QuickBooks Desktop 2018

1. QuickBooks Pro 2018 Online Course: Hello. Would you like to learn QuickBooks in order to run your business? Would you like to learn QuickBooks in order to advance your career? Would you like to learn QuickBooks? In order, Teoh, See how accounting principles are applied to real world application using RIA World software. This will be a comprehensive QuickBooks Pro 2018 course, which can help you achieve those goals. Why choose this course? This course will contain all current content using QuickBooks Pro 2018. Although this course has much more than just instructional videos, it does include around 25 hours of instructional videos, current instructional videos, not videos that were filmed that last year, the year prior to that. The year prior to that, and then have a few new videos. We're talking about the current content using the current software. More than just instructional videos will be included, including PdF files, pdf files, which can be downloaded pdf files, which can be printed. This allows us to have a reference for future reference. It allows us to share the content with our friends, family and co workers. It also allows us to work through the problems off line and This is a huge benefit to QuickBooks Pro. We can download the PdF files and do a lot of work with just the PDF files and the software . We're also gonna provide backup files, which really is a huge benefit to QuickBooks Pro, something that's not available with many other accounting Softwares, including the online version not giving that static backup. The static backup allows us to jump forward if we would like to and start at key components within a future process. If we want to learn some future topic first, it also allows us to go back to a prior topic, rework topics to a certain point in time rather than going back to at the beginning of a problem. It also allows us if there is an error, to start at key points within the problem and move forward all on the same page, rather than starting over, or rather than moving forward with a different number set huge benefit. Having backups who will I be learning from? You will be learning from someone who has both technical experience within the accounting concepts, as well as applications such as QuickBooks. You'll also be learning from someone who has teaching experience experience explaining complex concepts to both students and clients and someone who has experienced putting together curriculum thinking about learning objectives. Thinking about how students learn how best to help students learn and achieve their objectives. Your learning from someone who is a certified public accountant, a c p A a. Practicing C p A. Someone who has a chartered global management accountant, a c G m A. Someone who has a master's of science in taxation. Also, someone who is a certified postsecondary instructor has a lot of experience teaching and working with both students and clients with business, accounting and technical subjects such as QuickBooks and someone who is a curriculum development expert. Someone who has worked with curriculum development thought about how to put together a comprehensive course in a way that makes sense to people courses, including courses that are of a technical nature that use software or like QuickBooks. How will I be taught presentation and example? We're gonna give a presentation, and then we'll provide a practical example to work through that problem. We're will also provide in addition to video presentation, a Pdf file which will allow you to work through the problem work through much of the problem off line. If you so choose and go back to particular components, use the PDF file as a reference print out the Pdf files. We also have backups. Those backups will allow you to move forward to a particular topic if you so choose and have the data file at a particular point rather than going all the way back to the beginning. If you have a problem as you go through the data, we can also use the backup files to start at relevant points rather than starting over. If you want to rework a particular problem or show someone else how to work. A particular problem, back of files are very useful to do that presentation quality. The presentation quality will be, in essence, the quality here. This is not an advertisement video that's going to be way higher quality than what is actually presented within the course. In essence, in terms of video content, this is what you will be receiving. In addition, you will be receiving the PDF files and the backup files. Please join us and learn QuickBooks in order to run your business, learn QuickBooks in order to advance your career, learn QuickBooks in order to see how accounting theory applies in practice in real world application in real world software within QuickBooks Pro 2018 it'll be great. 2. QuickBooks Pro 2018 Download & Installation: Hello. In this presentation, we will download the QuickBooks Pro 2018 desktop version from the Intuit website. It is possible to purchase QuickBooks on ground at an office supply store and possible to purchase online. As we're doing here, this is purchasing from into its website. Intuit is the owner of QuickBooks, so we're here at the QuickBooks website at the Intuit's website. It is possible to purchase at other locations like Amazon, but just make sure that you know where your purchasing from, and it's a secure place to purchase from. I'm gonna scroll down through the site. The site will change over time, but the purchasing options should remain. Note that QuickBooks is has an online version will do a comparison with the online at a later time. There's pros and cons to the online version we hear are looking for the desktop version toe actually downloaded to the desktop and work through the desktop. That's kind of like the original QuickBooks version, and that's what we will be working with here. I'm going to scroll down to the options were looking for the products, and we're looking for QuickBooks pros. I'm gonna click on QuickBooks pro QuickBooks will update the software pretty much every year. These are the options we have here. We get QuickBooks Pro 2018. That's what we're looking for. This is the current price point. We have that premier 2018 and you can go through the added options that we have in the Premier through the check marks here. So we've got 150 industry specific run reports on the premiere, and they have a different forecasting options, industry specific features and therefore basically, that concept would