Bookkeeping Advice

[gouldie0]

Hi,

I have a query, my client who is a sole trader has used some of his own materials which were previously purchased by his business to complete an extension on his home.

How do i show this in his books, do i treat it as a sale and create a debtor and await a payment to be made to pay for the materials.

Any help would be much appreciated.

Kind Regards

Neil

[Zeno]

No, you should remove the value of the materials at cost from purchases and show as drawings. As a sole trader he cannot trade with himself or owe himself money.

You should warn you client about keeping private transactions separate from his business as it gives HMRC an opening that can be difficult to disprove.