Hi there - can anyone help me? At my work we use QB if there are any expenses entries to make. I first of all write a cheque to the necessary person and this is then coded to their expenses account - which in turn is a liability account. Then I journal the expense from their expense account into the relevant accounts such as mileage etc. My query is why are all the employees expense accounts set up as liability accounts when I would think they should be expense accounts. Unfortunately there are no other accounts bods in my company so it is up to me to find out from other sources! Regards Nicky
As the the payment for the expense came from the employee, the firm owes the employee and employee is a creditor (therefore the debt to the employee is a liability). They are a bit like a supplier, where the supplier give goods on credit, effectively so does the employee
I think if I was setting it up I would have CR employee personal expense account and DR appropriate expense nominal account. Then when employee is reimbused Cr Bank and Dr employee. There may be other reasons why the company wants it done that way and if the employees are claiming on an expenses form, it may easier to DR employees account and DR bank first. Then post to the expense nominal account.
Both ways work.
Hope that made sense
Bill
Sorry about all the edits. Kept thinking of differnt things after I posted
-- Edited by Wella on Saturday 18th of September 2010 06:32:35 PM
