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Read cash basis reports and resolve unexpected lines and amounts

When you run cash basis reports, unexpected lines and amounts will appear. These may not only confuse you, but convince that the report is incorrect. The reports are, indeed, complex, but they are not incorrect.

Be aware that a cash basis report may show several lines whereas the corresponding accrual basis report will show only one line for a transaction. To record cash basis income, QuickBooks Desktop must establish a link between a Payment and every item on an Invoice.

For the most part, we talk about the cash basis P&L report, but the same applies to other reports, e.g., Sales by Item Detail, Custom Transaction Detail, etc.

Root causes of issues with cash basis reports
Issues you may see with cash basis reports
Inventory and cash basis
Original Amount & Paid Amount

Three columns can help you understand cash basis reports:

  • Original Amount is added to cash basis report by default. It shows you the original amount of an item on an invoice/bill.
  • Paid Amount is a column you can add in Customize/Display. It shows you the amount that has been allocated to an item on an invoice/bill.
  • Open Balance is a column you can add in Customize/Display. It shows the amount due remaining for an item on an invoice/bill.
 

Suppose you enter a Bill from a vendor for $100 containing an $80 item and a $20 item. Later, you enter a Bill Payment for $10 and apply it to the $100 Bill. Run a Custom Transaction Detail report for a date range containing the dated of Bill Payment and add the Paid Amount and the Open Balance Columns. Then:

  • For the first item, the three columns show $80.00, $8.00 and $72.00.
  • For the second item, the three columns show $20.00, $2.00 and $18.00.
  • QuickBooks has allocated the the payment based on the percentages of the Original Amounts: %80 to the first item and %20 to the second item.
  • QuickBooks has allocated %80 of the payment to the first item and 20% of the payment to the second item.
KB ID# HOW21069
12/10/2016 8:04:02 PM
QYPPRDQBKSWS01 9138 Pro 2017 f0bf26