How do I record the cash that I received for charging my credit card for friends?

surestoreus

I'm new to Quicken. How to record the cash that I received from friends after paying for a restaurant bill or something brought online? Btw, I do not keep track of my cash transaction in Quicken.

Boatnmaniac

Sorry, I misunderstood.  I don't think it would be a good idea to do it as you asked because the "restaurant" part would be a debit and the "mis income" would be a credit so they would cancel each other out and your credit card transaction total would be $0. You want to make sure your credit card transaction total remains unchanged at $100 total otherwise your account balance will go out of whack.

I would not use the misc income category for a couple of reasons:

• The money received from "Bob" is not income.  It is simply a reimbursement for an expense.
• If you use the incorrect income category it could be counted as taxable income which would skew the tax reports and tax planner.

What I probably would do in this case:

1)  Enter the credit card transaction for $100.

2)  Split the transaction category:

• 1st line of the split transaction = $50 debit for "restaurant".  This would be for your share of the meal.
• 2nd line of the split transaction = $50 debit for "cash".  This would be for "Bob's" share of the meal.  You could enter a memo that this was for "Bob's" dinner and that "Bob" reimbursed you with cash.  "Cash" is the appropriate category because you are not depositing it and will spend it as cash at some time so it is a "cash" expense.
  
• Forget about recording an entry anywhere else for the $50 your friend paid you back.  It was cash and you noted it as cash in the 2nd line of the split category.
  

If you are not familiar with split transactions:  Go to Help > Quicken Help > search for "How do I record a split transaction?"  It's actually quite easy and fast to do.

Let me know if you have any questions.

(EDIT:  "Misc Exp" as suggested below by @volvogirl would be a good category substitution for "Cash" if you prefer.  When you take money out of your checking account for cash expenses, what is the category you use for that?  Whatever it is, I suggest using that category.)

Boatnmaniac

surestoreus said:

Thank you @Boatnmaniac @volvogirl

@Boatnmaniac when taking money out of my checking account I use the default Quicken category "Cash & ATM". In this case, I guess I just need to split that $100 into, $50 "Restaurant" & $50 "Cash & ATM" then make a memo "Bob share of the meal".

"Cash & ATM" would be a great category to use for "Bob's" share.  Looks like you got it down correctly.

surestoreus said:

Thank you @Boatnmaniac @volvogirl

@volvogirl, I get your point, never categorize expense as income. But the thing is I don't want to keep track of my cash use by creating a CASH account (I don't use cash that much anyway but pretty much charge everything on cc). In this example, I'd split the $100 charge as $50 Restaurant & $50 Cash & ATM, that would do it right? In addition, say if I use the $50 Bob gave me to purchase grocery, do you suggest I just split the transaction as $50 Restaurant & $50 Grocery?

I think she realized that her 1st paragraph might not be the best option (see the last sentence of that paragraph) and then in her 2nd paragraph she laid out the same process that I gave you. 

To answer your question, you can split the transaction as $50 "Restaurant" & $50 "Cash & ATM" or "Grocery" or something else like "Gas" if you want....whatever would most accurately reflect how you will use or did use it.

And what is really nice about Quicken is how flexible it is.  You could start off by using the 2nd split category as "Cash & ATM" and then change it later to "Grocery" or "Gas" or whatever when you know what you actually spent it on.  Quicken allows us to edit the details of transactions pretty much whenever we feel it is appropriate, even if it is years after the transaction was originally entered.

Boatnmaniac

Since there was no cash-out transaction recorded in Quicken then there should not be a corresponding cash-in transaction.

If/when there is a cash-out transaction (debit) recorded in Quicken, then when you get reimbursed it would be recorded as a cash-in transaction (credit) using the exact same category of the original cash-out transaction.

surestoreus

Actually there is cash-in transaction involved but I don't keep track of cash in Quicken. Allow me to be more specific. Let say if I charge my credit card in the amount of $100 when dining out with my friend and he pays me back $50 in cash to split the bill between us. Should I split that record under my credit card registry as $50 as "restaurant" & $50 as "mis income"?

Boatnmaniac

Sorry, I misunderstood.  I don't think it would be a good idea to do it as you asked because the "restaurant" part would be a debit and the "mis income" would be a credit so they would cancel each other out and your credit card transaction total would be $0. You want to make sure your credit card transaction total remains unchanged at $100 total otherwise your account balance will go out of whack.

