MaryEllen
New Member

Business & farm

Partners/members have accounts called equity. When you put money into the business, you increase the equity account and the bank account. When you pay a bill, you decrease cash and increase the expense account (not affecting the equity account.) If you pay an expense by credit card, you increase the credit card balance and increase the expense (again not affecting the equity account).  If you are following all these rules, you should have equity accounts equal to the amount of cash to added to the business. At the end of the year, there is a closing entry that reverses the total income and expenses and adjusts equity.
In TurboTax Business, there is interview for the equity accounts to help you get the right balance, but basically it should end up as the amount of cash minus the balance on the credit cards, probably a negative number at this time.