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Account Type Changes

I didn't set up the chart of accounts.  I have a line of credit that was entered as a bank when it should have been entered as a long-term liability.  When I try to change it, i get this following error.

 

"This account is being used on a Check, Deposit, Payment or other transaction where an account of type 'Cash' or 'Undeposited Funds' is required. You must locate and change those transactions to use a different Cash account before you can change the Account Type of this account. To find the transactions using an Account, run an Account QuickReport, or use the Account Register."

 

What?  what should I be looking for.  Payment are made to the line of credit from the operating account, from the owners personal equity, etc.  How do I track down the offending account and get this properly assigned?

Solved
Best answer 10-31-2018

Accepted Solutions
Established Community Backer ***

Re: Account Type Changes

You can use a long term liability account for a line of credit (LOC), but I prefer to use a credit card type account for that. It just makes it easier to show the withdrawal against the LOC and payments and interest, not to mention reconciling the account with monthly statements. And liability accounts do not always show as a choice for transactions. But which ever you choose ...


Create the new account for the LOC
run a report on the old LOC account
click on each transaction and edit it, change the account at the top to the new LOC account and save

then make the old LOC account inactive

4 Comments
QuickBooks Team

Re: Account Type Changes

Hello there, @paulapallo.

 

I can help you change your line of credit to long-term liability in QuickBoks Online.

 

The error message you're getting typically occurs if you have transactions attached to the account that you're trying to change. To be able to change account to long term liability, you'll need to delete the opening balance or other transactions associated to it.

 

Once done, you can now make changes to the accounts in the Chart of Accounts. I'd be happy to show you how:

  1. Go to Accounting tab.
  2. Select Chart of Accounts.
  3. Choose an account you'll want to change.
  4. Click View register and choose Edit.

Please reach out to me if you have more questions about this. I'd be more than happy to answer them for you.

Established Community Backer ***

Re: Account Type Changes

You can use a long term liability account for a line of credit (LOC), but I prefer to use a credit card type account for that. It just makes it easier to show the withdrawal against the LOC and payments and interest, not to mention reconciling the account with monthly statements. And liability accounts do not always show as a choice for transactions. But which ever you choose ...


Create the new account for the LOC
run a report on the old LOC account
click on each transaction and edit it, change the account at the top to the new LOC account and save

then make the old LOC account inactive

Established Community Backer ***

Re: Account Type Changes

I agree, create the new correct account, move transactions, make old account inactive if in QBO or delete in Desktop. Even when an account has never had transactions QBO only allows you to make it Inactive, not deleted

Active Member

Re: Account Type Changes

Thanks for the credit card suggestion.  I just never thought of that, but, it was easy as pie to change the LOC from Bank to Credit Card and it will NOW show up in the correct place on the balance sheet.  Thanks for the ridiculously simple solution.