The Book-keepers Forum (BKF)

Post Info TOPIC: bank statements used for personal and business transactions


Member

Status: Offline
Posts: 14
Date:
bank statements used for personal and business transactions
Permalink Closed


Good evening all.

A quick question if I may ....

I may be getting a self employed client who only has 1 bank account whereby he uses this for his personal AND business transactions.

Could someone please help in explaining what I should do in extracting the business items and reconciling the bank ?
I obviously know how to do a bank rec but I would normally show the year end bank balance as per the physical bank statement in the accounts and any transactions made for personal use would go to drawings (this is when a business bank account is being used).

Should I still do the same with the personal account with all his personal items going to drawings ?? OR not reconcile this bank account in the accounts and just extract the business items ?? I'm thinking its the latter but just need confirmation from you extremely nice bunch of people !
biggrin

__________________


Guru

Status: Offline
Posts: 1329
Date:
Permalink Closed

Need to enter his personal stuff as drawings and reconcile the bank.

__________________

Advice from beyond the grave!!!

E&OE



Senior Member

Status: Offline
Posts: 107
Date:
Permalink Closed

I would reconcile the bank statements & post to drawings. This ensures that by balancing the bank that everything has been entered. Just make sure you have the c/f balance from last year

__________________


Senior Member

Status: Offline
Posts: 207
Date:
Permalink Closed

I agree with both above. Use the bank account and account for anything not relating to the business to drawings. As Lisa said, this way you will ensure that you havent missed out any relevant business expenditure when preparing your clients accounts.

__________________
Beverley Flanagan MICB, CB Dip, PM Dip.
info@flexaccounting.co.uk
www.flexaccounting.co.uk


Expert

Status: Offline
Posts: 1963
Date:
Permalink Closed

I concur with eveyone too but I would suggest you encourage your client to open a business bank account for business transactions. Not only will this make your life easier it also helps that if there were ever a tax inspection, the inspector will not have to trudge through a million personal transactions and expect explanations of every little amount that occurred years before. Of course the inspector has the right to see personal accounts but it does simplify matters.

__________________
Rob
www.accounts-solutions.com
Page 1 of 1  sorted by
 
Quick Reply

Please log in to post quick replies.

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