more-arw search

Q&A Forum

Internal transaction

GA SU's Profile

Hi, we have started a new company. Since we haven't set up bank account yet. I've been entering deposits and payable from the other company. How do I account for this. How do I enter invoices in the current company for the new company? Am I allow to file HST paid and received from the new company to the current company. Please advise. SG

Answers

Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

If I am understanding you correctly; I just had to do this with my husband's construction company. He started a rental business and used the construction company to do work on it as well as used the construction company's check book to write checks out etc. What I had to do in the construction company was move all expenses / deposits to his equity (draw) account and go in the new company and record the expenses where they belonged.

This was the cleanest way my CPA recommended. :)

GA SU
Title: General Accountant
Company: TMS
(General Accountant, TMS) |

Thanks Christine.
So I won't be showing any HST in the current company.
I should record this properly as soon as I started with the new company.

Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

If the HST is in relation to the new company then yes you would want to report it in the new company. I would recommend getting the new company set up before getting too deep into transactions and recording them in this other company. Keeping separate business transactions is just cleaner. Maybe I don't fully understand but why would you want to enter invoices in the current company for the new company? Are these companies working together (e.g. my situation; the construction company does work on the rental company)?

GA SU
Title: General Accountant
Company: TMS
(General Accountant, TMS) |

Yes, everything is same except the name on the document.
But you are right I should record sales and payable in the correct company.
thanks again Christine.

1357 views
Topics

Get Free Membership

By signing up, you will receive emails from Proformative regarding Proformative programs, events, community news and activity. You can withdraw your consent at any time. Contact Us.

Business Exchange

Browse the Business Exchange to find information, resources and peer reviews to help you select the right solution for your business.

Learn more

Contribute to Community

If you’re interested in learning more about contributing to your Proformative community, we have many ways for you to get involved. Please email content@proformative.com to learn more about becoming a speaker or contributing to the blogs/Q&A Forum.