Owner's Capital - Investments question

[Ed B.]

When setting up my new business, I invested $8000 of my own money, which I
recorded as Owner's Capital - Investments. That $8000 automatically showed
up in Quickbooks in my bank checking account, which is where I wanted it. I
then paid some large bills for inventory and shipping from my checking
account, and my checking account was debited as expected, but my owner's
capital stayed at $8000. I expected it to go down too. So I changed those
payments to come from Owner's Capital - Investments, and then it debited
that account and my checking account which is what I expected. Whenever I
write checks now, my bank checking goes down as expected, buy my Owners
Capital - Investments doesn't change. This is just a small home business I
run in my spare time, but I want to get the accounting straight and I'm
obviously doing something wrong here. Any help would be appreciated.

Thanks,
Ed B.

 

[Joanne]

When setting up my new business, I invested $8000 of my own money, which I
recorded as Owner's Capital - Investments. That $8000 automatically
showed
up in Quickbooks in my bank checking account, which is where I wanted it.
I
then paid some large bills for inventory and shipping from my checking
account, and my checking account was debited as expected, but my owner's
capital stayed at $8000. I expected it to go down too. So I changed
those
payments to come from Owner's Capital - Investments, and then it debited
that account and my checking account which is what I expected. Whenever I
write checks now, my bank checking goes down as expected, buy my Owners
Capital - Investments doesn't change. This is just a small home business
I
run in my spare time, but I want to get the accounting straight and I'm
obviously doing something wrong here. Any help would be appreciated.

Thanks,
Ed B.

It would be to your advantage to have at least one appointment with a
QuickBooks knowledgeable accountant. QuickBooks would like all consumers
such as yourself to believe that the software is all that is necessary for
you to have comprehensive books. Get started right and you will love
QuickBooks. Mess it up to begin with and you will fight it forever.

The best thing I ever did when I bought my violin was to take lessons. I'll
never be stageworthy, but I can entertain myself. There are things I never
would have figured out on my own, I only would have compensated. If you
don't hold the bow correctly, everything that follows is compensating for
the basic error.

--
Sincerely,
Joanne

If it's right for you, then it's right, . . . . . for you!!!

Play - http://www.jobird.com
Pay for Play - http://www.jobird.com/refund.htm
Looking for Love? - http://www.jobird.com/hearts.htm
Garden Kinder CDs
http://www.jobird.com/cd/gardenkinderhome.html

 

[Allan Martin]

When setting up my new business, I invested $8000 of my own money, which I
recorded as Owner's Capital - Investments. That $8000 automatically
showed
up in Quickbooks in my bank checking account, which is where I wanted it.
I
then paid some large bills for inventory and shipping from my checking
account, and my checking account was debited as expected, but my owner's
capital stayed at $8000.

When you pay bills your Quickbooks cash account gets credited not debited.



I expected it to go down too.


You should not expect it to change at all, its not supposed to.


So I changed those

payments to come from Owner's Capital - Investments, and then it debited
that account and my checking account which is what I expected.

How did you change it? Any how undo what you did, its wrong.


Whenever I

write checks now, my bank checking goes down as expected, buy my Owners
Capital - Investments doesn't change.

Good, that the way it should be.




This is just a small home business I

 

[Allan Martin]

It would be to your advantage to have at least one appointment with a
QuickBooks knowledgeable accountant. QuickBooks would like all consumers
such as yourself to believe that the software is all that is necessary for
you to have comprehensive books.

That is not true. Everyone knows that if you can write a check you already
know how to use Quickbooks. I heard it on TV once so it must be fact.




Get started right and you will love

 

[Tee]

When setting up my new business, I invested $8000 of my own money, which I
recorded as Owner's Capital - Investments. That $8000 automatically
showed
up in Quickbooks in my bank checking account, which is where I wanted it.
I
then paid some large bills for inventory and shipping from my checking
account, and my checking account was debited as expected, but my owner's
capital stayed at $8000. I expected it to go down too. So I changed
those
payments to come from Owner's Capital - Investments, and then it debited
that account and my checking account which is what I expected. Whenever I
write checks now, my bank checking goes down as expected, buy my Owners
Capital - Investments doesn't change. This is just a small home business
I
run in my spare time, but I want to get the accounting straight and I'm
obviously doing something wrong here. Any help would be appreciated.

