qbteachmt: My original post was to recommend creating an intercompany loan situation to record the entries. I felt that this would resolve both scenarios posted for the credit card payments. It could also serve to resolve any other payments made by one company on behalf of the other, especially if one company has more available cash than the other. I see this happen quite a bit with new companies created by the same owner. As long as there is a detailed written agreement between the two companies to document the process used for recording these transactions, it should be able to stand up to an audit. This would also meet arm's length requirements as well and wouldn't require the use of Equity or Asset accounts. It's just simple entries back and forth. There is no duplication of expenses on either side, there are no false accounts created, and it keeps the CC balances in line with the statements.
As you pointed out, it depends on the text being used for teaching the course, that is correct. In my teaching experience, there are several college textbooks, not published by Intuit or Sleeter, that provide instruction on both JE and the QB functions. I would always teach my students how to use both methods because I felt it was important for them to understand the debits and credits going on in the software so that they could identify and fix issues if they occurred. I find that too many people rely on the QB functions to post entries and they never really understand how the accounting works in the background.
I don't need to try posting JE's to be able to create accrual or cash basis entries. I do it every day and have no problems with it. If you understand what these two accounting methods mean, then you know that it has nothing to do with using special buttons in a program, regardless of the program used.
JE's are debits and credits, so I'm not sure why you disagreed with me on that one... or why relational databases came into the conversation. Again, I'm not saying you should just bypass all of the tools/functions that QB provides, but it's also not impossible to post entries as JE's either if you know what you're doing. I use JE's for posting payroll entries all of the time. I don't use QB Payroll though. Every business user is going to use the system differently, so it's not a one-size fits all situation on how to post accounting entries.
People who think that QB is doing the accounting for them, and they dont need to know accounting are fooling themselves. I've audited many businesses who think this way, and I've dealt with many so-called accountants who think this way. Every time I've encountered those who think this way, I've found errors that have to be resolved because the user didn't understand basic accounting functions. They didn't know how to recognize an error when one occurred, and if they did recognize an error, they didn't know how to fix it. Too many people are relying on a system to do their accounting for them, with no accounting knowledge themselves. Intuit isn't going to be responsible for bad entries made by the end-user though. The IRS and other government agencies aren't going to care what software you used when your accounting data is wrong. The bottom line is that QB functions are great and helpful, but the user should still understand what is going on in the background, they should know where debits and credits should appear in their GL and Journal, and they shouldn't have to rely on QB's tools to do accounting for them. It makes things easier to have these tools, but it's not a defense in court when your GL is a mess because you relied on the software to be your accountant.
