Investment Category?

It's an expense only if you think you'll never get your money back, in which case why did you invest?

It's an asset. Create an asset account, and process the transaction as a transfer.

Well honestly I didn't plan on getting it back, it was my own investment into my company and I don't expect it to be paid back to me, I'd rather the company keeps it. That is why I asked how to categorize it as an expense.

Hi, Sharif.

Fred's right: It's an investment, an asset, to you.

"Company" is an imprecise term in this case. Is this a corporation? Or a partnership? Or simply a sole proprietorship owned entirely by you?

If it's a corporation, did you buy shares of stock? Or did you lend money to the corporation - or did you simply contribute to its capital? Even if you own ALL the shares, the corporation is still a separate "person" and its expenses are not your expenses.

If it's a partnership, who keeps the books for the partnership? This check increases your investment in the partnership (an asset to you); when the partnership spends the money, it becomes an expense to the partnership, not to you personally, and your share will be allocated to you at the end of the year, along with all the other partnership transactions.

If it's just your sole proprietorship, then there's nothing deductible about it - yet. You've just moved cash from your left pocket to your right. When the money gets spent (out of your ownership and control), then record an expense - or a different asset - depending on what you spend the cash for at that time. Until then, it's just YOUR money sitting in a different pocket, waiting for YOU to spend it.

If you keep formal books (or a separate Quicken "file") for your sole proprietorship, then record this check as an addition to that investment (Sharif's Car Wash, or whatever). And then, in the company's file, make a mirror entry creating or increasing your capital ("Owner's Equity"?) account. It's not an expense until the company spends it. Until then, it's Cash, a company asset.

But you cannot create a deductible expense just by moving money from one pocket to the other.

RC

Thanks so much for clreaing all that up.

Right now I recorded the investment in the quickbooks file in a "Owner's Equity/Capital" account. And in my personal Quicken file, I made an asset account with the Company's name and recorded a payment to it for the same amount as the investment.