Credit Card Q&A In QuickBooks
Sometimes new customers of QuickBooks have questions about how bank credit cards perform in the software. Here are some helpful attacks of details about this subject.
Aren't Credit score Cards Cost Accounts?
No. In the Graph of Information, responsibility accounts signify amounts of obligations to others. Bank credit cards are responsibility accounts, because whenever we use our credit credit cards, we owe cash to the bank bank. One nice feature of QuickBooks is that it allows us to set up a special kind of consideration for credit credit cards, called, needlessly to say, "Credit Card."
But make no mistake: this kind of consideration is a responsibility, and not a cost. When you buy something with a bank credit cards, you are paying for it with obtained cash, and the cash is obtained from the bank bank. This is why credit credit cards are considered responsibility accounts.
So When Are Costs Recorded?
When using the bank credit cards, the expenses are documented in the Record Credit score Card Charges display, in the lower half of the display, in the Costs tab. Let's say you went to Workplace Store and purchased some computer paper with your bank credit cards. Two things occurred when you did this:
1. You suffered a cost for Workplace Supplies
2. You went into debt to the bank credit cards company
When using the Get into Credit score Card Charges display, both of these activities are documented on only one display.
How Does This Correspond with Dual Access Accounting?
This above deal is an excellent example of double entry bookkeeping. Remember this and it will help you a lot in QuickBooks: every deal in QuickBooks is double entry - it records two activities with only one deal. If you understand this, and understand what those two activities are in each display, it will save you lots of your efforts and energy and effort and trouble in the long run.
Credit Card Users, Credit score Card Information. . . How to Set Up in QuickBooks?
Even if you have several bank credit cards customers for a primary consideration, my recommendation is to have only one consideration set up in QuickBooks for all customers. An alternative is to set up sub-accounts under a mother or father consideration, one sub-account for each bank credit cards customer. But I think the individual consideration will be easier to handle.
The only purpose to set up sub accounts is for some inner, management purpose - do you really need to monitor the individual responsibility levels out and expenses by bank credit cards user? How useful will that details be? The perform to keep a record of it this way needs to be balanced out by the effectiveness of the details.
Keep in mind, too, that three individual payments will need to be paid for each of the individual sub-accounts - this will ensure that the responsibility levels out in QB will stay correct. My recommendation is to keep life simple and only use only one bank credit cards responsibility consideration in this situation.
Sometimes new customers of QuickBooks have questions about how bank credit cards perform in the software. Here are some helpful attacks of details about this subject.
Aren't Credit score Cards Cost Accounts?
No. In the Graph of Information, responsibility accounts signify amounts of obligations to others. Bank credit cards are responsibility accounts, because whenever we use our credit credit cards, we owe cash to the bank bank. One nice feature of QuickBooks is that it allows us to set up a special kind of consideration for credit credit cards, called, needlessly to say, "Credit Card."
But make no mistake: this kind of consideration is a responsibility, and not a cost. When you buy something with a bank credit cards, you are paying for it with obtained cash, and the cash is obtained from the bank bank. This is why credit credit cards are considered responsibility accounts.
So When Are Costs Recorded?
When using the bank credit cards, the expenses are documented in the Record Credit score Card Charges display, in the lower half of the display, in the Costs tab. Let's say you went to Workplace Store and purchased some computer paper with your bank credit cards. Two things occurred when you did this:
1. You suffered a cost for Workplace Supplies
2. You went into debt to the bank credit cards company
When using the Get into Credit score Card Charges display, both of these activities are documented on only one display.
How Does This Correspond with Dual Access Accounting?
This above deal is an excellent example of double entry bookkeeping. Remember this and it will help you a lot in QuickBooks: every deal in QuickBooks is double entry - it records two activities with only one deal. If you understand this, and understand what those two activities are in each display, it will save you lots of your efforts and energy and effort and trouble in the long run.
Credit Card Users, Credit score Card Information. . . How to Set Up in QuickBooks?
Even if you have several bank credit cards customers for a primary consideration, my recommendation is to have only one consideration set up in QuickBooks for all customers. An alternative is to set up sub-accounts under a mother or father consideration, one sub-account for each bank credit cards customer. But I think the individual consideration will be easier to handle.
The only purpose to set up sub accounts is for some inner, management purpose - do you really need to monitor the individual responsibility levels out and expenses by bank credit cards user? How useful will that details be? The perform to keep a record of it this way needs to be balanced out by the effectiveness of the details.
Keep in mind, too, that three individual payments will need to be paid for each of the individual sub-accounts - this will ensure that the responsibility levels out in QB will stay correct. My recommendation is to keep life simple and only use only one bank credit cards responsibility consideration in this situation.
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