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Posted by <tpmuldoon on June 17, 2006, 2:29 pm
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Assuming that you receive one check (check no. xxx) in payment of invoice
No.1 for brother and payment of invoice No.2 for mother. Why not split the
check into two transactions in the "Payments Received" window
Received from Brother Mother
Amount yyy.yy zzz.zz
Date today today
Pmt method check check
Reference No. xxx xxx
Memo for brother Check No. xxx received from brother in amount of www to
pay this invoice and mother's invoice No. mmm
Memo for mother Check No. xxx received from brother in amount of www to
pay his invoice No. nnn and this invoice
If you use the same check number for both payments on the same "payments to
deposit" the deposit slip printing will merge the two payments together and
only show one check on the deposit slip. This method saves all of the extra
entries and shows the deposits in the deposit register.
> In case anyone is interested, I invoiced My (rich) brother for the
> amount of Mom's invoice. I had to create an item in the amount of
> Mom's invoice, which I gave an account type of "other charge", a
> tax code of "non" and an Account of "Clearing Account" (as below).
>
> Then I used the credit from my brother's overpayment to pay the
> invoice.
>
> Then I used the register to created a deposit in the clearing
> account (In my Mom's name) to match the payment. I gave the
> account as "Accounts Receivable". Then I paid her invoice with
> the credit that now showed on her account.
>
> I don't really know if it's right (many of the choices above are
> guesses), but the accounts all have 0 balances now.
>
> I don't understand why the clearing account went negative when
> I put my brother's payment in and why I had to use a "dep" type
> on the transaction to my mother's account to balance out. I thought
> it should be the other way round. I guess I don't understand
> accounting.
>
> If anyone knows a better way to handle this situation in Quickbooks
> Pro 2005, I would love to hear it.
>
>
> !-! wrote:
> > Sure you can. The alternative - recording it as 2 separate checks -
> > may be simpler but doesn't reflect what actually occurred, so in my
> > opinion is not a good method.
> >
> >
> > "Phil Nelson" wrote ...
> >> I wonder if I can use something like this technique to handle the
> >> check
> >> my brother just wrote to pay his and my mother's bill? Maybe
> >> transfer
> >> the credit on his bill through a "Clearing Account" to pay my
> >> mother's
> >> bill?
> >> Or is there a simpler way?
> >> Phil Nelson
> >
> >
> >> catrick@shaw.ca wrote:
> >>> Contra accounts (the majority of the time) are when an entity is
> >>> both a
> >>> customer and a vendor. The "contra" occurs when a payment is
> >>> required
> >>> and no money exchanges hand For example, a customer owed you money
> >>> and
> >>> you owe the customer money. The customer could state to apply the
> >>> amount you owe it against the monies the customer owed you.
> >>> Payments
> >>> exchange via a "contra" payment.
> >>>
> >>> How I handle this is to setup a bank account called "Clearing
> >>> Account".
> >>> I make a "bill payment" using this chequing account to record the
> >>> payment of the vendor invoice. I would then record "receive
> >>> payment"
> >>> through the same account to record the other side of the
> >>> transaction.
> >>> The net effect in your "Clearing Account" is zero. The vendor
> >>> invoice
> >>> is recorded as paid and the customer invoice is recorded as paid.
> >>>
> >
> >
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