be that pro is going to be for the majority of users. If we're looking for specific items, then it's possible that Premier would be useful. And then we can look into the enterprise for more specific options. We're going to start here with the QuickBooks Pro as you go through the purchasing process . QuickBooks may prompt you for some other things to purchase. One. Being payroll. Now here's the option for payroll. It might be something you wanted to consider, but you may want to consider it at a later time. There will be an option to purchase paperwork payroll at a later time, so I would go through this. I'm gonna go through and continue without the payroll at this time and just download the QuickBooks pro were then given our options here, we got, um the method is gonna be a download. The users is one. And that's gonna be the items that we will have here clearly. Then we're gonna have the payment options. Once we complete this process, we're gonna have our information here, and we can then download. You will have a license number and product number. You're gonna want to keep that in place, maybe screenshot the screen here and keep that in a place where you can go back and get back to intuit if there are any problems. So we're gonna go ahead and download depending on the browser you have. You may have an icon down here with the download option. This is within chrome. If you're in Firefox, it's probably gonna have an arrow up top. And in if you're in Explorer, it's gonna have some other indication. Probably a bar that will indicate the download. You wouldn't want to open up the downloaded item in whatever format is there. And of course, we're gonna have to allow its to to run with the security system, and it does take some time for Intuit to run. This is Intuit. QuickBooks is a fairly large program, so give it some time to run. Get some coffee, let it get set up. Once the program has been downloaded and unzipped, it should automatically prompt you toe have to run the program. If it doesn't, you'll go through there and go ahead and run the program. But it should automatically prompt that if it does not do so. You're probably going to see a set up QuickBooks on your desktop that have been implemented on the desktop, and you could try to run that as well, Or do a search for QuickBooks and run the set up process like So. So I'm going to say next and let it run the set up process once again. This will take some time, so give it some time. T to run through this QuickBooks is a large program. We will, of course, have to accept the terms. So you know, we wanna go through all of the terms here, read through the terms, accept the terms, and next you will then have a page prompting the license and product number. Now that was given to us when we were to download the product when we said to screenshot the page. So now we're gonna enter that product number and license number here once that has been completed, we have this set up process express or custom network options. Typically, if we're gonna use the default, which is the default, which will be expressed. If we have some custom network options that need to be configured, then we're gonna probably want to work with the I t A bit more and make sure that we're configuring the custom network options. I'm gonna go here with the Express. Once that has been completed, QuickBooks will once again be going through a fairly extensive installation Prague process . Remember, QuickBooks is a fairly large program, so let it think, Let it process. Once this has been completed, we should eventually see an icon on the desktop that will be the QuickBooks program. And of course, that is where we will open the program 3. 1.10 Restore Backup File QuickBooks Pro 2018: Hello. In this presentation, we will restore a backup file four QuickBooks Pro 2018. This will be the backup file that will be our practice file. We will start working with it will be eventually the file that we will create. So we're gonna get used to navigating around the QuickBooks program using this practice file. First step to that is to restore the practice file. Once you have QuickBooks set up, you should have an icon that will be a QuickBooks pro 2018. The backup file we will be using is a 2018 backup file, and therefore we will not be able to restore this backup file to anything prior to 2000 and 18 software. If you're restoring a different type of backup file as long as you're restoring to a a QuickBooks program that is later than in addition than the backup file. Typically you'll be able to restore the backup file up Teoh, the newest version that you are using. However, once you do update the version, you can't then go back and restore that backup file to a prior version. So, in other words, you can take an ah backup file from an older addition and upgraded when you restored to a newer version. However, you cannot then take that backup file and then go back to an older version and restore it back to an older version. So keep that in mind if we're working with 2018 and these data files, then we will be okay. Quick. Look at the data files. They're gonna be. I have mine stored here. Note that when we look at the data file, we are looking at a backup file. So when you store your files, you got to make sure what type of file you're looking at. They will be two of them. One will be a QuickBooks file, and that's gonna be what we're actually gonna use to open. The other will be a QuickBooks backup file. These air gonna be zipped type files. They're gonna be smaller type files. They're gonna be files that we need to restore in order to use those files. Therefore, the back of files. We cannot just double click on the file and open it because it's a zip file. What we have to do is open QuickBooks and then go through the restoration process and then create another file here which will not be a backup file but will be a QuickBooks file. That's the process we will do now going to start that process by just double clicking on the QuickBooks program. When you open QuickBooks, it may open to the prior company that you are working on or it may open to a screen like this. If you were working on prior companies, it will show the prior companies here and you can jump to them directly. And QuickBooks will find those companies on your computer and opened them up in that format . We can use these icons down here as well create a new company. We'll do that later. Open or restoring. Existing company will do that now, but not with that icon. And open a sample file. QuickBooks does