In QuickBooks, you will set up the chart of accounts for credit cards like this:
Create main parent account. This account is not connected to the bank credit card account. And then, create sub-accounts. Normally, if you’ve (like American Express or Chase) you will also need one account for recording payments and fees. So, if your Chart of Accounts, accounts setup will look like this:
Credit Card Company (example American Express):
Sub-account # 1 for payment
Sub-account # 2 for charges (business card 1)
Sub-account # 3 for charges (business card 2)
All three accounts are connected and each will download its transactions. Whenever you make a payment from your bank account to your credit card company, it will show up on card #1. And purchases will show up on card #2, #3 and so on.
When you reconcile the credit card account, you will reconcile the parent account, not the sub-accounts in QuickBooks. You will then write a Journal Entry to reclassify the payment and charges. From above subaccounts, for example, JE will look like this:
If you’re making full payment for that credit card account, all the sub-accounts in QuickBooks should show zero balance as of that date on the credit card accounts.
In QuickBooks, you will set up the chart of accounts for credit cards like this:
Create main parent account. This account is not connected to the bank credit card account. And then, create sub-accounts. Normally, if you’ve (like American Express or Chase) you will also need one account for recording payments and fees. So, if your Chart of Accounts, accounts setup will look like this:
Credit Card Company (example American Express):
Sub-account # 1 for payment
Sub-account # 2 for charges (business card 1)
Sub-account # 3 for charges (business card 2)
All three accounts are connected and each will download its transactions. Whenever you make a payment from your bank account to your credit card company, it will show up on card #1. And purchases will show up on card #2, #3 and so on.
When you reconcile the credit card account, you will reconcile the parent account, not the sub-accounts in QuickBooks. You will then write a Journal Entry to reclassify the payment and charges. From above subaccounts, for example, JE will look like this:
Credit = subaccount # 1
Debit = subaccount # 2
Debit = subaccount # 3
If you’re making full payment for that credit card account, all the sub-accounts in QuickBooks should show zero balance as of that date on the credit card accounts.
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