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Posted by Laura on April 26, 2006, 2:56 pm
Please log in for more thread options Rex's Mom wrote:
> danbrown wrote:
>> Rex's Mom wrote:
>>
>>
>>> First thing to remember is that QuickBooks is double-entry
>>> bookkeeping and Quicken is single-entry.
>>
>> Let's nip this one in the bud RIGHT NOW.
>>
>> Quicken IS (repeat IS) a double-entry accounting system ... which means
>> that for EVERY Quicken transaction you enter, there is an offsetting
>> entry to another account/category.
>
> I have to disagree with you. Categorizing a transaction is
> NOT the same as double-entry bookkeeping. In Quicken, one's
> books do not have to balance, i.e. for each debit there does
> not need to be equal and opposite transaction(s).
I don't agree. They are the same thing.
It will always balance unless you don't count leaving the category blank
(uncategorized) as being in balance. This is probably close to using the OBE
account in QB.
> And categorizing does not give rise to an automatic
> accumulation of transactions of the same category (vs.
> posting to an account). Yes, you can pull a report, but it's
> not the same!
I agree with Dan that Quicken is a double entry accounting system even
though it does not appear to be.
Here's how I view things:
In QB you have accounts. You have a full Chart of accounts. When you are in
the check book register (like quicken) you enter your transaction and then
select an offsetting account to post the transaction to. This makes it a
double sided accounting system. Restricting your transactions to income and
expense only you can create an income statement related to your check book
account.
In Quicken you have categories. You have a category list instead of a COA
containing all of your income and expense accounts. Balance sheet accounts
would be handled by different sections of the program. When you enter a
transaction you select a category instead of an account like you do in QB.
Technically this is the offset of the cash account even though you are not
selecting an account. You can now create an income statement just like you
did in QB.
Otherwise there really is no difference between the 2 in theory. If they
both were not double entry accounting systems then you would never be able
to construct an Income statement in either program.
> Yes, you can transfer funds between accounts and in that it
> simulates double-entry bookkeeping,
Transferring funds bwt accounts does not have anything to do with being
double-entry accounting. Both programs allow you to do that.
> but do not confuse accounts opened in Quicken with categories.
Quicken was designed to track expenses associated with a single bank account
using categories. If I loaded the same bank account into QB then I would use
expense accounts instead of categories. Not really much difference other
than the dimension that the programs use. But from a bookkeeping perspective
they really are the same thing. Just different names.
>> Quicken is a single DATA-ENTRY system, in that the accounting
>> double-entry takes place automatically (you don't have to create 2
>> separate data-entry records) ... but it still happens .
QB and quicken both create the offsetting transactions automatically in the
background. QB does it in 2 lines while quicken does it with one. But in
both cases using the register simulates a series of journal 2-sided journal
entries without the user having to worry about credits and/or debits.
> And in double entry bookkeeping, the system will often
> automatically generate the opposite transaction based on a
> previously established 'list of rules'.
Quicken can automatically populate the category based on prior information
stored in the program. QB and Peachtree are more sophisticated in how they
populate the account used for the transactions but the concept is the same.
But automatically generating the opposite transaction does not define
whether or not a system is a double entry accounting system.
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