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How does QuickBooks build the balance sheet by class report?

The Balance Sheet by Class report is only available in QuickBooks Premier and &qb_enterprise_solutions;.

The Balance Sheet by Class report uses the classes you enter on transactions. However, you can't enter a class on some QuickBooks forms and windows. How does QuickBooks handle this?

QuickBooks uses the classes you assign on the first transaction in a workflow to assign classes to its subsequent transactions. Let's look at the invoice workflow as an example. Note: This explanation uses complex accounting entries. Consult your accountant if you need assistance.

create an invoice

Step 1-Enter invoice

You can either assign a class to the whole invoice (at the top of the form) or next to each line item.


From an accounting perspective, this invoice affects both an income account (through the items) and the Accounts Receivable account. However, QuickBooks only assigns classes to the income account (through the items).

How does QuickBooks assign classes to the Accounts Receivable account? It uses the same class allocation you assigned to the items. When you run the Balance Sheet by Class report, QuickBooks calculates this as follows:

   Accounts Receivable-Class A      100

   Accounts Receivable-Class B      200

               Sales-Class A                          100

               Sales-Class B                          200

Note: You can't search for or view this journal entry because it doesn't exist as a journal entry in QuickBooks. It exists only as a calculation on the Balance Sheet by Class report.

Step 2-Enter customer payment

You use the Receive Payments window to enter the customer payment.

customer payment

There is no Class field in this window. What classes does QuickBooks use for this transaction?

It uses the first transaction of the workflow (invoice). Once you enter the customer payment, QuickBooks makes the following calculation when you run the Balance Sheet by Class report:

   Undeposited Funds-Class A      100

   Undeposited Funds-Class B      200

               Accounts Receivable-Class A             100

               Accounts Receivable-Class B             200

Step 3-Make deposit

You use the Make Deposits window to enter the deposit.

make deposits

There is a Class column in this window. However, if you deposit payments received in step 2 above, QuickBooks doesn't use this column. Classes you assign here have no effect on the report. Instead, QuickBooks uses the class assigned to the original invoice. QuickBooks makes the following calculation when you run the report:

   Checking-Class A      100

   Checking-Class B      200

               Undeposited Funds-Class A               100

               Undeposited Funds-Class B               200

Most workflows in QuickBooks work the same way. Consider the workflow you use to enter and pay bills:

pay bills

For both transactions, QuickBooks uses the classes on the bill to calculate the classes for accounts payable.

Important: Payroll transactions behave differently on the Balance Sheet by Class report. If you use QuickBooks for payroll, we recommend that you review unsupported transactions and their solutions.

11/21/2017 7:38:22 PM
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