 QuickBooks Online, pay down credit card form. Get ready to start moving on up with QuickBooks Online. We're gonna be using the free QuickBooks Online test drive searching in our online search engine for QuickBooks Online test drive, selecting the option that has Intuit.com in the URL Intuit being the owner of QuickBooks. We're gonna be picking the United States version and verifying that we're not a robot. Zooming in by holding down control up on the scroll wheel currently at 125% on the zoom in, selecting the cog dropdown. We're gonna be toggling back and forth but working mainly in the accountant view as opposed to the business view. We'll try to look at the business view from time to time so we can see where things are located under the two views. Selecting the tab up top, right clicking on it and duplicating it so that we can put our reports in the duplicated tab, right clicking the tab up top again, duplicating it again, then back to the tab to the left. Reports on the left hand side, opening the balance sheet, then going to the tab to the right and down to the tab to the left and opening up the profit and loss. I'm gonna close up the hamburger, the hamburger scrolling up to the top, ranging to the change in, changing the range from 010122 tab, 123122 tab, run the report to refresh the report and then go to the tab to the left and close the hamburger and scroll up top, range change, we're gonna go from 010122 to 123122 tab, run it to refresh it, that's the setup process we do every time. Support accounting instruction by clicking the link below, giving you a free month membership to all of the content on our website, broken out by category, further broken out by course, each course then organized in a logical, reasonable fashion, making it much more easy to find what you need than can be done on a YouTube page. We also include added resources, such as Excel practice problems, PDF files and more like QuickBooks backup files when applicable. So once again, click the link below for a free month membership to our website and all the content on it. Back to the tab to the left, we've been looking at the plus button, looking at all the options that are basically used to enter the day-to-day types of transactions and make the financial statements, this being broken out by the cycles, customers, vendors, employees, we've been focused over here in the other area, which includes items that don't really fit exactly into a cycle, but possibly still might be used in the day-to-day normal processings of the accounting software, which is why they're in basically this dropdown. This is the dropdown you go to for the quickest way or where everything's in one place for the normal day-to-day type of transactions. So now we're looking at the pay-down, the credit card. So the credit card in one sense is quite simple, but in another way it's a little bit confusing because the credit card, you can think of it as similar to basically a bank account because it's a financial institution type of account. You can connect it to the financial institutions in the same way that you can do so for the checking accounts and use bank feeds to record the transactions. It functions much like a bank account because you can imagine a type of business where you're making all of your transactions, in essence, instead of paying for expenses, utility bill, phone bill and whatnot with a bank transfer, possibly you're using a credit card and then just paying off the credit card, hopefully monthly, hopefully not getting a lot of charges for it, but you have the same transactions and with those transactions, instead of decreasing the checking account and recording an expense, you're gonna be increasing a liability and then you're gonna have to pay down the credit card. Now the reason it gets a little bit confusing is because the fact that you're increasing a liability when you make the credit card payments gets a little bit more confusing than having the asset go down, which is kind of what we're a mind or trained to do. And also we have the same forms, like we could call it an expense form still, but the expense form usually means to us that we're decreasing the checking account, but we can really pick any kind of financial institution account. So I could pick a credit card and then instead of decreasing the checking account, it's gonna increase the credit card. And then when you pay off the credit card, you've got an interbank or financial institution to financial institution, which could both have bank feeds on, for example, transaction. It's gonna come out of the checking account and the other side's gonna be paying down the credit card account, which can be a little bit confusing as well. And then when we pay down the credit card, we could, you might say, well, I'm gonna be paying something out of the checking account, so why don't I just make a check form or an expense form? The items that reduce the checking account and you could. And that's another thing that's a little bit confusing again, or you can use the pay down the credit card. Now, this is another area similar to what we saw with the transfer form up top, where you can use either option, but possibly this one could be used to sort your data in the transaction detail a little bit differently. And that could make it a little bit easier in some cases. So either one would work. Let's get an idea of what I'm talking about here. So if I go back to the balance sheet and let's go ahead and scroll down to where the credit cards are, liability. So we've got a master card here. So if I go into the detail of the master card, then we have our normal transactions. So if I make a lot of transactions with a credit card, then you could think of it basically as an expense type of form that in essence, we are generating with the credit cards, which is similar to a checking account, but now we're gonna be increasing the liability of the credit card and paying for normal expense type of items. And then typically we're gonna be paying down the credit card at some point with the amount that we're gonna pay out of the checking account that's then gonna be paying down the liability. So it's gonna go from inter transaction from one bank feed or financial institution account to another bank feed or basically financial institution account. Now, if I record that as is natural to do with an expense form out of the checking account, it's gonna show up here as an expense form, which can be a little bit confusing because now the expense form is gonna be going kind of in the opposite direction than the other expenses, right? It's gonna be decreasing