Questions and Answers
Ask a Free Bookkeeping Question

Are you having difficulties with Bookkeeping? Here on the Questions and Answers page, you can ask a question about any area of bookkeeping and accounting. If you are finding it hard to figure out where to categorize your expenses and are wasting valuable time worrying about what to do, you don't need to worry any more. From the general ledger, accounts receivable and accounts payable accounts all the way through to the generation of financial statements. No question is too big or small. You can ask it here. It's free and easy to do.

In response to the amount of questions I have been receiving via email, I decided to start this page to answer any questions you have about problems with your bookkeeping. It is always beneficial to have the help of other professional bookkeepers to make sure you are accurately taking care of your books. So if you find yourself worried and wondering if you are doing something correctly or not, have no fear! You have come to the right place for help.

Submit a bookkeeping question ~ See other visitors questions and answers

Rather than answering individual questions via email, this will give everyone a chance to read about problems that others are having too, and find out how to solve them. It will become a FAQ about Bookkeeping that will hopefully help to save a lot of headaches by sharing helpful information that can help you get it right the first time.

The advice I give is only from my experiences and way of doing things. If you have valuable experience to share, please help me by also contributing to the answers. This is a two way web page...you and me. You can ask a question, answer a question or do both. You will become my co-expert on these questions by rating and submitting comments.

Of course you can still contact me if you have a question that you feel would not benefit others or needs a personal response.


Questions and Answers - Income Tax Questions

Questions and Answers

There will also be a separate page to ask income tax questions. As well as asking a question about your income tax problems, you can also read previous income tax Q&A's on that page.

All other questions about any aspect of bookkeeping and accounting can be asked just below, on this page.

Important: If you do not include enough information in your question, I will not be able to answer it. Please be as detailed as possible.

Having Difficulties With Bookkeeping? Let Us Help

Ask questions about the problems you are having with bookkeeping. You can even answer questions that have already been asked. It's free, it's easy and it's fun.

This is for everyone to participate in. Let's all help and be helped. Don't forget to check back soon to view the answers. I'll do my best to give my personal reply within 24 hours.

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What Other Visitors Have Said

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Work Questions 
We bought cell phones for some of our Employees, to be used for both business and personal use. Employee is responsable for an agreed upon portion of the …

Gas Questions 
Hi, Example I keep my gas receipts for the month. I keep my client lunch receipts for the month. I have to submit HST taxes quarterly in Ontario Canada. …

Miscellaneous Questions 
Two partners owned one business and then brought in a 3rd partner and purchased a similar business and restructured ownership and debt of previous company. …

Gift Certificate Questions 
We are an S-corp. Have an employee buying 5% for 100K. We will loan the money. In addition we are gifting the employee $25,000 and will loan the balance …

Customer Questions 
I have a vendor who also is a customer. As a vendor they refunded us too much money and they want to use the credit to pay part of their customer bill. …

Capital Account Questions 
Hi, We lease a computer equipment for $10,000 that will be pay off within 4 years. This is a capital lease. Now I need to write a check for $700 using …

VAT Questions 
I'm doing a spreadsheet and I would like to know how to record: . vat clearing & . business levy in the financial statements???

Revenue Account Questions 
Can a deferred revenue be credited with a debit to Accounts Receivable? My business has deposits received for future services rendered. We like to set …

Petty Cash Questions 
Hi, Petty Cash is post to deposit(revenue) account, cheque is out. Now I am doing bank reconciliation, how can I fix it? Thank you so much, Liming …

Liability Account Questions 
A liability needs to be established thru payroll for the purchase of a protective vest for a new employee. Once they have now worked here for over a month, …

Correction Questions 
Yearly escrow fees for a rental condo are booked into a current asset acct. At year end the actual taxes paid from the escrow acct are reclassed to an …

Accounting Questions 
Hello, I need to do the accountancy for a company but it has been more than 10 years since I had some courses and I'm a bit stuck. Setting: There …

Check Questions 
How do you reissue a check that was not cashed in a previous year? The previous year has been closed, so the expense was already taken.

Vehicle Questions 
How Do I record vehicle trade ins?

Unanswered Bookkeeping Questions 
If a company purchases a vehicle for at the end of a lease agreement, does the company capitalise this payment or expense it?

Company Start-Up Questions 
If I want to get into book keeping and I do not realy know much about the subject where is the best place for me to start?

Suspense Account Questions 
When I clear a Suspense account do I have to clear it entry by entry or can I make one entry in General Ledger using the specific expense accounts totals …

Managing Vendor discounts 
Hi I am wondering what is the correct way to manage discounts I get from Vendors. They are flat rate discounts which vary from product to product. …

GST Questions 
Terms of 1%/10. Is the 1% to be taken on the whole invoice amount including G.S.T. or does the discount only apply to the product and customer has to …

Payroll Questions 
We formed a small family partnership to handle our parent's finances and care. In 2010 we issued only 2 payroll checks and withheld all of the payroll …

Tax Questions 
What are the taxation laws apply to a bookkeeper who is working as a BAS service provider?

