Equity Category

leerph
leerph Member
edited July 2022 in Before you Buy
Looking to switch from QB to Quicken. In QB for my business, I could write myself a check and call it shareholder distributions and it was set up as an "equity" under chart of accounts. I only see income and expense as options for Quicken. Is it possible to set this up so that when I pay myself out that it will not show up as an expense or as income? Otherwise it will throw off my P/L statements. Thanks.

Answers

  • volvogirl
    volvogirl SuperUser ✭✭✭✭✭
    That would just be a Transfer to another account, neither income nor expense.   Like from a business checking account to your personal bank account.  Quicken is not a real accounting program and is mainly for personal finance.   You can use it for self employment sole proprietor independent contractor income that goes on Schedule C in your personal tax return.   It's not really geared for doing a separate Business tax return like a 1065 or 1120.  

    Quicken doesn't use a Chart of Accounts.  You just have Accounts and Categories.  You can set up anything as an Account.  You could set up an Account and call it Owner Draws and exclude it from reports.  Quicken is pretty much free form.  You can set it up anyway you want.


  • jacobs
    jacobs SuperUser, Mac Beta Beta
    Think of Quicken's accounts as the assets and liabilities on a business balance sheet. There's no separate classification for owner's equity/shareholder's equity/retained earnings. So you can have such an account, but you'd have to identify it as a liability account. As @volvogirl says, a transaction which is a transfer to another account in Quicken, it is neither income nor expense, so it won't show up on a P&L statement. There are other ways to categorize a transaction so it doesn't show up as income or expense (in Quicken Mac, and I assume in Quicken Windows as well). 
    Quicken Mac Subscription • Quicken user since 1993
  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    "Quicken is not a real accounting program and is mainly for personal finance. "
    Well, I'd say Quicken is a real accounting program but it doesn't have any "equity" Accounts you can access since that's a "business" concept, where personal income statements tend to focus on "net worth" and Quicken is constantly calculating that with each entry you make.  (I have no experience with the Home and Business product but I do know that the "business" aspect of this program is focused on businesses that report on Schedule C of the income tax return, and in that situation "net worth" continues to be a valid concept.)
    One other way you can "pay yourself" without having any trace of that disbursement showing up in a P&L statement, (I'm assuming the cash comes out of a business checking account and is deposited into a personal checking account), would be to use as the Category for the disbursement the name of the business account, surrounded by square brackets, e.g., [Name of Business checking account].
    This is a bit of Quicken "magic" whereby the bank balance is reduced and your net worth is reduced without passing through any Quicken Category.  You could then deposit the check into your personal checking account, using the same trick of using the personal checking account's name as the Category.  The net result is two offsetting magic tricks whereby your overall net worth isn't affected (properly) but both bank accounts show correct activity.
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