If I loan my business $1000 to cover expenses what is that considered? Income? Liability? How do I record it in quickbooks? When the business pays it back is it just logged as an expense? Thanks.:confused:

Almonkey asked,

"If I loan my business $1000 to cover expenses what is that considered? Income? Liability? How do I record it in QuickBooks? When the business pays it back is it just logged as an expense?"

It depends on how you want to record it. If you loan the business the money and intend to make it a short term loan, you would deposit the money to your bank account and offset it with an entry in the short term notes payable field (a short term liability). It is not income.

The thousand dollars you deposited would be used for expenses and would be recorded as such.

When you pay yourself back, you pay it out of the same bank account and offset it (or attribute to the proper account) using the same liability account (short term notes or loans.) That way, you would zero it out. This is the fun of double entry bookkeeping.

If you are depositing this money to start up the business such as a sole proprietorship, then it would be deposited into your bank account with an offset to your owners equity account of capital additions or investments.

That is how I ask my small business clients in Seattle to handle this kind of issue.