Quicken & Other Budget/Accounting Software/QuickBooks Transfers

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Question
I am the treasurer of a condo association where we have two accounts: a checking account for daily operations and a savings account for building our reserves.  Our P&L is straightforward: monthly common charges are ordinary income which is offset by ordinary expenses and other income is our assessments offset by our capital projects which are other expenses. We now have a situation whereby the association agreed to partially pay for a major project out of the reserve account or savings.

How do I transfer money from the savings account to the checking account AND show it as an Other Income account? I have tried General Journal entries and the like but if I get the income statement correct my account balances go awry.

Any help would be greatly appreciated.

I can be reached on  or e-mail me at the above indicated e-mail address.

Thanks,  

Jack

Answer
Technically,
when you collect for the reserves it is income in the year you collect it.
It is not income when you use it, however, you need to reflect the
addition to reserves and use of reserves on the P&L
in order to balance your entries in QB

Set up chart accounts
type = Other income
Name - Use of reserves

Type - Other expense
Name - addition to reserves

You should already have set up an equity account for reserves
If not, they are all lumped into Retained Earnings.

Each year you will make a journal entry to show the amount of fees collected
that are allocated to reserves
Debit addition to reserves
Credit Reserve account (the one for the fund in Equity or Liability section of the chart)

When you use the money you will
Debit the reserve Account (the one for the fund in the equity or liability section)
Credit Use of reserves

In addition you will move the $ from the savings to the checking account with
a transaction (either a transfer (under banking menu), a deposit, or a Journal Entry)
It does not matter which type of transaction you use , transfer is the easiest

Hope this helps
Linda Saltz, CPA
Advanced Certified QuickBooks Advisor
http://www.qbalance.com

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Linda Saltz, CPA, QBalance.com

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QuickBooks best practices, troubleshooting, accounting, tax We have over 70 pages of website content about QuickBooks tips, running a business, tax and business startup at http://www.qbalance.com

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Accountant and CPA over 20 years. Specializing in accounting software for over 12 years, Certified QuickBooks Pro Advisor, QuickBooks seminar instructor since 1997.
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