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Anonymous
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So I'm reviewing my P&L and my expenses. Quick books has categorized credit card payments as expenses. Are these included on my P&L?

I need to generate the P&L for income tax purposes, and these are just plain old monthly payments.  Why would QB categorize them as expenses?
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QuickBooks Team

Re: So I'm reviewing my P&L and my expenses. Quick books has categorized credit card payments...

I’m happy to see you here in QuickBooks Community, @Anonymous.

 

Let me share the different ways to record credit card payments.

 

By writing a check:         

  1. Go to the Plus (+) icon.
  2. Under Vendor, select Check.
  3. In the Bank Account field, choose the bank account the payment was made.
  4. Uncheck Print later, and out the check number in the Check field.
  5. In the Payee field, enter the name of the credit card (Vendor Name).
  6. Enter $2000 for the Amount.
  7. In the Account field, select the credit card.
  8. Select Save and Close.

By creating a transfer:

  1. Go to Plus (+) icon.
  2. Under Other, select Transfer.
  3. From the Transfer Funds From, drop-down the bank account the credit card was paid from
  4. From the Transfer Funds To drop down, select the credit card that the payment went to.
  5. In the Transfer Amount box, enter the amount of the payment.
  6. (Optional) Edit the date.
  7. Select Save.

For your additional guidance with the steps above, you can refer to this article:How to Record Credit Card Payments.

 

If you still have other concerns, feel free to post below. Have a wonderful day!

Anonymous
Not applicable

Re: So I'm reviewing my P&L and my expenses. Quick books has categorized credit card payments...

Thanks for the response, however I do know how to record the transaction.

 

What I'm asking here is this:  How do I change the Type from Expense to Transfer? 

 

QBO entered the transaction as Expense.  I'm doing a spot audit as I do my taxes and there were a few transactions from 2018 that were marked this way - I was new then - and didn't do it right.  But I can't seem to change from Expense to Transfer.

QuickBooks Team

Re: So I'm reviewing my P&L and my expenses. Quick books has categorized credit card payments...

Hello there, john21.

 

QuickBooks Online (QBO) suggests a category based on your the bank's description. Transactions between bank or credit card accounts can be represented by Transfer, Expense, or Deposit transactions.

 

Let's fix this by undoing the transactions from the Reviewed tab then select the Record transfer button. I'd be glad to walk you through the steps:

  1. Go to the Banking tab.
  2. Click the Reviewed tab, and scroll down until you see the transaction. Select Undo.
  3. This will bring back the transactions into For Review. From there, click the transaction to classify it.
  4. Select the Record transfer button.

record transfer.PNG

To avoid this issue moving forward, make sure to reclassify the transactions from your Banking tab before adding them to QBO.

 

Allow me to share this article to be more familiar with transferring funds between accounts in QBO.

 

Please know that we're just around if you need our help with your concerns. 

ProAdvisor

Re: So I'm reviewing my P&L and my expenses. Quick books has categorized credit card payments as expenses. Are these included on my P&L?

@Anonymous 

 

"these are just plain old monthly payments."

 

If you're making payments for credit credit balance, do you have Credit Card liability setup in the QBO?

If so, you will just need to apply the payments against the credit card balance in QBO. In case, you don't have cc liability balance in QBO then, it is an expense regardless when the payment was due from, especially if you're on cash basis...but consult with Tax Accountant for further assistance.

 

If the QBO Banking for some reason is downloading payment for credit card as an "Add" to Expense, all you need to do is, click the transaction in question in Banking For Review tab from bank account and switch radio button to "Record transfer" and select Credit Card account as transfer account category. And on the Credit Card For Review, just Match, no need to add the transaction.

 

Hope this helps!

 

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