At times, you may find yourself needing to move money between accounts. Typically, this will be between accounts of the same type, usually to correct a mistake on a transaction that is no longer available to be edited, such as a check where the wrong expense account was used that has been cleared through the bank account reconciliation process. In this case, a journal entry is the correct type of transaction to handle this matter.
Note: If you're wanting to transfer money between asset/bank accounts, the process works differently than what this article describes, due to the bank account reconciliation process. For information on moving money between bank accounts, review this article.
- Identify the account that you need to move the money from and the account you want to move the money to. Typically, you'll want to reduce the account you're wanting to move the money to, and increase the account you're wanting to move the money to.
- Create a journal entry, dated for the date that you want this transfer to occur on. To determine which account you credit and which account you debit, review the chart below to see what increases and decreases each account.