Sole trader Bank account

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Arul
Arul Registered Posts: 8 New contributor 🐸
in General accounting discussion
Can anyone tell me how we treat sole trader accounts if they have business bank account.
I have a new client who am preparing balance sheet for, he has buiness bank account however does not use it wholly for business purposes, he seems to put all his personal transactions through as well.
Can anyone advise what to in such a situation. It is such small accounts.

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  • Poodle
    Poodle Registered Posts: 711 Epic contributor 🐘
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    Hi

    I would suggest posting any money withdrawn for private use as drawing.

    Poodle
  • groundy
    groundy Registered Posts: 495 Dedicated contributor 🦉
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    If there are a large number of personal items and very little balance sheet activity. It may be worth ignoring the pvt transactions and preparing the accounts on an income and expenditure basis.

    This depends on the fee and what has been agreed with the client. I would usually advise them that they will be incurring unneccasary bank charges by using a business account for personal items and that a weekly or monthly transfer should take place to a seperate private account.
  • Arul
    Arul Registered Posts: 8 New contributor 🐸
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    he has 1000 worth of fixed assets and 1 accrual this is all the balance sheet activity. the profit and loss has been prepared in vt transaction. All income and expenditure has been posted to bank at present. should i just debit drawings and credit bank and ignore? little unsure.
    thanks

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