How to Balance Investment Income on CoA

USA Discussion in 'General Accountancy Discussion' started by Dewey, Nov 14, 2017.

  1. Dewey

    Dewey

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    Kind of new at this - my specialty is technology, not accounting, but alas I have two "accountants" asking me and I'm not sure where to find information regarding resources for how to balance a Chart of Accounts.

    Firstly, my employer recently set up a new ERP (with my help), and so I think it is possible an account might be missing from the new system. Next, we just received our first dividend payment (since setting up the new ERP) in return for buying some stake in a customer (which happened a long time ago). I am looking at the chart of accounts, and they have created an "Investment Income" account under "NON-OPERATING INCOME and PROFIT" in the business' chart of accounts, which I assume I should be increasing as a result, but I am trying to figure out which balancing account to use to decrease in the General Journal to be able to post this payment. Which account(s) on the Chart of Accounts do people typically use to balance such payments?

    My fuzzy logic currently is as such...
    Recieve the dividend check from the other business:
    (+) "Investment Income" & (-) "unknown account"
    (+) "Notes Receivable" & (-) "unknown account"
    Check clears:
    (+) "Bank Account" & (-) "Notes Recivable"
     
    Dewey, Nov 14, 2017
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  2. Dewey

    Drmdcpa VIP Member

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    This looks suspiciously like an exam or homework question.
     
    Drmdcpa, Nov 14, 2017
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  3. Dewey

    Dewey

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    I am not sure if I should be offended or take that as a compliment, but I can assure you this is not school related; however, I am seriously considering taking an accounting class at the local university to enhance my accounting knowledge soon - perhaps next semester.

    Sorry, I am new to this forum, but is there supposed to be additional information you need me to provide to make this question seem less "like an exam or homework" on this forum?

    The ERP is Microsoft Dynamics NAV and the company I work with manufactures Air Conditioners (if that is helpful). I might know how to set up the servers and network, but I only took a couple of accounting classes when I was working on bachelors several years ago and I could really use some help on this.

    If you don't want to feed me an answer I would even love some recommendations on some resources to be able to look up something like this.
     
    Last edited: Nov 14, 2017
    Dewey, Nov 14, 2017
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  4. Dewey

    Drmdcpa VIP Member

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    Please note that if you are looking for assistance with an exam-style question, you must attempt the question yourself before asking for help. You can then state the answer you have so far and explain which aspect you need help with. Anyone posting exam-style questions expecting the answer to be given to them will have their posts removed. Repeat offenders will be banned from the forum.
     
    Drmdcpa, Nov 14, 2017
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  5. Dewey

    Dewey

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    Okay, not to belittle the forum rules, but I am finding it a bit amusing that you are essentially accusing me of trying to cheat considering I graduated like 6 years ago.

    I thought I explained which part I had trouble with - the balancing of accounts.

    Recieve the dividend check from a large customer we hold equity in:
    (+) "Investment Income" & (-) "unknown account"
    (+) "Notes Receivable" & (-) "unknown account"
    Check clears:
    (+) "Bank Account" & (-) "Notes Receivable"

    Are you asking me to guess what accounts it should be balanced with?

    Honestly, you don't need to give me a direct answer, but as a professional from another field (information technology), I would really appreciate it if you could point me in the direction of a resource which would contain such information about balancing a Chart of Accounts in general, including for dividends. Sorry to seem incompetent, but I haven't studied this stuff for several years and I was spoon fed the current Chart of Accounts I am using from the "accountants", which are not certified, that I am working with, who themselves don't seem to understand it too well.
     
    Last edited: Nov 14, 2017
    Dewey, Nov 14, 2017
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