have some sample files that are useful to look through. We're gonna use our sample file because it will relate closely. It will be the same type of problem we will work through when we start to build our example . Problem. I'm also not going to use the open or restore icon because I like to use the file tab up here. Reason being is that no matter what window your open the file tab will work. So the file drop down will be there whether you have a company open or not, and therefore it's it could be used any time. So you tend to use the file drop downtown. We're going to restore companies. So we're gonna go to the file, Tam. We're gonna go to the restore open or restore company, and then we want to make sure to take the 2nd 1 restore the company. We cannot just open the company because it's not a company file. It is a backup file. It's a ZIP file. We need to unzip that file. So we will say next it is gonna be a local backup. That's what we're looking for, not in online backup. So we're going to say next and then we just need to locate that backup. Now mine is on the desktop, and I had put it into to a folder called To Get Great Guitars, Section one. And here's the backup file. If it was not a backup file, it was if it were an actual QuickBooks file and I tried to restore it as a backup. It wouldn't show up here. I'd go to this fold and I wouldn't be able to find it because it would be a QuickBooks file . But it wouldn't be a Q B B file a backup file. It would be a normal quikbook file. This is gonna be the back of filing a double click on that, or you can click on it and select open. I tend to just double click on it and then go through the next process. What it's gonna do now is ask you, where do you want to put the file? And this could be a little confusing because you're probably saying, Well, I already have the file. It's right there. I just want to open it. But what it's gonna do is it's actually gonna unzip it and then create a new file to open. So you're gonna end up with two files one a backup file to a restored file. I'm gonna put this in the same location, which is QuickBooks will probably give me a a little air for O. R. A little message telling me that's not the wisest thing all the time, so we're gonna say, Get great guitars. I'm gonna put it into section one and I'm going to save it here. Note that that even though I'm in the same location, that backup file is no longer here. Why? Because now I'm trying to save this as at Q b w file on actual quickbooks file. So remember that other file is still here is just a backup. Now we're gonna put the actual file here, and once we go check that out, it'll have to files in there. A backup and the restored file. Hopefully so will hit save, and it's gonna go through the restore process. It can take a little bit of time. It does take a bit of time, Teoh. Go through the restore process. QuickBooks is a fairly large, extensive programme, even when you're working with files that don't have a lot of data. Once QuickBooks opens up and generally opens up to the homepage and it looks something like this and now we are ready to go and take a look at the homepage and go through the processes of QuickBooks. We are in the get great guitars problem. So we are first going to look at the problem with the populated data in it. Take a look at some reports, take a look at how the data entry works and how some of these flows work within the home page. And then we'll actually create a new get great guitars problem and populate that data as we go and see how we can create a new company from scratch that will look much like this one we are reviewing. Here. It is important to note where we restored the backup and where are backups are at. So just to give an idea of what it looks like now, in terms of where these files are on the computer, we save them to this folder. And so I'm gonna go into this folder, Section one. And here's the folder that they are in. You'll notes now that I have a lot of activity. I've got a couple things when you restore the file. QuickBooks makes the main file type here. So if you were to just double click on this file, it would then open QuickBooks and open the program. This being an actual QuickBooks file type s. So this is the actual file we have open. We also still have the backup file here. That's gonna be the file that we restored. So, no, we now have two files. One being the backup, one being the main file that we are working on. 4. Navigating Through QuickBooks Overview: Hello. In this presentation we will talk about the navigating through QuickBooks, a section and what is included within the navigating through QuickBooks. That section we're going to talk about how to get to components within QuickBooks. How to navigate within QuickBooks started with the home page. We're not actually gonna be entering data. We're gonna use the data set given and look through how we get to those components and get to those pieces. In order to enter some of that data, we're going to start with the home page looking at the different components of the home page. We can get to all these areas with different components or access them in different ways. Within QuickBooks, however, the home page is a really good place to access a lot of things we do from a day to day basis because it gives a nice flow chart telling us what the process is and that gives us an idea of what the journal entries will be and what the process will be. So we'll talk about that, starting with the vendor section and look at the pieces that make up the data entry components and what they then do in order to generate the financial statements. Not gonna be entering data will just be reviewing these components in these flow processes s so that we can When we do enter data, we can do it more efficiently. Then we'll look at the customer section. We got the same thing on the home page. What nice flow chart. A nice pictorial image of what is gonna happen through this process. Then we have the banking section will do the same thing there and go through those components. The company section's gonna include a couple key components, many of which we can we can access somewhere else. There's not as much of a flow chart here. However, these are important enough that QuickBooks put them on the main front home page. So these air key components we want to take a look at. Then we have the employees section and we'll go through those components where they're gonna look at reports and how to generate reports just in general, including the major financial statements. Those