Moving money between your Asset accounts works a little differently transferring money between other account types, specifically because of the implications it will have on your Bank Account Reconciliation. Because each transaction can only be marked as cleared a single time, if you try to do a transfer directly between two asset accounts, you'll never be able to get the reconciliations to balance for both accounts, you'll only be able to reconcile for the first bank account. Therefore, it's important that we have a pass-through account, and do two separate transactions to handle the movement of money between asset or bank accounts.
- If you don't already have one created, create a pass through account. An Income, Expense or Dedicated account can be used, but we would recommend using this account solely for the purposes of transferring money between accounts. The beginning balance on this account should be 0, and it should not be used for any other transactions.
- Create your journal entry showing the money leaving the account you're transferring the money from. In this transaction, you'll be crediting the Asset account the money is coming from, and debiting your transfer account. Save this transaction.
- Create your journal entry showing the money coming into the account you're transferring the money to. In this transaction, you'll be debiting the Asset account the money is going into, and you'll be crediting your transfer account. Save this transaction.
- If everything was done properly, the account you were transferring from will be reduced, the account you are transferring money to will be increased, and the transfer account will have a 0 dollar balance.