Hi Betty 

If there are two companies that are using the same bank account, which I will have to do two sets of financials for (each company individually), is it fine if I just split the bank statements according to their income and expenses? The two should then balance with the bank statements?

Kind regards,
Lance

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Hi Lance

They should rectify this situation as soon as possible, as each company is required to have its own bank account. With regards to recording what has happened to date: If the bank account is in one of the company’s names (e.g. Company A), then bank transactions should be captured in Company A. Any transactions that relate to Company B should be allocated to the inter-company loan account. Income and expenses in Company B should then be captured through the loan account with Company A (e.g. debit loan to/from Company A credit income). The inter-company loan accounts should then balanced at year-end.

If the bank account is in another party’s name, then all income and expenses should be contra’d with the loan account to/from the 3rd party.

Hope that helps!

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