Line of Credit setup as Bank Account by QB when Linking with Bank

Teesa66 · ‎May 05, 2020

Hi! When I linked my new QBO account to our bank, the existing Line of Credit was automatically set up as a bank account instead of an "Other Current Liability" account. In addition, it was "reconciled" at the same time. I need to correct this, but when I try, I get this error message:

"Changing the type or detail type of an account may affect your accounting and reporting. Are you sure you want to do this?"

Upon Clicking "Yes", I receive the following message:

"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."

The only transaction on the Account register is the Opening Balance Equity, with a transaction type of "Check". How do I correct this?

Rustler · ‎May 06, 2020

IMO a line of credit should be set up as a CC tyoe account, that makes it easier since in effect that is what it is, borrow and pay back.

I assume the Opening balance equity entry is because the LOC has an opening balance

I would

1. delete the OBE entry from the register

2. delete or inactivate the bank account

3. create a credit card type account (no connection, do it from the chart of accounts)

4. make the following journal entry

debit OBE and credit the LOC account for that amount

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Line of Credit setup as Bank Account by QB when Linking with Bank

Line of Credit setup as Bank Account by QB when Linking with Bank

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