Closing an Account with a Negative Balance

computermomof6 · ‎January 14, 2020

We had a business account that was in the negative and was closed. How do I closed the account with a negative balance? They marked it as "Overdraft Write-Off" What type of entry should it be for me in Quickbooks?

Rustler · ‎January 15, 2020

use a journal entry

debit the account for the amount of the write off, credit Other Income

the overdraft, negative amount is a debt you owed, when debt is forgiven it is your income since you no longer have to pay it. (there are some rare exceptions to that with mortgages, etc)

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Rustler · ‎January 15, 2020

use a journal entry

debit the account for the amount of the write off, credit Other Income

the overdraft, negative amount is a debt you owed, when debt is forgiven it is your income since you no longer have to pay it. (there are some rare exceptions to that with mortgages, etc)

computermomof6 · ‎January 15, 2020

Thank you. I mean we actually still owe it, even though it was written off to close the account. So I wasn't sure.

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Closing an Account with a Negative Balance