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July 3, 2021
Question

Accidental transfer from personal to business account

  • July 3, 2021
  • 1 reply
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How can I record an accidental transfer from a Partner's personal checking to Business Checking and then a same day reversal from Business Checking to Personal?    I would like to record this as a transfer but do not want to add the Partner Personal Checking as an Account.

 

This was originally recorded as a credit and then debit to Owner Investment, but I prefer to record as a transfer.   Can this be done?

1 reply

July 3, 2021

Let me help you record the transfer by not adding it to the Partner Personal Checking as an account, pauker01. 

 

We can use a clearing Clearing Account to move money from one account to another account when you cannot move the money directly. This account has a balance of $0.00 because you always take out the same amount that you put in and it is also called a Barter or Wash Account. To set it up, follow the steps below:

  1. From the Lists menu, select Chart of Accounts.
  2. Right-click anywhere in the Chart of Accounts, then choose New.
  3. In the Add New Account window, select the Bank radio button.
  4. While you can choose from several types of accounts, the best is a bank account because of the following reasons:
    • You can pay into a bank account via Receive Payments or Make Deposits.
    • You can payout of a bank account via Write Checks or Pay Bills.
    • A bank account appears on the balance sheet and on the statement of cash flows to balances and changes in balances.
    • To allocate expenses to overhead or class using a zero check, you must use a bank account as your Clearing account.
  5. Tap  Continue.
  6. In the Account Name field, enter Clearing AccountBarter Account, a,  or Wash Account. Then, don't enter an opening balance.
  7. Press Save & Close.

 

To use a clearing account, see the Set up a clearing account article for the steps and details. Once you get your bank statements, compare the list of transactions with what you entered into QuickBooks. To reconcile your accounts so they match your bank and credit card statements, check out the Reconcile an account in the QuickBooks Desktop article.

 

I'd like to know how you get on after trying the steps as I want to ensure this is resolved for you. Just reply to this post and I'll get back to you. Take care always.