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Correct Chart of Accounts Name

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  • Correct Chart of Accounts Name

    So I am working with two checking accounts right now. I manage a bunch of airbnbs for owners. I have an escrow account and another operations account where I make payments to employees, vendors, and owners. I transfer money from my escrow account to the operations account in order to do this. Now, what would I call al the deposits from my escrow account to the operations account? What category and chart of accounts name?

  • #2
    The transfer from one bank account to another is recorded using only Balance Sheet accounts. There is neither an expense to record nor is there income to recognize.

    To illustrate: Suppose you have at least the following two accounts in your Chart of Accounts Bank type of accounts
    • 1005 Operations Bank Account
    • 1010 Escrow Account
    If the accounts are in the same bank and you can make transfers on-line, record the transaction using a general journal entry with a credit entry of $5,000 to bank account 1005 and a debit entry of $5,000 to bank account 1010.

    Note: A credit entry decreases the balance in a balance sheet account. A debit entry increases the balance in a balance sheet account.

    To make a General Journal entry, click on Company on the top or side Menu Bar. Scroll down to select "Make a general journal entries".

    If the accounts are not in the same bank or you cannot make transfers on-line, add a new Bank type account to the Chart of Accounts:
    • 1015 Bank Transfers
    In QuickBooks write a check to your company with the "Expense" being to1015 Bank Transfer account. Make a deposit slip to account 1010 Escrow Account with the credit to the 1015 Transfer Account.
    Lorin Browning, Ph. D.
    Fellow -- National Tax Practice Institute

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    • #3
      Okay! Sounds great. Also, when I have to review these previous transfers, what do I categorize them as? Because they have to be put somewhere, and I am not sure where to put these transfers.

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      • #4
        Unless I am missing something, you categorize them as Bank Transfers. They do not show up as either Income nor as Expense.
        Lorin Browning, Ph. D.
        Fellow -- National Tax Practice Institute

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