just my opinion.Īnother example of work I feel bookkeepers should not perform is the dividend / salary decision. Section 84 rollovers should be performed by a certified accountant in public practice with a tax speciality. What at times looks like a simple task is only that if you are aware of ALL the tax laws and rules pertaining to the election being taken. One mistake and the client could be paying for it for years. no matter how simple it looks.Ī section 84 rollover is when a sole proprietor incorporates his business. What kind of functions would that be? For example, I don't think a bookkeeper should ever do a section 84 rollover. I feel very strongly that there are certain functions a bookkeeper should not perform. The Bookkeeper's Role and Responsibilitiesīookkeeper's need to be cognisant of their responsibilies and roles. You should not act or rely on this information without engaging professional advice specific to your situation prior to using this site content for any reason whatsoever. The general information provided in this post or on my site should not be construed as advice. I would like to remind you there is a difference between information and advice. In the event of an audit, mixing personal and business expenses invites CRA to audit both the company and the owner's personal accounts. If possible, suggest the owner/manager get a separate credit card that he uses solely for business purposes. The journal entry would end up DR Cash in Bank, DR Due to Shareholder, CR Undeposited Funds (or Accounts Receivable if you are not using a clearing account for customer payments). If you use QuickBooks, and the cash is from shorting bank deposits, then when I book the bank deposit, I use the bottom portion of the form to book the cash withdrawal by the owner. However, if the owner is being paid by cash, your entry would be DR Due to Shareholder and CR Cash … or a similar account on your chart of accounts. My preference is for the owner to always be reimbursed by cheque. I save the Shareholder Loan account (long term liability) for actual loans / cash infusions to the company and the subsequent repayments. I use this account solely for expense reports. To assist in reconciling this account, you can see that in QuickBooks, I set it up as a credit card account (current liability) called "Owed to John Doe". In Creating An Trail I talk about how to reimburse an owner for business expenses purchased with personal funds. Obviously I will just be estimating and giving a rounded off number because as I stated he takes out 40 here and 100 there. Should I create another account to credit or should I be crediting the account that I originally entered when he first purchased this stuff. Is there any easier way to deal with him paying himself back? I know I have to now debit Due to Shareholder but I can't tell which account to credit because he is just taking money out here and there and it obviously doesn't match to any of his receipts. My problem is he also periodically takes out cash throughout the month to pay himself back, but it is $40.00 here and $100.00 there, etc. I credit Due to Shareholder and debit the account depending on what it is. I have created an account Due to Shareholder and I enter what he has purchased. The owner often purchases supplies with cash and his personal credit card. T2125 Schedule Series - Canadian sole proprietors.Travel/Auto Rates Options - US and Canada.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |