I've purchased Quickbooks, but I have a question regarding the accounting procedure for handling seed money. The source of the money is my personal account. Your question is a common one for new business owners. Your investment should be recorded in your accounting program as a credit to owner s equity and a debit to cash. It isn t income.
Income is money that comes into the business as a result of sales or interest on invested money.
Your seed money is investment capital, and you re the investor. It s confusing because business and finance involve words we don t use in everyday conversations, such as capital and equity. I think accountants and bankers use these fancy terms just to keep folks like us from understanding what it is they do. As a business owner, you need a working understanding of accounting and finance terms and methods. Expertise is what professional accountants and bookkeepers provide.