Payment Items

There are payments and there are payments. In Accounts Receivable, a payment is money that you receive. Payments typically move through receivables and end up in a bank account. The name of the payment item XE "payment item" is often is XE "item:payment" usually the same as the payment type, such as cash, check, visa. Almost any name can be used at your convenience. Earlier versions put all payments into Undeposited Funds, a Current Asset account.

Beginning with QuickBooks 4.0, a payment item may be set up to deposit the payment to a Bank account or Other Current Asset account, selected by clicking the down arrow, to see a list of all accounts that can be accepted here. ( Control-L also works, but lists all accounts, most of which cannot be entered here.)

Certain rare circumstances require connecting an account of a prohibited type to a payment item. One situation, and the trick for dealing with it, are described near the end of Chapter 8, under the heading “Advance Payments.”

The usual accounting action of a payment item is an increase (debit) to some cash-type account, and a decrease (credit) in receivables.