What is the simplest way of entering bank account interest income? Should I click on "Refunds and Credits," create a "Customer: Job" (ABC Bank), then create an ITEM (ABC Bank Interest) that is assigned to an ACCOUNT (Interest Income) which is assigned to TYPE: "Other Income." I am new to Quickbooks and would appreciate any suggestions.
When you receive your bank statements you should then reconcile. You will find that it offers two inputs, one for Interest Received and the other for Fees and Charges. This will assign to the correct accounts.
Stan
Go to Banking, Reconcile and you will be asked to enter statement date, final balance and interest earned. Interest is then automatically included in your accounts.
Hope this helps!
I have done one of 2 things, neither of which is use the Enter Fees and Interest function in the Reconcile tool.
1) I open Write Cheques, and for the cheque number I put in STMT (indicates to me it is a bank statement charge). I then enter the bank name (create as an Other) and the amount of the service charges. EG. Monthly fee, item charges, NSF fees, internet banking charges etc. and I use Bank Charges for the expense account. I will put all the like charges (eg. Bank Fees separate from Interest) in as a total and break each type of charge down as separate line items in the Expense tab (if you want to split hairs, and I usually do). I enter overdraft and loan interest as a separate "cheque", and break that down similarly, and use the Interest expense account (usually a sub account of Bank Charges). I then use the Customers; Make Deposits tool and enter any interest earned and post to the Interest Income or Miscellaneous Income (I prefer Interest) account.2) My preference is to make a G/J entry and post all charges and interest earned and expense on the same date (as on the bank statement). So it looks like this:
July 31, 2005 STMT
DR Bank Charges 15.00 monthly fees DR Bank Charges 12.86 item fee DR Bank Charges 10.00 returned items CR Bank 37.86 monthly bank charges
DR Interest Expense 18.42 overdraft interest CR Bank 18.42 overdraft interest
DR Bank 14.32 interest earned CR Interest Income 14.32 interest earned
This way I can see what I've entered during the reconcile process and be certain that the charges and earnings have been posted correctly.
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