On 1/20/2025 3:36 PM, David Cousens wrote:
Michael,
you have convinced me that it does make more sense to treat the
contributions as an asset rather than a reduction in equity.
David
"Contributions? I am confused.
On the books of these businesses, equity represents the ownership
interests << in this special case, you are the sole owner --- but there
COULD be multiple owners and the accounts under equity would track that
>> If you make a contribution to the business (increase your
investment) then on the books of the business that would increase YOUR
equity account. But since a sole owner, just undivided equity. The debit
side would depend on the nature of this "contribution".
On YOUR (personal) books the business is an investment, an asset. When
you make a contribution (say pay a business expense using your personal
CC) that is an increase in your investment (debit an asset) and a credit
to your liabilities (the CC)
Look, we aren't talking about gnucash here, but accounting. Please note
that I lack "qualifications" to give accounting advice.
Michael D Novack
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