being something that QuickBooks calls records as well. Then we'll look at forms including bills and checks, and we'll look at the terms of forms. It's important to know what forms mean. And QuickBooks forms are really what? The data input is that Dr How QuickBooks uses that data in order to generate financial statements. So how do we build forms? How do we set up the forms so that they could be entered in easily by someone that doesn't know the whole system? How can we make the entering of the forms Easy to do lists is another key component. They're gonna have a special name, really? Within QuickBooks. Certain types of lists are very important. These air gonna be this structural components we need to put together, including the chart of accounts and the item lists. Two lists that are really important to understand in order to understand the functioning of QuickBooks. Well, look at the help function within QuickBooks. And when we do have a problem, we can go through the different various aspects of the help functions. A lot of different resource is within QuickBooks to look through when we have questions. We're then gonna print of reports and see how to export those reports. So we'll look through the functionality of what Ah, printing report looks like how we're gonna print the reports. How can we save a report to a pdf? How can we format of report? And how can we export a report to excel, which is going to be very useful not just for QuickBooks, but any database program. You're pretty much gonna have to print reports, format reports. And if you can export them to excel, if we can export them to excel, that helps us out a lot. That's gonna be a big benefit. 5. 1.15 Home Page – Vendors Section QuickBooks Pro 2018: Hello. In this presentation, we're gonna take a look at the home page and specifically the vendor section over the home page within QuickBooks Pro 2018. We will be continuing with the get great guitars problem. If you are falling along with us, that's great. If not, that's OK. We will be talking about the home page and looking through the icons on the home page paying special attention to the vendor section in this presentation. If you have access to the backup file, you can restore the backup file by going to the file and open re storm. We took a look at the process for doing so in a prior presentation. We're also gonna have the open windows list over over here open and to open that, go to the windows tap or the View tab, I should say, and then go to open window list and that will keep these open windows open. The only thing we currently have open is the home page. The homepage open in order to get to the home page. If Thesis TEM did not open to the homepage as it normally does, then we're gonna go to the company up top and home page. It's useful that QuickBooks does open to the home page because the home page is the driving page. It gives us really most of the areas that we're gonna need to input data, and it gives us a nice visual in terms of what data is there the systems that will be in place by cycle, by vendor, cycle by customer cycle and by employees cycle. So by going through these cycles by going through this visual weaken, inter date it in a fairly easy way. Using forms Those forms, then, is what QuickBooks uses to generate the financial statements. So QuickBooks is trying to give us a guide for us to put the information in as easily as possible using these forms. What we're gonna do is take a look at these forms. Take a look at the flow within each of these sections within the vendor section, the customer section and the employees section, starting with the vendor section here, and we'll go over the flow in general, talk about what it does, what the's forms Dio and then as we go forward and look at some other areas within, QuickBooks will always go back to this home page. We're always gonna take a look at these driving icons that have thes driving forms that are gonna help us to generate the financial statements. Look at the effect on the financial statements later on. We're gonna start off here with the vendor section. We here have started a company that has both service type businesses and merchandise, meaning we sell inventory and we sell services. If we set up a business that set up that only has services, we may not have all the icons here. We may not have the purchase orders or the received inventory icons here. We will typically always have the inter bills and pay bills icon. That's gonna be the main thing that will be there all the time within the vendors section. So as you set up your company within QuickBooks and we'll take a look at that set up process in the preferences for your company, depending on those preferences, what type of company we are, whether we are a merchandiser, whether we're a service company, then these icons will differ. If we look at the standard icons for the vendor section, what happens is we're gonna inter bills and then we're gonna pay bills. And that's gonna be the typical flow from the vendors section. Meaning if we have the typical bills at the end of the time period on, we're gonna pay the utility bill, we're gonna we're gonna pay the rent, bill and what not. We're gonna enter those into the Inter Bill icon here, And as we do that, QuickBooks will generate the journal entry. As we input this data, When we go into the Inter Bills icon, it really looks a lot like a check. So it looks like a check. But it's a bill, and the fact that it's a bill just means that QuickBooks is going to increase what they call the payable account. And that's gonna be what we owe to its gonna be accounts payable track. Who we owe by vendor. We're gonna enter. The vendor here will have the date. We'll have the address and then we'll have to pick some other account, usually an expense type account, possibly an asset type account. Later on, we'll pick on I inventory type account in the inventory items, and as we do that QuickBooks by being a bill will increase the fact that we owe somebody money and they will increase the other thing that happened. If it was an expense like utilities expense, it will produce that and generate that on the journal entries for us without us needing to know debits and credits or how to build on income statement or how to build a balance sheet . So these are the driving data input forms gonna close this back out with the X icon up top . Then, of course, we are going to pay bills. That's the typical vendors scenario. We pay the bills. If we click on this, will have a list of all