Money: How to Use Cash Basis Accounting to Report Net Worth (76974)


The information in this article applies to:

  • Microsoft Money 2004 Deluxe
  • Microsoft Money 2003 Deluxe
  • Microsoft Money Deluxe 2002
  • Microsoft Money 2001
  • Microsoft Money 2000
  • Microsoft Money 99
  • Microsoft Money 98
  • Microsoft Money 97
  • Microsoft Money 2000 Business and Personal
  • Microsoft Money 98 Deluxe Edition
  • Microsoft Money 98 Financial Suite
This article was previously published under Q76974

SUMMARY

This article describes how to use cash basis accounting to report your net worth.

Cash basis accounting (as opposed to accrual basis) is a system of accounting in which income and expenses are accounted for on a cash received and cash paid basis. To create a net worth report for a cash-based accounting system, create the report without including accounts receivable information.

MORE INFORMATION

To use cash basis accounting to report your net worth, you first must set up accounts properly by creating at least two asset accounts: one for entering the credit or cash accumulated by the company (this may be any one of the Money account types: asset, bank, or cash); and one for tracking accounts receivable (AR).

When the company issues an invoice to a client, the invoice is entered as an increase transaction in the AR account. When the client pays the invoice, another transaction is entered to transfer funds from the AR account to the bank account.

Note When the payment transaction is entered, the AR account balance must decrease, and the bank account balance must increase.

Customizing the Report

To customize the Net Worth report, use the appropriate method for your version of Money.

Money 99 or Later

  1. On the Money Home screen, click Reports on the navigation bar, and then click What I Have.
  2. Click Net Worth, and then click Go To Report/Chart.
  3. If you see a chart, click the Report button in the lower-left of the screen.
  4. Click Customize.
  5. On the Account tab, click Select All.
  6. Click to remove the accounts receivable Asset account from the list.
  7. Click OK.

Money 98

  1. On the Money Home screen, click Reports on the navigation bar, and then click What I Have.
  2. Click Net Worth, and then click Go To Report/Chart.
  3. If you see a chart, click the Report button in the lower-left of the screen.
  4. Click Customize.
  5. In the Accounts list, click Multiple Accounts.
  6. On the Account tab, click All Accounts.
  7. Click to remove the accounts receivable Asset account from the list.
  8. Click OK.
  9. Click View.

Money 97

  1. In the Contents area, click the Report & Chart Gallery, and then click What I Have.
  2. Click Net Worth, and then click Go To Report/Chart.
  3. If you see a chart, click Report.
  4. Click Customize.
  5. Under Accounts, click Multiple Accounts.
  6. On the Account tab, click All Accounts.
  7. Remove the accounts receivable Asset account from the list.
  8. Click OK.
  9. Click View.

Setting up a Future Transaction to Handle the Payment When It Is Made

To do this, use the appropriate method for your version Money.

Money 99 or Later

  1. On the Money Home screen, click Bills on the navigation bar.
  2. In the left pane, click Set up Bills & Deposits.
  3. Click New.

    This should open the Create New Scheduled Transaction dialog box.
  4. Click Transfer, and then click Next.
  5. Click Only Once to specify the frequency, and then click Next.
  6. In the Payment Method list, click Other.
  7. In the From field, enter the account receivable Asset account.
  8. In the To field, enter the bank account.
  9. In the Pay To field, enter the payee.
  10. Enter the amount and date.
  11. Click Finish.
  12. When the payment is made, return to the Bill Calendar and and click Bill Calendar in the left pane; then double-click the date of the transaction.

    This will bring up a list of all of the transactions scheduled for that date.
  13. Click to select the transfer transaction, and click Record Transfer.
  14. In the Record Transfer dialog box, review the information and if all is correct, click Record Transfer.

Money 98

  1. On the Money Home screen, click Bills.
  2. Click New Bill.
  3. Click Transfer, click Next, and then click Next again.
  4. In the Frequency list, click Only Once.
  5. In the From field, enter the AR account.
  6. In the To field, enter the bank account.
  7. In the Pay To field, enter the payee (this step is optional).
  8. Enter the amount.
  9. Click OK.
  10. When the payment is made, return to the Payment Calendar, and click the Uncheck All button if it is available.

    Make sure the box to the left of the transaction is checked, and then click Enter.
  11. Click Enter Now.
  12. Click Enter in the Enter Recurring Transfer dialog box.

    You will see a deposit in the bank account register and a decrease in the AR account for the payment.

Money 97

  1. In the Contents area, click Payment Calendar.
  2. Click New.
  3. Click Transfer, click Next, and then click Next again.
  4. In the Frequency box, click Only Once.
  5. In the From box, enter the AR account.
  6. In the To box, enter the bank account.
  7. In the Pay To box, enter the payee (this step is optional).
  8. Enter the amount.
  9. Click OK.
  10. When the payment is made, return to the Payment Calendar, click Uncheck All, if it is available, make sure the box to the left of the transaction is checked, and click Enter.
  11. Click Enter in the Enter Recurring Transfer dialog box.

    You will see a deposit in the bank account register and a decrease in the AR account for the payment.
Modification Type:MajorLast Reviewed:1/5/2005
Keywords:kbhowto KB76974
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