Sole Proprietor Questions 
Can I show proprietorship expenses in P&L A/c? It is valid for Indian Income tax.

Accrual Basis Questions 
My organization is putting on a large paid event in six months. We just started taking $100 reservations by credit card - we get $97 and the credit card …

Expense Questions 
A colleague has submitted some expenses now going back to 2009 and even ones from this year are from before our year end in 31/07/11. What is the best …

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Cost of Goods Sold Questions 
Hello, We are a new company (an LLC). We are service only and will not have any inventory on hand. When we create an invoice in our accounting system …

Bank Account Questions 
What is the meaning of debit and credit? Thank you for your inquiry about bookkeeping debits and credits. Basically a debit is the left hand column …

What Are Prototypes And Product Creation 
What are prototypes, design and development of a product categorized as?

Cash Questions 
Cash received as loan goes to which side in Trial Balance?

Payment Questions 
Should original invoice from a service provider be included with payment or is a copy okay?

More Bookkeeping Questions 
What is the double entry for for issuing shares to employees?

LLC Questions 
I have a client who was going to convert to a S-Corp from a LLC early in 2011. It never happened. He changed his mind with it. In the mean time, he …

Receipt Questions 
Our Charity received a call to say money was deposited into our account in error. We will refund, but do we write out a receipt for this amount, since …

Loan Questions 
Our business began with the loan: Dr Bank Cr Loan Account For making payments I have just: Dr Loan account Cr Bank Now I have received monthly …

Equity Questions 
Does assets - liabilities = owner's equity?

Bookkeeper Questions 
What courses in college must you take to become a bookkeeper?

Posting Questions 
When you start a sole proprietership business and paid expenses out of your pocket before receiving income where do you post that in the books?

Rent Questions 
How should I categorize a moving truck rental? Thank you for your question regarding how to categorize a moving truck rental. The expense for renting …

Classify Questions 
What do you classify health club membership fees for employees as on the books of a business?

Funding Questions 
If I have a small business (sole prop) that I have been doing business from for years. My accountant has urged me to incorporate, so I did. I still use …

Journal Questions 
I am self-employed and work on commission as a distributor. Booking that commission is straight forward. My question is: They also issue product certificates …

Refund Questions 
I have made a single payment to a staff member - the complete amount is the overpayment. How do I reconcile this in Quickbooks. I have written a cheque …

Account Questions 
What do I look for when reviewing a clients account?

Business Questions 
Should gas be put under travel or vehicle expense? Thank you for your question about business gas expense. Gas is typically put under gas expense …

Asset Questions 
Purchased new vehicle and traded in old. The amount owing on old vehicle was 14000. received 17000. trade in allowance. I have credit old vehicle asset …

Personal Questions 
I have an S Corporation I am trying to do BK for, the problem is he is taking cash from his checking to pay off his personal charges from a CC. I cant …

Money Questions 
We borrowed money from friends and family to live while getting a business going. Last year was the first year we could pay any of it back and we did so. …

Transfer Questions 
I'm trying for the first time to use the Quickbooks budgeting feature and really stick to my budget. I can't figure out how to track payments on loans …

Credit Questions 
If I have a business and I purchase fuel oil and I get a $10.00 discount, what type of an account would I create to record this discount? Thanks, Norma …

HST Questions 
Can you claim HST on mileage expense?

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Merchant Credit Card Fees Not rated yet
When I receive a credit card payment of, lets say, $100. But the merchant credit card company only deposits into my account $97.50 due to deducting $2.50 …

Investing In Construction Company In Panama. Not rated yet
Good day, I would like to recieve some information regarding my question, please. My incorporation just finished the prosess of refinancing, and because …

Year End Rollover Not rated yet
What happens when a end of year rollover is done in an accounting package?

Income Tax Questions Not rated yet
I just turned 18. I've been living with my boyfriend. Can he claim me on his income tax?

General Ledger Questions Not rated yet
When an owner buys goods or services with their personal money with the intention of being re-paid later, how is this shown on a general ledger? In addition …

Salary Questions Not rated yet
Is salary debited or credited? Thank you for your question about salaries. The salaries account for amounts paid to employees typically carries a …

S Corp Questions Not rated yet
We are in the process of opening another restaurant dba under the same S corp. We will keep a seperate set of books. How do I account for all the dollars …

Credit Card Questions Not rated yet
Hi, I am a bit confused on how to treate such a transaction. Credit card was used to purchase some goods. But the invocie has not been received yet. …

Insurance Questions Not rated yet
How to post an insurance claim check which was received in payment of property loss without it showing up as income?

