QuickBooks Products

What Are Special Account Types?

Chief Mechanic · August 23, 2010 ·

QuickBooks maintains approximately 13 different Special Account Types. These types are assigned to individual accounts in a company’s chart of accounts. The assignment of a Special Account Type to an account permits that account to carry out a special function.

AccountsReceivable
UndepositedFunds
InventoryAssets
AccountsPayable
PayrollLiabilities
OpeningBalanceEquity
RetainedEarnings
UncategorizedIncome
CostOfGoodsSold
PayrollExpenses
UncategorizedExpenses
Estimates
PurchaseOrders

Special Account Types and the assignment of those types to accounts are not visible to a typical QuickBooks user.

However, a typical user can determine which account is assigned a Special Account Type by recording a transaction that should impact the balance of an account functioning as an account with a Special Account Type and tracking which account balance was affected. For example, an expense transaction of $100 in the prior year should impact the account functioning as RetainedEarnings. Be sure to delete these test transactions once you’ve completed your testing.

It’s important to understand that an account’s Special Account Type is independent of its name. That is, an account can be named Undeposited Funds but not have a Special Account Type of UndepositedFunds. This situation typically occurs if accounts were renamed and preferences changed over time. If QuickBooks creates a new account that’s a Special Account Type and the default QuickBooks name is already in use, it will place an asterix at the start of the account name, as in *Undeposited Funds. If you observe accounts that start with an asterix, it’s likely that these accounts are the actual accounts assigned Special Account Types.

(+1 rating, 1 votes)

What Is the Undeposited Funds Account and Why Should I Use It?

Chief Mechanic · July 25, 2010 ·

The Undeposited Funds account is an Other Current Asset account that’s automatically created by QuickBooks to record funds received by a company that are not immediately deposited in a bank account.

When you record customer payments by clicking on the Customers->Receive Payments menu selection, you’re recording individual receipts. In actual practice, these individual receipts are grouped into a bank deposit that consists of funds from several customers. By using the Undeposited Funds account as a holding account, your accounting for customer receipts can match actual practice and simplify bank reconciliations. A customer receipt results in a debit to Undeposited Funds pending deposit in a bank account. Receipts from several customers can be grouped by clicking on the Banking->Make Deposits menu selection and selecting those receipts that make up the total deposit. Making a bank deposit in this manner results in a credit to the Undeposited Funds account and insures that the transaction recorded in your bank account register matches the actual deposit made to the bank. If customer receipts had not been first put in Undeposited Funds as a holding account, each individual receipt would appear as a deposit in the bank account register. That doesn’t match actual practice and complicates bank reconciliations because the amounts recorded in the bank register won’t match what appears on the bank statement.

In order to use the Undeposited Funds account, you first need to enable this preference. Click on the Edit->Preferences menu selection to open the Preferences window. Click on the Sales & Customers sub-menu on the Company Preferences tab and check the box on the Use Undeposited Funds as a default deposit to account. Note: Enterprise Solutions users will find this preference on the Payments sub-menu.

QuickBooks Premier 2009 Undeposited Funds Preference

To display the transactions in the Undeposited Funds account, first click the Lists->Chart of Accounts menu selection (or use the keyboard shortcut Ctrl + A). Double click on the Undeposited Funds account to display the register for that account. Alternately, you can select the account in the list and use the keyboard shortcut Ctrl + R or click the Activities button and choose Use Register on the pop-up menu.

QuickBooks Premier 2009 Undeposited Funds Register

You can safely rename the Undeposited Funds account that QuickBooks automatically creates without changing the function of this account. Likewise, simply assigning the name Undeposited Funds to an account won’t by itself cause it to behave like this special account. Depending on preference settings, QuickBooks creates and assigns special account types to certain general ledger accounts, and these special account type settings aren’t clearly marked in the program.

A common QuickBooks bookkeeping problem can occur if the Use Undeposited Funds as a default deposit to account is selected but deposits are not made using the Banking->Make Deposits function. In that situation, customer AR reports will be accurate because customer receipts have been recorded, but the bank balance will be inaccurate because those payments have not been grouped into bank deposits and recorded in the bank account. Examining the Undeposited Funds register will usually reveal the source of the problem. The Undeposited Funds account balance should only reflect those funds that have been received by a company but not yet deposited in the bank. If the account balance reflects an unusually high balance, that indicates that either funds aren’t being deposited in a bank account immediately – or that some of the required processing steps when using the Undeposited Funds account have been skipped.

(+11 rating, 15 votes)

How Do I Determine My QuickBooks Version and Release?

Chief Mechanic · May 16, 2010 ·

To determine the version and release of QuickBooks, press F2 (or alternately, Ctrl + 1) while QuickBooks is running to display the Product Information window.

QuickBooks Enterprise Solutions 10 Product Information

The Product field shows the version and release at the top left of the window. In the example below, Enterprise Solutions: Accountant 10.0 is the version and R6P is the release.

(+2 rating, 2 votes)

What Is Class Tracking and How Do I Enable It?

Chief Mechanic · April 4, 2010 ·

A class in QuickBooks is a single-purpose tool to classify income and expense transactions. Class tracking is not used for balance sheet accounts. It’s also not a way to group customers, jobs, or vendors. To do that, use a Type, which can be managed on the Lists->Customer & Vendor Profile Lists menu selection.

To use class tracking, it first must be enabled on the Accounting sub-menu of the Company Preferences tab on the Edit->Preferences menu selection; just check the box for Use class tracking. To have QuickBooks request the appropriate class for a transaction, check the box for Prompt to assign classes.

Keep in mind that class tracking is a single purpose tool – it can’t be used to track unrelated aspects of your business. Proper use of classes depends largely on your business reporting needs. Classes can be used to track:

locations
product lines or service types
partners in a professional services firm
funds for a public sector or non-profit enterprise

Since classes can be applied to both income and expense transactions, class tracking enables producing a Profit & Loss statement for each class.

QuickBooks supports sub-classes, or nested classes, up to 5 levels deep.

If you use class tracking, you’ll want to:

carefully consider your reporting requirements before you use class tracking
assign classes to both income and expenses
create a “miscellaneous” or “other” class to classify transactions that don’t fit another, more specific class
consistently assign a class to all transactions so that your class-level reports are accurate
create an “unclassified” class for transactions not yet classified – QuickBooks reporting won’t allow you to filter for transactions that have no class assigned

To manage your classes, click on the Lists->Class List menu selection.

(+1 rating, 9 votes)

QuickBooks Products

Accounting

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