Credit card expenses showing as Liabilities in QuickBooks
Is it normal in QuickBooks to have credit card expenses being shows as   liabilities? Is there a way I can correct this? If they are expenses they shouldn't be negative liabilities unless you overpaid your credit card by that amount. It sounds like perhaps when you linked the account the credit/debit mapping may have been mixed up. I've not used QB Online, but it looks like you might have to un-link the account, move all the existing transactions to 'excluded' and then link the account again and flip-flop the debit/credit mapping from what it is now. Hopefully there's an easier way. This QB community thread seems to address the same issue.
"Here's a very basic MySQL query I put together that does what I want for  income/expense report. Basically it reports the same info as the canned income/expense report, but limits it those income/expenses associated with a particular account (rental property, in my case).  My main complaint is the output ""report"" is pretty ugly. And modifying for a different rental property requires changing the code (I could pass parameters etc). Again, the main ""issue"" in my mind with GnuCash income/expense report is that there is no filter for which account (rental property) you want income/expenses for, unless you set up account tree so that each rental property has its own defined incomes and expenses (i.e. PropertyA:Expense:Utility:electric).  Hopefully someone will point me to a more elegant solution that uses the report generator built into GnuCash. THanks! SELECT a2.account_type , a4.name, a3.name, a2.name, SUM(ROUND(IF(a2.account_type='EXPENSE',-  s2.value_num,ABS(s2.value_num))/s2.value_denom,2)) AS amt FROM    (     SELECT  s1.tx_guid     FROM    gnucash.accounts AS a1         INNER JOIN gnucash.splits AS s1 ON s1.account_guid = a1.guid     WHERE   a1.name='Property A'         ) AS X     INNER JOIN gnucash.splits s2 ON x.tx_guid = s2.tx_guid     INNER JOIN gnucash.accounts a2 ON a2.guid=s2.account_guid     INNER JOIN gnucash.transactions t ON t.guid=s2.tx_guid     LEFT JOIN gnucash.accounts a3 ON a3.guid = a2.parent_guid     LEFT JOIN gnucash.accounts a4 ON a4.guid = a3.parent_guid WHERE   a2.name <> 'Property A' # get all the accounts associated with tx in Property A account (but not the actual Property A Bank duplicate entries.         AND t.post_date BETWEEN CAST('2016-01-01' AS DATE) AND CAST('2016-12-31' AS DATE) GROUP BY a2.account_type ,a4.name, a3.name, a2.name  WITH ROLLUP ; And here's the output. Hopefully someone has a better suggested approach!" Lots of business do work and buy products for their customers then invoice them later think of landscapers or IT professionals. They keep track of the work and products on post-its they stick on their desks. Need further help, contact QuickBooks Support team by visit our site - https://www.wizxpert.com/quickbooks-support-help-phone-number/ "One easy way to monitor costs in QuickBooks is to establish sub-bank accounts.   For example, you may have an asset account called ""State Bank"" numbered 11100 (asset, cash and cash equivalents, bank). Convert this to a parent account for a middle school by making subaccounts such as At budget formation, transfer $800 from Operations 11110 to Family Fun Committee 11130.  Then write all checks for Family Fun from the Family Fun 11130 subaccount.   For fundraising, transfer $0 at budget formation to the X Grade accounts.  Do deposit all grade-level receipts into the appropriate grade-level subaccounts and write all checks for the grades from the grade-level subaccounts.   The downside to the above is that reconciling the check book each month is slightly more complicated because you will be reconciling one monthly paper bank statement to multiple virtual subaccounts. Also, you must remember to never write a check from the parent ""State Bank"" 11100, and instead write the checks from the appropriate subaccounts." Because a paying down a liability and thus gaining asset equity is not technically an expense, GnuCash will not include it in any expense reports. However, you can abuse the system a bit to do what you want.  The mortgage payment should be divided into principle, interest, and escrow / tax / insurance accounts. For example: A mortgage payment will then be a split transaction that puts money into these accounts from your bank account: For completeness, the escrow account will periodically be used to pay actual expenses, which just moves the expense from escrow into insurance or tax. This is nice so that expenses for a month aren't inflated due to a tax payment being made: Now, this is all fairly typical and results in all but the principle part of the mortgage payment being included in expense reports. The trick then is to duplicate the principle portion in a way that it makes its way into your expenses. One way to do this is to create a principle expense account and also a fictional equity account that provides the funds to pay it: Every time you record a mortgage payment, add a transfer from this equity account into the Principle Payments expense account. This will mess things up at some level, since you're inventing an expense that does not truly exist, but if you're using GnuCash more to monitor monthly cash flow, it causes the Income/Expense report to finally make sense. Example transaction split: "You need one ""company file"" for each company that you want to track through QuickBooks.  Looks like, in your case, that is at least the PM and the PH (as you labeled them in your question).  The companies that just hold property and pay utilities might be simple enough that you don't need the full power of QB, in which case you might just track their finances on a spread sheet.  Subsidiary companies will probably appear as ""assets"" of some sort on the books of the parent company. This set-up probably does limit liability at some level, but it's going to create a lot of overhead for your that incurs some expense either in your time or in actual fees paid.  