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)

View solution in original post

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)

View solution in original post

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