Bank Interest

Bank Interest

Bank Interest

Am I right in thinking that to gross up Bank interest you use 100/80 and for Dividends its 100/90?

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Jul 26, 2023
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starstarstarstarstar 		Gross Us Bank Interest
by: BB

No, you are not correct in thinking that. To gross up bank interest or dividends, you typically use 100/ (100 - withholding tax rate). For example, if the withholding tax rate on bank interest is 20%, you would use 100/80 to gross up the interest income. Similarly, if the withholding tax rate on dividends is 10%, you would use 100/90 to gross up the dividend income.

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Bank Loan

by rpm
(Ontario)

Bank Loan

Bank Loan

When a bank loan and loan interest payment is made, is it correct to post a credit to the bank and a debit to the balance sheet account called bank loan payable and then a debit to the income and expense account called Bank Loan Interest Expense? Does the loan repayment portion inpact the Income Statement?

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Apr 20, 2011
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starstarstarstar 		Loan from Bank
by: Stephanie

Yes when a bank loan and loan interest payment is made, it is correct to post a credit to the bank and a debit to the Balance sheet account called bank loan payable and another debit to the income and expense account called Bank Loan Interest Expense.

The loan repayment portion does not impact the Income Statement only the interest paid each year that is deductible as an expense impacts the profit and loss statement.

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Bank Reconciliation Not Balancing

by Peter
(Adelaide)

Bank Reconciliation Not Balancing

Bank Reconciliation Not Balancing

I am a beginner using MYOB Accounting Plus v17, and I encountered an issue with my bank reconciliation for February. My boss accidentally paid two bills twice during that month, causing the balance to be off. One of the companies has refunded the payment in March, while the other is keeping the money as credit for our next purchase. I'm seeking advice on how to rectify this situation and balance the accounts for January. Any help would be greatly appreciated. Thank you.

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Jul 27, 2023
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starstarstarstarstar 		MYOB Bank Reconciliations
by: Stephanie

To resolve the issue with your MYOB bank reconciliation for February, you can follow these steps:

Check your bank statements and identify the duplicate payments made by your boss.

In MYOB, locate the transactions for the duplicate payments and mark them as unreconciled.

Adjust the bank balance in MYOB to account for the refunded payment received in March. Enter a new transaction for this refund and reconcile it with your bank statement.

For the company that has kept the money as credit for your next purchase, you can create a credit note or a customer prepayment in MYOB to record this amount. This will reduce the outstanding balance owed to that company.

Once you have made these adjustments, redo the bank reconciliation for February to ensure it balances correctly.

If you are unsure about the specific steps in MYOB, it's a good idea to refer to the user guide or seek assistance from someone with more experience using the software.

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Bank Statement Nightmare

by Alison
(Appleton, WI, USA)

Bank Statement Nightmare

Bank Statement Nightmare

The Bookkeeper before me did not put the deposits in QB instead she put 0.00 amounts then did splits for our commissioned employees. They also do not add up to the actual deposits. So, I guess my question is how I reconcile the bank account.

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Jul 27, 2023
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starstarstarstarstar 		Reconciling The Bank Account
by: BB

Reconciling the bank account can be a bit challenging in this situation. Here's a step-by-step guide to help you:

Gather all bank statements: Start by collecting the bank statements for the period you need to reconcile.

Compare deposits: Compare the deposits on the bank statements with the 0.00 amounts and splits entered in QuickBooks (QB). Identify any discrepancies.

Verify individual transactions: For each deposit, review the split transactions entered by the previous bookkeeper. Make sure they accurately represent the commissioned employees' shares and that they add up correctly to the actual deposit amounts.

Correct discrepancies: If you find discrepancies between the actual deposits and the QB entries, make adjustments in QuickBooks. You may need to create new transactions or modify existing ones to match the correct deposit amounts.

Add missing deposits: If any deposits were not entered in QuickBooks at all, create new transactions for those deposits.

Reconcile the bank account: Once you have made the necessary corrections and added any missing deposits, reconcile the bank account in QuickBooks with the corresponding bank statement. Ensure that the ending balances match.

Double-check other transactions: While reconciling, review other transactions in QuickBooks, such as expenses, payments, and transfers, to ensure their accuracy as well.

Keep records: Maintain detailed records of the adjustments made and any changes to the transactions for future reference.

By following these steps, you should be able to reconcile the bank account and ensure accurate financial records in QuickBooks.

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Bank Statements

by Anthony
(Syracuse, NY)

Bank Statements

Bank Statements

I am working for a Paving Company. Are you supposed to keep your bank/checking account statements for a certain period of time? Do I attach them to my balance sheet and general ledger for year-end audits by the company hired accountants?

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Jul 27, 2023
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starstarstarstarstar 		Keep Your Tax Returns Four Years
by: BB

It is recommended that you keep your tax returns and all supporting documentation (including bank statements) for at least 4 years.