You should really consider whether the limitations on liability balance against those costs. (Think ahead to what you're going to do when you have to file taxes on this network of companies, whether you need separate insurance policies for each instead of getting one policy covering multiple properties, etc.)" Your account entries are generally correct, but do note that the last transaction is a mixture of the balance sheet and income statement.  If Quickbooks doesn't do this automatically then the expense must be manually removed from the balance sheet. The expense should be recognized on the balance sheet and income statement when it accrues, and it accrues when the prepaid rent is extinguished when consumed by the landlord, so that is when the second entry in your question should be booked. The cash flow statement will reflect all of these cash transactions immediately. You could classify the mortgage as a different assets class and then create automated additions and deductions to the account as deems fit. other than that quickbooks online is a bit fishy so it seems. "You report it when the expense was incurred/accrued. Which is, in your case, 2014. There's no such thing as ""accounts payable"" on tax forms, it is an account on balance sheet, but most likely it is irrelevant for you since your LLC is probably cash-based. The reimbursement is a red-herring, what matters is when you paid the money." "Exactly what accounts are affected by any given transaction is not a fixed thing. Just for example, in a simple accounting system you might have one account for ""stock on hand"". In a more complex system you might have this broken out into many accounts for different types of stock, stock in different locations, etc. So I can only suggest example specific accounts. But account type -- asset, liability, capital (or ""equity""), income, expense -- should be universal. Debit and credit rules should be universal. 1: Sold product on account: You say it cost you $500 to produce. You don't say the selling price, but let's say it's, oh, $700. Credit (decrease) Asset ""Stock on hand"" by $500. Debit (increase) Asset ""Accounts receivable"" by $700. Credit (increase) Income ""Sales"" by $700. Debit (increase) Expense ""Cost of goods sold"" by $500. 2: $1000 spent on wedding party by friend I'm not sure how your friend's expenses affect your accounts. Are you asking how he would record this expense? Did you pay it for him? Are you expecting him to pay you back? Did he pay with cash, check, a credit card, bought on credit? I just don't know what's happening here. But just for example, if you're asking how your friend would record this in his own records, and if he paid by check: Credit (decrease) Asset ""checking account"" by $1000. Debit (increase) Expense ""wedding expenses"" by $1000. If he paid with a credit card: Credit (increase) Liability ""credit card"" by $1000. Debit (increase) Expense ""wedding expenses"" by $1000. When he pays off the credit card: Debit (decrease) Liability ""credit card"" by $1000. Credit (decrease) Asset ""cash"" by $1000. (Or more realistically, there are other expenses on the credit card and the amount would be higher.) 3: Issue $3000 in stock to partner company I'm a little shakier on this, I haven't worked with the stock side of accounting. But here's my best stab: Well, did you get anything in return? Like did they pay you for the stock? I wouldn't think you would just give someone stock as a present. If they paid you cash for the stock: Debit (increase) Asset ""cash"". Credit (decrease) Capital ""shareholder equity"". Anyone else want to chime in on that one, I'm a little shaky there. Here, let me give you the general rules. My boss years ago described it to me this way: You only need to know three things to understand double-entry accounting: 1: There are five types of accounts: Assets: anything you have that has value, like cash, buildings, equipment, and merchandise. Includes things you may not actually have in your hands but that are rightly yours, like money people owe you but haven't yet paid. Liabilities: Anything you owe to someone else. Debts, merchandise paid for but not yet delivered, and taxes due. Capital (some call it ""capital"", others call it ""equity""): The difference between Assets and Liabilities. The owners investment in the company, retained earnings, etc. Income: Money coming in, the biggest being sales. Expenses: Money going out, like salaries to employees, cost of purchasing merchandise for resale, rent, electric bill, taxes, etc. Okay, that's a big ""one thing"". 2: Every transaction must update two or more accounts. Each update is either a ""debit"" or a ""credit"". The total of the debits must equal the total of the credits. 3: A dollar bill in your pocket is a debit. With a little thought (okay, sometimes a lot of thought) you can figure out everything else from there." "I'll assume United States as the country; the answer may (probably does) vary somewhat if this is not correct.  Also, I preface this with the caveat that I am neither a lawyer nor an accountant.  However, this is my understanding: You must recognize the revenue at the time the credits are purchased (when money changes hands), and charge sales tax on the full amount at that time.  This is because the customer has pre-paid and purchased a service (i.e. the ""credits"", which are units of time available in the application).  This is clearly a complete transaction.  The use of the credits is irrelevant.  This is equivalent to a customer purchasing a box of widgets for future delivery; the payment is made and the widgets are available but have simply not been shipped (and therefore used).  This mirrors many online service providers (say, NetFlix) in business model.   This is different from the case in which a customer purchases a ""gift card"" or ""reloadable debit card"".  In this case, sales tax is NOT collected (because this is technically not a purchase).  Revenue is also not booked at this time.  Instead, the revenue is booked when the gift card's balance is used to pay for a good or service, and at that time the tax is collected (usually from the funds on the card).  To do otherwise would greatly complicate the tax basis (suppose the gift card is used in a different state or county, where sales tax is charged differently?  Suppose the gift card is used to purchase a tax-exempt item?)  