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Account Questions

Here are some fast answers to questions recently asked through the Fathom site.

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Show/Hide AnswerWhat tax line do you assign to a petty cash account in QuickBooks?

Petty Cash Account should be a bank account. So no tax line for expenses. Petty Cash is not an expense. The things that you buy with petty cash for business use are an expense. You would record petty cash purchases by using the write checks feature and "writing checks" from the Petty Cash Bank Account. If you are tracking your balance sheet balances, then you could either count your cash at the end of the year and reconcile the account, or you could zero it out into draws if you are a sole proprietor. This mostly depends on the size of company you have.

Show/Hide AnswerDoes Petty Cash always go above Bank Accounts in a Chart of Accounts?

Not necessarily. If you sort your chart of accounts, (click Account at the bottom of the window and click Resort List), the accounts will sort by type and then by name. Petty Cash will move to its location based on the names of all your bank accounts. You can relocate it by clicking on the diamond to the left of the name and dragging it to the location you prefer. Or to make it permanently sort to the preferred location, either change its name so the it will sort as you wish, or to make it sort to the bottom of the bank account list, rename it zPetty Cash.

If you use account numbers, resorting the chart of accounts, will sort the accounts into type and then number order. In this case, number your bank accounts in the order you wish them to appear. It's a good idea to leave skips in your numbering so that you can add accounts without the need to renumber existing accounts.

Show/Hide AnswerHow do I establish a till account?

Go to Lists, Chart of Accounts and create a new bank account named "Till."

To put money in the till, you can write a check from your checking account for cash for the till. Post the check to the "Till" account. If you put funds from the owner's funds in the till, you can go to Banking, Make Deposits, choose the "Till" and record that the funds were received from the owner and post to an equity account such as Owner's Investment or Owner's Draws.

 

 

Advice and tips provided on the Fathom Graphics website are not a substitute for advice from your CPA, tax preparer or attorney. We are not CPAs or attorneys and do not provide legal or tax advice.