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walsc001
September 7, 2022
Solved

Transferring a liability

  • September 7, 2022
  • 1 reply
  • 0 views

Would love some advice on this.  I am treasurer of a booster club, and have just taken over the financials for the new fiscal year.  Last year the club collected money for something they needed to purchase.  However, the item they purchased was slightly less than what they collected.  The previous treasurer recorded this as a liability on the account.  However, this really isn't a liability, as the amount isn't going to get paid out to anyone.  It should have just hit the income and expense accounts respectively.  Then it would have been included in our carryover amount.  

 

The amount carried over in to the new fiscal year, and will forever show as a liability unless I transfer it to another account.  However, I'm not seeing how I can do that?  My only choices on transfer or journal entry are from a customer, vendor, and employee.  I don't have an option to transfer from one account to another. 

 

I googled this problem, and saw the steps to reclass, but I don't see that is a choice for me.  I'm wondering if the version we have doesn't support that. 

 

Any help you could provide would be great!

  

Best answer by CharleneMaeF

I would love to help you transfer the fund, walsc001.

 

I also appreciate your efforts to get this resolved. 

 

The Reclassify tool used to edit multiple transactions is only available in the Accountant version. 

 

If you have a different version, let's create a clearing account instead to move the fund from the liability account.

 

Here's how:

 

  1. Go to the Gear icon and then select Chart of Accounts.
  2. Click the New tab.
  3. Choose Bank for the Account Type. You may choose any detail type you want for your clearing account.
  4. Type in the name.
  5. Leave the Amount field blank before clicking Save and Close.

 

You can check this article for more details. Although this is for QuickBooks Desktop, this is also applicable for the online version: Set up a Clearing Account.

 

After that, we can now create a journal entry to move the transactions:

 

  1. Go to + New menu and then select Journal entry.
  2. Add the account from which you're moving the money.
  3. Enter the Clearing account.
  4. Save the journal entry.
  5. Create a second journal entry.
  6. Add the Clearing account.
  7. Enter the correct account.
  8. Click Save and close.

  

I also recommend consulting an accountant to ensure you've selected the correct accounts. You can visit our ProAdvisor page to find one.

 

Once done, I encourage browsing this article that'll help you match your QuickBooks account to your bank and credit card statement: Reconcile Workflow.

 

Please let us know if you need help managing your accounts for this fiscal year. We're always here to assist you.

1 reply

C
CharleneMaeFQuickBooks TeamAnswer
QuickBooks Team
September 7, 2022

I would love to help you transfer the fund, walsc001.

 

I also appreciate your efforts to get this resolved. 

 

The Reclassify tool used to edit multiple transactions is only available in the Accountant version. 

 

If you have a different version, let's create a clearing account instead to move the fund from the liability account.

 

Here's how:

 

  1. Go to the Gear icon and then select Chart of Accounts.
  2. Click the New tab.
  3. Choose Bank for the Account Type. You may choose any detail type you want for your clearing account.
  4. Type in the name.
  5. Leave the Amount field blank before clicking Save and Close.

 

You can check this article for more details. Although this is for QuickBooks Desktop, this is also applicable for the online version: Set up a Clearing Account.

 

After that, we can now create a journal entry to move the transactions:

 

  1. Go to + New menu and then select Journal entry.
  2. Add the account from which you're moving the money.
  3. Enter the Clearing account.
  4. Save the journal entry.
  5. Create a second journal entry.
  6. Add the Clearing account.
  7. Enter the correct account.
  8. Click Save and close.

  

I also recommend consulting an accountant to ensure you've selected the correct accounts. You can visit our ProAdvisor page to find one.

 

Once done, I encourage browsing this article that'll help you match your QuickBooks account to your bank and credit card statement: Reconcile Workflow.

 

Please let us know if you need help managing your accounts for this fiscal year. We're always here to assist you.

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