Typically, your December statement showing the balance at 12/31 and the December bank reconciliation should be kept with the Year End Balance Sheet in order to show that the two "tie out" or match.
Jul 27, 2023
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starstarstarstarstar 		Keep Your Tax Returns Four Years
by: BB

It is recommended that you keep your tax returns and all supporting documentation (including bank statements) for at least 4 years.

Typically, your December statement showing the balance at 12/31 and the December bank reconciliation should be kept with the Year End Balance Sheet in order to show that the two "tie out" or match.

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Banking

Banking

Banking

I have to record in the general ledger a monthly repayment on a bank loan of $3100. The interest component of the loan is $1625. How do I record this in the general ledger?

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Jul 26, 2023
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starstarstarstarstar 		Journal Entry For Loan Repayment
by: BB

To record the monthly repayment on the bank loan in the general ledger, you would make the following journal entry:

Debit: Bank Loan (Liability account) - $3100
Credit: Cash/Bank (Asset account) - $1475
Credit: Interest Expense (Expense account) - $1625

Explanation:

The debit to "Bank Loan" reduces the outstanding loan amount by $3100, reflecting the principal repayment. The credit to "Cash/Bank" represents the cash outflow of $1475, which is the total repayment amount ($3100 - $1625).

The credit to "Interest Expense" reflects the interest portion of the payment ($1625), which is recognized as an expense. This entry ensures that the loan liability is reduced by the principal repayment, and the interest expense is recorded separately as an operating cost.

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Banking Fees

Banking Fees

Banking Fees

I am the volunteer treasurer for my church. At the beginning of each month the bank statement shows the account fees for the activity of the previous month. So, when the January statement shows the monthly fee for December, which is in a different calendar year, do I include those charges for the current year or prior year?

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Aug 05, 2023
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starstarstarstarstar 		Church Volunteer Treasurer
by: BB

As a volunteer treasurer for your church, handling bank fees that appear on the January statement for activities in the previous December, which falls in a different calendar year, can be a bit confusing. To ensure accurate financial reporting, it's essential to follow standard accounting principles.

In this scenario, the bank fees should be included in the financial records for the year in which they were incurred. Since the fees are related to the activities of the previous month (December), they should be recorded as expenses in the prior year (December's calendar year) and not in the current year (January's calendar year).

Properly categorizing the bank fees in the correct calendar year is crucial for maintaining accurate financial statements and adhering to accounting standards. By recording the expenses in the appropriate year, you can ensure that your church's financial records reflect the true financial position for each period.

As a best practice, reconcile your bank statements promptly at the end of each month and record all relevant transactions in the corresponding calendar year. This will help you maintain accurate records and make financial reporting and analysis much smoother for your church.

If you have any uncertainties or complex accounting scenarios, consider seeking advice from a professional accountant or financial advisor to ensure the accuracy and compliance of your church's financial management.

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Bookkeeping Bank Deposit

Bookkeeping Bank Deposit

Bookkeeping Bank Deposit

I was just going through my bank reconciliations for end of the year, and I noticed some business checks were deposited into my personal account. Both accounts are on the same card so in error it went to savings instead of checking. Will revenue Canada penalize me?

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Jul 26, 2023
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starstarstarstarstar 		Reporting business income to CRA
by: BB

Regarding Revenue Canada (Canada Revenue Agency - CRA), they typically focus on the accuracy and completeness of your tax reporting. As long as you report all your business income correctly, even if there was a temporary error in the deposit, it should not result in penalties as long as it is rectified in a timely manner. However, if you have concerns or need specific advice regarding your situation, it's best to consult a tax professional or reach out to the CRA directly for guidance.

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Bookeeping Debits and Credits

by Suman
(Kolkata)

Bookkeeping Credits and Debits

Bookkeeping Credits and Debits

What is the meaning of Debits and Credits in bookkeeping and accounting?

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Aug 05, 2023
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starstarstarstarstar 		Debits and Credits in Bookkeeping
by: BB

In bookkeeping and accounting, debits and credits are fundamental concepts used to record financial transactions and maintain accurate financial records. They form the basis of double-entry accounting, a system where every transaction has equal and opposite effects on at least two accounts.

Debits and credits refer to the side of the accounting equation on which a transaction is recorded. Here's a breakdown of their meanings:

Debit: When you record a transaction on the left side of an account, it is considered a debit. Debits are used to increase assets and expenses or decrease liabilities and equity accounts. For example, when you make a purchase, you debit the asset account representing the item purchased and credit the liability or cash account used to make the payment.

Credit: On the right side of an account, recording a transaction is known as a credit. Credits are used to increase liabilities and equity or decrease assets and expenses. For instance, when a business borrows money, it credits the liability account representing the loan and debits the cash account where the funds are received.

The fundamental principle behind double-entry accounting is that every transaction must have equal debits and credits. This ensures that the accounting equation (Assets = Liabilities + Equity) remains in balance. It also allows for accurate financial reporting and provides a comprehensive view of a company's financial health.

