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Posted by R. C. White on December 8, 2006, 9:54 am
Please log in for more thread options Hi, Stan.
Well, there are several ways you can handle this, but that one makes the
most sense to me.
If you use Quicken only to keep track of your checkbook - which was its
original purpose - then you would record the deposit of the CD proceeds as
having come into your account from some outside source. You would record
the deposit and show it as coming from "Stan and Sue", rather than from any
income source.
But I think that most Quicken users keep track of much more than just their
checking account - as I do. We record all or most of our assets, especially
money in all its forms (checking, savings, CDs) and investments (stocks,
bonds, real estate). Many or most of us also include non-financial assets,
such as our homes and cars. In such a system, we would have an account for
CDs (or several accounts for multiple CDs). When we buy a CD, we would
record the disbursement from our checking account as a transfer to the CD
account, not as an expense of any kind, of course. As we receive interest
checks, they would be increases in the checking account, offset by increases
in our interest income category. And when the CD matures, we would transfer
the proceeds from our CD account when we record the deposit into our
checking account. Quicken uses [Accounts] to record assets and liabilities,
and Categories to record income and expenses.
No matter how you use Quicken, you must make a clear distinction between
cash flow and income. They are NOT the same thing, as your question
illustrates.
RC
--
R. C. White, CPA
San Marcos, TX
(Retired. No longer licensed to practice public accounting.)
rc@grandecom.net
Microsoft Windows MVP
(Currently running Vista Ultimate x64)
> hello R.C. then you are saying that I should enter the cd in quicken
> as an account and then transfer from it? Stan
>> Hi, Stan.
>>
>> Right; a transfer is not income. You are just moving your own money from
>> one asset (the CD) to another asset (the MM account). You DO have the CD
>> in an Asset Account or an Investment Account, don't you? And the MM is
>> in a Checking Account? (I've forgotten already what Q2006 called these
>> accounts; in Q2007 they are Spending & Savings Accounts in the Cash Flow
>> Center.)
>>
>> In the simplest form, assuming your accounts as I've pictured in my mind,
>> just make an entry in your MM checking account for the deposit and show
>> that it came from the CD Account (by whatever name you call it).
>>
>> Interest earned on the CD is another matter. That is income and should
>> be accounted for as such. The method depends on whether you get a check
>> periodically (monthly? quarterly?) or at maturity, or if the interest
>> gets compounded (added to principal). But we'll leave that question
>> until you ask it.
>>
>> RC
>>
>>> have quicken 06. Bank of America will be transfering from a cd to my
>>> money market.how do I keep quicken from labeling this as income? Stan
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