Transaction imported from bank - double accounting
Mitch_H
Member Posts: 3
I have a transaction that was an owner loan (transfer from personal bank account to business). The transaction was pulled into WaveApps automatically with the account set as the business bank account. However, I am not sure how to categorize it. I do not believe the transaction should be considered income, but rather an asset. However if I choose Cash on Hand for example as the category, it then shows up on the general ledger under both Cash on Hand and the business account assets. The business account is not available under category. Open to ideas of how to best handle this. Thank you in advance.
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@Mitch_H,
You would categorize it as an owner investment. You could also put it to owner loan. You may need to create that account as either a short or long term asset depending on when you anticipate paying yourself back. Greater than one year? Then long term.
Hi @Mikeg , thank you for the feedback. However the issue remains that in WaveApps, if I categorize it as an asset, it appears on the general ledger twice...once under the asset category (owner loan) and once under the bank account. I have a liability for it to be paid back as well. I have included an attachment for an example.
@Mitch_H,
From your attachment there is a deposit and withdrawal on the same day. How are these amounts being posted on the transaction journal? Usually, you would not need to make any manual postings if you are either importing the transactions or the bank account is linked. The reason being is that if you make a manual entry it would be double counted since it was already imported. To me, the deposit of 2500 should be categorized as Founder Loan. The second amount appears to be a repayment (disbursement) of the loan.
@Mikeg Thanks for your feedback. I did not make a manual entry, just trying to categorize the transaction. For the amount going into the BUSINESS FUNDAME..., it is not income, however if I categorize it as a Owner Loan (or Cash in Hand...both assets) it shows up on the General Ledger under Owner Loan (or Cash in Hand) and under BUSINESS FUNDAME. The other transaction in red is actually a liability account showing that there is a liability to Founder Loan.
TBH, I think this is something specific with WaveApps functionality, not just general accounting. Perhaps someone from their team could intervene as well, but not sure how to beckon the WaveApp Gods. Thanks again.
@Mitch_H,
Sure. I not really sure because the transaction register is one side of the accounting entry. By categorizing transactions your are telling it what the other side of the entry is. So for example. You made a deposit of 2500 into Business Fundamentals. The debit is there with the deposit, (debit Cash) now Wave would look for you to categorize the other side (credit). To me that would be owner loan. Now with no other items your balance sheet or general ledger would have a cash balance of 2500 and a credit balance (liability) to owner for 2500. Not sure why there is a 2500 withdrawal on the transaction register if it was not withdrawn and no manual entries made.