Capital Accounts

[Tut]

No, you should not create a cash in hand capital account. Create capital accounts for yourself and your partner according to this Guide:

Capital accounts

Capital accounts are used to track funds contributed, drawings and share of profit of business owners. They can be adapted to suit any type of business entity including sole proprietors, partnerships, companies, trusts and funds. [image] Sole proprietorships only require a single capital account. Partnerships require a capital account for each partner. Trusts require a capital account for each beneficiary. Funds require a capital account for each member. [image] By default, capital accounts …

Create cash accounts as needed according to this Guide:

Set up a cash account

Cash accounts are created to record money received or spent from accounts held with financial institutions, including current/checking accounts, savings accounts and credit facilities. Cash accounts can also be used for petty cash imprest accounts and cash floats. Before you create the first cash account, you need to enable the Cash Accounts tab. To do that, click Customize under the list of tabs. [image] Select Cash Accounts option. [image] And click Update button at the bottom to confirm…

Receive money under the Cash Accounts tab, allocating $10,000 to your capital contributions account and $5,000 to your partner’s capital contributions account. In both cases, I assume you would receive both amounts in a company bank account created under the Cash Accounts tab. (Money in your personal bank account or your partner’s hand does your company little good.)

Unless you intend to maintain a petty cash fund and deposit your partner’s contribution there, you have no need for a cash in hand account at all. But if you decide you want one, create it under the Cash Accounts tab, but do not check the box indicating it is maintained by a financial institution.

(This discussion assumes your software is up to date. If it is not, some of it will make no sense.)