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Balance sheet by class report

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

How do I create this report?

Choose Reports > Company & Financial > Balance Sheet by Class.

What this report tells you

This report shows a financial snapshot of your company as of a specific date. It calculates how much your business is worth (equity) by subtracting all the money your company owes (liabilities) from everything it owns (assets).

QuickBooks segments this report by class. Each of your classes appears as a column.

Important: The Balance Sheet by Class report is an advanced report that differs from other QuickBooks reports. Specifically, QuickBooks calculates the class allocations for the report each time you run the report. Because of this, you may experience some unexpected results. Understanding and fixing these results requires a strong background in accounting and a good working knowledge of QuickBooks. Only use this report if you need a balance sheet broken down by class.

Date range

The date is today's date, but you can change the date by entering a different date in the As Of field.

Common questions

How does QuickBooks build the 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.

invoice

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.

Is there a special way to enter transactions for this report?

Why does my report show Unbalanced Classes?

Why does my Balance Sheet by Class show amounts in the Unclassified column?

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

The Balance Sheet by Class report shows unclassified amounts in an Unclassified column. QuickBooks generates these amounts if it can't find or calculate a class for a transaction. This happens if:

  1. You forgot to enter a class.

    For example, you didn't assign a class to a line item on a bill or invoice.

    To correct the problem, double-click to QuickZoom an amount in the column to see the detail. Then double-click to QuickZoom a line in the report to see the transaction. Assign a class to the transaction.

  2. There is no field to enter a class and no prior transaction in the workflow.

    For example, you can't enter a class in the Receive Payments window. Usually QuickBooks assigns the class based on the first transaction in the workflow (in this case, invoice). However, if you enter a prepayment or deposit in the Receive Payments window, there is no prior transaction that QuickBooks can refer to for the class. The prepayment appears as unclassified on the report.

    Note: Later, when you apply the prepayment against an invoice, QuickBooks classifies the amount on the report.

  3. You entered a class, but the report doesn't support the transaction.

    There are several transactions that the Balance by Class report doesn't support. Some of these transactions create unclassified amounts. For example, you can't allocate a paycheck to multiple classes. If you do, the amounts appear as unclassified on the report. Learn more about unsupported transactions and their solutions.

Why does net income on the report differ from net income on the Profit & Loss 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 makes calculations to balance a transaction's classes. In some cases, this causes the net income for a class on the Profit & Loss by Class report to differ from the net income for that same class on the Balance Sheet by Class report.

Why is this important?

The two primary financial statements in QuickBooks are the balance sheet and the profit & loss statement. Net Income appears as a line item on both reports:

  • It's the bottom line on the Profit & Loss Standard report.

  • It's a component of Equity on the Standard Balance Sheet report.

The net income number is always the same between the two reports.

However, the net income for a class is not always the same on the class-based versions of the same reports. This happens because the Balance Sheet by Class report handles a few transactions differently than the Profit & Loss by Class report. Note: In total, the net income amounts always match.

For example, consider this invoice with three line items in three different classes:

invoice line items

The customer pays early and receives an early payment discount. You apply the discount in this window:

Discounts and Credits window

The two class reports handle the discount transaction differently:

  • The Profit & Loss by Class report shows the full discount for Class 1. The report increases discounts for Class 1, so net income for Class 1 decreases.

  • The Balance Sheet by Class report allocates the discount based on the classes on the original invoice. The original invoice used Class 1, Class 2, and Class 3 in equal amounts. The report increases discounts for Class 1, Class 2, and Class 3, so net income for all 3 classes decreases.

The net income on the two reports doesn't match. See other unsupported transactions and their solutions.

Why is my Balance Sheet by Class a few cents off for certain columns and accounts?

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

The Balance Sheet by Class report makes calculations to balance transactions. Sometimes these calculations cause small rounding errors on the report.

Here's an example:

Step 1-Invoice

You create an invoice with 3 line items:

invoice with 3 line items

QuickBooks allocates $100 to the income and accounts receivable account for each class.

Step 2-Partial Customer Payment

The customer makes a partial payment of $200. Here's the problem. QuickBooks must apply the $200 equally to the 3 classes:

Payment amount (200) X Allocation from original invoice (1/3) = Amount applied to class (66.67).

QuickBooks applies $66.67 to each class. However, $66.67 X 3 is $200.01. This creates a .01 rounding error on the report:

rounding error

The total of $100 for Accounts Receivable does not equal the sum of the individual class amounts ($99.99). The same is true for Undeposited Funds ($200.00 and $200.01, respectively).

Note: The Total column on the report is correct. The rounding errors only affect the individual classes.

Why can't I see journal entries QuickBooks makes for the Balance Sheet by Class?

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

You can run the Transaction Journal report to see the debits and credits for a QuickBooks transaction.

If you use classes, the Transaction Journal report:

  • Shows the specific classes for profit & loss accounts.

  • Doesn't show the specific classes for balance sheet accounts. The Balance Sheet by Class report only calculates the class when you run the report itself. The debits and credits by class don't exist as part of the transaction's journal entry.

This makes it more difficult to see a transaction's effect on the Balance Sheet by Class report.

Here's an example of a typical invoice:

typical invoice

Press CTRL + Y to see the Transaction Journal for a transaction. Here's the Transaction Journal report for the invoice:

Transaction Journal report

The yellow area shows how QuickBooks allocates the classes to the income account. The green area shows that QuickBooks does not allocate any class to the Accounts Receivable account. However, when you run the Balance Sheet by Class report, QuickBooks calculates the class allocation for the Accounts Receivable account.

How do I troubleshoot problems with the Balance Sheet by Class?

See also

KB ID# H_RPT_BALSHEET_BY_CLASS
10/30/2014 7:25:05 AM
PPRDQSSWS407 9102 Pro 2013 2726ac