Consultation on Accounting Treatment of Expenses Before and After Company Establishment
A sole owner of a newly established company consults: how expenses before and after the registration date should be recorded in Opening Balance Equity and Owner Equity accounts respectively, and whether GST paid personally after the registration date can be recorded.
Hello everyone,
I recently registered a company and am currently troubled by how to correctly record various expenses. I am the sole owner of the company, which was registered on May 27 of this year. Since my business credit card has not yet arrived, all expenses have been paid out of pocket by me personally.
The specific issue is as follows:
- Should I record all expenses before the registration date (May 27) into the "Opening Balance Equity" account, and expenses on and after May 27 into the "Owner Equity" account? Is this approach correct?
- For GST (Canadian Goods and Services Tax) incurred before May 27, I do not plan to record it; but for GST incurred on and after May 27, even if paid personally by me, can it also be recorded normally? Although this is not a major issue, I still want to confirm.
Thank you all for any information you can provide!