Question

Journal Entry after posted check

Forum|Forum|5 years ago
April 8, 2021
2 replies
18 views

Every month or so my business hosts a Charity Ride. We collect cash from riders to reserve their spot in the class. Afterwards I deposit the cash and then write a check for the Charity. Can somebody please help me with the accounting for this type of situation?

Here are the real-life steps of what's happening:

Receive Cash, Sales increase
Deposit Cash, Checking account increases
Write check, charity account expensed

The posted check shows up in my banking transactions to review. I categorize it as "Charitable Contributions", an Expense account. (side note, I also have a sales category for this, "Sales: Charity Rides".). After the check is posted & categorized, I created a Journal entry.

JE Attempt:

Debit – Cash

Credit – Sales: Charity Rides

Debit – Checking account

Credit – Cash

Is this correct? This journal entry with the posted check?
I've tried it a couple ways but can't seem to get my Check to show up under payments when reconciling my checking account. I've probably deleted it / adjusted it too many times. It does show up correctly in my Charitable Contributions register, but not when reconciling my bank statement....

Any help would be appreciated!

For reference, attached is a similar example with both cash + digital donations. Just trying to make sure I'm doing this correct.

QuickBooks Online

Rustler

Level 15

What you show is correct, but I would refrain from using a journal entry. QB is not designed to be a journal entry type of software and sometimes journal entries do not show in reporting.

just transfer money from banking to cash, or write an eft type check and use cash as the expense (reason) for the payment

H

HyJohn

I don't like how you record this cash as income. Since it really isn't. This is how I would record it.

1. Recieve the deposit into your bank account and code to transaction to another bank account (checking or savings) called "charity". Think of this charity bank account as a virtual safe in your books. This way the transaction is non-posting to your GL. Is simply putting the cash from one pocket into the other. This will result in a positive balance in your real checking account, and a negative balance in your "charity" account.

2. When you write the actual check to charity, simple post the transaction to this same "charity" bank account, and it zeros out that account. Reconcile this account every time you contribute so that it doesn't get messy.

If you have any questions about this, let me know and I'll help you through this.

In summary, since this money is technically not your business's, your simply putting it into you cash and then removing it. No income or expense transaction need take place.

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