Paying business expenses with personal funds

Question

The owner of this business paid business expenses with personal credit cards. His former cpa created journal entries to credit owner's equity and debit the expense account (the total amount). The owner has been small payments to these personal credit cards with business funds. My question is since his equity account has already been credited for the expenses he made, can he still make payments using business funds? Is there a journal entry for that?

Answer 1

Hi Ericka,

If he received reimbursement from the business for the items on his credit card (small payments from the business account to the credit card) the entry would be the opposite of the one booked to account for the payment of items using the credit card that are for the business. He should be keeping these things separate or managing like expense reports.