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C
CCampbell
November 15, 2021
Solved

Liability account

  • November 15, 2021
  • 2 replies
  • 0 views

As well as my own business' books, I also keep books for a local church.  I set up a liability account for an upcoming building project.  At the time, the funds were just kept in the same checking/savings account as general fund monies. I later set up a savings account to track and keep income for this project.  However, I guess I've tracked things differently over the past couple years and the accounts do not match.  Is there a journal entry or something I can do to show the two accounts with the same dollar amounts?     

Best answer by Rustler

A liability means you owe someone for something. sounds like that is not the case. Putting the money in a separate account, bank type, is all you can do to "reserve" the funds for that purpose.

2 replies

Rustler
RustlerAnswer
Level 15
November 15, 2021

A liability means you owe someone for something. sounds like that is not the case. Putting the money in a separate account, bank type, is all you can do to "reserve" the funds for that purpose.

C
CCampbellAuthor
November 15, 2021

True!  I knew we would be owing the money to someone in the future so I set it aside to reserve it in the liability account.  Guess that was my first mistake.  I'll try to undo what I've done and just use the savings account to track until we actually start using the funds.  

N
Netprojin
May 12, 2022

My suggestions are:

First: you need to verify where you record the initial fund. (If you record some amount in an account different in the type of the transaction you will see a negative sign with the amount in the financial statement and it is a good point of starting)

Second: Go to report and run a General Ledger in the Accountant Report option, and in it, you can see all transactions associated with every account. It is the best way where the funds to be allocated. Once you find the amount that you need to reallocate, you should create a reversal journal entry in order to move the fund to the correct account. Be careful with the date. 

Third: If you are unable to find the wrong transaction (and the difference is not a big amount), just make an adjustment journal entry and explain what happens with the original records and update the balance in the bank account

I hope my answer helps you

S
southwestcontrac
March 10, 2023

if a company has several car loans would that6 be a liability or an asset

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