How do you record a credit card transaction in QuickBooks Online?

To record a credit card transaction in QuickBooks Online, the most appropriate method is to select the "+ New" icon, choose "Expense," and select "Credit Card" as the payment method. This process is specifically designed to capture credit card expenses accurately.

When you create an expense categorized as a credit card payment, QuickBooks Online allows you to track the expenses associated with the credit card account separately from cash or checking accounts. This method ensures that your financial records reflect the actual liabilities associated with credit card transactions, making it easier to reconcile your accounts and manage your budget.

Setting the payment method as “Credit Card” accurately associates the transaction with your credit card liability account, which is crucial for effective expense tracking and reporting. It helps in maintaining an accurate view of your business finances, especially when managing multiple payment methods.

Other methods, such as recording it under the "Banking" section or manually adding it to the general ledger, do not appropriately categorize the transaction as a credit card transaction and could lead to inaccurate financial reporting. Inputting the transaction as a transfer between accounts is also not suitable, as it does not accurately represent the expenditure incurred when using a credit card.