Sunday, February 28, 2016

Making Journal Entries

Most of the time, you don’t need to know double-entry accounting (page xxi) to use QuickBooks. When you write checks, receive payments, and perform many other tasks in QuickBooks, the program creates transactions that unobtrusively handle the double-entry accounting
for you. But every once in a while, such transactions can’t help, and your only choice is moving money around directly between accounts.
In the accounting world, these direct manipulations are known as journal entries. For example, if you posted income to your only income account but have since decided that you need several income accounts to track the money you make, journal entries are the way to reclassify money in that original income account to the new ones.
The steps for creating a journal entry are deceptively easy; it’s assigning money to accounts in the correct way that’s maddeningly difficult for weekend accountants. And, unfortunately, QuickBooks doesn’t have any magic looking glass that makes these assignments crystal clear. This chapter gets you started by showing you how to create journal entries, and provides examples of journal entries you’re likely to need. However, you’ll want to talk to your bookkeeper or accountant about the specific journal entries you need and the accounts to use in them.

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