I would not use the misc income category for a couple of reasons:

• The money received from "Bob" is not income.  It is simply a reimbursement for an expense.
• If you use the incorrect income category it could be counted as taxable income which would skew the tax reports and tax planner.

What I probably would do in this case:

1)  Enter the credit card transaction for $100.

2)  Split the transaction category:

• 1st line of the split transaction = $50 debit for "restaurant".  This would be for your share of the meal.
• 2nd line of the split transaction = $50 debit for "cash".  This would be for "Bob's" share of the meal.  You could enter a memo that this was for "Bob's" dinner and that "Bob" reimbursed you with cash.  "Cash" is the appropriate category because you are not depositing it and will spend it as cash at some time so it is a "cash" expense.
  
• Forget about recording an entry anywhere else for the $50 your friend paid you back.  It was cash and you noted it as cash in the 2nd line of the split category.
  

If you are not familiar with split transactions:  Go to Help > Quicken Help > search for "How do I record a split transaction?"  It's actually quite easy and fast to do.

Let me know if you have any questions.

(EDIT:  "Misc Exp" as suggested below by @volvogirl would be a good category substitution for "Cash" if you prefer.  When you take money out of your checking account for cash expenses, what is the category you use for that?  Whatever it is, I suggest using that category.)

volvogirl

No.  You still got charged the $100.   You need a cash account.  Or to deposit the 50 cash in your checking account.  Then you can categorize the 50 cash received to the Dining category or wherever you posted the 109 charge.  OR when you entered the charge what category did you use?  You could also set up a receivable account and split the charge to 50 dinning and 50 Receivable.  Hmmm, but then you would still need a deposit or cash account to record the reimbursement.

So I guess you could record the 100 charge as 50 Restaurant and 50 to another category.  It wouldn't be income but should be a Receivable or an Expense account.  Misc Exp is good.  Then if you figure out how you want to enter the cash reimb it would go to that account.

surestoreus

Thank you @Boatnmaniac @volvogirl

@Boatnmaniac when taking money out of my checking account I use the default Quicken category "Cash & ATM". In this case, I guess I just need to split that $100 into, $50 "Restaurant" & $50 "Cash & ATM" then make a memo "Bob share of the meal".

@volvogirl, I get your point, never categorize expense as income. But the thing is I don't want to keep track of my cash use by creating a CASH account (I don't use cash that much anyway but pretty much charge everything on cc). In this example, I'd split the $100 charge as $50 Restaurant & $50 Cash & ATM, that would do it right? In addition, say if I use the $50 Bob gave me to purchase grocery, do you suggest I just split the transaction as $50 Restaurant & $50 Grocery?

[Deleted User]

@surestoreous - 

I created a category "Cash Reimbursement" for any time I purchase something for someone and get reimbursed.    The offsetting category would be the original category used for the purchase. 



These two offsetting entries would be added to the original transaction for the purchase, when I get reimbursed.

Boatnmaniac

surestoreus said:

Thank you @Boatnmaniac @volvogirl

@Boatnmaniac when taking money out of my checking account I use the default Quicken category "Cash & ATM". In this case, I guess I just need to split that $100 into, $50 "Restaurant" & $50 "Cash & ATM" then make a memo "Bob share of the meal".

"Cash & ATM" would be a great category to use for "Bob's" share.  Looks like you got it down correctly.

surestoreus said:

Thank you @Boatnmaniac @volvogirl

@volvogirl, I get your point, never categorize expense as income. But the thing is I don't want to keep track of my cash use by creating a CASH account (I don't use cash that much anyway but pretty much charge everything on cc). In this example, I'd split the $100 charge as $50 Restaurant & $50 Cash & ATM, that would do it right? In addition, say if I use the $50 Bob gave me to purchase grocery, do you suggest I just split the transaction as $50 Restaurant & $50 Grocery?

I think she realized that her 1st paragraph might not be the best option (see the last sentence of that paragraph) and then in her 2nd paragraph she laid out the same process that I gave you. 

To answer your question, you can split the transaction as $50 "Restaurant" & $50 "Cash & ATM" or "Grocery" or something else like "Gas" if you want....whatever would most accurately reflect how you will use or did use it.

And what is really nice about Quicken is how flexible it is.  You could start off by using the 2nd split category as "Cash & ATM" and then change it later to "Grocery" or "Gas" or whatever when you know what you actually spent it on.  Quicken allows us to edit the details of transactions pretty much whenever we feel it is appropriate, even if it is years after the transaction was originally entered.

surestoreus

@Boatnmaniac Thank you for shedding light.