QuickBooks Cheat Sheet: How to Adjust Amounts Posted to the Wrong Class

If a business with multiple locations is using QuickBooks classes to track income and expenses between the locations, sometimes deposits or checks are posted to the wrong class.  For instance, in our sample two-location company, all deposits have been posted to one location, which skews the Profit and Loss Report by Class, as shown below.

two-location-misclassed-income&expense

The report above would lead a reader to think that the Kapolei Clinic wasn’t making any money at all, which is incorrect.  That clinic has actually made $15,000 during the reporting period, so we need to correct our records to show the correct allocation of income.

Therefore, we need to move $15,000 to the Kapolei Clinic’s income.  There are two ways to do this: the first — and probably most familiar method — is to use a journal entry. Go to COMPANY > MAKE GENERAL JOURNAL ENTRIES, and the General Journal Entry window opens.

Use the “Journal Entries” account as the first line of the journal entry to ensure that it will be easy to find in the Journal Entries “bank” account register later.

On the next line, choose the appropriate income account – in this case 43700 – Fee for Service Income –  to debit (which moves money OUT of the acount) and select the “Kaneohe  Clinic” class.  On the next line, you’ll credit the same income account but choose the “Kapolei Clinic” class.

GeneralJournal to reallocate income by class

Click SAVE AND CLOSE.  Running a Profit and Loss By Class Report now will show income  allocated properly to each location.

 P&L-2locations-reclassed

I hope this is helpful.

Wishing you a happy and prosperous day.

Patti Killelea-Almonte

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