Quick examples
Move loan payment to interest expense
Record an owner distribution
Accrue unpaid wages at month end
Record depreciation on a vehicle
Owner contributed cash to the business
Invoice a client for $1,500
Client paid their invoice
Buy equipment with a loan
Record a prepaid insurance payment
Write off a bad debt
Record deferred revenue from a deposit
Reclassify a miscoded expense
Gross up revenue for Stripe processing fees
Owner paid business expense from personal card
Owner used business card for personal expense
Clear stale uncleared transactions at year end
Clear the Ask My Accountant suspense account
Reconcile sales tax payable
Shopify deposit didn't split out sales tax
Pay and remit sales tax to the state
The DEALER Mnemonic — What Goes Up
Dividends Expenses Assets
Debit to increase
Liabilities Equity Revenue
Credit to increase
Debit increases these accounts
AssetsCash, AR, Equipment, Prepaid
ExpensesP&L
Distributions / DrawsContra-equity
DividendsContra-equity
Accumulated DepreciationTo clear contra-asset
COGSP&L
Credit increases these accounts
LiabilitiesAP, Loans, Credit Cards
EquityOwner's Capital, Retained Earnings
RevenueP&L
Accumulated DepreciationContra-asset, Balance Sheet
Deferred RevenueLiability until earned
Accrued LiabilitiesExpenses incurred not yet paid
Common QBO Adjusting Entries
Prepaid Expense
When paid: DR Prepaid / CR Cash. Each period as used: DR Expense / CR Prepaid.
Deferred Revenue
When collected: DR Cash / CR Deferred Revenue. When earned: DR Deferred Revenue / CR Revenue.
Loan Payment Split
DR Loan Payable (principal) + DR Interest Expense (interest) / CR Cash (total payment).
Accrued Expense
DR Expense / CR Accrued Liability. Reversed when paid in the following period.
Depreciation
DR Depreciation Expense / CR Accumulated Depreciation. Never credit the asset directly.
Year-End Close
DR Retained Earnings / CR Distributions (to zero out draws). Revenue and expense accounts close to Retained Earnings.