Rounding in QuickBooks 2004

Legacy KB ID: 1787

Question

How does the rounding method work in QuickBooks 2004?

Answer

With the advent of Quickbooks 2004, there has been a change in the way that Quickbooks rounds certain calculations in invoices.  This has been brought about in an effort to promote correct accounting practices.  The following applies when the check-box for amounts include tax is unticked.  When entering an amount for the total number of units to be invoiced in the amount column, Quickbooks calculates and then rounds the unit price to 5 decimal places.  Quickbooks then does a second calculation, multiplying the unit price by the number of units.  The value placed in the amount column is then updated to reflect the second calculation. Because the unit price may have been rounded, the value would then change from the original amount entered.

Example:
                                    Quantity                   $/unit                     $Amount
Amounts entered:         500,000                     ---                          427.50
Resulting $/unit:                                           0.000855                         
Then rounded:                                              0.00086                           
Re-calculated:              500,000                   0.00086                  430.00


When the check-box for amounts include tax is ticked, the calculation goes to zero (based on the figures above).

Where the items invoiced are stock items, the correct procedure is to add either a discount item or price level to the invoice or the customer so that the final figure of the invoice displays the amount to be charged.

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