Savings account and interest earned

ytayta Member Posts: 2

Hi,

I gained some interest in a savings account, Wave categorized that as 'uncategorized income'. What's the right way to reconcile this?

Thanks!

edited February 12, 2019 in Accounting

Comments

  • MikegMikeg Member Posts: 383 ✭✭✭

    You can create an income account under your chart of accounts called Interest Income.
    Mike G, CPA
    www.mgfinancial.net
    Better Service - Better Pricing

  • ytayta Member Posts: 2

    Thanks Mike, that's what I did, I wonder why this is not a predefined income account in Waveapp.

  • skykingskyking Member Posts: 2

    Hi Mikeg, I have same problem. However, follow your instruction and get the opposite effect. Can you give an example of the transaction?

  • MikegMikeg Member Posts: 383 ✭✭✭

    @skyking,
    Are you having Wave import transactions from your bank? If so, it should show up as green (deposit). If you don't have an interest income account in your chart of accounts then you will need to create one under Chart of Accounts/Income. You would categorize the deposit as interest income.
    If you are creating a journal entry then you would debit the cash account that earned the income and credit interest income. Hope that helps. You welcome to post a screen shot if you are still having trouble.

  • skykingskyking Member Posts: 2

    Thanks Mikeg. I can now entering the bank interest correctly,

  • lelecaleleca Member Posts: 2

    Hi,

    I'm doing my sole trader bookkeeping to lodge my tax return, I have a doubt.

    I opened a separate bank account to receive my invoices, my bank statement has an interest earned because it is a saving account, I did the reconciliation and It's showing as Interest Income in my profit and loss, but It's showing the same amount in myGov account Interest. Do I need to pay double? Do I need to clear the interest income? How can I clear this account?

    Thank you!

  • ZoeCZoeC Administrator Posts: 389 admin

    Hey @leticia Thanks for reaching out! I'm not sure if I fully understand what's going on here though, are you seeing 2 interest transactions for the same thing? Is one of the transactions for the interest categorized to an interest account? Could you send along some screenshots?

    You should have 1 deposit for the interest income, and as Mike mentioned above, you will then need to create a journal transaction that credits the bank account and credits the interest account.

  • lelecaleleca Member Posts: 2

    Hi Zoe,

    Thank you, I really appreciate your message, I create a journal transaction for my bank vs Interest Income, but in my tax return is showing the same amount that I have in my books. I was wondering if is possible I clear the Income Account in my books, I mean in the accounting rule is it correct? How can I do it? Because If I didn't clean it I'll pay double.


    This is the profit and loss that shows Interest Income. (example)


    This is the amount shown in my tax return. (example)


    This the journal transaction example.

    Regards,

  • James_HudsonJames_Hudson Administrator Posts: 128 admin

    Hi @leleca , these screenshots are really helpful in understanding this situation, but I would like to clarify a few more things here.

    You mentioned that you're concerned about interest being recorded twice in Wave. If you have your bank account connected so that Wave imports your transactions, then you should not have to manually enter the journal transaction that you mentioned above. Instead, simply categorizing the bank transaction to Interest Income should do the trick.

    If this does not answer your concern, can you show us the area in Wave where this amount is recorded twice?

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