 So we're going to say there's the 50 so this will go into our countless choosing account and we're going to put it into the Cash clearing account. I should put an account number on it, but the cash clearing account So it's going to go into the clearing account at 150. So if I deposit it It wants a reference. I'll just put a D for deposit All right, boom 150. So now if I go into my my balance sheet and update Now we've got in the clearing account The cash clearing account the 150 nothing's yet in the checking account and the accounts receivable went back down So AR goes back down if I go into the A to the R Our matey We've got This goes back down and the 50 Okay, and then and so so now the AR went down and we put it into The clearing account and you can see it went into the clearing account not as 100 and 150 but just as $50. So again if If that was the only thing that you needed to do then you could have just we could have just deposited this directly into actually it went in here at One at 100 and 150 so it's in here as two separate transactions So this might still be useful here because now we're gonna do we're gonna transfer it from the clearing account into the checking account and we're gonna do that with With one deposit so then it'll go into the checking account as just one lump sum amount Which is what we want to see because that's gonna be easiest to connect to the bank feeds all right, so let's go back and Now I'm gonna do a transfer I'm gonna go back to the first tab and I'm gonna imagine that I know that that 150 is now going to be grouped together When it hits the bank account, right? So that's what that's the system what I have to figure out now notice that if you have fees and stuff involved as well Then you can also Find different systems to use the clearing account To also help you to kind of figure out the fees and how you're gonna deal with the fees with payment processors Which is often an issue if you have like online shops like a Shopify or Amazon or something like that There are different systems you can put in place that that sometimes have to deal with the fees But anytime you deal with a PayPal's and the and the stripes those intermediary the credit card companies Fees can come into play as well and a clearing account can help you put a system to deal with the fees All right, but in any case I'm gonna go to the first tab and I'm just gonna go to the transfer now I'm gonna make a transfer now. I could use a deposit form Because I'm depositing into the checking account, but when I use a deposit form it will actually show a Deposit in the clearing account that is decreasing the clearing account which is like a cash account So that looks a little funny. So but you could do that because everything is going into The the checking account But I'm gonna use the transfer form because the transfer doesn't look funny on either side, right? Because the transfer could mean a decrease to the to the cash account or an increase to the cash account So I'm gonna say it's coming out of the clearing account and it's going into the checking account. Let's do this on October October to let's go 2022 October and Okay, and then We're gonna say let's just say the 7th and it's gonna be for 150 reference deposit all right, let's transfer it and Then if I go back to the balance sheet and update We've got the clearing account goes away because it's back down to zero checking account has the 150 in it, but not two separate transactions For 150 instead having just one one fifty one fifty Right there So one fifty. I thought one fifty meant a dollar and fifty cents Fitty means fifty cents doesn't it? Whatever dude one fifty you can say it for either 150 or a dollar and fifty cents. It's one fifty man Okay, so we're gonna go into the checking account. Let's go back into the bank accounts and then Drop down here. Let's go into the account transactions and see if the system matched it out now So I'm gonna go into reconciled and look for that 150 and see if zero picked it up as a match And you can see it did now right so now zero was able to recognize Zero was able to recognize the one fifty you better recognize one fifty. That's right So there we have it so zero recognized it now So now so but now when I add it all it's doing is reconciling. It's not gonna add anything new to the It's not gonna add anything new to the transactions So we'll just reconcile that helps us out with our bank reconciliation So nothing new happening to the financial statements here But still important to do because it helps us with that reconciliation process We still want to do bank reconcilations by the way just to make sure I would still you know process a bank rec Which they have a nice report zero does we'll look at it later But that's that let's let's see how our financial statements have been constructed thus far Tabbing another tab open so I can open the trial balance You better recognize one fitty man one fitty Inflation I used to be fitty I used to be just fitty but now I'm one fitty because of inflict report reports Okay Okay focus trial balance and then We're gonna go There okay, so so here's what we have it so we can see that this is just a balance sheet on top of the income statement And we're just constructing this thing as we go the income statement stopping or the balance sheet stopping at retained earnings Income statement below that so that debits equal the credits is the same thing is saying that our assets Equal our liabilities and our equity the income statement is part of equity because it's being squished together in this one number of The current year earnings, which is the bottom line of the income statement seven six oh nine fifty four Seven six oh nine fifty four on the trial balance. We're not grouping that in there into the equity Which is gonna eventually go into retained earnings This is the prior year equity and then the current activity is broken out in the income statement format accounts