the bills that we will then want to pay. And we contract the bills in this format, and we could just take off which bills we want to pay. And then we can either write a check for those bills, meaning will have external checks that will put into the printer, and they will be pre printed checks that will. Then the amounts will then be printed on them, but the check numbers will be pre printed on them, or we can just into the data into QuickBooks and have the checks generated in some other fashion, perhaps by hand. But use QuickBooks to enter the data into the system so that QuickBooks can make those financial statements. We need the balance sheet and the income statement Gonna close this back out. That's gonna be the major format of the fender section. Now, in order to set up the vendor section, there's gonna be some other driving factors we need. We're gonna need a chart of accounts we're gonna need to set up. Some vendors will talk about how to do that as an in a bit as we go. However, we could do some of those things As we actually create the bills. We could create vendors as we generate bills. We could create accounts as we generate bills. But when we look at those lists, when we look at the chart of accounts, when we look at the vendor list, we will go back and forth to this home tab and these driving documents. We then have a purchase order receiving documents and inter bills. These air gonna be specific to if we sell merchandise. So if we sell merchandise, we may pre order the merchandise with a purchase order. And therefore, if we're gonna get some goods in our case, guitars were gonna bike. It's ours. We would then request the guitars with a purchase order. We select the purchase order, it's going to look like this. And we're gonna select the item here. That's gonna be an inventory item. If we go back one, we can see a purchase order where we have an inventory item, the description of the item, the quantity that we're gonna have the rate. This is just a request to our vendor in this case, EPA phone for these items. There's no actual journal entry related to this. This is a request for those. I'm gonna close that back out once we get the inventory, Then we can go to this icon and I'm gonna close that back out. I'm gonna try to hit the drop down, and we could say received inventory with a bill or receive it without a bill. And so typically, we're gonna invoice. We're gonna get the inventory with a bill, typically, and we're gonna have to enter that information, increasing the inventory we have and entering the bill. And then eventually we, of course, will pay the bill, and that's gonna be the process for us ordering inventory and then pain the inventory. If we order inventory, um, than the people we order from in our case, we're gonna be ordering guitars and then reselling guitars are going to be our major vendors that we're gonna have to track. And we will track who we owe through the reports that will be generated as we enter bills into the system. We also have this item appear, which is managed sales tax. And that's gonna manage the sales tax we have when we make sales four items that have sales tax or a value added tax. And that's gonna be different for each state that we have. What are gonna be the different taxes that we're gonna have when we make the sales? And QuickBooks provides this item to manage the reason it's up here in the vendor section and not in the customer section, because typically we charge sales tax to customers, win. We create invoices to our customers or create sales receipts. Not when we create a bill. However, when we pay the people that government agency that that ah, we owe for the sales tax with value added tax. Then we are going to have to have a vendor. So we're gonna be paying that that organization will be a vendor to us. This will help us organize that in track who we owe and pay that automatically. We'll get down to How are we going to calculate the sales tax, or where does the sales tax come from out when we get down to the creating the invoice and when we talk about items? 6. 1.20 Home Page – Customer Section QuickBooks Pro 2018: Hello. In this presentation, we will be taking a look at the home page of QuickBooks Pro 2018. Specifically, looking into the customer section. Been continuing along with us, we will be continuing with the get great guitars problem. If you want to restore the backup file and have access to of the backup file, you can go to the file and restore the backup. We have done so in a prior presentation toe walk through that process. We have the current open windows open over here and over order to open the open windows item, go to the view tab and select the open windows list. The only current window we have open is the hometown. If the company opens up, it typically opens to the home tab. But if it does not, you can go to the company dropped down, up top and the home tab. The home tab will be that useful page. We looked last time at the vendor section over the home tab. The home tab will give that pictorial view, help us drive through the implementation of most of the data like 90% of the data will be input. Using some icon from the home tab. QuickBooks will then use that to create a form. Those forms then will be used to generate everything we need in terms of the reports that balance sheet and the income statement. So this is really a great place to go. We're gonna We're gonna take a look at it here, go through the flows, and then as we create the set up process and as we go through their reports, we will continually go back to these icons. These are the driving factors that will be used. They're kind of like the keys on the calculator that QuickBooks uses from the input perspective in order to do their calculations. In the case of QuickBooks, those being the financial statements three sections we have the vendor section, the customer section and the employees section. We went over the vendor section last time. That's like the accounts payable section that, um, the payables or purchases cycle. We're going to go through the customers section here. That's gonna be the sales cycle customers who we sell to the vendors who we purchase from. So this is gonna be our main sales cycle when we go through the sales cycle. We typically think of it as starting with an invoice. So we're gonna have the invoice, and that's gonna be the typical item where if you are in a kind of business where we do work and then we build the client and then we're going to get the payment in the future in the mail, such