Entering an expense. Payment account selected is under "other assets." Quickbooks says, "there is something wrong." Choose a different account type." What is wrong?

Glad to have you here in the Community, @brian-pickett-co.

Let me provide some information about the error you encounter.

This happens if you selected an asset account as a payment account. However, make sure to select the correct bank account in creating an expense. Let me show you how to do it.

1. From the left menu, click the + New icon.

2. Select Expense.

3. In the Payment account section, select your bank account.

4. Under Category, click Owner's Equity.

5. Enter the amount.

6.Click Save and close.

For more reference, you can check this article: Enter, edit, or delete expenses in QuickBooks Online

You can also visit our Banking and bank feed page to learn some tips on managing your bank account in QuickBooks Online (QBO).

I look forward to hearing from you. You can always get back to us if you have other concerns.

Hello,

I am trying to do the same thing - intentionally. I want the Payment account to be a Prepaid Expenditure account so that the credit is against the prepaid expense account, not cash. How do I change it so that QBO allows me to pick the prepaid account?? I checked Settings but don't see an option for that.

Thanks

Joining the conversation to help with your question about payment accounts, EndlessDoF.

For now, we're unable to use an Other current asset account as a payment method when recording expenses. You'll want to set up the prepaid account as a bank so you can use it when recording the transaction. 

You can either edit the existing account or create a new one. However, I would strongly recommend reaching out to your accountant before making the changes since this will affect your accounting records. Here's how to change the account:

1. Open your Chart of Accounts and look for the prepaid expense account. 
2. Click the drop-down list beside View register and select Edit.
3. Change the Account Type to Bank, then select a Detail Type.
4. Click Save and close.
5. Select Yes to confirm that you want to change the account.

If you want to create a separate account, follow the steps in this article on how to do it: Add An Account To Your Chart Of Accounts In QuickBooks Online.

Alternatively, you can create a journal entry to record the expense transaction if you want to keep the prepaid expense account as it is. Here's an article as a guide: Create A Journal Entry In QuickBooks Online.

Feel free to save this article just in case you might need an extra hand with your year-end tasks in QBO: Year-end Guide For QuickBooks Online.

I'd be glad to get back here and help you again if you have more questions and inquiries. We'll make sure that everything is taken care of. 

Thank you for your response. I am the accountant (DoF stands for dir of finance) and would prefer not to have to add our prepaid expense accounts as bank accounts. Every transaction has an underlying journal entry so users should be able to choose whatever account it wishes to credit when creating expense transactions, especial other asset accounts with balances.

At any rate, can you please add this request to your development request log - to allow for non-bank/other current asset accounts to be chosen as Payment accounts in Expenses and Bill payments?

Thanks

Thanks for getting back to us, @EndlessDoF.

We will definitely get your suggestion sent to our Product Development Team. I also went ahead and included some steps below to send feedback requests in QuickBooks Online, in case you ever want to send new ideas to our Developers. You can send in a request at any time. Our Development Team loves to hear from customers like you. 

Here's how:

1. Select the Gear icon at the top, then Feedback.
2. Enter your comments or product suggestions. Then click Next to submit Feedback.

You can track feature requests through the QuickBooks Online Feature Requests website.

Please know that you can reach out any time you need a helping hand. Take care!