Offset Handle
basic accounting principles. How to handle credit card purchases?
How do I record credit card purchases for my small business? The purchases are for material to be sold or to be consumed while conducting the business.
The credit card is in the name of the business and is used exclusiverly for the business.
As I use the credit card, accounting principles dictate to treat the purchase like a cash purchase. However, I ceated a liability using the credit card. The credit card bill has to be paid with a company check.
I imagine the following procedure: Record the cc transaction in an account called "credit card". Should this be an liability account that is later offset by a cash payment from the company's bank account ? The check payment is then broken up over the various corresponding expense accounts. Is this workable?
Thank you for any input. Hendrik
dt purchases or whatever expense it is
ct accounts payable
when paying your credit card
dt accounts payable
ct cash
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