The Book-keepers Forum (BKF)
The Book-keepers Forum (UK) -> General Book-keeping & Accounting -> Cash banked into personal account
Post Info TOPIC: Cash banked into personal account
Kate1


Veteran Member

Status: Offline
Posts: 32
Date:
Cash banked into personal account
Permalink Closed

Hi,

I prepare a monthly profit and loss for a small business (sole trader).  The owner banks some cash into their personal bank account and I only see cash going into the business bank account - how should I account for this?

Thanks



__________________
Susie Sue


Senior Member

Status: Offline
Posts: 345
Date:
Permalink Closed

Post it to their drawings.

__________________
Sue
Assist Office Services - Bradford Bookkeeper
kjmcculloch83


Expert

Status: Offline
Posts: 2085
Date:
Permalink Closed

It's probably worth having a word with them too if they are the same sole trader buying things from their personal account. Tell them it's cleaner if they use their business account. Possibly their bank charge them for use of their business account and thats why they're doing it, but it's not good practice.

Kris

__________________

BKN Most Innovative Accountancy Firm 2012

Director and Co-Founder of The Bookkeepers Alliance

 
Kate1


Veteran Member

Status: Offline
Posts: 32
Date:
Permalink Closed

Thanks, I've just started doing the books for this sole trader.  For the first year - no records were kept, should I be asking to see the personal bank statements, so that I can include the cash banked amounts onto sales and off expenses (drawings)?



__________________
Shamus


Forum Moderator & Expert

Status: Offline
Posts: 11981
Date:
Permalink Closed

Hi Kate,

I think my response over on your other post answers this one.

Just thinking that for anyone else reading this the two threads are pretty intertwined so also refer to :

http://www.book-keepers.org.uk/t45455219/expenses-paid-by-personal-account/

Short answer though is that in this instance you need to also be reviewing movements in the clients personal accounts in order to build a full(er) picture of the business affairs for the period.

kind regards,

Shaun.

__________________

Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
morgwick


Senior Member

Status: Offline
Posts: 246
Date:
Permalink Closed

Hi Kate,
If no records kept, and you know that money is banked into a personal account, then I would ask to see the personal statements like Shaun states, so that you can see the bigger picture. It will help you to produce a cash control account. If you know what was banked and what cash expenses were paid (may have to ask for estimates) then it would give you an indication of what the cash income is for the business.

What type of business does the sole trader have?
Is it mainly a cash business, or do his customers pay by card etc?

When producing the accounts, you would dr drawings with the cash banked into the personal account and cr cash account.

Regards
Gill

__________________

Gill
Kate1


Veteran Member

Status: Offline
Posts: 32
Date:
Permalink Closed

Hi Gill,

Thanks for your reply.  The sole trader is a beauty therapist and it is roughly 50% cash sales and 50% card sales. 

There are approx. 30 transactions per month, is it necessary to do double entry for this amount of transactions?  There are no receivables and only 1 creditor and I'm only producing a profit and loss, not a balance sheet...

At present I'm just doing - Sales less business Expenses less Drawings equals Profit/Loss...

 



__________________
ADAS


Guru

Status: Offline
Posts: 827
Date:
Permalink Closed

Hi Kate,

How does your client record their sales? If the only way to prove their income is by looking at the personal account, then I'd say it was necessary.

__________________
Tony

Responses are intended as outline only. Formal advice should be sort from your Institutes Technical Department or a suitably qualified Accountant.
.
Page 1 of 1  sorted by
 
Quick Reply

Please log in to post quick replies.
The Book-keepers Forum (UK) -> General Book-keeping & Accounting -> Cash banked into personal account
Tweet this page Post to Digg Post to Del.icio.us
Members Login
Username 
 
Password 
    Remember Me  
©2007-2024 The Book-keepers Forum (BKF). All Rights Reserved. The Book-keepers Forum (BKF) is a trading division of Bookcert Ltd. Registered in England Company Number 05782923. 2 Laurel House, 1 Station Rd, Worle, Weston-super-Mare, North Somerset, BS22 6AR, United Kingdom. The Book-keepers Forum and BKF are trademarks of Bookcert Ltd. This forum is a discussion forum only. There will usually be more than one opinion to any question and any posting should not be viewed as a definitive solution. No responsibility for loss occasioned to any person acting or refraining from action as a result of any posting on this site is accepted by the contributors or The Book-keepers Forum. In all cases, appropriate professional advice should be sought before making a decision. We reserve the right to remove any postings which are offensive, libellous, self-promoting or engaged in covert marketing. We will not notify users of removals. The views expressed in the forum posts are those of the individual and do not necessary reflect or agree with those of The Book-keepers Forum. Any offensive or unsuitable posts will be removed by the moderators. Any reader of this forum can request for a post to be looked into by sending an email to: bookcertltd@gmail.com.

Privacy & Cookie Policy  About