Personal Income

Hi Pal2,

Thanks for your post, and welcome to the Community Forum! In situations like this, consulting with an accountant is advisable for an accurate solution. However, to give you an idea, "Personal Income" and "Personal Expenses" have specific meanings that differ from what you might assume based solely on their names.
 

Personal Income: This refers to income received by the business owner or sole trader that is not related to the business itself. It could include income from other sources like investments, rental properties, or a secondary job that's not part of your sole trading business. Money you put into your sole trading business at the start (i.e., capital contributions) isn't usually categorized as "Personal Income" in accounting terms. Instead, it's part of the equity or capital section of your business's financial statements.

Personal Expenses: These are the expenses incurred by you personally, not by the business. They include costs related to your personal life, such as groceries, rent or mortgage payments for your home, personal utilities, entertainment, etc. Money transferred from your business account to your personal account isn't categorized as a "Personal Expense" within your business's accounting. Rather, this transfer represents a withdrawal or distribution of profits to you as the business owner.

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Regards,
Earl

Pal2Earl_HD 

Traditionally, a Company would have say $2 of Capital and further monies lent to the Company by the Director would be a loan.

I believe a Sole Trader should use a Equity Account called Owners Capital/ Drawings. It may be that 2 accounts are used eg Owners Capital and Owners Drawings.

Duncan

I'm confused about this too - as I would have expected Funds Contributed and Drawings to be standard accounts in the chart of accounts. I'm confused in the same way as Pal2 who initiated this question.

Are ... Funds Contributed - the sames as MYOB's Personal Income, and;

Are Drawings - the same as MYOB's Personal Expenses, or ... the other way around.

As stated, I'm surprised these aren't standard in the Business Lite chart of accounts as a lot of users would be sole traders and these are pretty important categories.

Can anyone clarify - this shouldn't be a question to incur accountant costs - it is all just symantic but wanting to get it the right way around.

Thanks in advance. Much appreciated!

Thanks - very helpful -

So ... I'm called them as follows! 

• owners drawings/personal expenses
•  owners funds introduced/personal income

Appreciate your help!