When entering deposits meant for a scholarship program, they were categorized as an other asset. Why does this show up as a negative number and how do I fix it?

In QuickBooks Online (QBO), when deposits are categorized to an "Other Asset" account, and they appear as negative, there are several reasons for this.

If a deposit is recorded to an "Other Asset" account, it should increase as a debit because this account type tracks long-term asset values. However, if the deposit is mistakenly entered through a journal entry or the bank deposit screen and the "Other Asset" account is selected in the Account field (rather than the correct Received From or income/donation account), QBO may record it as a credit, reducing the asset and causing a negative balance. This issue can also occur if a transfer is incorrectly made into the "Other Asset" account and QBO reverses the transaction, resulting in a negative balance.

If these deposits are incoming scholarship funds, You can classify them as:

• Income (“Scholarship Income” or “Donations Received”)
• Liability if you’re holding funds temporarily for students (like a trust)
• In a separate bank or asset account if it’s a designated fund.

To fix this and ensure accuracy, I suggest consulting an accountant to review your transactions and reclassify them if necessary.

Refer to this article on how to find an accountant in QBO: Find an Accountant or Bookkeeper with QuickBooks ProAdvisor.

For future use, check this article on how to reconcile an account in QBO: How to reconcile an account in QuickBooks Online.

If you need further assistance, feel free to reach out again. I'm always here to help.

@gallery 

If the scholarship fund is donor-restricted, it should be set up as an equity account, not an asset account.  It shows up as a negative amount because the cash deposit (another asset account) is positive.  So, if you assign an asset account to a deposit, that asset account has to be negative to keep your balance sheet balanced.