment transaction?

3. When the LLC makes a payment towards the card, how should I record the funds leaving the LLC's bank? DR owners equity CR cash?

4. When the payment from the LLC posts to the card statment, example "$500 - payment recieved", how should I record this in my bookkeeping software?

5. Should all transactions touching an LLC's bank or the cards used in its business be accounted for in the bookkeeping software? Example, a "verfication" microdeposit of a few cents which is subsequently withdrawn. Im aware this is superficial and "zero's out", and some say to simply "delete" this from the bookkeeping records. Im under the spell that all transactions should be kept on the books. Thoughts?

6. For personal cards I begin using in my busineses, how do I account for a current balance? Example: Jan 5th I have a $25 uber transaction. Then Jan 10th I start using the card for business, and business related expenses start posting. Do I simply delete this $25 uber transaction from my january card statment in my bookkeeping software?

7. Since the credit cards are in my "personal" name (not my business name/ein), does this mean I do not have to track the cards current liability amount such as opening and closing balances on the card, or reconcile payments posted to the cards statment, either from me or the LLC?

8. Do payments posted to the credit card statment have to be accounted for? Example, payments from personal funds or llc funds posted to the credit card statement. Note: Expenses on the card statment are already acccounted as DR expense and CR owner contribution, and payments that left the LLC bank are accounted as DR owner contribution and CR cash, so how do I "reconcile" payments posted to the card statment in my bookkeeping software?

9. Cashback redemptions posted to the card statment. How should I account for this? If its treated as income, this income is on credit card balance which is a personal card. Would it not be wiser to treat it as a DR owners contribution and CR expense?

10. I have sales tax liability for my internatial sales. I track these internatial sales it its natural currency (CAD). I have an internatial sales tax liability account for sales tax I collect, and when I remit to the tax authority I debit this account. How should I account for sales tax deposits (not from sales). made to this tax authority? To add further complexity, the CAD sales tax deposists are charged to my USD cards, so the charge I see on my end is in USD. How should this be accounted for?

 

[UncleSam]

No offense, but when you have these many questions that's when you actually hire and PAY an accountant.

 

[taxesanddeath]

No offense, but when you have these many questions that's when you actually hire and PAY an accountant.

I understand your sentiment, but this is an accountanting forum for discussinng accounting topics. These are questions I would like to discuss with others so I can have a better understanding and it will help others who have similiar questions and come acrosss it.

 

[Jessymathew]

I've done my best to answer all the questions. If you have any more questions or need further suggestions on the same topic, please don't hesitate to ask.

1. No, not all charges on the credit card should be accounted as DR (debit) expense and CR (credit) owner's equity. The specific accounts depend on the nature of the expenses. Some charges may be categorized differently, such as assets or liabilities, based on the type of transaction.
2. If you make a payment towards the card with personal funds, you should account for it. Do not delete the transaction; instead, record it as a DR owner's equity (or capital) and CR cash. This reflects your personal contribution to the business.
3. When the LLC makes a payment towards the card, record it as DR owner's equity and CR cash. This represents the LLC using its funds to pay off the credit card.
4. When the payment from the LLC posts to the card statement, record it as DR credit card payable and CR cash. This shows the reduction of the credit card balance.
5. Yes, all transactions, including microdeposits, should be accounted for in your bookkeeping software to maintain accurate records, even if they "zero out." This ensures a complete financial history.
6. For personal cards used for business, do not delete the initial personal transactions. Instead, categorize them as personal expenses, and then begin recording business-related expenses separately.
7. You should still track the credit card's current liability amount, opening and closing balances, and reconcile payments, even if the cards are in your personal name. This ensures accurate financial records.
8. Payments posted to the credit card statement should be accounted for by DR credit card payable and CR cash, as these transactions reduce the credit card balance.
9. Cashback redemptions should be accounted for as DR cash and CR credit card payable. Treating it as income could complicate your financial records, especially if the card is personal.
10. Sales tax deposits should be recorded as DR sales tax liability (in CAD) and CR cash (in USD) to accurately reflect the liability and the actual payment made in a different currency. This allows you to track both your liability and payment accurately.