I'm trying to work on the Paypal issue as well. People are telling Johns to record as a transfer from one bank account to another bank account. . I use QB Pro plus 20222 desktop (I don't like the online version). I have two checking accounts one that is titled ebay checking and the other (the bank name) checking. Obviously I can tranfer from the main checking to ebay checking. I use expense accounts to record the transactions and regular income accounts for any payments we receive via paypal. The accout labeled ebay checking is linked directly to our ebay account and we use paypal for purchasing. Paypal wants you to maintain money in the account and to have a backup credit card or bank account on file when your purchases or customer refunds are higher than the funds in the paypal account. The other day I had to "add funds" to the paypal account. No problem, I just hit add funds and gave it the amount. All done right? Not exactly the funds transferred to the paypal account but the came out and went back into the same checking account. The transaction recorded itself as a deposit. Needless to say, I wanted it to show funds coming out of the ebay account and going to the Paypal account. I had never set up a paypal account via the chart of accounts. There wasn't a need. Now, because the ebay account actually is used for all the paypal transactions, the whole thing only posted as a deposit. Even if it had posted as a transfer and then the money going into paypal, in this instance it would have gong into the same checking account leaving 0.00 financial recording. Like I said, I use the account called ebay checking for all the paypal transactions and this time, first time its ever happened, it pulled the transfer from its own account and posted the deposit. Appears as a one sided entry and throws the account out of balance.. Long story short. I set up another account and titled it Paypal account. I set it up as a bank account because the funds that are transferred to the paypal account are an asset. I plan on maintaining the transactions the same as before, through income and expense accounts. Is this satisfactory or how should I handle the bookkeeping?
