What is a valid way to record a loan from the owner in QuickBooks Online?

• A. Create a Journal Entry or deposit to cash and credit the liability or equity account; ensure double-entry increases cash and records liability/equity.
• B. Write off the loan as a bad debt.
• C. Record as an expense.
• D. Record on the income statement.

Answer: (A)

When the owner lends money to the business, it’s a financing activity that increases both cash (an asset) and a corresponding liability or equity account. In QuickBooks Online, you reflect this by debiting cash and crediting a liability account (like Owner’s Loan Payable) or crediting Owner’s Equity if it’s treated as an investment. A Journal Entry or a Bank Deposit can accomplish this, ensuring the books stay in balance with proper double-entry accounting. This is not an expense or income, and it doesn’t appear on the income statement; the effect sits on the balance sheet as cash plus a liability or equity to the owner.