How to Handle a "Special" Transaction

Boysdaddy

Each month I receive and deposit a check from my Mother-In-Law, and I deposit it into my checking account. Then I immediately remove the same amount in cash from the same account in the particular denominations that she wants. I would prefer that those two transactions not appear as income and expense, respectively, in my Quicken reports. How should I record this?

Bob_L

One way is to just create an income category called CheckCashing.  Then categorize both the deposit and withdrawal to that category.  When reports are run just exclude the CheckCashing category.

Tom Young

@Bob_L 's suggestion will certainly work fine, unless the deposit and disbursement happen to span an "ending" period - month end, year end, etc.  I'd use a "clearing" Account - an asset of liability as you see fit - that will keep those transactions completely away from all Spending reports without having to create a new Category.

q_lurker

A consideration with respect to @Tom Young would be reconciling your checking account and whether your bank shows those transactions but you choose to not include them in your register.  

I think my approach might be to categorize both transactions to the [Checking] account you are using.  It then might depend on how your specific report is set to include/exclude various transfers.  The standard Income/Expense by Category defaults to Exclude Internal transfers which seems to be what you would want.  

Tom Young

@q_lurker

You seem to be indicating that I proposed making the deposit and disbursement in the clearing Account?.  That certainly isn't what I had in mind.  I just proposed using a clearing Account as the offsets to the deposits and disbursements recorded in the checking Account instead of using a Category.

q_lurker

Tom Young said:

@q_lurker

You seem to be indicating that I proposed making the deposit and disbursement in the clearing Account?.  That certainly isn't what I had in mind.  I just proposed using a clearing Account as the offsets to the deposits and disbursements recorded in the checking Account instead of using a Category.

Yes, you are correct.  I did misinterpret your suggestion. Apologies

You were suggesting 
Bank deposit of $x with Category = [Clearing Acct] effectively that the money came from the clearing account.
then 
Bank withdrawal of $x with Category = [Clearing Acct] effectively sending the money back to the clearing account.
Clearing account starts with and ends with $0.  Two transactions in the checking account register.