Hi, firstly, please forgive my ignorance as I am new to the world of accounting! I am a director in a new business and have been given the responsibility of bookkeeping, so am trying out your software. I must say I am very impressed with what I have seen so far (having been an IT trainer for the last 10 years I feel qualified in saying that), and am looking forward to getting stuck in with the numbers. My first question, of what I feel is likely to be many, is how/where do I record the capial investment from myself and my partners? I have been buried in Accounting for Dummies and believe that this should be placed in a capital account ,and have therefore created four new accounts under 'Owners Equity', one for each partner, and have credited each account with their investment amount. Is this the correct procedure? Having done this the 'balancing account' (I'm unsure of what this is) now displays the total investment as a negative figure, is this correct?
Again, apologies for the ignorance, I'm not an idiot and believe I can pick things up fairly quickly but any help along the way will be greatly appreciated!
Many thanks in advance,
David
Hi David,
Yes, that is the correct procedure for recording the investment by each of your partners. However, you also need to record the opening balance of the cheque account - this would normally be the sum of the funds invested by each partner. This will result in the Balancing Account automatically being set to zero. See here for more information about the balancing account:
http://www.solaraccounts.co.uk/forum/topic.php?TopicId=314&Posts=1
Cheers,
Makes perfect sense, thanks for the swift reply Mark!
Rather than use the default cheque account I have added two seperate accounts to reflect our 'client' and 'operating' bank accounts....I presume that so long as these are created as Asset accounts they will work in exactly the same way as the cheque account?
Ragards,
David
Hi David,
Yes, that's correct - it doesn't matter as long as the total assets equal the total funds put in by the partners.
Cheers,