You gave/invested $8k to your business. The fact that your business has
expenses doesn't make your investement less. Until and unless the business
repays *you* the $8k, or any portion thereof, your capital would & should
remain the same. Its money you invested and haven't been given back.

 

[John Gallup]

Good to see an answer that isn't another thinly-disguised attempt to build
CPA job security by saying, "Booga-booga--It's all mysterious! You'll never
understand without the witch-doctor's help!" If you've got $8K to play with
an after-market book about QB or accounting might be $25 well spent.

 

[Ed B.]

Point taken. I have some resources I can tap into to get some help on this.
I need to set it up correctly from the start or it will turn into a can of
worms.

Ed B.

Good to see an answer that isn't another thinly-disguised attempt to build
CPA job security by saying, "Booga-booga--It's all mysterious! You'll never
understand without the witch-doctor's help!" If you've got $8K to play with
an after-market book about QB or accounting might be $25 well spent.

 

[Allan Martin]

Good to see an answer that isn't another thinly-disguised attempt to build
CPA job security by saying, "Booga-booga--It's all mysterious! You'll
never
understand without the witch-doctor's help!" If you've got $8K to play
with
an after-market book about QB or accounting might be $25 well spent.

Indeed. If Tee were a CPA she would have said that at the end of the fiscal
year any income or loss as well as any owner's draw is netted against the
capital account. The OP did not indicate that his business was
incorporated. Her answer would be fine if we were talking about capital
stock, but we are not. As far as the CPA job security, spoken like someone
that can't afford professional help.

 

[Joanne]

Point taken. I have some resources I can tap into to get some help on
this.
I need to set it up correctly from the start or it will turn into a can of
worms.

Ed B.

You don't need a highly-priced professional to help to get you off on the
right track. There are many public accountants who have QuickBooks teaching
experience. A session with a human is so worth the small investment.

--
Sincerely,
Joanne

If it's right for you, then it's right, . . . . . for you!!!

Play - http://www.jobird.com
Pay for Play - http://www.jobird.com/refund.htm
Looking for Love? - http://www.jobird.com/hearts.htm
Garden Kinder CDs
http://www.jobird.com/cd/gardenkinderhome.html

 

[forked tongue]

You don't need a highly-priced professional to help to get you off on the
right track. There are many public accountants who have QuickBooks teaching
experience. A session with a human is so worth the small investment.

Hey Joanne:

Which is more cost effective? A $25 book on simple business accounting for
dummies or a couple hours of CPA time that you can't go back to and listen to
again?

 

[myQBaccountant]

You have done the right entry for Owner's Investment. But whenever
you buy any thing that should be your expenses i.e your Income
Statement should be effected. The net income or loss will be adjusted
against your Investment.

myQBaccountant Team
Free unlimited Quickbooks Support
http://www.myqbaccountant.com/

 

[Joanne]

Hey Joanne:

Which is more cost effective? A $25 book on simple business accounting
for
dummies or a couple hours of CPA time that you can't go back to and listen
to
again?

You are right, the book is cheaper. You did not include among your choices
a QB consultant who is a public accountant. This is a mid-range cost
option.

Not everyone was born understanding accounting. Every business has its
individual needs. Setting up QB for a specific company forms the framework
for future success.

The original poster thought he was debiting the bank account when writing a
check. He would benefit from human assistance to get started.

Go cheap and pay the price later in clean-up, to say nothing of the ongoing
frustration of fighting with a system that isn't the most efficient design
for individual needs.

--
Sincerely,
Joanne

If it's right for you, then it's right, . . . . . for you!!!

Play - http://www.jobird.com
Pay for Play - http://www.jobird.com/refund.htm
Looking for Love? - http://www.jobird.com/hearts.htm
Garden Kinder CDs
http://www.jobird.com/cd/gardenkinderhome.html

 

[Allan Martin]

You are right, the book is cheaper. You did not include among your
choices a QB consultant who is a public accountant. This is a mid-range
cost option.

Not everyone was born understanding accounting. Every business has its
individual needs. Setting up QB for a specific company forms the
framework for future success.

The original poster thought he was debiting the bank account when writing
a check. He would benefit from human assistance to get started.

Go cheap and pay the price later in clean-up, to say nothing of the
ongoing frustration of fighting with a system that isn't the most
efficient design for individual needs.

Joanne,

You are missing the most important point. For many QB users it really does
not matter how bad their accounting records are kept because they couldn't
recognize the difference. It may be sad, but it is true, what you don't
know can't hurt you.