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QuickBooks - How To Record Certain Transactions

Written by: Janie Palmer

Article Overview: Day to day tasks are one thing, but special transactions require some expertise to record properly.

QuickBooks - How To Record Certain Transactions

1. Let's say you just got a loan. How do you record this? First of all, did the money go to the bank, or did you make purchases with cash? Getting the details is important. If it's a loan and the money is in the bank, then record as follows:

Bank + debit
Long term liabiliy - credit

If equipment purchases were made, then record this way:

Equipment (asset) + debit
Long term liability - credit

When you make payments, record the loan payment against the liability account, and include your interest payment as an expense for interest expense. Don't touch the asset account. You must keep this figure to show the "worth" of your purchase.


2. What if you received a rebate or refund check? This is NOT income. Record the deposit against the account that the original check was writtten from. If you got a refund check for insurance, then use insurance account. If it was cost of goods sold or some other expense, then use that account.


3. Company credit cards need to have their own account, so you can record payments and purchases. This should be RECONCILED monthly just like your bank statement. This will save time at year end for your accountant.


4. If you have more than one company, and you let each company "borrow" funds from the other, BE CAREFUL. Make sure these particular accounts are set up correctly.
Company A borrows from company b. Company A should show a loan (liability). Company B should show an asset (loans to company A). This also applies if you give employee advances. This is an asset.

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Article Tags: accountant, asset account, asset loans, b company, bank debit, company b, credit cards, equipment asset, equipment purchases, insurance, insurance account, interest expense, interest payment, liability account, liability company, loan payment, refund check, t touch, term liability, year end



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