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A deposit is not always a sale: document where the money came from
Use deposit evidence to distinguish customer receipts, owner funding and borrowing before assigning an accounting category.
Applies to: U.S. business bookkeeping; evidence review before classification. Entity-specific equity and loan treatment requires the responsible accountant.
A bank statement shows that money arrived. It may not explain why. If an owner transfers funds into a business account on the same day a customer pays an invoice, similar-looking deposits can represent different events.
The IRS’s Publication 583 recommends identifying deposit sources, including business income, personal funds and loans. The practical worksheet below makes that evidence available to the person deciding the accounting treatment.
Build a source worksheet before selecting a category
- Record the bank date, amount, currency and a short internal reference.
- Identify the sender and obtain an explanation of the purpose.
- Connect customer receipts to the relevant invoice or sales evidence.
- For owner-provided funds, record the intended arrangement and obtain supporting approval or documentation.
- For borrowing, retain the lender’s reference, agreement and funding evidence.
- Mark unresolved items for review, with a named owner and next action.
A transfer description such as “funds” does not establish whether the money is a contribution, a loan or a customer payment made through an owner’s account. Preserve the explanation instead of letting a bank rule decide from that word alone.
Three deposits, three evidence trails
In a hypothetical week, a business receives $900 against an invoice, $2,000 transferred by its owner and $5,000 from a lender. Its worksheet totals $7,900, agreeing with the bank. It also contains three different evidence references. Treating that entire total as sales would discard the information needed to explain the funding.
The reviewer signs off each classification only after checking the underlying facts. If the owner’s intention remains unclear, the unresolved question stays visible rather than being hidden inside a convenient category.
Make the decision traceable
Retain the reviewer, decision date and resulting bookkeeping reference. A later correction should explain what new evidence changed the decision. Our bookkeeping and accounting service can help organize that handover.
Deposit-source questions
Does the sender’s name prove the accounting category?
No. Connect the sender to the purpose and supporting documents.
Should uncertain owner funding automatically become equity?
No. Obtain a reviewed decision appropriate to the entity and arrangement.
Must I retain an entire personal statement?
Collect only the relevant evidence needed for the review and store it securely.
Prepared by The Solution Bridge. Sources checked 2026-10-09. Educational guidance; verify current product instructions and applicable requirements.
Useful answers
Bookkeeping FAQs
What should I prepare before a bookkeeping review?
Start with the period, bank and card statements, sales and purchase records, and a list of unresolved transactions. Agree a secure document-sharing method before sending files.
Should I guess a category for an unclear transaction?
Keep it on an exception list with its date, amount and question. Ask the responsible person for supporting evidence before approving the final treatment.
Can bookkeeping support include catch-up work?
Catch-up work can be discussed separately. The period, missing documents, software access and review responsibilities determine the scope.
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