Year End Business Health Check UpPosted on November 26, 2013 by
It is the goal of this column to answer questions about QuickBooks and how it is used in the REI arena. Know how to record transactions in the proper way and have your set of books in good shape when it comes time for taxes. It is our intention to do this by you the members submitting questions to Karen@smallbusinessadvisor.biz , and getting answers here in this column.
You are invited FREE!
Come to the Small Business Group for a
Year End Business Health Check Up!!
Do you know what your Safe Harbor is?
Do you know when you have reached that point in your business?
Are you getting all the tax deductions you are entitled to?
How are you keeping a good set of books?
Are you working with a Payroll Company?
Are you in compliance on 1099 employees?
Are you currently working with a CPA?
Reserve your FREE Ticket here: http://bit.ly/1bRmeKO
Q: I received a “Refundable Security Deposit” from my tenant. How do I enter this into QuickBooks?
A: This is a Liability account that you will need to payout at some later date. In your chart of accounts you should have a Liability account set up for Security Deposits Escrow – or some name that sets it apart from security deposits you paid that are owed back to you (which is an Asset). In the deposit window, instead of showing this as income you should go to this special Liability account and book it to that account. When it is time to pay the tenant the money back, less any damages if need be, you will write the check out and expense it also to this Liability account to clear the money from the account.
Q: If I change the reporting basis in the Reports & Graphs preferences from Cash to Accrual what reports will this change?
A: When you change your reporting basis the main area that will change is the Balance Sheet. On a Cash basis it will not show the Accounts Receivable or the Accounts Payable; on an Accrual basis these two accounts do show up. While you can modify reports back and forth between Cash and Accrual, any reports you run for your CPA or for any loan request or other reason you are providing financial reports, you should always run them the same basis that you file your tax returns. This way your balance sheet at 12/31 of any given year should match those tax returns you are providing.