We deduct health insurance premiums from our workers payroll. Those withholdings go into a liability account in our school's QB account until I pay the health insurance invoice.
I accidentally paid the invoice from the church's QB account and not the school's.
How do I clear the liability in the school account since I paid the invoice from the church account? I am not sure what line items to use on a Journal Entry.
"How do I clear the liability in the school account since I paid the invoice from the church account? I am not sure what line items to use on a Journal Entry."
There's no need for a journal entry. Are you planning on reimbursing the church account from the school account? It's definitely best to do that. To clear the liability, issue payment from the school to the church and assign the liability account to the payment just like you're paying the health insurance company. Then, deposit the payment into the church's account and assign the same account to the deposit that was assigned to the original payment made by mistake. If it's a liability account, that account should be understated since you assigned that account to the payment and the deposit should correct it.
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