Question asked by adam 10 years ago
hi, I was a sole trader and became ltd. I sold various items to the company on its first day, the company bought around 5000 pounds worth of gear. Im new to clearbooks and don't know where or how to record this?
In bookkeeping (and journal) terms the transaction would actually debit fixed assets and credit the bank (or DLA), not the other way round. It's easy to think funds leaving the bank account are a DR because that's how we see it explained on our high street bank statements but in our little world it's the opposite way round - a credit reduces the bank.
I'd personally create a bill with you as the supplier and then pay it in the normal fashion - from the bank account if cash has physically changed hands or from the Directors Loan Account should you be leaving the funds within the company.
Kevin @ Platform Accounting.
Best answerHello Adam,
You will need to use a journal to show this information. This will let you enter the money coming into the business from the proceeds and also adjust your banking.
Please go to Tools > Journals > Create and then enter the relevant account codes and accounting date.
A sale of £5000 in assets will debit your bank account and credit your fixed assets if they are already on the system. If you have no fixed assets to use, you may need to put it off against Retained Earnings. Do consult an accountant for the correct debits and credits please.
Vanish
In bookkeeping (and journal) terms the transaction would actually debit fixed assets and credit the bank (or DLA), not the other way round. It's easy to think funds leaving the bank account are a DR because that's how we see it explained on our high street bank statements but in our little world it's the opposite way round - a credit reduces the bank.
I'd personally create a bill with you as the supplier and then pay it in the normal fashion - from the bank account if cash has physically changed hands or from the Directors Loan Account should you be leaving the funds within the company.
Kevin @ Platform Accounting.
Best answer
You must 