Mastering the concept of debits and credits is crucial for anyone involved in bookkeeping or accounting. It forms the foundation of accurately recording financial transactions, generating financial statements, and making informed business decisions.

By understanding how debits and credits work, financial professionals can effectively analyze financial data, track the flow of money, and ensure the accuracy of a company's financial records.

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Multiple Checking Accounts

by Janet Price

Multiple Banking Accounts

Multiple Banking Accounts

I keep books for my church, and we are currently in the process of building a new one.

We opened a new account specifically for this, and I have been keeping books separately for the building program.

We are now using our original account at a different bank. My question: is it acceptable to record monthly expenses from two separate banks in the same book?

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Aug 05, 2023
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starstarstarstarstar 		Multiple Banking Accounts
by: BB

Hello Janet, Thank you for your question about multiple checking accounts. The answer to your question is, YES. It is perfectly acceptable (and common) to record monthly expenses from two separate banks in the same book.

Many businesses actually use multiple kinds of accounts for business expenditures including checking, savings, credit card, loan and equity accounts. Warm regards!

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Reconcile the Bank

by Sylvia
(Yorkshire)

Reconcile The Bank Account

Reconcile The Bank Account

I am doing sage bookkeeping. I have looked over my accounts I dont know how many times. But when Igo to do my reconcile bank account as the bank statement it does not match. There is one entry for 258.00 which is a supplier's payment that is not working out which is not on the statement but in my sage :( Can you explain? Regards, Sylvia

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Aug 05, 2023
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starstarstarstarstar 		Sage Bookkeeping Bank Reconciliation Discrepancy
by: BB

Bank reconciliation discrepancies can be frustrating, but they are common in bookkeeping. If you've reviewed your accounts multiple times and still can't find the missing entry, it's essential to double-check your process. In Sage bookkeeping, discrepancies can occur due to various reasons, such as data entry errors, timing differences, or overlooked transactions.

In your case, the missing entry for the supplier's payment of $258.00 in Sage may be a result of an unrecorded transaction or an incorrect posting. To resolve this, start by verifying that the payment was indeed made and properly recorded in your Sage system. Check the payment date, amount, and supplier details for accuracy.

Next, compare your Sage records with the bank statement to identify any discrepancies. Look for potential timing differences, such as payments that were processed after the bank's cutoff date but recorded in Sage on time. Also, watch out for any duplicate entries or accidental omissions that might have caused the discrepancy.

If you still can't locate the missing entry, try reaching out to your bank to verify if the payment was processed and if there were any delays or issues on their end. Additionally, cross-check your supplier's records to ensure they have received the payment as expected.

In the future, it's a good practice to regularly reconcile your bank accounts and keep a close eye on transactions to prevent such discrepancies. Thoroughly documenting all transactions and keeping a clear record of supplier payments will help maintain accurate and reliable bookkeeping in Sage.

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Recording Bank Fees Deducted

by Annie
(Houston, TX)

Recording Bank Fees

Recording Bank Fees

I started working for a company which uses the following process to pay vendors:

1- Invoices are paid by Wire transfer
2- A bank fee is incurred and vendor is responsible for half the fee.
3-Invoice total does not include bank fee however deducted from invoice total amount upon making payment
4-Payment is recorded by using Pay Bill in QuickBooks
5-The total invoice amount is selected when recording payment.
6-A separate manual journal entry is recorded to record the bank fee

Is there an easier way to record bank fee using the pay bill feature?

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Jul 27, 2023
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starstarstarstarstar 		QuickBooks Pay Bill
by: Stephanie

es, there is a more streamlined way to record the bank fee using the Pay Bill feature in QuickBooks. Instead of using a separate manual journal entry, you can include the bank fee directly in the Pay Bill transaction. Here's how:

Open the Pay Bills window in QuickBooks. Select the vendor invoice you want to pay and click on the "Set Discount" button (in some versions, it may be labeled "Set Credit").

In the Set Discount window, enter the bank fee amount as a negative number. This will deduct the bank fee from the total invoice amount. Click "Done" to apply the discount to the payment.

Enter the rest of the payment details, including the payment method (Wire transfer) and the bank account from which the payment will be made. Click "Pay Selected Bills" to complete the payment.

By using the Set Discount feature in the Pay Bill window, you can easily deduct the bank fee from the total invoice amount and record the payment with the correct amount. This eliminates the need for a separate manual journal entry and simplifies the payment process.

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Stale Dated Cheques

by Marion
(Ottaw, Canada)

Voiding Business Checks

Voiding Business Checks

How do you remove a stale dated cheque when it was used to reconcile a bank statement?
Thank you, Marion

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Aug 05, 2023
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starstarstarstarstar 		Voiding Business Checks
by: Stephanie

If you are using bookkeeping software, all you need to do is to void the check. You can do this through the check register by highlighting the transaction and selecting void. Using double entry accounting software, you can do a journal entry to reverse the original transaction.

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