Cash transfers between two entities

What type of entity is the company?

I would hope there were times you transfer money from the company bank account to your personal account . . .

thanks for you reply. how does the typical accountant like to see these transactions recorded?

hi. it's a sole proprietorship.

yes, of course :)

I use two equity accounts for a sole proprietor.

1. Owner Equity or Owner Capital - This account remains the same all year long and changes when the books are closed at year-end.

1. Owner Draw/Contribution - This is the account I use for all current year transactions to and from the owner such as money deposited by the owner and draws taken by the owner. I also use this account for cash expenses paid from the owner's pocket and credit card purchases made for business on the owner's personal credit card. I also use this account and sub-accounts thereof for various payments the owner makes from the company account for personal debt. I use a sub-account if it is a category of tax deductibility such as state income taxes or medical expense.

In a perfect set of books, personal expense would not be paid from company books, but it happens. Sometimes, clients don't realize that something is not a company deductible expense. Sometimes a portion of a check is not deductible and that portion would be entered to Owner Draw/Contribution such as a bookstore purchase of a reference book and a pleasure novel.

Your initial coding is fine. I've only described the way I do it.

thanks Joanne.