Setting Up Credit Card Accounts

You can set up a credit card as a separate liability account in QuickBooks. The account can be a subaccount of another liability account, or it can stand alone as a separate item on your balance sheet. Each month, as you make credit card charges, you increase the balance of your credit card liability. When you make payments on the account, you decrease the liability balance. QuickBooks provides the opportunity to reconcile your credit card account every month just as you do your bank account.

Set Up a Credit Card Account

Press Ctrl+A to open the Chart of Accounts list.

Press Ctrl+N to open a New Account window.

Select Credit Card for the Type.

Enter the name for this credit card account.

Indicate whether you want this account to be a subaccount of another liability account.

Enter optional description, credit card number, tax line, and opening balance information.

Click OK.

Did You Know?

It's your choice when you enter credit card charges. You can record charges as they are incurred or record them all at once when the monthly statement arrives. The best accounting practice, however, is to enter charges as they are incurred.

Record Credit Card Charges

Select Enter Credit Card Charges from the Banking menu.

Indicate which credit card you used for this charge.

Enter the name of the vendor from whom you made the purchase.

Enter the date of the purchase.

Enter the account in which the purchase should be recorded.

Enter the amount of the purchase. The amount you enter in the expense area of the form is automatically filled in above, in the Amount section of the form.

Repeat steps 5 and 6 to enter any additional purchases made in this transaction.

Save the form.

Pay/Reconcile a Credit Card Account

Select Reconcile from the Banking menu.

TIMESAVER

You can also click the Reconcile button in the Banking area on the Home page.

Enter the credit card for which you have received a statement.

Enter the date of the statement.

Enter the ending balance that appears on your statement.

Enter any finance charge that appears on the statement.

Enter the date on which the finance charge was assessed.

Verify the account to which the finance charge should be recorded.

Click Continue.

Check off all the entries that appear on your credit card statement. These entries are drawn from transactions you have entered into your QuickBooks file as payments or using the Enter Credit Card Charges form.

Click Reconcile Now to complete the reconciliation.

Did You Know?

You can leave the reconciliation and finish later. If you forgot to enter some charges and want to do so before reconciling, click the Leave button, enter your charges, and begin the reconciliation again.

The Reconcile Adjustment window appears if a difference exists between the statement balance and the sum of the items you checked off in step 9. Click Return to Reconcile to return to the reconciliation if you want to identify the difference.

Click Leave Reconcile if you want to leave the reconciliation to enter additional charges or payments before continuing.

Click Enter Adjustment to enter an adjustment for the unreconciled amount. Note: The adjustment is recorded in the Opening Balance Equity account; at some point you must create a journal entry to reclassify this adjustment to another account.

Select whether you want to issue a check or record the credit card bill as a payable.

Click OK.

Select the type(s) of reconciliation report you want to produce.

Click Display to display the report(s) onscreen.

Click Print to print a paper copy of the report(s).

See Also

See "Reconciling to Your Bank Statement" on page 328 for more information on the QuickBooks reconciliation feature.

QuickBooks creates a check if you requested payment by check. Verify the information on the check, and indicate whether it is to be printed or paid online.

Save the check.