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Hi Megan. If I am a sole prop and use my personal accounts

to pay for business expenses...
Hi Megan. If I am a sole prop and use my personal accounts to pay for business expenses, do I need to reconcile any accounts? I run on a cash basis versus accrual accounting method.
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Answered in 1 minute by:
10/29/2013
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Megan C :

Hello! I am a CPA here to assist you with your tax questions. My goal is to provide you with excellent service today.

Megan C :

How are you today?

Megan C :

It's always a good idea to reconcile accounts.

Megan C :

If you have a business account, I would consider paying yourself back out of the business account.

Customer:

I don't have a business account for the sole prop as I thought it wasn't needed. Should I open one for FY 2014?

Megan C :

I would always keep your personal and business accounts separate - makes it easier to keep track of everything.

Megan C :

And if you pay for everything out of your business account, at the end of the year you can pull a spreadsheet from your bank website with the expenses totaled up for you :-)

Megan C :

It's not required, though

Customer:

Okay, well in the meantime can I just keep receipts until I open a business account?

Megan C :

Yes, that's fine

Customer:

Great! I'll do that for the rest of the year and then open an account shortly. Thanks for all of your help again :)

Megan C :

You're welcome. Feel free to ask for me anytime you need anything

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Megan C
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
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Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

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