as a bookkeeping service where we actually have to do the work and then we gotta count how many hours we spent generate a bill and then mail the bailout, and then we're gonna have to get paid at a later point in time. This invoice, then, is what we're going to use in order to build. The client has a few functions. If we click on the invoice, we can go back to one of the invoices that have been generated by going to the previous icon, and we could see the data that we're gonna use to input the invoice. It's got the customer, and we're gonna have the type of template gonna have a date invoice number generated automatically by the envoys bill, too. Purchase. Order the terms when we expect to get paid, and then the item In this case, it's an inventory item. We sold inventory a guitar here, and then we're gonna have the sales tax information at the bottom. So when we put this information into the invoice, what the invoice does is it says, because it's an invoice, it's going to assume that we have not yet received payments. Were just mailing the bill in essence, to our customer. And therefore it's going to increase the accounts receivable What is owed to us from the customer by just generating this invoice. It will also increase the sales that are going to be on our income statement by, in this case, the 500. And it will even calculate the sales tax for us and track the fact that we owe sales tax, that being to the vendor of whoever state we owe the sales tax on the value added tax on any sales that we make. It will also, if we are selling inventory track, the decrease in inventory for the in this case guitar that we sold and the increase in the cost of goods sold. If we don't sell inventory, then of course we don't have to worry about that. We won't have any inventory to worry about. So by in putting this data just into the screen, pretty simple input screen QuickBooks will do all that. It will generate what we need on the balance sheet. It'll track who owes us money in terms of accounts receivable so that we can go back and ask for that. It will track who we owe money to in terms of sales tax and so that we can pay the sales tax or value added tax that we need to pay. Now, of course, there is some issues. When setting this stuff up, we're going to set up the items that we're gonna use here in order to create the invoice that takes a bit of time. We're going to go back and forth through the invoice when setting up items once set up. However, pretty easy to just do the data input. We're also gonna look at the financial statements and then go back from the financial statements to the invoice at a later time. But this invoice is the first step in our process. We're gonna close this back out, so typically we think of making an invoice, and then we're going to receive the payment. After we've made the invoice, we're gonna get something in the mail. Typically a check hopefully in the mail after we build the clients for our bookkeeping service. If that's our example, when we select the receive payment icon, we're just going to say we have a check in her hand that we got from the mail. We go back one, we can take a look at an example of one. And this one came from a music store stuff this is ah, customer gave us a check for 816. There's the date check number of the check we received. And then we could just check that off to a particular invoice owed tying out the invoice to the check so this would be stepped to We would get the check. And all we have to do is go in here and say, there's the customer we got it from and it would just say, Well, here's the two invoices that a road from this customer in this case, this is the invoice we are applying it to, and it will then tie that out and it will do all the calculations for us once again, meaning it's going to decrease the amount that that customer music store stuff owes us from this particular invoice that has now been paid by this check. It will also increase the cash type account in this case on under and revenue. We'll talk a bit more about that, but it will increase the fact that we got money. We gotta check. I count, and it will. Do you know all that for us? Just by this simple clicking basically, just this check box here, so we'll be able to take a look at the financials later on. We'll look at the financials and we'll see exactly what is happening. When that happens, we'll close this back out. And then if we go straight through the slow process, we got create invoice, we got received payments and then we're gonna make a deposit. Now the deposits not exactly in the customer section customer section banking section, but it's pretty close, and it's part of the same process. Usually when we make a deposit. Hopefully, most of those deposits are from the fact that we sold something to a customer, and so it's part of the customers cycle here. And so if we double quick if we click on the deposit, it will pop up a screen here that will just tie out the deposits that theoretically we have on hand from the last icon we checked on. And in essence, if we were to click on that, we would just click on him in accordance with the actual deposits that we're going to the bank with two deposit and then little group that deposits in accordance with the amounts that we are going to deposit into the bank, and it'll just tie those out. So we're not gonna actually do that here. But when we make the deposit once again, QuickBooks will do everything for us, meaning it'll deposit those items into our checking account in accordance with the grouping that we're gonna deposit them in when we go to the bank. And it will reduce the UN deposited funds, which we'll talk about more of that process. But in essence, it will record. They deposit for us. Someone close this out and close this out. That's going to be the main process. So when you think about the customer cycle, typically you think about were selling something on accounts, increasing people, owing US money, accounts receivable and sales. Then we're going to get the money from the customers and QuickBooks world record that, but not put it into the checking account until we actually record the deposit, we'll go through. This process will take a look at how to set up inventory items and sales tax items later and will always be jumping back to some of these items when we do so. We also have the estimates here. Now this is going to be important for some types of companies, possibly construction companies that would need to set up a estimate before creating the invoice. That option will