How to Record Owner Investment in QuickBooks Desktop

Total Time: 10 minutes

1. Easy Step Interview

   Once the QuickBooks software is installed, you will be taken to the Easy Step Interview, here you will be asked to add the basic information related to your company of yours along with the contact information, and tax information (you have to add the ID number of tax) and legal organization, defining whether your firm is a corporation or a sole proprietorship. The owner’s Account will be then created automatically by the QuickBooks program. This is called Owner’s Equity.

2. Gathering the Details and Documents of the Initial Investment

   In this step, you have to ensure that you have all the details and documents that are related to the initial investment made in the business.

   This comprises the canceled checks of the personal funds that were used for the loan documentation, which was taken to get the business started, or the deposit slips showing the records of the deposits made in the account of the business.

   Entering the Owner’s capital depends upon the way you have received the funds, was it through the business capital loan or from the debt-free personal account.

3. Creating the General Journal Entry

   Tap on the button that has Company written on it and present it at the top of the menu bar, after that select the tab saying Make General Journal Entries. A window will pop up, that is going to be like a spreadsheet having five columns across it and also several rows towards the downside.

   Five columns will have the headings like Class, Customer, Credit, Debit, and Account because this is going to record the initial investment, though class and customer columns are not required.

4. Step Four

   Now from the first column of the first row, tap on Owner’s Equity account. You will find that the labeling of the first column is done as Account, then you will see a little side arrow present in the first column of the first row, click on it.

   A window having all your accounts that are a part of the chart of accounts of your company, will pop-up. Now, go to the first column’s second row and then get the account entered that was used to deposit these funds, in the column of Debit, savings, checking, etc.

5. Entering the Corresponding Credit

   Here, go to the column that has Credit written on it and enter the corresponding Credit. The amount of corresponding credit is going to be the same as the amount that was of the initial investment.

6. Creating the Liability Account for long-term

   In this step get the liability account created for the long-term. If the business you are planning to start will get started through the loan, then you have to create a liability account, a long-term one.

   For that, you have to get the chart of accounts opened by tapping on the button of List, which is present at the top of the menu bar, and then choose Chart of Accounts, hold the N and CTRL keys so that the new account is created.

7. Selecting the new account’s Type

   In step 7, you have to choose the type of your new account. Go to the Type bar and select Long Term Liability. Click on Enter Opening Balance, button and then add the loan’s amount and the date as well. After that, ensure that you create the General Journal Entry of that amount by keeping the Owner’s Capital in credit and debit in that account where the funds were kept by you.

8. Dividing the portion of Investment as per the Initial Investment

   In this step, you have to ensure that portions of investment are divided as per the amount that was invested during initial investments. In case you have taken help from relatives and friends to make the investment in your business, then make sure that the total investment of all the owners is used to get the percentage of every investment calculated.

9. Creating the Equity Accounts

   Get the two equity accounts created and then label them as Owner 1 Capital and Owner 2 Capital or in your name. get the Chart of Accounts opened and then hold the keys N and CTRL so that a new account is created under the Type and then choose Equity.

1. What sort of account is an owner investment?

   The owner’s investment account is a brief value account with a credit balance. This implies that the venture account is finished off toward the finish of every year expanding the equilibrium in the owner’s capital account. You can think about a venture as an owner offering cash to the company. Each time the owner offers cash to the company; the owner’s capital account develops.

2. How would you record your interests in accounting?

   💠 This type of interest is at first recorded at cost.
   💠 Toward the finish of each resulting accounting period.
   💠 Change the recorded speculation to its reasonable incentive as of the finish of the period.
   💠 Any undiscovered holding gains and misfortunes are to be recorded in working income.
   💠 This speculation can be either a charge or a value instrument.

3. How would you record an owner’s cash that is utilized to begin a company?

   💠 The seven stages of placing individual cash into a business are: Make sure that you have separate Bank accounts.
   💠 Then, asset your business bank account.
   💠 After that, you have to record your money as either a loan or equity.
   💠 Now, you are all set to charge the sash account.
   💠 Then, credit the capital account and reconcile the Deposit to your cash balance.