What is the best way to record a cash investment in your books?
Is it better to do it all at once or gradually over time?
Should you even be making a cash investment in the first place?
This article will answer these questions and more.
The content of this article was created by Trisha Lafevers, an expert accountant.
How to Properly Record a Cash Investment .
A cash investment made by the owner should be recorded in the, “Cash” section on the balance sheet.
The amount of money that was invested should then be added to an account titled “Investment.”
This will allow you and your accountant to easily track all incoming investments and reinvestments.
It is also important that this transaction is classified as a current asset on your books because it represents property currently available for use or sale.
If not correctly accounted for, these transactions can result in inaccurate financial statements.
Which could lead to serious legal issues down the line if discovered during an audit or tax examination.
If you need help with accounting services such as bookkeeping, contact me.