be there as well. You might be thinking, well, that I have a company that does not create an invoice and build them. I build the company. I build the client right then and there. So maybe we have a a type of business where we do not want Teoh send the bill out and run it through accounts receivable. But in essence, just make a sales receipt. So in our case, if we're selling the guitars, if we're in the store and we just make a sale of the guitars, then we don't really need to make an invoice and take it in and out of accounts receivable . We are just going to receive the payment at that point in time. And by doing so, we're basically bypassing this and this and going directly here where we want to say I'm getting a check or money or cash and I'm recording the sale. At that point in time, that would be this icon. And if we check on that looks much the same as the invoice, except it's a sales receipt. If we go back one, we can see an example. Music store stuff here is the customer. That template, it's gonna be a check was received. Date sales number will generate automatically check amount and then the item. In this case, once again, we sold an inventory item, so it's ah, guitar. We sold. So actually, wasn't rent music equipped. We rented out music equipment was not an inventory item. We rented music equipment and therefore we had the rent price and this form will do everything for us in order to record this just like the invoice. In this case, however, the sales received not meaning that people owe us money but meaning that we have received in this case a check and therefore it's gonna go into an increase in a re received check account called the UN Deposit Funds. Until we deposited more on that later, the other side will be the revenue in this case, the revenue for rental revenue for the music equipment. So we're gonna close that out. That then, of course, will bypass and go directly to this point in our progression. And then we would go to the deposit and just deposit that at the end of the day, this will be the main process that we will be focusing in on the main process of the customers cycle. That being the create invoices, receive payments, record deposits or create sales receipt and then record deposits. We do have some other icons which will be the accept credit cards dealing with the setting up of the acceptance of credit cards, the refunds and credits dealing with when we have someone that's going to return something and we have to give it refund and or credit and then some adjustments in terms of the statement changes, we could make some adjustments and use this icon to adjust some statements and then take a look at those statements through this icon. But we're gonna be focusing mainly here on this core process within the customers cycle. As we do so, we will set up some items which we will go back and forth to this icon here in particular, and this icon here to see what those items will be, in particular the inventory items and the sales tax items. And then, of course, we'll go to the financial statements when we look at the balance sheet and the income statement and continually go back to these documents. These being the driving documents used to create those financial statements, the functions of these documents in order to generate these documents being some of the things that we will create in the lists and items when we look at the items, those will be the inventory items and of course we will also have to set up the accounts which will be used when we record these documents as well 7. 1.25 Home Page – Banking Section QuickBooks Pro 2018: Hello. In this presentation, we will take a look at the home page of QuickBooks Pro 2018 focusing and here on the banking section of the home page. If you've been working along with us, we will be continuing with get great guitars problem. If not, that's OK. We will be looking at the banking section of the home page. If you have the backup file, you can restore that by going to the file and restore. We see that in a prior presentation, and we have the open Windows icon over here to have the open Windows icon open, go to the View tab and open Windows list. We currently have the home page open to open the home page. If it's not currently open, we go to the company tab and home page. In prior presentations, we looked at the vendor section, the customer section, the employees section and the company section. We are now going to take a look at the banking section of the home page, another really important area in terms of many important icons. However, the flow here typically this deposit is going to be as it shows here, part of the customers section often times because the deposit is gonna be part of the flow in terms of creating invoices, receiving payments and then making a deposit. So this item I often use in terms of the homepage because it is part of that flow process. I also used the write checks oftentimes within the home page, because that's a convenient item to have within ah, the banking section here. It's not up here in the vendor section, which is the typical flow for when we write checks. We would have the putting the bill into QuickBooks and then using the pay bill to write checks. So that's gonna be the difference between those two items. Some of these other items, like the company section up here because they're not really part of the standard flow of the day to day processes. I tend to use the drop downs in order to get to some of these other sections, so I'll show you that as we go. The deposit here, like we say, is typically oftentimes part of this normal flow within the customer section where we create an invoice, received the payment, have the check in hand and then it go to the bank or creative sales receipt and then go to the bank. So this is the actual icon we wanna have. When we're looking for the amount that we will be putting into the bank, we're gonna group all the checks together. All of the parts that we have go to the bank and put him in the bank in accordance with that group in. Then we would select this icon typically, and when we do so, it will have a pop up here. And that's usually going to be the stuff that QuickBooks says, Hey, this is ready to deposit. Meaning you have a sales receipt and we put it into this UN deposited funds account, which we'll talk about later. And now you need to put it into here as a deposit. And when we do that, then once we go through this process, QuickBooks will do the transaction of increasing the checking account for the amount going into