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sam2lucky
Level 1

Year End General Journal Entries

Hi,

While reconciling our checking account there was an general journal entry made at the end of the year to reclassify  earnest money.  The entry was:

checking acct:     2,000 (debit)

earnest money:   2,000 (credit)

This creates a credit on our checking account and I cannot balance the checking account.  I would appreciate any help with this.  Thank you.

LL

1 Comment 1
Rustler
Level 15

Year End General Journal Entries

earnest money is usually something you pay and is carried as an asset until the purchase

 

Why try to put it back in the checking account?  the check is entered and is valid even though not cashed yet.

 

If the earnest money  was refunded, then rather than a journal entry, you should use make deposits, and use the earnest money asset account as the source account for the deposit

 

Journal entries should be the exception when using QB, they often do not work as you think they should, and  when you use inventory type items they never work for inventory. It is much better to use the forms on the home page the way QB is designed to be used.    Journal entries also bypass accrual/cash reporting, and will not show on many reports.

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