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Level 2

How to move an old Credit Memo to a new receivable account for application

I have a credit memo in a receivable account from May 2019 that needs to be moved to a different A/R account (lets call it A/R2) where the customer's activity is now being recorded. In a rush, we reduced the amount of the invoice recorded in A/R2 simply by changing the amount of a line item and notating the difference on the invoice. 

 

Now I have a credit in the A/R account that will not be cleared and the balance of A/R2 needs the credit balance applied in order to balance.

 

I understand that I will need to replace the credit memo with a journal entry before it can be re-classed in order to keep the reporting for the month of may in tact. I am unclear on how to re-class the entry from A/R to A/R2.

Solved
Best answer 11-14-2019

Best Answers
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QuickBooks Team

How to move an old Credit Memo to a new receivable account for application

You can use a clearing account to move the credit memo from one A/R account to another under the same customer, AndreaT.

 

 

Let me give you these steps on how to set it up:

 

 

To set up a clearing account

 

  1. Go to the Lists menu, then select Chart of Accounts.
  2. Press CTRL + N to create a new account.
  3. Select Bank. Take note that while you can use other types of account, it's best to use bank because of the following reasons:
    • You can pay into a bank account via Receive Payments or Make Deposits.
    • You can pay out of a bank account via Write Checks or Pay Bills.
    • A bank account appears on the balance sheet and on the statement of cash flows to balances and changes in balances.
    • To allocate expenses to overhead or class using a zero check, you must use a bank account as your Clearing account.
  4. Click Continue.
  5. Enter Clearing AccountBarter Account, or Wash Account in the Account Name field.
  6. Leave the Opening Balance box blank.
  7. Click Save & Close.

To use a clearing account

 

  1. Create a journal entry.
  2. Select the A/R account from which you're moving the credit memo.
  3. Add the clearing account, the amount of the credit memo, and any other details.
  4. Click Save.
  5. Create a second journal entry.
  6. Add the clearing and the second A/R account.
  7. Add any other details and click Save.
  8. Link the journal entries together through the Receive Payment window.

More details about using a clearing account are discussed here: Set Up A Clearing Account.

 

You can also add a reply below in case you need more help when moving the amount or sorting out other accounts in QBO.  

View solution in original post

Highlighted
Level 2

How to move an old Credit Memo to a new receivable account for application

Thank you so much. I am taking over these accounts and was wondering where the clearing account came into play. just to clarify before I can complete the steps you provided, I will need to remove the credit memo and replace it with a journal entry correct?

View solution in original post

Highlighted
Moderator

How to move an old Credit Memo to a new receivable account for application

Hi there, @AndreaT,

 

QuickBooks doesn't allow inputting more than one Accounts Receivables on the same transaction. If you need to transfer funds between two A/R registers, use a clearing account.

 

Correct the balance by creating two journal entries. Here's how:

 

  1. Go to the Company menu at the top toolbar.
  2. Select Make General Journal Entries from the list.
    je3.PNG

 

Here are sample screenshots on how to use the clearing account:

 

je1.PNG je.PNG

 

Do not remove or delete the credit memo, this will only mess the A/R balance.

 

If you have other questions or clarifications, let me know by clicking the Reply button below. I'll be right here to share and provide further assistance whenever you need it. Have a wonderful day!

View solution in original post

4 Comments
Highlighted
QuickBooks Team

How to move an old Credit Memo to a new receivable account for application

You can use a clearing account to move the credit memo from one A/R account to another under the same customer, AndreaT.

 

 

Let me give you these steps on how to set it up:

 

 

To set up a clearing account

 

  1. Go to the Lists menu, then select Chart of Accounts.
  2. Press CTRL + N to create a new account.
  3. Select Bank. Take note that while you can use other types of account, it's best to use bank because of the following reasons:
    • You can pay into a bank account via Receive Payments or Make Deposits.
    • You can pay out of a bank account via Write Checks or Pay Bills.
    • A bank account appears on the balance sheet and on the statement of cash flows to balances and changes in balances.
    • To allocate expenses to overhead or class using a zero check, you must use a bank account as your Clearing account.
  4. Click Continue.
  5. Enter Clearing AccountBarter Account, or Wash Account in the Account Name field.
  6. Leave the Opening Balance box blank.
  7. Click Save & Close.

To use a clearing account

 

  1. Create a journal entry.
  2. Select the A/R account from which you're moving the credit memo.
  3. Add the clearing account, the amount of the credit memo, and any other details.
  4. Click Save.
  5. Create a second journal entry.
  6. Add the clearing and the second A/R account.
  7. Add any other details and click Save.
  8. Link the journal entries together through the Receive Payment window.

More details about using a clearing account are discussed here: Set Up A Clearing Account.

 

You can also add a reply below in case you need more help when moving the amount or sorting out other accounts in QBO.  

View solution in original post

Highlighted
Level 2

How to move an old Credit Memo to a new receivable account for application

Thank you so much. I am taking over these accounts and was wondering where the clearing account came into play. just to clarify before I can complete the steps you provided, I will need to remove the credit memo and replace it with a journal entry correct?

View solution in original post

Highlighted
Moderator

How to move an old Credit Memo to a new receivable account for application

Hi there, @AndreaT,

 

QuickBooks doesn't allow inputting more than one Accounts Receivables on the same transaction. If you need to transfer funds between two A/R registers, use a clearing account.

 

Correct the balance by creating two journal entries. Here's how:

 

  1. Go to the Company menu at the top toolbar.
  2. Select Make General Journal Entries from the list.
    je3.PNG

 

Here are sample screenshots on how to use the clearing account:

 

je1.PNG je.PNG

 

Do not remove or delete the credit memo, this will only mess the A/R balance.

 

If you have other questions or clarifications, let me know by clicking the Reply button below. I'll be right here to share and provide further assistance whenever you need it. Have a wonderful day!

View solution in original post

Highlighted
Level 2

How to move an old Credit Memo to a new receivable account for application

Thank you so much for your help.

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