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

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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..

QuickBooks 2011In 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:

Account Name Debit Credit Class
Contracts Checking $500.00 Contracts
Clearing Account $500.00 Contracts
Clearing Account $500.00 Installation
Installation Checking $500.00 Installation

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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4 Responses to QuickBooks 2011 – New Balance Sheet by Class Report – Part 11

  • Great fix! Thanks for sharing your results.

  • Even the Intuit FAQ site mentioned using matching journal entries, similar to what your tutorial suggested. But I still couldn’t get it to transfer (that’s the wrong word, obviously) funds between classes (it’s more of a re-designation than a transfer). I did find a solution; from our petty-cash account we entered a payable item split between a positive debit designated to the originating class and a negative debit designated as the receiving class. The ledger for petty cash shows an entry of zero value, but in that entry the class was successfully reassigned and the Balance Sheet by Class Report is now how we want it. Thanks for your ideas. Hope this fix helps someone someday 🙂

  • Journal entries are pretty much not supported by the Balance Sheet by Class report. It’s a difficult report at best.

  • Using QB Pro Plus 2011 and can’t get this technique to work. Even trying absurd journal entries, like moving $10000000000000 between classes has no affect. Any suggestions? It doesn’t seem that journal entries affect actual ledgers or account balances at all. Any ideas? Thanks!

About Your Host:

Nancy Smyth, Certified QuickBooks ProAdvisor

Nancy Smyth, Sunburst Software Solutions, Inc.
QuickBooks Construction & Payroll Expert

I've been using and supporting QuickBooks products since the early 1990's. I've worked with thousands of contractors, assisting them with QuickBooks setup, Certified Payroll Reporting requirements, AIA Billing and Weighted-Average Overtime.

QuickBooks is a powerful product, but learning how to use it in your construction business can be difficult. I hope you find resources available here to be helpful.

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