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I have setup a cash transaction(petty cash) account under

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bank in quickbooks, it is...
I have setup a cash transaction(petty cash) account under bank in quickbooks, it is currently showing a negative balance because I just entered cash receipts as vendor and then coded to the expense category that is appropriate. However, now I need to take the petty cash amount that is appropriate for the year from the revenue account, to decrease the revenue but make the cash transaction (petty cash) account to equal zero. How do I make this journal entry in quickbooks.
Submitted: 2 years ago.Category: Financial Software
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Answered in 1 day by:
10/12/2015
Tech Support Rep: BK-CPA, Certified Public Accountant (CPA) replied 2 years ago
BK-CPA
BK-CPA, Certified Public Accountant (CPA)
Category: Financial Software
Satisfied Customers: 933
Experience: CPA, experience with multiple accounting software packages
Verified

Thank you for your question.

With all due respect, it is very confusing for the following reasons:

1) Cash receipts are deposits so one would think they ought to increase a cash account

2) Cash receipts generally come from customers in Quickbooks, not vendors (you pay money to vendors)

3) Cash receipts generally get posted to revenue accounts, not expense accounts

4) Increasing petty cash by decreasing revenue is a very odd entry and would generally only be used to correct an entry that was made in error

If you are certain that you simply need to decrease revenue and increase petty cash, you can make a journal entry (debit petty cash, credit revenue) following these instructions:

http://support.quickbooks.intuit.com/support/articles/HOW12658

If I assume you recorded expenses against petty cash, thereby reducing petty cash, and are now trying to restore a $0 balance in petty cash, this maybe makes a little more sense. If that is the case, then the entry to restore petty cash depends on where the funds came from. If it came from the owner(s) of a business as a capital contribution, you would debit petty cash and credit owners' capital. If it came from a bank account, you would debit petty cash and credit the bank account. Again, debiting petty cash and crediting revenue is a very odd entry.

We here would love to help you. I'm guessing this hasn't yet answered your question, but perhaps we may make some progress. I will opt out so that if you respond with clarification other answers will help too (I might not be online personally). Good luck!

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Tech Support Rep: Angie Russell, Bookkeeper replied 2 years ago
Angie Russell
Angie Russell, Bookkeeper
Category: Financial Software
Satisfied Customers: 226
Experience: Quickbooks proadvisor, expert in payroll taxes, sales taxes, business taxes, bookkeeping and tax preparation.
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I believe there is a little confusion in the terminology.

Your journal entry to increase petty cash should be a in the debit column....however you will not decrease revenue... as you coded the expenses these totals decrease revenue on the bot***** *****ne of the p&l.....

In your situation, I would credit a capital account to correct the negative balance...

In the future what you should do is as follows:

If you receive 1000 in income....and keep 100 in petty cash your entry would look like this:

Income 1000.00 (credit)

Cash in bank 900.00 (debit)

Petty Cash 100.00 (debit)

This correctly records the income you received and where the money from that income went.

When you pay a vendor cash..... your entries should look something like this:

Supplies/materials 50.00 (debit)

Petty Cash 50.00 Credit

This will leave your petty cash with a balance of $50.00....

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Angie Russell
Angie Russell
Angie Russell, Bookkeeper
Category: Financial Software
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Experience: Quickbooks proadvisor, expert in payroll taxes, sales taxes, business taxes, bookkeeping and tax preparation.

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