Capital introduced
If youre a business owner and want to invest your personal money, stock or assets into your business, you must record these in Accounting. You can easily record the capital you introduce using journals.
To help you record the investment, a default capital introduced nominal ledger account of 3200 already exists. If your company is a partnership, to keep track of which partner has invested into the business, you should create a new nominal ledger account for each partner. When you create the account, you need to make sure you choose the Equity category. You can enter any code you want, but you may want to keep it in the range of 3000 to 3999 along with your other equity codes.
When you record the journal, you enter the capital introduced as a credit and post the opposite debit entry to the nominal ledger account you want to affect.
To record capital introduced.
- Go to Journals and click New Journal.
- Enter the reference, date and a description if you want to.
- Enter the information required to record the capital introduced and click Save.
For example, to record money invested, enter the following information:
To record stock or assets, enter the following information:
Ledger AccountDetailsDebitCreditInclude on VAT Return?Asset or stock accountCapital introducedValue of the asset or stock0.00Leave clearCapital introduced [3200]Capital introduced0.00Value of the asset or stockLeave clearIf youre VAT registered and you paid VAT on the original purchase of the asset, you may be able to reclaim the VAT on this. If youre not sure if you can reclaim the VAT, you should contact your local tax office. If you can reclaim VAT, when you record the journal, you should show the VAT element separately. For example, if you introduced a van to the business, post the following journal:
Ledger Account*DetailsDebitCreditInclude on VAT Return?Capital introduced [3200]Capital introduced0.00Gross value of the vanLeave clearMotor Vehicles Cost [0050]Capital introducedNet value of the van0.00Select this check boxVAT on Purchases [2201]Capital introducedVAT amount0.00Select this check box