One of our bookkeepers was working on a new client – she said – “There are quite a few personal expenses being spent out of the Business Acc (i.e. taking wife out to dinner and taking cash out at ATMs etc), I am using Liability Acc ‘XXX-Loan’, and at the moment it is -$12,000ish, however he initially invested $15,000 into the business and I feel this should be offset to that Liability Acc… ? Do I leave it as a negative running balance.. ??”
Answer – Yes leave the account whether negative (credit) or positive (debit) – there will be other adjustments at end of tax year, so let the tax agent finalise those and where the loan account ends up – they will advise the client.
Need help? Not sure? Call for FREE 30min advice / strategy session today!