March 15, 2018 at 11:08 pm #174940
I recently received a 670.00 refund on my MasterCard. Several questions: First, I do not have a credit card account in my chart of accounts (switched to QBOnline two months ago). Should I simply add one? If so, what type of account is it? Is it an expense account? Or is it actually it’s own TYPE of account as well – meaning the name would be Master Card Credit Card and the TYPE would be Credit Card.? If it is a credit card TYPE account, is this a liability account?
Also, If I record the 670 credit and apply it to the expense account the original purchase was applied to, I understand that. Here’s the next challenge: Several small charges have occurred since then and my credit card of course is not showing an amount due because of the 670 credit still covering these subsequent small charges. How do I account for the small charges that the 670 is covering? THANK YOU!March 15, 2018 at 11:16 pm #175306
Hey Greg! You ask good questions. 🙂
Ok, so here are my responses to your questions in the order that you asked them:
Yes, you need to add the credit card to your chart of accounts. Select Credit Card as the type and then you can put something like Mastercard, x1234 (last 4 digits of the card if you will be setting up more than one).
Yes your Mastercard will be set up as a liability account; all credit card types are treated as a liability because you owe that money to a creditor (i.e. Mastercard)
You are correct in how to handle the credit of $670 so be sure to enter that into the credit card register for your Mastercard.
For all of the charges that have come thru since then, enter them directly in the Mastercard account and select the appropriate expense account.
I’m not sure if you have already watched them but we have a couple of video tutorials that cover how to manage your credit card transactions in QuickBooks Online. I have included the links below:
Video Tutorial: https://fitsmallbusiness.com/credit-card-sales-3rd-party-credit-card-processor/
Thank you for the great questions and for reading our articles!
All the Best-