Double Entry with no Bank

Hi all,
My mind's gone blank after not having to do double entry for months.
My wife's just set up a self employed cleaning business and I'm doing her bookkeeping. She doesn't operate a business bank account, so for now I've handled income in this way:
CR Sales -> £50
DR Drawings -> £50
It's on the principle that money would normally go Sales -> Bank -> Drawings anyway, and since there is no bank, she's kinda pocketted the money instantly.
However, what would be the entries for her weekly National Insurance Class IIs?
I'm imagining it would go this way:
CR NICs Owed -> £2.40
DR NIC Expense -> £2.40
(4 weeks later, she pays as below)
DR NICs Owed -> £9.60
CR Capital -> £9.60
That would reflect that by drawing out 100% of the income she's leaving a gap of £2.40 a week in the business which as owner she later has to fill by reinjecting capital back into it. Am I reasoning this out properly?
The only issue that crossed my mind is whether I should CR Capital or Drawings, since in a sense it's drawn funds she's reimbursing rather than a completely new capital injection.
It's not a huge issue but it'll bother me if I don't get it sorted out, lol.
Chris
My mind's gone blank after not having to do double entry for months.
My wife's just set up a self employed cleaning business and I'm doing her bookkeeping. She doesn't operate a business bank account, so for now I've handled income in this way:
CR Sales -> £50
DR Drawings -> £50
It's on the principle that money would normally go Sales -> Bank -> Drawings anyway, and since there is no bank, she's kinda pocketted the money instantly.
However, what would be the entries for her weekly National Insurance Class IIs?
I'm imagining it would go this way:
CR NICs Owed -> £2.40
DR NIC Expense -> £2.40
(4 weeks later, she pays as below)
DR NICs Owed -> £9.60
CR Capital -> £9.60
That would reflect that by drawing out 100% of the income she's leaving a gap of £2.40 a week in the business which as owner she later has to fill by reinjecting capital back into it. Am I reasoning this out properly?
The only issue that crossed my mind is whether I should CR Capital or Drawings, since in a sense it's drawn funds she's reimbursing rather than a completely new capital injection.
It's not a huge issue but it'll bother me if I don't get it sorted out, lol.
Chris
0
Comments
You then wouldn't have to worry about the dilemma of entering the payment of NI through "Drawings" or "Capital".
I agree
The simplest method would be to use a 'cash in hand' account.
Burg
I agree too!
"But I'm self employed and I only pay it because I'm self employed so it's a business expense, and I'll put it in every year, despite you advising me not to every year" ~ Mr Client
Had one client code it to "Professional fees"....!