Fixing AP Balance/Entering Credits

The error "You cannot use more than one A/R or A/P account in the same transaction" occurs in QuickBooks Desktop because it restricts direct journal entries to Accounts Payable (A/P) when assigning vendor names and mixing classes. Since A/P is a control account linked to the vendor sub-ledger, QuickBooks blocks this action. To fix the issue, create a clearing account and use two journal entries to transfer the incorrect class balance to the correct one.

Here's how:

1. Go to Company and click Chart of Accounts.
2. Select the Account dropdown and choose New.
3. Select Bank or Other Current Asset, name it AP Clearing, and click Save & Close.
4. Then, create a Journal Entry by going to the Company section again and selecting Make General Journal Entries.
5. Use your newly created A/P Clearing account to adjust amounts between classes, ensuring that debits and credits balance out for each class.

Run the Balance Sheet by Class report to confirm the class discrepancies in A/P are resolved, and the clearing account balance has returned to zero.

You can use non-expense accounts (like Assets or Inventory) on a bill, but QuickBooks Desktop requires a class on every single line. Ensure you assign a class to every line item on the Expenses tab, and ensure inventory items or line columns are properly classified.

To properly account for credits so they are assigned to the correct class, please follow these steps:

1. Go to Vendors and select Enter Bills.
2. At the top of the screen, change the radio button from Bill to Credit.
3. Enter the credit amount as a positive number.
4. On the Expense or Item tab, assign the specific Class the credit belongs to.
5. When paying the standard Bill later via Pay Bills, click the Set Credits button to apply this Vendor Credit against the open balance. This keeps the A/P class allocation perfectly balanced.

Please respond to this post if you have additional concerns.