Problem: How can you reconcile the Supplier Payable Account with the Shareholder’s account?Solution: One An owner of the entity 's owners paid the Supplier paid a supplier directly on behalf of the company. This amount should be recorded under the Capital Issued section of the Balance Sheet, therefore utilize creates the need to reconcile the Supplier Payable Account with the Shareholder’s Account, as the payment represents a contribution by the owner.
Solution: To properly record this, utilize the Mutual Settlement and Other Income documents to address this issue, as demonstrated below, ensuring the supplier liability is cleared and the shareholder’s contribution is recognized under Capital Issued.
1. Write off Payable Balance
To write off Payable Balancea payable balance, create a Mutual Settlement document with Transaction Type using the Supplier Debt Adjustment.
Select relevant transaction type, and specify the appropriate Income GL account in the Account field:.
See also 7.5.10.5.1. Creating a Mutual Settlement document. The Main tab
2. At At the Accounts Payable tab, select choose the payable document from related to this Supplier supplier (please use the Pickoptions option to select from the list of outstanding invoices):
See also 7.5.10.5.2. Creating a Mutual Settlement document. The Accounts Payable tab
Mutual Settlement creates Once all details are filled, post the document. The document will create the following transaction:
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Cr Other Operating Income
3
2. Other Income Document
Create an Other Income document with Transaction using the transaction type Reversal to adjust Income with Shareholder's account:offset the income against the Shareholder’s account.
To accurately reflect the payment made by the owner on behalf of the company, follow these steps:
Record the Shareholder’s Contribution:
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In the Income tab, record the Shareholder’s Contribution on the credit side. Select the Shareholder’s Account under the Capital Issued section
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of the Balance Sheet.
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Verify that the Shareholder is set up as a company
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in the accounting system.
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Assign the
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correct contract dimension to the Shareholder.
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Add the Income GL Account
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on the debit side; it should be the same Income
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GL
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Account that was previously used in the Mutual Settlement transaction.
Other Income document creates the following transaction:
Dr. Once all details are filled, post the document. The transaction below should appear.
Dr Other Operating Income
Cr Capital issued (Owner 1)
3. Repayment to Shareholder
If repayment to the shareholder has been agreed, record a Bank or Cash Payment using the Transaction Type: Others. In the Payment Details tab, provide the necessary information to process the repayment.
Thank you for being a FirstBIT customer! # pay from owner account