Struggling to understand I have Cash injections into the company whch show as a credit in the petty cash chart of accounts .
HOWEVER
the payemts created by “Enter new purchase” and paid by petty cash shows as a credit in the chart of accounts as expected ….
am i overlooking something?
How did you record the cash injections?
For bank accounts, “money in” is a debit on the chart of accounts, and money out is a credit, so yes, payments for purchases that were paid from petty cash should be credits but the cash injections should be debit (with the other side being a credit on some kind of drawings or “capital introduced” nominal.
ian- what you have outlined is corrected and quickfile reads as such - I believe it is my mis-unsterstanding of how it reports as i thought a purchase would be a debit
When you record a purchase in QuickFile the nominal entries it creates are debit on the relevant expense code (general purchases, advertising, whatever category you selected) and on the purchase tax control account if you’re vat registered, and credit on the creditors control account to represent the liability that you now have to the supplier.
When you make payment that’s a debit on the creditors control account (to cancel the liability) and a credit on whichever bank account the payment came out of (in this case petty cash).
End result - the expense shows as a debit on P&L, the payment shows as a credit on the bank account nominal, which shows as “money out” on the bank statement view.
The confusion often stems from the fact that when you look at a statement that your bank sends you, that shows money in as credit and money out as debit. But that statement is the bank’s view of you, whereas what you see in QuickFile is your view of the bank, so it makes sense for the credits and debits to be the other way round.