Undeposited Funds Account Error
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I have a client who uses QuickBooks Pro 2008. They use Undeposited Funds. Instead of crediting the Undeposited Funds account, it is being applied to Leasehold Improvements (an Other Current Asset account). I have searched the Preferences and I am not able to determine how to change the account that the Undeposited Funds is being applied to. Can someone help me out?
Solved!
Answer
I'm not sure what is happening -- this is how it should work:
Invoice -- increases accounts receivable & records income.
Receive Payment -- decreases accts rec & increases undeposited funds.
Make/Record Deposit -- decreases undeposited funds & increase checking account.
I'd investigate to see how/where they're using the leasehold improvements account.
PLEASE mark this answer as solved (click the button under the answer in the lower, right corner) or post additional questions. Thanks so much!!!
Michelle L. Long, CPA, MBA
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Solved!
It appears that your client has renamed the original undeposited funds account that was set up when the data file was created. Rename the Leasehold Improvements account to Undeposited Funds and see if that works. You will then have to do a journal entry to move the balance for the actual Leasehold Improvements account to a new account so that activity is preserved.
Comment
I had thought that someone had renamed the Undeposited Funds account to Leasehold Improvements but wondered who would do such a thing and that there was an easy fix rather than re-naming it back. Since the balance in the current Leasehold Improvements account, the best solution seems to be to re-name it back to Uncollected Funds. Thank you.