Quicken & Other Budget/Accounting Software/Cost Sharing

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QUESTION: Hi,

The company is going to organize 1 event with the cost of $50k. Company A has agreed to co-organize the event with half-half split cost with us. So they are required to pay us back $25k. In this case we spent the money first and bill Company A later.

Actual cost incurred is 50k.
How should i enter the transaction above, so the 25k money received from Company A won't reflect as an income in my accounts.

ANSWER: Hi FA

When you receive the check you can do a journal entry and allocate the
money across all expense accounts
For example
Debit Bank account  (for deposit amount)
Credit Event expenses
  you may have several event expense categories so you will
   want to split the 25K among all the expenses.


Here in the USA we have an account (an income account)
called reimbursed expense income
And we code amounts paid for expenses the company incurred
from customers or vendors. That way if we ever need to
reconcile deposits in bank to amounts reported in the P&L
it is easier to do so since all deposits that are reimbursements
are in the same place.

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

We sell and support QuickBooks Enterprise


---------- FOLLOW-UP ----------

QUESTION: Hi,

You don't answer my question.
Our company spent $50k first, then claim back the half $25k from company A that has agreed to half-half split cost with us.

How should i enter the transaction above, so the 25k money received from Company A won't reflect as an income in my accounts?

Answer
I do the first sentence of my response answers your question:

When you receive the check you can do a journal entry and allocate the
money across all expense accounts

For example

Debit Bank account  (for deposit amount)
Credit Event expenses
 you may have several event expense categories so you will
  want to split the 25K among all the expenses.


You will need to look up what accounts the $50,000 was posted to and allocate
the 25K among those accounts.

The remainder of my response  suggested that an alternative would be
to set up an income account called reimbursed expenses making it easier
to reconcile cash in bank for the year to amounts reported on the profit and loss
However, it is not necessary, and you can post to the expense account directly.

Linda Saltz, CPA  

Quicken & Other Budget/Accounting Software

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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.
Producer of www.QBalance.com over 100 pages devoted to QuickBooks help and support and training for small business owners in tax and accounting issues.

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