QuickBooks 2011 – New Balance Sheet by Class Report – Part 11

The Balance Sheet by Class Report was first introduced with QuickBooks 2011, however, it is also available in QuickBooks 2012, 2013, and 2014; has specific requirements for handling many or our normal day-to-day transactions. These requirements remain unchanged from the original introduction in QuickBooks 2011..

In this last installment of our 11-part series on the Balance Sheet by Class Report, we’ll discuss how you cannot use the Funds Transfer window to transfer funds between classes – instead you will have to make a journal entry to transfer funds between classes.

As we discussed in Part 2, accounting professionals and end users will need to change their procedures when creating journal entries so that they were balanced, by making sure that when creating a journal entry that Debits MUST equal Credits FOR EACH CLASS.

Because Debits MUST equal Credits for EACH CLASS, you must first add a clearing or wash account to your chart of accounts; this account should be an Expense or Other Expense type.  Once the clearing account is in place, you will use it to balance the classes.

Let’s assume that we want to transfer $500.00 from the Contracts Checking account to the Installation Checking Account; you would make the following journal entry:

Remember, the key rules for making Journal Entries are:

• Debits must equal credits for EACH CLASS
• When using a Clearing Account, it should ALWAYS have a zero balance when you have completed your transaction.

Be sure to read our complete series, which details special procedures for normal-day-to-day transactions:

• Part 1, we touched briefly on the fact that transactions will have to be entered in a very specific manner and there are many data entry transactions that are not supported by the Balance Sheet by Class Report
• Part 2, we discussed how accounting professionals and end users would need to change their procedures when creating journal entries so that they were balanced
• Part 3, we discussed how users and accounting professionals would no longer be able to assign multiple classes to a single paycheck.
• Part 4, we discussed how you would need to classify Payroll Liability Payments in order for them to be appropriately recognized on the final report.
• Part 5, we discussed how you need to classify Sales Tax Liability Payments using a Journal Entry AFTER you actually make the payment.
• Part 6, we discussed the effect of handling customer prepayments when using the Receive Payments window.
• Part 7 – we talked about invoices with multiple classes and how offering customer discounts in the Receive Payments window would cause discrepancies between the Profit & Loss by Class and the Balance Sheet by Class reports.
• Part 8 – we discussed entering a single Vendor bill with multiple classes and taking advantage of vendor discounts in the Pay Bills window causes discrepancies between the Profit & Loss by Class and the Balance Sheet by Class reports and how to correct this.
• Part 9 – we discussed how the Balance Sheet by Class does not support the use of multiple currencies.
• Part 10 – we discussed specific requirements for entering Vendor Bills which are assigned to different/multiple classes, then entering a Bill Credit with a different proportion of the same classes created unbalanced classes on a Cash Basis Report and creates Account Payable misclassifications on accrual basis reports.

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