Mortgage Questions Not rated yet
I know that a mortgage due is a short term liability for what principle is due within the current fiscal year; and a long term liability for the remainder. …

Depreciation Questions Not rated yet
When the Australian dollar depreciates against the US dollar, what effect does this have on Australian exorters who export to the US? How does it effect …

Sales Questions Not rated yet
Hi, I have a question on how to use the 'deductions' section when calculating my sales tax payable. Am I supposed to deduct my business expenses in this …

Stock Questions Not rated yet
When I incorporated as s-corp from sole prop i was given 100% of the stock for all assets under sole prop, how do i report this into quickbooks, is it …

Donation Questions Not rated yet
What is the double entry for donation received as goods from supplier?

Entering Questions Not rated yet
I am setting up my one-man web design company using an open source, double entry accounting program. Since I "sell" intangible items like website development …

Equipment Questions Not rated yet
We have leased equipment. The lessee has paid us $50000 against the total amount of the equipment, which is $550,000. They will lease the equipment from …

Deposit Questions Not rated yet
I have to deposits from previous years that have never cleared. I need to close the book for this year how do I get rid of them? Thanks

Owner Questions Not rated yet
I am a owner that withdraw cashier checks from my bank and deposit the unused cashier checks back in to my bank account. How do I book it in quickbooks …

Trusts Not rated yet
We have set up a trust for a retarded child. We are not using the money out of it for her yet - it is just in the bank collecting interest. I am told …

Prepaid Questions Not rated yet
How to post a prepaid insurance expense, or can I just post it as a one time expense when invoiced? The payments are made monthly over a one year …

Company Questions Not rated yet
Can I buy merchandise from Marshalls with a company card and export this merchandise in Europe even Marshall doesn't issue an invoice on my company name, …

Double Entry Questions Not rated yet
How will refund rate be shown in the double entry bookkeeping?

Chapter Journal Questions Not rated yet
PREPARE A PETTY CASH BOOK OF VIGNESH TRADERS FOR THE FIRST WEEK OF AUGUST 2009. THE BUSINESS MAINTAINS BOOKS UNDER IMPREST SYSTEM WHERE IN FLOAT IS FIXED …

Trade Questions Not rated yet
How are trading goods received as gift recorded in journal?

Register Is Off Not rated yet
The register in my account is off. It shows I have a negative balance, however I can reconcile every month. How do I fix the register to show the correct …

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From Chapter Bill of Exchange Not rated yet
Manish accepted a bill of Rs.40,000 drawn by Krishna at 3 months. Krishna got the bill discounted with his bank for Rs.39,000. Before the due date, Manish …

Financial Report Not rated yet
Hi, The opening balance for the period + the income from the P & L minus the expenses on the P & L does not equal the ending balance in the GL. What …

Unbilled Suppliers Orders Not rated yet
I receieved invoices dating back July 2008 from one of my suppliers for unbilled orders I placed with him. The total of all the invoices come to approximately …

Quick School Question Not rated yet
On August 4, Sanders provides services to Frederickson for $5,000, terms 3/10, n/30. Frederickson pays for the services on August 12. What amount would …

Balancing Questions Not rated yet
I have three Investments accounts in GLedger, all are Debit accounts. Lets call them I,IIcall account and III. Money gets moved from III into …

Retainer Questions Not rated yet
How do I record a 'retainer' paid to a vendor or supplier? I use QuickBooks. Thanks.

Ledger Not rated yet
If a firm purchases office equipment which account should record the purcase the purchase account? Or do you make a office equipment account?

Invoice Questions Not rated yet
I am a very small business - a one-person secretarial service, and I've never had the facility -- nor a pressing need -- to accept credit cards (though …

Labor Questions Not rated yet
Entries for donated help in setting up your business

Transaction Questions Not rated yet
Our Non-Profit Society sells items on consignment. We do not purchase the items. Upon the sale of the items, we keep 25% and the consignee gets 75% at …

Fee Questions Not rated yet
Do I post a semi annual fee associated with a home mortgage to an expense account?

Write Off Questions Not rated yet
If a job was done for a client, but client is not billed because the job was bad due to our fault, it would not be considered a Bad Debt because client …

Quickbooks Questions Not rated yet
I am helping a company with their bookkeeping and migrating their financial information (6 years) from receipts and invoices stuffed in paper bags and …

Purchase Questions Not rated yet
I have recently purchased multiple SFR as investment properties. I am currently doing numerous renovations on the home, such as new texture, replacing …

Percentage Questions Not rated yet
In our nursery business, when we deliver plants out of state, we charge the customer freight on the total amount of the invoice. I already know how to …

Closing Questions Not rated yet
After unadjusted trial balance is verified, what is next step in month-end close process?

