Banking and Transactions
What this domain tests
Bank feeds, transaction categorization, transfers, reconciliation, and the discipline that keeps the books tied to the bank.
Core concepts
Connected accounts download transactions into a feed. For each line you can Add (create a new transaction), Match (link to an existing entry), Exclude (remove from reports without deleting), record a Transfer, or split across categories. Bank rules automate categorization by condition and can be set to auto-add.
Reconciliation compares the statement ending balance and date with the QuickBooks balance. Outstanding cheques and deposits explain most differences. Reconciled transactions should be voided rather than deleted, because deletion breaks prior reconciliations. Credit card accounts reconcile to a negative balance representing amounts owed.
Traps
- Recording a transfer as two separate entries (an expense and a deposit), which double-counts the movement.
- Using Exclude as a substitute for deleting; the item disappears from reports but remains in the feed history.
- Auto-add rules creating duplicates when a matching entry already exists.
- Categorizing to Opening Balance Equity instead of the correct income or expense account.
- Reconciling a period before all transactions for it are entered.
Worked example
A statement shows 5,000.00 and QuickBooks shows 4,850.00. A 150.00 cheque has not yet cleared, so the two agree. If QuickBooks instead reads 5,150.00 with everything matched, look for a duplicated deposit or a missing expense before adjusting.
Rule of thumb: reconcile monthly at statement close, and correct differences with an adjusting entry to the proper account rather than deleting history.