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Kass1111
Level 1

Correcting bank balance when moving from old company to new one

I have a company that closed end of 2020 (company A) and a new company started 1/1/2021 (company B). All transactions for company B were run through company A's bank account for January. I have since created a "bank account" in Company B's COA so I could move all the transactions from January into Company B's QBO. I have one transaction that I am not sure how to handle.

One invoice from Company A was paid in January. I do not want to move the payment since I want to show and report that all AR has been collected for Company A. How do I show that income on the Company B bank account without really showing it as income so that the balance is right? I am worried that I will end up reporting the income twice. 

Solved
Best answer February 24, 2021

Best Answers
Rustler
Level 15

Correcting bank balance when moving from old company to new one

It really depends on whether you file as an accrual based tax payer or a cash based taxpayer.

 

In accrual it is accounted for as of the date of the invoice.  make a deposit and use owner equity investment as the source account for the deposit

 

In cash based it is income when received, 2021 in other words.  make a deposit and use Other income as the source account for the deposit

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1 Comment 1
Rustler
Level 15

Correcting bank balance when moving from old company to new one

It really depends on whether you file as an accrual based tax payer or a cash based taxpayer.

 

In accrual it is accounted for as of the date of the invoice.  make a deposit and use owner equity investment as the source account for the deposit

 

In cash based it is income when received, 2021 in other words.  make a deposit and use Other income as the source account for the deposit

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