Fundamanetal account question

buy something from Ebay. I recently had my first instance where someone paid for a small genealogical lookup (a hobby) via Paypal, so I had $5 sitt ing in the account when I made a $25 contribution to a rescue I follow.

e I would expect it to have a 0 balance aince it is tied to a credit card a nd that is recorded immediately. This last situation caused it to have a positive balance, so that was used for part of the contribution and the res t went to my credit card as usual.

the Paypal account? Asset/liability? How would I enter the transaction I just described? Is there another way to treat this without being so ana l, assuming it isn't likely to occur very often, if ever again?

continue to elude my fundamentally good Quicken knowledge but not so good a ccounting conceptual understanding. I'm sure there is a simple way to trea t it.

I am not an accountant and also profit greatly from R.C.'s advice. That sai d, to me PayPal is a payee in that it is just a conduit for cash, as is Wes tern Union. I do not record purchases on eBay seller by seller, but rather use the PayPal payee and mention the item and/or seller in the memo field. For tax purposes, any PayPal charity payment is automatically linked to tax lines because of the category used, not the payee. That's my 2 cents, which I could deduct from my "Cash Account" account, but won't.

Hi, Jo.

I've used PayPal only twice, as I recall, and that was to buy a software program online and to make a donation several years ago. I treated PayPal just about like a credit card each time. I charged each transaction to my VISA card and paid it as usual when it showed up on my VISA bill the next month. I entered the transaction just like a purchase in my VISA credit card account.

I've never had a positive balance with PayPal, so I'm not sure how I would handle it. Probably just like an overpaid balance in my VISA account. So far as Quicken knows, I don't even have a "PayPal Account". Heck, I don't even have a Wal*Mart account, even though I do business with WMT almost every month.

When I've returned a purchase to WMT, they've usually just credited my VISA, but sometimes they've given me a "store credit card" with the small return amount on it, which I've used to buy something else soon after. My Quicken does have a "Property" account for "Gift Certificates", so I just use that for the store card; that account normally has a zero balance. I probably would handle PayPal the same way.

RC

-- -- R. C. White, CPA San Marcos, TX (Retired. No longer licensed to practice public accounting.) snipped-for-privacy@grandecom.net Microsoft Windows MVP (2002-2010) (Using Quicken Deluxe 2015 R4 and Windows Live Mail in Win8.1 x64)

I use Paypal to make most of my charitable contributions and occasionally buy something from Ebay. I recently had my first instance where someone paid for a small genealogical lookup (a hobby) via Paypal, so I had $5 sitting in the account when I made a $25 contribution to a rescue I follow.

I am blanking out on how to classify the Paypal account. 99.9% of the time I would expect it to have a 0 balance aince it is tied to a credit card and that is recorded immediately. This last situation caused it to have a positive balance, so that was used for part of the contribution and the rest went to my credit card as usual.

If I'm anal enough to want to mimic reality here, what kind of account is the Paypal account? Asset/liability? How would I enter the transaction I just described? Is there another way to treat this without being so anal, assuming it isn't likely to occur very often, if ever again?

R.C. You're good at unclouding my mind with these kinds of accounts that continue to elude my fundamentally good Quicken knowledge but not so good accounting conceptual understanding. I'm sure there is a simple way to treat it.

jo

I set up my paypal account as a checking like bank account in my Quicken

2013. I enter all my paypal purchases and categorize them in the paypal account. The paypal account is linked to my primary checking account's debit card. I record those transactions as a transfer from my primary checking account to the paypal account with the payee in the memo field. (This is to cover the expense of the paypal transaction, since there often isn't any money in my paypal account - I use backup funding from my checking account). Occasionally there is a refund or payment to the paypal account. Then I usually sit tight a few days, and manually reconcile the balances when I figure out what is going on. Between the banks online balance and paypal's online balance, I almost always can sort things out.

ly buy something from Ebay. I recently had my first instance where someon e paid for a small genealogical lookup (a hobby) via Paypal, so I had $5 si tting in the account when I made a $25 contribution to a rescue I follow.

ime I would expect it to have a 0 balance aince it is tied to a credit card and that is recorded immediately. This last situation caused it to have a positive balance, so that was used for part of the contribution and the r est went to my credit card as usual.

is the Paypal account? Asset/liability? How would I enter the transacti on I just described? Is there another way to treat this without being so a nal, assuming it isn't likely to occur very often, if ever again?

t continue to elude my fundamentally good Quicken knowledge but not so good accounting conceptual understanding. I'm sure there is a simple way to tr eat it.

Intuit appears to recommend Tim's method of modeling it as a checking accou nt:

Here's another article that discusses pros/cons of the type of account used : -quicken-2014

ally buy something from Ebay. I recently had my first instance where some one paid for a small genealogical lookup (a hobby) via Paypal, so I had $5 sitting in the account when I made a $25 contribution to a rescue I follow.

time I would expect it to have a 0 balance aince it is tied to a credit ca rd and that is recorded immediately. This last situation caused it to hav e a positive balance, so that was used for part of the contribution and the rest went to my credit card as usual.

t is the Paypal account? Asset/liability? How would I enter the transac tion I just described? Is there another way to treat this without being so anal, assuming it isn't likely to occur very often, if ever again?

hat continue to elude my fundamentally good Quicken knowledge but not so go od accounting conceptual understanding. I'm sure there is a simple way to treat it.

Thanks for the links. I think the checking or charge account ideas are bot h viable. I REALLY don't need anything complicated for what I'm doing.