Questions answered by tax and business professionals.

Separate accounts make transactions easier to document, reconcile, and explain. They also help avoid accidentally treating personal spending as a business expense.

A write-off removes or reduces an asset that is no longer expected to provide value, such as an uncollectible receivable. A write-off does not automatically mean a tax deduction.

Owner contributions add the owner's funds to the business and generally affect equity, while sales arise from customers. Keep the supporting bank and ownership records.

Loan proceeds usually create a repayment obligation, rather than sales revenue. Record the loan, interest, and repayments separately based on the agreement.

The general ledger records transactions by account and supports the balances shown on financial statements. Detailed entries should be traceable to source records.

A trial balance lists general ledger accounts and balances to check whether debits equal credits. It does not by itself prove every transaction is correct.