Hey guys, just doing a little housekeeping on my account today. Looking at the balance sheet it shows the Bank Account as an asset being (€684). Clicking on it and scrolling through I see that I never accounted for a €10,000 lodgement that we made into the business bank account when we opened it in 2015. So the bank account shows a negative when in fact the balance in the bank account is nearly 10k. I want to fix this so that my equity is more correct. Do I create a Manual Journal Entry, and if so what other account do I balance the bank account against? Thanking you in advance…

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Hey guys, just doing a little housekeeping on my account today. Looking at the balance sheet it shows the Bank Account as an asset being (€684). Clicking on it and scrolling through I see that I never accounted for a €10,000 lodgement that we made into the business bank account when we opened it in 2015. So the bank account shows a negative when in fact the balance in the bank account is nearly 10k. I want to fix this so that my equity is more correct. Do I create a Manual Journal Entry, and if so what other account do I balance the bank account against? Thanking you in advance…

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Peter Connor ⋅ Staff October 3, 2016
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Hi, 
You’re best asking your accountant for advice on that. We could undo something that’s being done. We’re not accountants and cant’ really advice in that area. 
Sorry about that – thanks 

Pete

#answer-4125
  1. Peter Connor October 3, 2016
    For the mechanics - you'd need to use the double entry system. But, be careful with that it's complex
  2. thepalvgm October 3, 2016
    Ok, thanks Pete - I appreciate it.
  3. thepalvgm October 3, 2016
    Just one more thing, is Owner Equity the same as Capital?
  4. Peter Connor October 3, 2016
    Well Capital is a very broad term. So working Capital would be say cash in the bank but that could come from anything, loan, director loan etc.
    Owner Equity is the shares you hold in the company and they're valuation. For most small startup service based businesses this would be nothing.
  5. thepalvgm October 3, 2016
    So maybe Funds Introduced is the best account for me to make note of the deposit? That's under Liability
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Peter Connor ⋅ Staff October 3, 2016
Public

If you’re not sure what to do then don’t do it. Those accounts have logic behind the. 

If you’re giving the company money from your personal savings, just issue a director’s loan.

#answer-4126
  1. thepalvgm October 3, 2016
    Oh yeah, that's a much better idea. Will do. thanks again!
  2. Peter Connor October 3, 2016
    Cool.
  3. thepalvgm October 3, 2016
    Still a Sole Trader status so I don't think that's going to work, as I haven't any employees added. I'll get on to my accountant and see what way I should do the manual entry. Thanks pete
  4. Peter Connor October 3, 2016
    If you are a sole trader there is no way ever you can do it. You are the company. Everything you own is the company.
    A limited business is a separate entity. You lend it money.
    You can never do what your trying to do as a sole trader.
  5. thepalvgm October 3, 2016
    So it's okay that the balance sheet is off? I should just leave it?
  6. Peter Connor October 3, 2016
    Just add your business bank account with an opening balance.
    On the balance sheet that should be fine.
  7. thepalvgm October 3, 2016
    Ok, thanks again

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