Owner taking merchandise

[mjwebb]

I own a pet food business that is a sole proprietorship. I regularly use my product to feed my pets. What is the best way to account for this? I use Quickbooks 2004 Manufacturing edition.

I'd prefer to use those merchandise draws to reduce my company's "reimbursement owed owner" liability account.

Thanks

[ultipet]

Hi!
I have the same dilemma...(literally) and I haven't gotten any straight answers. Some people recommend "buying" the stuff from myself, some say to use a "personal use" account and some say "be creative and don't worry about it".

If I come up with a more info, I will let you know!

[pete]

Set yourself up as a customer.

Sell yourself on open account at cost plus sales taxes.

Monthly do a journal entry to transfer the account balance from AR to your "reimbursement owed owner" account.

By the way, that is a quite imaginative account. Assuming it is a sole prop business, all transactions dealing with the owner should show in the Equity section and be either an Investment (any money put in, including anything you personally buy for the business) or as a Draw (anything you take from the business in any form)

Keep this in mind, as a sole prop, you can't owe yourself. Nor can you be indebted to yourself. Any transactions between you as an individual and you as a business should take place in the Equity area and a draw or investment.

Sure, paying cash for a book of stamps hardly seems like an Investment, but that's how it should be shown. It's money you took from your personal billfold and "invested" in the business.