Credit card expenses

You don't have any accounts payable. You paid the bill by charging it through a third-party (your credit card). When you pay the credit card bill is irrelevant and has nothing to do with your business finances.

In that case then, what entry will you make on the books? The debit(s) will be to expense(s); and the credit to........ ?? ChEAr$, Harlan Lunsford, EA n LA

Hi Herb, thanks for the answer but I still don't understand how I can get my balance sheet to balance if I don't have account payable. Say I have $100 expense charged to my credit card on Dec 30,

Regards, Uly

Not at all.

However, you speak of filing a 1065 which is a partnership return, meaning two or more partners. First, does the partnership have a separate credit card in just it's name? I doubt it. Which leaves you as a partner having the expense charged to your card. The partnership therefore owe you personally for what was charged. It's bookkeeping entry is a debit to expense(s) and a credit to your capital account. Similarly if your partner also used his card. Or you could treat it as a short term partner loan, and therefore as a payable if to be paid within a short time. ChEAr$, Harlan Lunsford, EA n LA

Thank you so much for your replies. Just to clarify, this is a partnership between me and my wife. The credit cards used for business are personal credit cards. However, I normally segregate the business portion and pay it directly from the business account. I suppose I could make the credit goes to the partners' capital accounts, however I have been crediting the cash account directly.

If I were to do this, this short-term loan would fall under liabilities in my balance sheet, right? My question is whether it's okay to have such liabilities in our balance sheet (for tax-return purpose) given that we file under cash-accounting basis. Thank you again.

Sincerely, Uly

I can't tell you how to account for this since I operate as a C Corp and I'm also not a tax pro.

However my C Corp also operates on a cash basis and on the recommendation of my account stop using my corporate credit card a couple of days before the end of our tax year (Dec

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