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Proper Way to Setup Line of Credit
Hi - just started a LOC with the bank.
For setup, what is the best way to account for this?
- Setup the LOC as a Credit Card (there won't be a bank feed though...)
- Setup the LOC as a Current Liability & mark as a 'payment account'
- other?
Thanks
Tags: loc
Replies to This Discussion
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Permalink Reply by Cassandra Scott on -
Brad
I would be setting this up as a "Bank" account. You can initiate a live bank feed for the information (you will find that credit card wont work).
In terms of Balance Sheet reporting, you will need to decide whether you want it to appear as a negative asset (I've seen LOC listed as assets), or as a Liability. Once you have made this decision, then just amend the report layout for your Balance Sheet to report the account in the relevant area.
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