Glad to have you here in the Community, @colleen16.
To record the deposit, we'll have to set up a clearing account. It is used to move the money from one account to another. This account normally has a balance of $0.00 because you always take out the same amount that you put in. It may also be called a Barter or Wash Account.
To set up a clearing account:
- Go to the Accounting menu, and then Chart of Accounts.
- Click New.
- Choose Bank from the Account Type drop-down arrow. You may choose any detail type you want for your clearing account.
- Type in the Name for the clearing account.
- Make sure you do not type in any amount on the balance before clicking Save and Close.
You can now move money from one account to another account using the clearing account. Here's how:
- Go to the +New button.
- Under Other, select Journal entry.
- Add the Account Receivable (A/R) or Account Payable (A/P) account from which you are moving money.
- Enter the Clearing account.
- Click Save.
- Create a second journal entry.
- Add the Clearing account.
- Enter the AR or AP account to which you moving money, then click Save and close.
- In either Pay Bills or Receive Payments, link the Journal Entries together.
I’d also recommend working with your accountant for additional guidance. They can advise you on what account A/R or A/P account to use. If you’re not affiliated with one, you can check our ProAdvisor page and we’ll help find one from there.
Once everything is settled, you might want to read this link that serves as your guide in reconciling your accounts effectively: Reconcile an account in QuickBooks Online.
As always, I'm just a few clicks away if you need anything else. Have a great day.
