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R
reolsen
March 9, 2019
Solved

Credit Cards, Importing, and Allocating to Expense Accounts

  • March 9, 2019
  • 2 replies
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We use the cash basis of accounting and QuickBooks Desktop.  My chart of accounts includes a business credit card liability account and various associated expense accounts (including copying, scanning, and binding).  I downloaded the first monthly credit card statement today, and it included one transaction, a February 1 charge for copying, scanning, and binding.  I paid the February credit card balance owing by a March 8 transfer from a bank account.  Ultimately, when I generate a P&L statement for March, I would like the payment of the February credit card balance to be allocated to copying, scanning, and binding.   

 

I am unsure whether I should book the downloaded February 1 charge to the liability account or the expense account.  Similarly I am unsure whether the March 8 transfer of cash out of the bank account should have the liability account or the expense account as its contra account

 

Can you walk me through the appropriate to book the monthly charges and payments?  Thank you.

 

reolsen

Best answer by

Credit card charges are considered cash basis events when the charge is made, not when the credit card account balance is paid.  So, for cash basis reporting, record your credit card charges on the dates you make purchases with the card.

2 replies

A
Anonymous
Answer
March 9, 2019

Credit card charges are considered cash basis events when the charge is made, not when the credit card account balance is paid.  So, for cash basis reporting, record your credit card charges on the dates you make purchases with the card.

    R
    reolsenAuthor
    March 10, 2019

    Thanks, and I see that the expense account entry is made at the same time as the liability is created.  Got it now.

    J
    JLynnesLLC
    August 10, 2021

    I am entering a credit card account with multiple authorized users.  I would like to allocate the charges to the user that made the transaction without creating sub accounts.  What would be the best way to do this or the best field to enter the user's name?  Memo, Item, Cost, Ref? 

     

    For different purposes, i.e. if we would like to run reports by user 

     

    Thank you!

    R
    RCV
    August 10, 2021

    Thanks for checking in with us, JLynnesLLC.

     

    We can enter the user's name that made the transaction in the Memo field when creating credit card charges. Heres's how: 

    1. From the Banking menu, select Enter Credit Card Charges.
    2. Enter the user's name in the Memo field. 
    3. Choose the credit card account from the Credit Card dropdown.
    4. Purchase/Charge is the default. If you want to record credit or refund you received through the credit card, select the Refund/Credit instead.
    5. Choose the vendor from the Purchased From ▼ dropdown.
    6. Select the date.
    7. Tap the Expenses or Items tab and enter the expenses/items you want to track.
    8. Press Save & Close. 

     

    If you need to enter an item’s description that will show automatically in the credit card charges Description column, just put the details on the item’s setup. The information that appears in the Description column from the credit card charge is based on what’s entered in the Description on Purchase Transactions field. Let me show you how: 

    1. Go to Lists at the top menu bar.
    2. Choose Item List.
    3. Select the item you’re working on.
    4. Enter the product/item’s information in the Description on Purchase Transactions field box.
    5. Press OK. 

     

    To learn more about setting up and paying credit card accounts in QuickBooks, just follow the steps and details in the Set up, use, and pay credit card accounts article. 

     

    Visit our Sales and customers page for more insight s about managing your company's income and customers.

     

    You can always update us on the result after performing the steps in the comment below. I'd like to ensure this is resolved for you. You have a good one. 

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