asset.

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.

Author:.

I am a certified QuickBooks pro advisor. I started my accounting career in 1979 fresh out of high school. I worked for various cpa firms prior to starting Quick Bookkeeper Incorporated in February 2001. The continuing focus is to help business owners with their accounting questions and their frustrations regarding QuickBooks software. My staff and I realize there is a link missing between a business and its accountant. We are here to fill that void for you. Our services include: QuickBooks softw...

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Have a question for Janie?

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heidi
23rd May 2014 10:06am
I take in customer deposits for product ordered. Once the product is rec'd by the customer I know I need to make a journal entry debiting it customer deposits but what account do I credit?

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parveen
27th May 2014 12:50am
Hi Janie, Our company has recently purchased share purchase of another company from the current holders. How do I record this into QBO please..? Many thanks in advance.

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Susan
27th May 2014 9:33pm
we have booth rental in our salon. The stylists use our credit card machine. At the end of the week we need to give them back their money minus 5% credit card processing fees, What account is this charged to? Refund to Stylist? COG sold? It is definitely not income to the salon.
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Janie Palmer
28th October 2014 11:28pm
The funds from credit card sales is income to the salon, but offset by the 1099 expense to stylists and merchant fees for the processing.

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Kristi
2nd June 2014 4:47am
We sold one of our businesses on credit. We receive a monthly payment from the buyer for 60 months. How do I account for this in QB?

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Margaret
10th June 2014 11:14am
The business purchased an item for a friend using the Company credit card and debit card. The friend is going to make payments over the next four years to repay the company. How do I set that up in QuickBooks Pro?

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Erryyk
1st July 2014 3:14am
Hi Janie. i account for two separate companys owned by same individual. How do i record "Company A Purchases goods for Company A & B with same cheque" in quickbooks record

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Michelle
22nd July 2014 12:10pm
Hi Janie ~ We receive small payments from IFTA - Highway Use/Fuel Use Tax. How/Where should I apply these sorts for "refunds"? Thanks

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Elizabeth
25th July 2014 5:47am
How to show an income received on behalf of someone.....which has to be paid later??Please help

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Elizabeth
25th July 2014 5:48am
How to show an income that has been received on behalf of someone......which has to be repaid later??

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Toni Austin
25th July 2014 9:04am
where do I put cable transfers and bank drafts in quick books

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Jaime
22nd September 2014 6:06pm
My company occasionally receives free goods from certain vendors. How should this be recorded in inventory for bookkeeping purposes.

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Michael Lucius
5th October 2014 9:59pm
Just getting going with Quickbooks online. Trying to reconcile bank. Problem is, to what do I record the monthly fee from my bank TO Intuit, FOR the Quickbooks software? I have asked this question a million different ways in Google and NADA!! Please advise....please.
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Janie Palmer
10th November 2014 7:50pm
Michael....create an expense account called "Computer Expenses-Intuit". This will record your online Qbks fee.

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spring keene
7th October 2014 3:47pm
My boss just sold a piece of land. We are receiving monthly payments for this land. They monthly payments are being put into his personal account (which is managed in quickbooks also) I am unsure what "account or category" to put in the "from account" section of the deposit info.

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Bill
28th October 2014 12:11am
QB Pro 2012 - paid contractors for repairs to condo units damaged by water. I recorded these payments against Liability account 1320 , Property Damage. Is this the proper way for handling this? Now we have a partial recover of the funds through an insurance claim against the master policy. How do I record that payment in QB so it offset that liability.
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Janie Palmer
28th October 2014 11:35pm
Hi Bill, what you want to do is record the deposit, but show it coming from the account #1320. that way, it's not treated as income.

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Janie Palmer
28th October 2014 11:37pm
It should be set up as an asset. it's not a liability, because the company doesn't owe it. the friend owes the debt, but it is an asset (company is the owner of the loan to friend). funds coming in to pay down the friend's loan should be recorded against the asset. hope this helps!

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Valerie
10th November 2014 7:08pm
I don't quiet understand how to record the refunds from insurance, credits from bank account or refund of overpayment. What do you mean by "use that account"? Can you explain it in detail?

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kelly
24th November 2014 9:06am
The business replaced an old computer cost $1250 and acc dep $416 with a new one costing $2550 including vat (20%). The business took the old computer for personal use at an agreed valuation of $700, vat implications on the disposal should be ignored. How do I record this in quickbooks??

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