the value here, whereas these expense forms were increasing it. So therefore you might wanna use another form in order to make your payments. That's kind of the general idea. Although, again, I think the expense form isn't too burdensome to do, especially if you don't have a lot of transactions on the credit card, but if, well, let's check it out. I'll show you the two forms and see what happens. So if I go back on over and let's say we're just gonna pay off the credit card. So the credit card, I'm gonna say I'm gonna pay it, I'm gonna pay it out of my checking account and I'm just gonna use what would be natural and expense form because I'm paying it out of the checking account. Same expense form is usually what's created when you make a bank feed kind of transaction as well and you record a decrease to the checking account. So I'm gonna hit the plus button. We're just gonna say it's gonna be an expense form and we're gonna say it's gonna be the payee, I'll just keep it as blank for now. It's gonna be the credit card. So I could put the credit card, but I'll keep it there and we'll just say that we're gonna be paying out the category of the, I think it's master card, was it? Master card account. So there's the credit card account and let's just say $50. So this is gonna decrease because it's an expense form, the checking account and the other side's gonna be going to the master card. That's what would naturally what you would kind of think to do. So I would say, okay, save it and close it. And then if I go into my balance sheet and I scroll up and run it and I go into my checking account, then we would have just what we would expect an expense type of form. Now the expense form's not going to an expense because expense form really just means decrease to the checking account. It's like a check form without the check number and the decrease to the 50. So that makes sense to me. If I wanted to sort this, for example, by decreases to the checking account, I could sort by expense form, which makes sense because that's the form typically used to decrease the checking account. If I go back though and I go into my liability account for master card, then there's a little bit of confusion here because now normally I have these expense forms, but then down here I have an expense form that's going the opposite direction because the expense form is designed to go out of the checking account. And therefore it's going and usually goes to it to something we're purchasing, like a fixed asset, property, planting, equipment or typically an expense. So that's where it looks a little bit funny. If I wanted to sort like my credit card transactions for things that I purchased, like increases to the credit card, then this would be stuck in there. And if I wanted to search just for my payments, it becomes difficult to do it. If I wanted to go in here to this transaction detail and say, hey, I want to look for all of my payments of the credit card, I can't do it because I can't search by transaction type. It's not as easy. I can't do it as naturally. So I'd like to maybe change this type to something else. Now, the other two options you might use is you could use maybe a transfer form is the other natural thing that would come to mind because although you're not transferring from checking to checking bank account to bank account, you're still going from a financial institution account that you can use bank feeds from to another financial institution account. So you could use that. You could say, okay, maybe I'm gonna use the good old transfer form here and say it's gonna come from my checking account and it's gonna go into the master card account. And I'll say this is for $75. Let's say just, we'll say it for $30. I think we're running low on a balance over there on the credit card side. So $35. So this will do the same thing, same transaction, but now it's gonna record it in that detail as a transfer, which could help my sorting. So it's really just a sorting thing. The journal entry will be the same. So let's save and close it. And so now I can say, okay, close in this out and then I can run my report, go back into my checking account. So now down here, I've got a transfer. So that still kind of makes sense for me, for me in this side of things. So if I was to try to look at all the decreases, then I would have to take into consideration the transfers, which could be an increase or decrease whether I'm transferring money in or out of the checking account. And if I go to the other side on this side to the master card going into that, now I can see it as a transfer. Now, if I record this as a transfer, then if I'm trying to look at all my payments and I made them all as transfers, I can sort. So what I mean is I can customize this and I can start to say, okay, I wanna filter this and I wanna look at it by transaction type. And then instead of picking expense, which won't help because the expenses are going up and down. If I make all my transfers, the payments, then I can run it and I can sort by the transfers. And if I have all of the payments as transfers, it's a way that I can sort it possibly a little bit easier. So the journal entry is the same, either one will work. And then the other option is if I hit the dropdown and I go down to the pay down credit card. So I go to the pay down credit card. And so now same kind of idea, it's like a transfer, but they give us this other option to sort it. So now this is gonna give us another kind of thing that I can sort by. So if I make all of my payments on this pay down, I can say I'm gonna pay down the master card. I'm not gonna put a payee. I'm just gonna say it's for $10. Let's just say $5 because I'm getting low and a balance on the credit card. And then I'm gonna say the other side's the checking account. Same thing, but now it's gonna have a different description, same journal entry in other words. Transaction's gonna be the same. So I'm gonna say save it and close it. Let's go to the balance sheet, run it and check it out. If I go to the checking account and scroll down, now I've got the $5, but now it's in there as a credit card payment, which could be good or bad because now I can search all of my data in here if I make all of my credit card payments as a credit card payment form, then it might be easier for me to search just for my credit card payments. However, if I wanna look for all my decreases to the checking account, I've gotta remember that now I've got expense forms, I've got check forms, I've got other kinds of check forms, I've got possibly transfer forms which could go up or down and I've got the credit