For justification, see bankruptcy consideration of the two cases.  In the former, the customer has ""ownership"" of an asset (the credits), which cannot be taken from him (although it might be unusable).  In the latter, the holder of the debit card is technically an unsecured creditor of the company - and is last in line if the company's assets are liquidated for repayment.   Consider also the case where the cost of the ""credits"" is increased part-way through the year (say, from $10 per credit to $20 per credit) or if a discount promotion is applied (buy 5 credits, get one free).  The customer has a ""tangible"" item (one credit) which gets the same functionality regardless of price.  This would be different if instead of ""credits"" you instead maintain an ""account"" where the user deposited $1000 and was billed for usage; in this case you fall back to the ""gift card"" scenario (but usage is charged at the current rate) and revenue is booked when the usage is purchased; similarly, tax is collected on the purchase of the service.  For this model to work, the ""credit"" would likely have to be refundable, and could not expire (see gift cards, above), and must be usable on a variety of ""services"".  You may have particular responsibility in the handling of this ""deposit"" as well." "When you pay expenses on behalf of someone, you do not Debit your expense accounts.  You credit your Bank and debit the Liability.  The method that you mentioned (debit expense then credit it back to liability) is an acceptable practice, but the method is only used when you accidentially debited your expense accounts without knowing that it is for someone else (or in the case of split transactions). You need to specify ""being expense paid on behalf of someone"" when you credit the expense account." "A.1 and B.1 are properly balanced, but ""Business Expense"" is an expense, not an asset. The T entries should be timestamped.  The time should be equal to the time on the credit card receipts.  This will make audit and balancing easier. A or B can be used, but if the the business is to be reimbursed for personal expenses, the accounts should be renamed to reflect that fact. More explicit account names could be ""Business expense - stationary"" and ""Personal expense - lunch"" or even better ""Personal expense - cammil - lunch"".  With a consistent format, the account names can be computer parsed for higher resolution and organization, but when tallying these high resolution accounts, debits & credits should always be used. When it comes time to collect from employees, only accounts with ""Personal expense"" need be referenced.  When it comes time to collect from ""cammil"", only net accounts of ""Personal expense - cammil"" need be referenced. An example of higher resolution, to determine what ""cammil"" owes, would be to copy the main books, reverse any account beginning with ""Personal expense - cammil"", and then take the balance.  Using the entries in the question as an example, here's the account to determine ""cammil""'s balance: Now, after all such balancing entries are performed, the net credit ""Personal expense - cammil"" is what ""cammil"" owes to the business. The scheme for account names should be from left to right, general to specific." Judgement, settlement, insurance proceeds, etc etc. These would probably be recorded as a negative expense in the same category where the original expense was recorded. "I think you misunderstand the purpose of the liability account.  I would suggest you review the standard accounting model, but to give you a brief overview: Income and expenses are money coming into and out of your possession.  They are the pipes flowing into and out of your ""box"".  Inside your box, you have assets (bank, savings, cash, etc) and liabilities (credit cards, unpaid debts, etc).  Money can flow into and out of either asset or liability accounts, for example: deposit a payment (income to asset), buy office supplies with cash (asset to expense), pay a bill with credit card (liability to expense), customer pays one of your debts directly (income to liability).  Paying off a debt with an asset does not affect your overall net worth, so paying a check to your credit card bill (asset to liability) doesn't decrease your total balance, it merely moves the value from one bucket to another. Now to your question: Mandatory payments, such as taxes or insurance (or for that matter, utilities, rent, food- all things that ""must"" be bought occasionally) are not liabilities, instead they are all expenses.  They might be paid FROM a liability account, if they are paid on credit for example, but the money still flows from liability to expense.  In my own records I have Expense:Taxes and Expense:Insurance, with sub-accounts in each.  Where the money comes from depends entirely on how I pay my bills, whether from cash or banks (asset) or whether it's a charge (liability).  Sometimes you receive payments back from an insurance company.  I find that rather than treating insurance premiums as a positive balance in a liability (with eventual payments as debits to the liability account), it is better to treat any payment from the insurance as income. Hope that helps!" I have been following some of these threads. Some of them are really old. I have read used recording to equity accounts to resolve the imbalance USD issue. The thing I noticed is that all my imbalances occur when paying bills. I took all the bills and set them up as vendor accounts, entered the bills in the new bills, and used the process payment when paying bills. The imbalance issue stopped. It makes sense. The system is a double entry. That's it will credit and debit. Assets accounts are increased with a debit and decreased with a credit. Equity accounts are increased with a credit and decreased with a debit. ie; Say you have an monthly insurance bill for $100. You enter it into the new vendor bill. This credits Accounts Payable. When paying the bill it credits checking, debits account payable, credits vendor account, debits the expense insurance. In short for each credit there has to be a debit for the books to balance. When there is no account for it to record to it will record in Imbalance USD to balance the books.