Employee Questions Not rated yet
Hi, We are a small contracting company, and we use Quickbooks. One of our employees got another job, and we are trying to reconcile his balance based …

Inventory Questions Not rated yet
If I pay an employee in his paycheck for items he purchased for the company how do I put the bill into the books and then not have the accts payable still …

Partner Questions Not rated yet
My company just took on a new partner. The partner is investing money into the company. I need to post a large amount that has been put into our savings …

Freight Questions Not rated yet
I have an invoice for 6 different items, some are raw products, some are equipment. Total shipping was $8.50. What is the proper way to divide up shipping …

Want to Claim for a House  Not rated yet
My husband is unemployed since one and half year we have one son n we live in my mother in low's house we have no property now she want us to be out from …

Clean Up Questions Not rated yet
I am working woth a new non-profit. They did not keep accurate records for the year 2010. While thier bank statements show more income that they show …

PREPARE FOR END OF FISCAL YEAR Not rated yet
We have a new Treasurer bookkeeper and I am a new president of a small 501c3 non-profit. This clause shown below is in our bylaws and It seems the past …

Budget Questions Not rated yet
How do I show the mortgage principal payment as part of the monthly expenses for budgeting when it is a liability account and does not show on the QuickBooks …

What Would Be Debit in the Case Given Below  Not rated yet
Let off the part of the premises receiving rent by checque $75

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Life Insurance Questions Not rated yet
Can I write off the premium's for life insurance. I file long form.

Service Questions Not rated yet
A usual charge for a sale of an advanced teaching service from School A is £250. However a Customer performs some duties for School A (ie some cooking/cleaning/teachi …

Handling A SEP IRA Contribution? Not rated yet
SEP IRAs retirement plans similar to 401Ks except that the company makes 100% of the contributions. There are numerous requirements that are well documented …

Rebate Questions Not rated yet
How do I balance my books if the supplier is not giving cash back for rebates but take it as payment for what he is owed?

Bad Debt Questions Not rated yet
Our business makes the following entry when a sponsorship is agreed upon. We debit Accounts Receivable and credit Deferred Revenue Sponsorships. I have …

Property Management Escrows Not rated yet
A homeowner buying on land contract who is paying water directly was delinquent and water amount went to taxes. Can we take the amount paid by land …

Networks Not rated yet
I have question about networks that I am hoping that someone will be able to help me with. Specifically, what is a network? Also what are the components …

Trial Balance Questions Not rated yet
How are Bank Deposit account, Dividends Paid, Loan Stock & Interest on Debentures recorded in the Trial Balance? Which do you debit and which do you credit? …

Wrong Form of the Social Security Not rated yet
There are 2 business and I have been doing my income tax by a bookkeeper. The other business went with another accountant and he said that he had found …

Over/Under Billing Not rated yet
How do you book over/under billing for WIP on Profit and Loss.

What Is The Proper Way To Itemize This Scenerio? Not rated yet
What is the proper way to itemize this scenerio? Company I am helping is a middle man for title company and County court houses. He receives money …

Help Answer Questions Not rated yet
What is the correct way to account for auctioneers commission deducted from the gross sale price. E.G Items sold for £2010.00 at auction Auctioneers …

Sage 50 Not rated yet
In sage 50, where do i find the suppliers payment wizzard, and which box on the suppliers window do i bring the payment wizzard up. also i would like …

suppliers wizzard Not rated yet
Hi. Could you please tell me where i can find the suppliers payment wizzard, on the suppliers list, thank you.

Business Startup Questions Not rated yet
I did 2 bookkeeping courses: Bookkeeping to trial balance & Payroll to statutory returns when I go in a company where do start, or what must I do first? …

Lease Questions Not rated yet
I have started a small business and purchased a sign with a lease purchase agreement. I paid $1000.00 down leaving a balance due of $7400 (with monthly …

Foreign Currencies Not rated yet
I have a new client who deals in US $ and does not need to exchange into CAD $ as he pays his expenses, salaries etc all in US $ . I am writng from …

Website Business Questions Not rated yet
I am going to start to develop a website soon about gardening. I will be using Site Build It and I will like to keep all records of income, expenses and …

Underpayment Penalty Not rated yet
A taxpayer may owe an underpayment penalty for what? Hi, Thanks for your question, A taxpayer may owe an underpayment penalty when he/she is …

Corporate Questions Not rated yet
I have a client, who is an S Corporation. One of the 4 shareholders took out a loan to (1) pay off back payroll taxes and equipment purchases and (2) …

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