Paypal account negative

msimms06

When i purchase something online using my paypal account. The money passes thought paypal from my checking account. Quicken see this transaction and sees it as a debit in my paypal account. Now my paypal account is showing a negative balance.

Tom Young

"Now my paypal account is showing a negative balance."

I assume that's because you're not showing the "initiating" purchase in the PayPal Account to begin with.

If the entire accounting for the purchase is simply accounted for as a transfer from the checking Account to the PayPal Account, then as you drive down your cash balance you're affecting the PayPal Account in a similar amount.  Assuming the PayPal Account was set up as a liability Account that would cause the PayPal Account to have a negative balance. 

You need to establish the purchase within PayPal as:

Debit (increase) Category set up as an expense category $X

Credit (increase) [PayPal Account]                                      $X

Then when the transfer occurs the accounting is:

Debit (decrease) [PayPal Account]                                      $X

Credit (decrease) [Checking Account]                                 $X

and that zeros out the PayPal Account.

Boatnmaniac

When you send money or pay for a purchase via PayPal and the source of the funds is your credit card or your bank account, PayPal will record that transaction as a debit.  But that money from your credit card or banking account is simply a pass through transaction that is never deposited to your PayPal account so there is no deposit transaction to be recorded in PayPal.

The easiest way to deal with this is when your credit card or bank account transaction downloads make sure to record that transaction as a transfer to your PayPal  account.  The dates for the debit and credit in Paypal will be 1-3 days apart but your ending balance will be accurate.

Or, you can enter a manual transfer transaction from your credit card or bank account for the same day as the PayPal transaction if you want the dates to be the same.  Then just make sure when your credit card or bank account transaction downloads it is matched to your manual transaction entry.

Another way to resolve the issue is to transfer money into your PayPal account for PayPal to hold.  PayPal will download that transaction as a deposit.  Then PayPal will first use that deposited money to pay for your purchase.