Get Your QuickBooks Questions Answered

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 mailto:Karen@smallbusinessadvisor.biz, and getting answers here in this column.

Q: I have used my business checking/debit card to make a number of purchases that were for me personally and have nothing to do with my business – how can I fix this?

A: You have two choices: You can reimburse the company for those expenses and put them in an account (equity) called Personal Expense and then when you make the deposit you apply that to the same account.  Or you can just leave them in the Equity account and this will become income to you at the end of the year.

Q: I just started to use QuickBooks and when I look at my chart of accounts I found an account called “Opening Balance Equity”. I did not create this account. How did it get there and what is it used for?

A: The account “Opening Balance Equity” is not a General Accounting Practice account; it is an account that is generated by QuickBooks specifically for setting up specific accounts that will have a beginning balance. For instance: bank accounts, credit card accounts, mortgages and several other types of accounts. QuickBooks “assumes” that the brand new user may not know where to put the off-setting entry when setting up a bank account or other type of account with an existing beginning balance. It allows the user to get their accounts set up and begin using QuickBooks. Later, your CPA will come along and re-class those amounts to their proper place in your books. This account should always have a zero balance.  You should never post anything directly to this account.

Q: I am having difficulty reconciling my bank account.  I have reviewed each entry and have found that several of my deposits do not match the amount the bank has for them. How do I see all my detail on each deposit without clicking on each one to open it?

A: Go to Reports – Banking – and look for a report called “Deposit Detail”. It will give you line-by-line detail of your deposits in one report and you can compare that to what you have in the bank.  If you make copies of the checks for each deposit and put it with your deposit ticket on each one, that will give you a paper backup of what you actually gave the bank. This way if the bank made the error then you have details of what you produced to the bank.