I have created a sub account within Income called startup and directors loans. This is to account for monies into my buisness. When I do a general transaction to move the money to either cheque or petty cash it adds the amount within income and does not deduct what i have moved. Thus i get a constantly growing income field called startup that never decreases no matter how much i take out.
Is there another way of doing this??
Hi Adrian,
You shouldn't record money the director pays into the businessas as income. Instead, create a new liability account called 'Directors Loan Liability' by clicking menu File > New > Account and setting the Account Type to 'Liability'.
When the director puts money into the business, record a General Transaction from this account to the Cheque Account (this will increase the liability account because it tracks how much money must eventually be 'paid back' to the director.).
When the director takes money out of the business, record a General Transaction from the 'Cheque Account' to the 'Directors Loan Liability' account (this will reduce the liability in the same way that you had 'paid off' a bank loan).
Cheers,
