Bookkeeping for a Proprietorship?

Question

When bookkeeping for a proprietorship and they have a busniess bank account do you have to reconcile the account? They have been making alot of personal purchases through the business account, which I cannot put in, but does it really matter becasue they have to claim it all on there tax return anyways?

Answer 1

Yes, you should do the reconciliation.Since you've already identified the discrepancies, you could explain it to them (if they don't know already) that just because the amount come out of their "business account" doesn't make the expense a "business expense", and suggest ways that they can make it easier for both of you to track business expenses in the future. If they are already aware that the expenses aren't deductible, it will be even easier to explain to them that the extra transactions require extra work, and (hopfully) that they've had to pay extra for this.

Answer 2

You should reconcile the account.

Debit the amounts to the owners drawing account the way you would if he was writing checks to himself.

....then, tell him to stop it!