Nonprofit category for a deposit
We have an investment account and at this point in the year don't want to add the whole account into our QB and go back and do all that (we'll do that at the start of the year.) The problem is we had a $100,000 moved from our investment account into our main operating account earlier in the year. What do I categorize that investment deposit as? We are going through an audit for our insurance review and our accountant has been non-responsive.
Quick Answer:
For the purposes of your bookkeeping and the insurance audit, do not categorize this deposit as revenue or income. Since the funds originated from your own investment account, this is a **transfer of assets**, not taxable earnings.
To record this in QuickBooks without yet integrating the full investment history, you should:
1. **Create an Asset Account:** Set up an "Other Current Asset" account named something like "Investment Clearing" or "[Brokerage Name] Investment Account."
2. **Categorize the Deposit:** Code the $100,000 incoming wire to this new Asset account.
3. **The Result:** On your Balance Sheet, the cash increases, and the Investment Asset account shows a negative $100,000 (representing the withdrawal).
When you eventually reconcile the full investment account at year-end, the beginning balance and subsequent activity will offset this $100,000, bringing the books into balance.
**Crucial for Insurance Audit:** Ensure this is clearly labeled so the auditor does not include the $100,000 in your gross receipts, which would unnecessarily inflate your premiums. Keep the transfer confirmation or brokerage statement handy to prove the source of funds.
Note: This answer is provided for convenience only. It is important that you speak to a CPA about your individual tax situation.
