"Journal Entries" in Quicken

Hi,

I'm much more familiar with Quickbooks, so this may be a simple question. I'm wondering how to simulate complicated General Journal Entries in Quicken. An example would be a real estate closing/settlement statement where there are many different accounts to consider: basis of the asset, loan costs that can be amortized, non-deductible expenses, etc. I can't seem to see a way to get all this data into the proper Quicken accounts. I'm using Home & Business 2006.

TIA.

Stephen Porter Los Angeles, CA

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Reply to
Stephen Porter
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You can enter a split tansaction for the RE closing: amount would be total amount and in the splits there would be the associated amount and either a category (I think that is an account in QB) or if it needs to 'post' against an actual Quicken account, then that account would be category.

Quicken basically only does amortizations within its Loan facility. So, you could take the loan costs and create it as a 'loan' with an amoritzation schedule BUT...Quicken would not automatically post...you would have to do dummy postings to simulate reducing the outstanding amount.

In a word - QB and Quicken are sufficiently different animals, that you need to figure out how to use.

I had my own consulting business fo over 10 years and only ever used Quicken. Did not have inventory, created my invoices in word processing. Did not have accruals or aging.

HTH

Reply to
Rex's Mom

Let's nip this one in the bud RIGHT NOW.

Quicken IS (repeat IS) a double-entry accounting system ... which means that for EVERY Quicken transaction you enter, there is an offsetting entry to another account/category.

Quicken is a single DATA-ENTRY system, in that the accounting double-entry takes place automatically (you don't have to create 2 separate data-entry records) ... but it still happens .

What Quicken doesn't really handle gracefully is "Equity Accounts" (aka, Ownership Accounts) and inventory. Quicken determines your net worth by subtracting total liabilies from total assets to arrive at a single figure. You can do work arounds to simulate multiple ownership/equity accounts ... but its a royal pain. If you're a sole proprietor, Quicken can handle your needs ... otherwise look at QB.

Likewise for inventory. Quicken can handle the cash value of the inventory, but not the "items on hand" (unless, of course, your inventory is valued at exactly $1 per item). Since maintaining an inventory (as opposed to purchase and immediate re-sell) invariably involves Accrual accounting ... look at QB if you've got this issue.

db

Reply to
danbrown

Hi Dan (and Rex's Mom),

I understand double-entry accounting quite well and use QB mostly for clients with businesses. I'd never try Quicken for a business with inventory, accounts receivable, accrual-based transactions of any sort. It's funny, but I got into Quicken because I thought a) it would be fun and perhaps profitable to learn another system; b) I thought it might actually be better for tracking investment accounts, especially brokerage statements and things like that. The simple answer to my original question is the "split" transaction, which for some reason didn't pop up when I dashed the question off.

I used to use a program called "Financial Navigator" which handled all KINDS of investments really well, but it's such a niche product and is really only suitable for wealthy individuals. I'd learn Quicken faster if it were someone else's accounting I was doing...!

Dan, I'm assuming that Quicken has some strengths and scenarios where it works better than Quickbooks?

Thanks for the tips...learning a lot.

Stephen Porter LA, CA

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Reply to
Stephen Porter

I have to disagree with you. Categorizing a transaction is NOT the same as double-entry bookkeeping. In Quicken, one's books do not have to balance, i.e. for each debit there does not need to be equal and opposite transaction(s).

And categorizing does not give rise to an automatic accumulation of transactions of the same category (vs. posting to an account). Yes, you can pull a report, but it's not the same!

Yes, you can transfer funds between accounts and in that it simulates double-entry bookkeeping, but do not confuse accounts opened in Quicken with categories.

And in double entry bookkeeping, the system will often automatically generate the opposite transaction based on a previously established 'list of rules'.

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Reply to
Rex's Mom

double entry n : bookkeeper debits the transaction to one account and credits it to another [syn: double-entry bookkeeping]

Source: Webster's Revised Unabridged Dictionary

Quicken FULLY meets that definition. There is ABSOLUTELY NO requirement for double-data-entry.

db

Reply to
danbrown

OR,

double entry. The system of recording transactions that maintains the equality of the accounting equation; each entry results in recording equal amounts of debits and credits.

Source: Financial Accounting, An Introduction to Concepts, Methods, and Uses {this was a text at UC Berkley, School of Business when my wife got her MBA}.

AGAIN, Quicken fully and completely meets this definition.

db

Reply to
danbrown

Stephen, thanks for the update on your background. I couldn't quite tell for certain if you had an accounting background or not. Makes some of this discussion easier.

I haven't used QB for a couple of years ... so I'm not sure what current features are. My understanding, comparing Q to QB of a couple of years ago, is that Q (and Q H&B) are MUCH better for personal accounting (including sole proprietorships without inventory issues).

The electronic downloads of banking and investment transactions makes personal bookkeeping actually quite easy. The versions of QB that I worked with didn't handle investment accounts with any grace at all (you could create an asset account to hold the investments, but you'd have to track the securities in something else and cross-post).

Q (including H&B) assumes that there's only one financial entity per file-set. So while you can sub-divide income (for example) using classes, ALL transactions flow to the single bottom-line. Also note my earlier note regarding things Q doesn't do.

BTW, while I live in Nashville now (and consult on financial systems for the big banks & brokerages), I'm a former Wells Fargo Audit VP in SF.

db

Reply to
danbrown

I don't agree. They are the same thing.

It will always balance unless you don't count leaving the category blank (uncategorized) as being in balance. This is probably close to using the OBE account in QB.

I agree with Dan that Quicken is a double entry accounting system even though it does not appear to be.

Here's how I view things:

In QB you have accounts. You have a full Chart of accounts. When you are in the check book register (like quicken) you enter your transaction and then select an offsetting account to post the transaction to. This makes it a double sided accounting system. Restricting your transactions to income and expense only you can create an income statement related to your check book account.

In Quicken you have categories. You have a category list instead of a COA containing all of your income and expense accounts. Balance sheet accounts would be handled by different sections of the program. When you enter a transaction you select a category instead of an account like you do in QB. Technically this is the offset of the cash account even though you are not selecting an account. You can now create an income statement just like you did in QB.

Otherwise there really is no difference between the 2 in theory. If they both were not double entry accounting systems then you would never be able to construct an Income statement in either program.

Transferring funds bwt accounts does not have anything to do with being double-entry accounting. Both programs allow you to do that.

Quicken was designed to track expenses associated with a single bank account using categories. If I loaded the same bank account into QB then I would use expense accounts instead of categories. Not really much difference other than the dimension that the programs use. But from a bookkeeping perspective they really are the same thing. Just different names.

QB and quicken both create the offsetting transactions automatically in the background. QB does it in 2 lines while quicken does it with one. But in both cases using the register simulates a series of journal 2-sided journal entries without the user having to worry about credits and/or debits.

Quicken can automatically populate the category based on prior information stored in the program. QB and Peachtree are more sophisticated in how they populate the account used for the transactions but the concept is the same. But automatically generating the opposite transaction does not define whether or not a system is a double entry accounting system.

Reply to
Laura

Sorry, but it does. IN FACT, posting offsetting credits and debits is the ONLY requirement to be double-entry.

See the 2 definitions that I posted above.

db

Reply to
danbrown

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