Proper Categorizing Transactions/Transfers

Dangerruss · June 2020

My credit card transactions are categorized as an expense. I payoff my credit card with a direct transfer from my banks checking account. How should I properly categorize this payment transfer from my checking account to my credit card?
Thanks in advance... Russell

NotACPA · June 2020

To do this properly, you should:

Create credit card accounts (1 per card account) in Q
Record your card transactions in those Q card accounts (THESE are the expenses)
Transfer money from your Q checking account to the Q Card account(s). If THESE were expenses ... then you'd be double-counting the expenses.

Income and Expense transactions make you richer or poorer, respectively. A Transfer merely moves money from on pocket to another ... and because of the Transfer you're neither richer nor poorer.

NotACPA · June 2020

To do this properly, you should:

Create credit card accounts (1 per card account) in Q
Record your card transactions in those Q card accounts (THESE are the expenses)
Transfer money from your Q checking account to the Q Card account(s). If THESE were expenses ... then you'd be double-counting the expenses.

Income and Expense transactions make you richer or poorer, respectively. A Transfer merely moves money from on pocket to another ... and because of the Transfer you're neither richer nor poorer.

Dangerruss · June 2020

Thanks.. #1 & 2 completed years ago. Totally understand #3. This is what I am trying to fix so I am not double counting expenses. I would like this bank transfer to my credit card not have a category assigned. How do I fix this? Thanks!!!

NotACPA · June 2020

I'm confused. The card payment, in your checking account register, should have as the Category the name of the Card account enclosed in square brackets, e.g. [VISA].

This will cause the transfer to happen in Q, and your Card balance will be reduced (moved closer to zero).

What are you showing as the "category" in the checking account transaction for these payments?

Dangerruss · June 2020

I think I just figured it out. I mistakenly created these transfer categories instead of selecting the proper TRANSFER item from the category drop down menu. I hope that make sense... When I fix all those transfers, I'll report back

Dangerruss · June 2020

FIXED!!!

NotACPA · June 2020

Congrats. NOW, you should be able to pull out your old Card statements and Reconcile that/those card accounts.

Proper Categorizing Transactions/Transfers

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