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Journal entry debit from "bank" account shows as a deposit to the bank. Going to (credit) "Payable" account (where it shows as an increase)

Forum|Forum|7 years ago
December 11, 2018
5 replies
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Trying to cleanup a previous mistake - -

Need to "fund" a payroll "payable" account from a bank account. (Short story: It wasn't funded properly when a paycheck was written, so now the payable acct is negative after properly paying withholding).

I did a journal entry - to DEBIT the bank acct, and CREDIT the "Payable" account. BUT the bank account now shows the "debit" as a deposit. Did something stupid I'm sure. Should a "Transfer" from the bank to "payable" have been used instead?

QuickBooks Desktop

Best answer by qbteachmt

What are you calling a "payable" account? Is this AP?

AP requires a Name. You don't use JE when a transaction needs a Name associated. So, your "payable" account must be some other type of Liability account? Credit Card? Debt?

"Why did a DEBIT to the checking account show as a DEPOSIT?"

Debits increase Asset accounts and Decrease liability and equity accounts. That is ALWAYS how it works.

Moving money OUT of bank = Write Check, for using QB. You list this "other account" on the Expenses tab.

Checks Credit Bank and Debit anything you listed on the Expenses tab, or any account to which the Item(s) is linked for using Items on the Items tab, for this Purchase or Payment transaction.

If your Bank increased, the "other account" is the Credit. A credit to a Liability account INCREASES what you owe. For example, I take out a Loan for Cash to Bank =

Deposit to Banking (debit)
Loan balance increases (credit)

I take out a Loan for Car = Debit (increase) new Fixed Asset

I have a Car Loan = Credit (balance is higher)

Then, pay down the loan principal:

Check = credit Bank $100 (decreases my balance)

Loan = debit (loan balance goes down by $100)

Using QB means you DON'T need to think about Debits and Credits and using JE for Banking is not the right tool.

If you paid out funds, then use Banking Menu > Write Check.

Example: Prepay a supplier = Write Check, posting to an Other Asset account. Bank goes down (credit) and Other Asset goes up (like an Escrow account, they have my money).

And paying a "payable" often means I already used Enter Bill (AP) and need to use Pay Bills. JE cannot clear AP.

This is a Program with an Interface = set of Tools.

qbteachmtAnswer

What are you calling a "payable" account? Is this AP?

AP requires a Name. You don't use JE when a transaction needs a Name associated. So, your "payable" account must be some other type of Liability account? Credit Card? Debt?

"Why did a DEBIT to the checking account show as a DEPOSIT?"

Debits increase Asset accounts and Decrease liability and equity accounts. That is ALWAYS how it works.

Moving money OUT of bank = Write Check, for using QB. You list this "other account" on the Expenses tab.

Checks Credit Bank and Debit anything you listed on the Expenses tab, or any account to which the Item(s) is linked for using Items on the Items tab, for this Purchase or Payment transaction.

If your Bank increased, the "other account" is the Credit. A credit to a Liability account INCREASES what you owe. For example, I take out a Loan for Cash to Bank =

Deposit to Banking (debit)
Loan balance increases (credit)

I take out a Loan for Car = Debit (increase) new Fixed Asset

I have a Car Loan = Credit (balance is higher)

Then, pay down the loan principal:

Check = credit Bank $100 (decreases my balance)

Loan = debit (loan balance goes down by $100)

Using QB means you DON'T need to think about Debits and Credits and using JE for Banking is not the right tool.

If you paid out funds, then use Banking Menu > Write Check.

Example: Prepay a supplier = Write Check, posting to an Other Asset account. Bank goes down (credit) and Other Asset goes up (like an Escrow account, they have my money).

And paying a "payable" often means I already used Enter Bill (AP) and need to use Pay Bills. JE cannot clear AP.

This is a Program with an Interface = set of Tools.

J

Jea2252

I agree. I have the same issue. I have setup the liability account with a negative balance. But when making payments using the check feature as all these posts recommend, It increases the total balance in the liability account

J

JonpriL

Hi there, @Jea2252!

It seems you have started a new thread saying you need help with making a liability payment by writing a check. My colleague already shared her response with the steps needed on how to accomplish your goal.

If you haven't yet, I've included this link for you to easily check her reply:

https://quickbooks.intuit.com/learn-support/en-us/account-management/paying-a-liability-with-a-check/00/947633

Let us know in the comments below if you got other concerns. The Community space is always available and ready to assist you. Have a good one!

D

docsbp29

To do a journal entry click on my company the make journal entries. Your credit entries will be to the correct payroll liability accounts Your debits will be to the accounts they erroneously used. If that doesn't help attach the specifics details of what was originally done and Ill see if I can send you the correct journal entry.

D

docsbp29

You said withholding was properly paid so leave that alone. Go in and change the payroll check to properly fund the liability account.

R

rdiaz108Author

Long story - but that is not an option in this case (never let anyone touch your books!!) So I'm stuck with a less desirable option - how can I do a journal to fund the liability account? or can't I. As I said, the "debit" shows as a deposit in the "bank" account.

qbteachmt

You can't use JE for payroll and expect this to work.

QB Payroll is changed either on the paycheck details or by using the Adjust Liabilities function. There also is a button there for the option to Affect Accounts, or just to fix the payroll item(s).

JE don't affect PR Items.

" As I said, the "debit" shows as a deposit in the "bank" account."

If the PR Item is set up incorrectly, you can just edit and fix it, and QB will offer to move no data, ALL date, or ONLY data as of a specific date, for you.

R

rdiaz108Author

I must be dense...All I need to do is move money out of my checking account and move to the payable account to offset a negative balance.  (I "can't" adjust the offending check for reasons I can't address here.)

Why did a DEBIT to the checking account show as a DEPOSIT?

This is what I did:

Acct-23/GENJRNL
account              Debit     Credit
BANK(checking)    70
Payable  Acct                     70

Result:
In BANK Check register
   Acct-23/GENJRNL    (no name)     payment=blank       Deposit = 70
In Payable acct:
                                                                                                        Initial Balance =-70
   Acct-23/GENJRNL  (payee blank)    Increase=70      Decrease=blank   Balance= -0

qbteachmt

And if we are still on the Payroll error, you don't need to Adjust the check. But you also Don't use JE.

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