General Journal

makeitsew29 · ‎October 19, 2023

I created a Journal Entry to transfer funds from one customer to another. It shows as a debit for the one customer but there's no corresponding General Journal entry for the customer who was credited. Please help me figure out what I'm doing wrong. I've attached a screenshot of the General Journal page and I'm using QuickBooks Desktop for Mac.

Maybelle_S · ‎October 19, 2023

I'll help you fix the error in your journal entry, makeitsew29.

In QuickBooks, you cannot record a transaction that contains two A/P accounts. Saving these transactions will result in the message Warning: You cannot use more than one A/R or A/P account in the same transaction.

Let's fix this by setting up a clearing account so you can move money from one customer to another. This account, a Barter or Wash Account, typically maintains a $0.00 balance due to equal withdrawals and deposits. I'll guide you on how to do it.

Go to the Lists menu and select Chart of Accounts.
Click the Accounts drop-down arrow, then select New.
Select the Bank radio button, then Continue.
In the Account Name field, enter Clearing, Barter, or Wash Account.
Do NOT enter an opening balance.
Hit Save & Close.

Once done, create a journal entry to use the clearing account. Here's how.

Click New Entry or select the + at the bottom of the list.
Choose the date, and select AR or AP from which you are moving money.
Enter the amount.
Add the Clearing account.
Hit Save.
Create a second Journal Entry.
Choose the Clearing Account.
Select the AR or AP account to which you are moving money.
Tap Save.
In either Pay Bills or Receive Payments, link the Journal Entries together.

I hope this explanation helps. If you have any further questions or concerns, please let me know. I'm more than willing to help. Take care!

View solution in original post

JamesAndrewM · ‎October 19, 2023

I'll share guidelines to help you create a journal entry to transfer funds from one customer to another.

You can go to the Transaction Center to make journal entries. Here is how:

Click the New Entry on the left panel or click the + at the bottom of the list. To edit a check, select a check in the list on the left panel. (If you do not see this list, click the Left View.)
Choose the date, and on the first line item, select Accounts Receivable (A/R) from the Account drop-down list.
Ensure to input the transferred amount in the Debits section.
In the Memo field, note the reason for the journal entry.
Choose the customer Name to transfer the credit from them from the drop-down list.
On the second line item, select Accounts Receivable (A/R) from the Account drop-down list.
Choose the name from the drop-down menu to transfer the credit.
Fill in the entry number of the transaction.
Click Save.

I recommend consulting with your accountant to ensure your records are in tip-top shape.

You can visit this article you can use in the future: Create a journal entry in QuickBooks Desktop for Windows or Mac.

Feel free to post here again if you have further QuickBooks-related concerns. We are available 24/7 to lend a hand with each of your queries. Stay safe!

makeitsew29 · ‎October 19, 2023

Thank you for replying. Unfortunately, this doesn't help me, at all. The instructions you gave me don't match anything that I have available in QB Desktop for Mac. However, I was able to figure out how to get there by the Google search I did a few days ago, which were the same instructions you sent to me. My issue is not how to create a General Journal Entry, it's getting it to show up in both customers accounts. Also, when I select A/R for both line items, I get the warning that I screenshot and attached.

Maybelle_S · ‎October 19, 2023

I'll help you fix the error in your journal entry, makeitsew29.

In QuickBooks, you cannot record a transaction that contains two A/P accounts. Saving these transactions will result in the message Warning: You cannot use more than one A/R or A/P account in the same transaction.

Let's fix this by setting up a clearing account so you can move money from one customer to another. This account, a Barter or Wash Account, typically maintains a $0.00 balance due to equal withdrawals and deposits. I'll guide you on how to do it.

Go to the Lists menu and select Chart of Accounts.
Click the Accounts drop-down arrow, then select New.
Select the Bank radio button, then Continue.
In the Account Name field, enter Clearing, Barter, or Wash Account.
Do NOT enter an opening balance.
Hit Save & Close.

Once done, create a journal entry to use the clearing account. Here's how.

Click New Entry or select the + at the bottom of the list.
Choose the date, and select AR or AP from which you are moving money.
Enter the amount.
Add the Clearing account.
Hit Save.
Create a second Journal Entry.
Choose the Clearing Account.
Select the AR or AP account to which you are moving money.
Tap Save.
In either Pay Bills or Receive Payments, link the Journal Entries together.

I hope this explanation helps. If you have any further questions or concerns, please let me know. I'm more than willing to help. Take care!

makeitsew29 · ‎October 20, 2023

Hi Maybelle,

Thank you for your reply and the screenshots; they would have been helpful had that been the platform that I use. I got the gist of it, though, and did create a "wash" account and created the Journal Entry. Through all the steps you sent, I think I've figured out what I was doing wrong.

Thanks again,

Kim

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