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Ethan Zhou
April 24, 2019
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If my client's company was got scammed $2,500, how should I record that loss in quickbooks? Thanks!

  • April 24, 2019
  • 2 replies
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If my client's company was got scammed $2,500, how should I record that loss in quickbooks? Thanks!

Best answer by Rustler

@Joyce_P 

If the company got scammed for 2500, there is no bad debt, the money is gone.

 

@Ethan Zhou 

Create an expense account called fraud expense

 

Since you did not say what the payment was for, you will have to make the decision in the journal entry

debit fraud expense

credit the account that the fraud payment was used for

explain in the memo block

2 replies

J
Joyce_P
April 24, 2019

Hello there, Ethan Zhou.

 

There are times when a supposed income becomes a loss, you can write off bad debts in recording them. This way, the invoices will be cleared out and the net profit will be reduced. 

 

Here's how:

  1. Review the Accounts Receivable Aging report.
  2. Create an account for bad debts.
  3. Create a product/services item for bad debt.
  4. Create a credit memo for the debt.
  5. Apply credit memo.

These steps also have sub-steps, please refer to this article to see them: How to Write Off Bad Debt.

 

Also, I'd suggest consulting an accountant  to be advised on how to record the scammed or loss amount. 

 

I'd be right here if you need more help.

    Rustler
    RustlerAnswer
    April 24, 2019

    @Joyce_P 

    If the company got scammed for 2500, there is no bad debt, the money is gone.

     

    @Ethan Zhou 

    Create an expense account called fraud expense

     

    Since you did not say what the payment was for, you will have to make the decision in the journal entry

    debit fraud expense

    credit the account that the fraud payment was used for

    explain in the memo block

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