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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Annie Allen: Hi, using QB contractor edition I need to ask how to record closing costs paid for a home purchase please. Thanks! Annie
Jeff: i used $1,000 from my personal savings to register a new company and also bought some office supplies and equipments before i start my business. After 3 months i opened current account from a local bank and deposited $3,000. I don't have any accounting knowledge, so to start using QB should i just deposit that $1,000 and record all those expenses and continue? Please help