Beginning bookkeeper trying to "fix" a problem!
Cash proceeds from a volunteer thrift store (the total amount of cash is recorded at the store) was given to the bookkeeper. The director over the volunteer thrift store project wanted to give the thrift store volunteer a gift for Christmas. So he asks the bookkeeper for $50.00 cash to be given in a card to the volunteer at a luncheon.
The bookkeeper had just received the cash proceeds from the store when the director asks for the $50.00, so she gives him $50.00 from the recorded cash proceeds; the bookkeeper knows that the cash is recorded before she receives it so she writes a check from the account that the proceeds are deposited into to make the cash proceeds total amount match the recorded amount. She posted the deposit in quick books and expensed the check as a "gift". The deposit and check has cleared the bank and the independent audit is $50.00 off.
What bookkeeping entry can be made to correct this.
(No wrong doing was intended, the bookkeeper just did not know what to do.)
Can you help?
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Bookkeeping Posting
Is posting an expense, a debit entry to the expense account?
Hi,
Thanks for the question. Yes, when posting an expense you are making a debit entry to the expense account as it carries a normal debit balance.
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Deleting posted payments
by Carol
(Pittsburgh PA)
After 38 years of working, I have always believed that a computer system should not allow staff to delete payments, charges and adjustments once they have been posted. Unfortunately, not everyone where I currently work believes in that statement. Is there some place I can get written proof that this is not a good practice? Thanks
Hello Carol,
Thank you for your question.
Deleting posted payments is a huge no-no and a red flag if ever audited!
I would check out the IRS website at www.irs.gov.
I will be on the lookout and post back if I happen to find anything for you.
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How Do I Post a Loss on Rental Properties?
This has been a bad year and I have one property that the Tenants moved out owing us a lot of money. Do I post this as a Journal entry? Is it an expense, liability, what?
Loss of rent is not posted as a journal entry on the books. The loss will show up on your tax return, (On Schedule E), when the amount of rent received is less than the amount you've paid in expenses.
Thanks for asking. This is a great question as many people are running into the same issue this year. I hope next year is much better for you!
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Post to Which Account
If an employee of a restaurant leaves food out to spoil. The employer takes the money for the loss out of the employees next paycheck.
The employee's check will show a deduction for $25. Does that goes against sales or purchases. Which account will be debited and which credited?
Hello,
Thank you for your question.
I believe that the deduction from the employee's paycheck would be credited to purchases (COGS), since it is a purchased expense that is being reimbursed.
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Posting an Insurance Premium Refund
by Teresa
(Glen Allen, VA)
What two accounts do I post an insurance premium refund to?
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Posting to a GL Account
A credit is posted to your checking account by your bank because you transferred funds from another account to cover an overdraft. When posting this credit in your checking account register, what GL account should you post to? It's not "bank service charges" or "NSF" charges....
Hi,
Thanks for your inquiry. If the other account was a personal account, the credit would be posted as an Owner's contribution.
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Proper entries for business owner's mortgage payment
by Yolanda
(Philly)
An owner bought a building and uses it to be his daycare center. The building is under his name and his mortgage check payment is made out of his daycare. How do I post this payment correctly? Treat it as a rent expense to the daycare and to owner as income or... one more thing his daycare is non-profit under registration.
Hello Yolanda,
Thank you for your inquiry.
First, the owner would need to set-up the building and mortgage accounts. If the building and loan value were 100,000, the transaction would be as follows:
DEBIT 100,000 Building (Asset)
CREDIT 100,000 Mortgage Loan Payable (Liability)
Then each mortgage payment would be recorded as follows:
CREDIT Cash Account
DEBIT Mortgage Loan Payable (principal portion)
DEBIT Loan Interest Expense (interest portion)
The interest portion of the payment is the only amount that is deductible, while the building itself would be depreciated.
Great question!
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