Removing debt in Cash on Hand Account

JMadeley

I manually entered some of my rent as a business expense, drawn from the cash on hand account. I later transferred money from my business to my personal bank account to cover the rent. What category do I put the bank account transfer so it removes the debt showing in my cash on hand account?

AlexL

Hey @JMadeley , can you explain why you're using your Cash on Hand account to account for rent payment? Also, can you explain the real life workflow of how this money is moving front to back? All of this information will help us decide how this should be properly accounted for in Wave.

Let me know!

JMadeley

Thanks for answering Alex. When it came time to do my taxes I entered a portion of my house rent as a rent expense for the business I run out of my home, with the date retroactively entered as the end of my tax year. At this point, the transaction was virtual since I had not transferred any real money. Wave defaulted to my Cash on Hand account which I did not change. It showed as a debt, which seemed reasonable as a non-accountant. When I later transferred real money I could not make things balance. What is the proper account I should use when putting a recording a rent expense when the cash transfer is to be done at a later date? When I do the cash transfer how do I enter it so that things properly balance? Thanks!

JulianP

Hey there @JMadeley ! In this case, you can change the account from "Cash on Hand" to the account used to make the rent payment. Also, if you have a bank connection or uploaded a bank statement to import transactions, the expense may have been recorded in your account twice. If that is the case, you will need to delete the imported transaction. This should help balance your accounts.

"Rent Expense" may suffice as the category, however, I suggest reaching out to a registered CPA to ensure you receive correct accounting advice as we at Wave Support are not accountants.