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  #1  
Old 01-24-2005, 05:25 PM
BarbC BarbC is offline
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Question Deposits showing as negative

When I run a report on a single account thru Chart of Accounts, the deposits to the account show as negatives and the checks written show as positives. The balances are correct, but how do I get the report to show a deposit as positive and checks as negative? The numbers show correctly when I run a Custom Transaction Detail report on the bank account, but not when I run an Account QuickReport on a single account. In the register I have the deposits in the deposit column and the checks in the Payment column. Can anyone help?!

Thanks,

Barb C
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  #2  
Old 01-28-2005, 04:45 AM
Kendor Kendor is offline
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To answer your question thoroughly I think one needs to know something about the haphazard and confusing way in which QB shows amounts as positive or negative (without, fortunately, detracting from the accounting integrity of the accounts), so I'll start off by setting out what I see in each of various account types regarding the categorisation of amounts as positive and negative, but first let me set out some broad accounting principles which it is always useful to keep in mind: (Strange as they may sound, they are true)

Income is negative
Expenses are positive (Don't tell the big spenders)
Assets are positive
Liabilities are negative
Equity is negative (It's a liability of the business)

Let's now look at whether QB labels entries to each category of account correctly as negative or positive:

2. Income:

Income is, as I have said, negative in accounting terms but the QB Income Accounts show income as positive. Only reversals of income are shown as negatives, when they should be positives. The transfer to profit and loss at year-end is not shown at all. The reasoning for the reversal of positive and negative is presumably that the type of account (Income) shows that income is a negative and a minus sign must therefore be implied before each income entry. In the case of reversals, there is a double negative - one implied and the other express - and a double negative equals a positive. QB gotcha there, didn't it!

3. Expenses:

Expense accounts show expenses as as positive too and in this case this happens to be correct in accounting terms. Reversals, by the same token, are shown as negatives, which is right again. The transfer to profit and loss is again not shown

4. Assets:

Asset Accounts should show positive balances but in QB this is only generally so as it sometimes switches and reflects assets as negative amounts.

4.1. Fixed Asset Accounts

Fixed Asset Accounts correctly show the original cost as positive and depreciation as negative. (Depreciation, you may say, is an expense and should therefore be a positive in accounting terms, and so it is, but what you are seeing in the Fixed Asset Account is the credit corresponding to the debit in the Depreciation Account)

4.2 Other Current Asset Accounts

Other current asset accounts also correctly show the asset as positive

4.3 Customer Accounts/Accounts Receivable

Customer accounts are equivalent to an Other Current Asset Account. However, for reasons best known to QB, these accounts deal with the negative/positive issue differently: they show both the amounts due by the the customer and the payments of such amounts by the customer as positive amounts. The first is correct and the second incorrect. Accounts Receivable on the other hand show both types of entry correctly.

This is a real mish-mash which makes reading and reconciling the accounts very difficult. Apparently one is expected to imply a negative before payments by the customer and before reversals but not before the amounts owing by the customer. It seems to me that it here where QB's assumption of an implied negative in some cases but not others really comes home to roost

4.4 Bank Account

A "credit" balance in a Bank Account is an asset. I put "credit" in quotes because it is a credit in the bank's books but a debit in one's own books. QB correctly shows deposits as debits and cheques drawn as credits

5. Liabilities:

Liability Accounts should show negative balances but again in QB this is sometimes but not always so.

5.1 Other Current Liability Accounts

Other Current Liability Accounts should reflect a negative balance but QB reverses the "polarity" of all entries in the accounts, so positive entries must be understood as negative and negative entries must be understood as a double negatives and hence positive

5.2 Supplier Accounts/Accounts Payable

Supplier accounts reflect the same mish-mash as Customer Accounts, except that both bills from and payments to suppliers are shown as negative. Accounts Payable also show all positive entries as negative and negative entries as positive

5.3 Bank Accounts

If one's bank account is in overdraft this should be shown as a liability, ie a negative. Here, QB gets it right.

6. Equity Accounts:

Equity is a liability of the business and Equity Accounts should therefore show a negative balance, but here too QB reverses everything

If you are confused and disconcerted by all of this, that makes two of us. I can't imagine what went on in the programmers' minds in deciding to create all this quite unnecessary confusion.

This brings me to your question. In the bank account, cheques drawn are negative and deposits are positive. QB gets this right, as I have said. In the corresponding account to which the other half of the double entry is posted, the polarity should be reversed but what actually happens in QB is another matter, as I have pointed out. It will vary according to the type of account, for no apparent rhyme or reason.

I'm sure that the the reversal of some positives and negatives is deeply embedded in the program and I would be very surprised if it can be changed without rewriting the program extensively. More's the pity because, apart from being confusing and making it difficult to read accounts, the confusion gives rise to real problems, especially in reconciling accounts.

Ken
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  #3  
Old 01-28-2005, 07:29 AM
suzannemead suzannemead is offline
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Ken, you must have stayed up all night to write this. I'm almost scared to open my QB this morning.
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  #4  
Old 01-28-2005, 10:55 AM
BarbC BarbC is offline
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Thumbs up

Ken, thank you so much for your response. I feel like I really hit the jackpot with your reply. It answered so many questions I've had far beyond the one I posted. I'm glad to know that it wasn't something I did wrong in the set up of the bank account. I will keep your response on hand as I am sure I will refer to it many times in the future.

Thanks again, and have a great weekend!

Barb
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  #5  
Old 01-28-2005, 02:17 PM
Kendor Kendor is offline
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To tell the truth, I had a lot of fun writing it because I had to work out everything for myself as I went along. So thank you for the question which made me understand QB a lot better.

Ken
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  #6  
Old 01-30-2005, 05:44 PM
hartford hartford is offline
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Hi Ken
and not bad for a lawyer!
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  #7  
Old 01-31-2005, 05:32 AM
Kendor Kendor is offline
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Hartford

Funny how lawyers tend to be none too numerate. Tell a lawyer that he's semi-numerate and he'll generally be quite chuffed (but don't dare call him semi-literate!)

In this country, aspirant attorneys (solicitors) now have to pass a one-year course in accounting at university because of the handling of trust money. But when I qualified many years ago, the profession ran its own accounting exam with study material written by an advocate (barrister, a generally even less numerate group than attorneys) and the exam paper was set and marked by attorneys.

One of the questions I had to answer was taken directly from an example in the study material, and it gave me no end of pleasure - you will have noticed that I like bashing icons - to give the answer from the study material and then to point out why it was wrong and give the correct answer. At first I used to wonder whether the examiners knew the study material was wrong and were trying to find out how many students understod the subject well enough to realise it. But I can no longer even visualise this charitable possibility.

Ken
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