I've got a client who doesn't have a business bank account and all sales are for cash. Client does have a personal bank account and a personal credit card. Client has kept all receipts for expenses and accurate sales record. The receipts for expenses show that some expenses have been paid in cash and some paid from personal bank/credit card accounts.
My problem is this. No details have been kept of drawings/how much cash was paid to the personal bank account or if the expenses paid in cash were from the sales receipts or cash taken back out of the personal bank account.
So therefore I cannot give an accurate figure of drawings or cash on the balance sheet.
In the circumtances would it be reasonable just to use the capital account ie
dr all expenses and cr capital introduced
cr all sales and dr capital introduced
At least I would have an accurate capital account at the end of the period. At the moment I am trying to guess at drawings and how much cash might be left on hand. Customer has no idea of the cash movements. I have of course told customer that they will have to separate business and personal transactions from now on and open a business bank account.
Any help or suggestions would be very much appreciated. Right off to bed now.