card form. So it's kind of a sorting issue that you're dealing with. The transaction's the same. You can use either one. It might not be a big deal to you, the fact that you can't sort for, you know that you have these different things, but this is what you kinda wanna think about where the differences are and where that might help you to organize your data. If I go to the tab to the right, I'm sorry, not the tab to the right. If I go down to the master card and go into that, now I've got in here instead of a transfer, the credit card payment, which once again, if I wanted to search for all my payments, if I had a whole bunch of transactions and expenses and I wanted to search by my payments, then I can go into the credit card and just note like these expense forms, when you add an expense, if I go over here, I go to the plus button and I said I'm just gonna have an expense, but instead of it going to, and let's say we're gonna pay whatever, and then instead of it to check an account, I'm just gonna choose a master card. So what's that going to do? Now it's gonna increase the liability, so it's still like I can use the expense form, which is common, but now it's gonna go to a financial institution account, but it's gonna be impacting a credit card account, which will increase a liability. And this is just how the bank feeds work too, and I can do the same, like just utilities down here, let's say, even though Bob's Burger doesn't sound like a utility company, but you get what I'm saying. Let's make this 500, so we can get that liability account back up to a normal price. So if I save that and then go to the balance sheet and I scroll back and I refresh and run to refresh and then go down into my master card, so now you've got your expense form that's increasing here, so that's your expense form. So it gets a little bit tricky because I can use that same expense form, but then if I pay off with an expense form out of the checking account, then it creates a sorting problem here, and that's why the transfer could be useful or a credit card payment form. Now, one other thing with the credit cards I wanna point out just as I'm here is you might get like a credit from the credit card company. So you might call them and they reduce your credit because they eliminated a charge or something like that, and you might say, well, how do I deal with that? So if they reduce a charge, you could go into here and you could say that you have a credit card credit is one way that you can deal with that. Now, remember that that term credit and credit card for that matter is all confusing because this is all based on the idea of debits and credits, just two sides of a ledger, debits and credits not being good or bad, but if you're thinking about the credit card company, then on their side of the books, when they're making their books, what you owe them, your credit card balance is basically a receivable to them. So that's a debit balance account. So if you call them and they say, hey, yeah, I see a debit balance on my side of the ledger over here and you owe me $100 and you say, well, can't you decrease that because you charged me $30 or $50 or whatever that was a late fee. And they say, okay, yeah, we'll waive the late fee. I'm gonna reduce your balance from $100 to $50. Well, what they did on their side, just in a bookkeeping ledger is they credited your account. They credited accounts receivable on their side. You no longer owe them 100. They decreased it by crediting your account $50. But to us, we start thinking of it, well, they credited our account. So that's a good thing. They lowered the balance, right? That's why, but it's the same term. It just started meaning different things because of that. But in any case, so then we can have a credit to the account and let's say they just lower the balance, they remove a charge. So I'm not gonna put a payee. I'll just say the master card again. And then the other side might go to miscellaneous or bank fees, bank charges maybe, because maybe they charged you a bank fee and now they waived it. And let's say that was for, let's say that was for $25, whatever. And that's where you could record that adjustment. And so we'll save and close that. And so now I can go back on over here and I can run and I can go down to my credit card and go into that. And so now I've got my 25 and that's the credit card credit, which is basically an adjustment, right? They just adjusted your account is when you might use that one. So the credit cards will basically increase the liability instead of decreasing an asset with kind of like expense forms generally. And then when you pay down the credit card, you could use an expense form from the checking account, but then you've got this issue with expense forms going up and down in the credit card. You could try to fix that with the detail by using a transfer form, although it might not be a big issue to you or you can use the credit card payment form in order to sort your data a little bit better. And then if you're lowering your credit card for something other than a payment, like they waived a charge, then you might use that credit card charge. And remember that all of the credit cards can be connected to the bank feeds. So the bank feeds are in here. If you have the bank feeds on, you're gonna have these issues or you're gonna have these links between the checking account and the master card, which is the credit card when you pay off from the checking account to the master card and you can match those payments up. So you're basically gonna be using kind of the default forms oftentimes that are gonna be used within the bank feeds. As you do that, we'll talk more about the bank feeds in another section or another course, but I just wanna point that out now. Now I'm gonna hit the dropdown up top and go to the switch to the business view just to see where things are located within it. So I'm gonna go to the homepage and in the plus button up top, same stuff here. We've been working with the pay down the credit card. We've been looking on the left-hand side at the get paid and pay area. And here's the customer section and so on on the get paid and pay area. And I think that's mainly what we've been looking at. And then we've been looking at the business overview and the reports. So that's where the reports are located. And then, oh, then there's the banking or the bookkeeping information. That's where the bank feeds are and the transactions and then the bank transactions. And here you gotta close this for some reason. It gives you this under this view, but there's your banking transactions.