the checking account, and it will decrease this UN deposited funds so well, Seymour, about what that UN deposited funds is in a bit. But in essence, of course, I'm closing this back out. Closing this back out the deposit will increase the checking account. That being our main deposit account, Typically then we have the right checks. Icons write checks. Close means that we're actually writing Just going to write the check. This is going to be different than the vendor section. You might think it would be reasonable to have this write two checks. I tell Icon up here in the vendors section and I'm not exactly sure why they didn't put it up in the vendor section, except maybe that it might confuse the normal ah payables process with vendors which would be to actually enter the bill first, meaning it goes into a liability of accounts payable and we record the expense. And then we pay the bill with a check, meaning we're gonna decrease the bank account and decrease the fact that we owe the people money. The right check will bypass this first item in the vendor section by just writing a check, which means we're going to decrease the checking account and we're going Teoh, I hit the other account, which will be something like expenses or on acid if we're buying an asset and it would look just like we would expect if we look at the right checks, I come. We got the check, we got the check number. The check number will be pre numbered. So if we write checks through QuickBooks, we're gonna need pre printed checks that we will then put into the printer. The printer will then print on those pre printed cheques, one of the big internal controls being the fact that we have the pre printed check numbers , which should match these check numbers. Here. We've got the date who were paying to the amount, the address and the expense in terms of what the other side will be when we record this, then we will be decreasing the checking account and doing something to the other side, often times and expense that will have to label this something like utilities expense, telephone expense, meals and entertainment there for buying inventory. Then we're gonna be over here in the items section, so we'll see more about that when we go through. The process is so we'll close this back out. Then we have the print cheques, icons, and when we write the checks, we could write a right to the checks and assigned them. So if we selected the right checks once a can and we say prince later, then we won't to sign the check number until we actually print them, and then we can go ahead and print to them. So if we say Prince later says to print, rather than if I uncheck that it gives us the check number closing this back out of in. If we went to the prints checks, we convinced print out those checks and it would have signed the check number in accordance with Avi printed cheques. And that would only be used if we were to print the checks where we have to have pre printed cheques. We in this system, we're gonna assign the check numbers here and just inter enter the checks as we go when we work for the problem. But I'll try to show you when when the cheque printing process could happen and it could be useful. Teoh, use the checks and print the check. That is another internal control that can be used. If we use QuickBooks to print checks out, then we have the bank reconciliation. This is gonna be a critical thing to do at the end of each month. We want to get the bank statement. We want to reconcile it. What this does is we just taking the bank statement and comparing it to exactly what we have in the books. It's the huge, huge internal control, not only over cash, but over a lot of the other processes. Because cash is involved, you'll see in all of these cycles. So the fact that we can double check our cash account in all the transactions that go through cash with 1/3 party, the bank, typically very dependable, then we're really kind of checking all of our transaction. So is a huge thing to do. I typically don't go through the it here, however, because it's not part of the just day to day flow process. And so you can get to that same section and we will as we work problems go through the banking section and go to the reconcile in this format. If we selected reconcile, it'll be this process. It'll have the checking account, whatever can't were working in the month that were going to reconcile, beginning balance that beginning balance of the ending balance of the last bank reconciliation event, the ending balance. And once we go forward through this, we're just gonna take anti everything off from the bank statements to our books. It's actually not too bad, pretty easy to do, and it's a huge internal control. So we will look at that. Look forward to that, and then we have the check register. That's gonna be a lot of people are really used to seeing the check register, and QuickBooks uses a registered type of function for a lot of different All the accounts, all the balance sheet accounts, basically, so we'll use the register in terms of the check register can be very useful to look at. And we'll use that registers and actually some other accounts to to try to avoid some journal entries, sometimes, so to try to do some processes in such a way that we don't need as much of an understanding of debits and credit to do them. So let's take a look at the check register and this again. This might be a little bit more familiar looking type of thing. Teoh people that worked in working with with a register so we would have the date we would have check number we've got who were paying to this is this is an employee check. Let's look at this when we pay the bill. So it's going to Verizon when it was a payment with payment section versus the deposit section and then we paid off in this case, the accounts payables the other accounts. This may be the thing that people are not as used to if we're just used Teoh reconcile our cash account, meaning we probably just said Verizon, decrease our cash count, said, Yeah, our cash account makes sense. OK, but then we also just need this added information of same. The Verizon would be a telephone bill except for the here we're paying off of the bill, so we paid off accounts payable. So we need that other account, in other words, here to make sure that QuickBooks has two accounts so it can record a transaction with two accounts, and that's how the register will work. It's close this back out, closing out the register, and then we've got the inter credit card charges. Now this is gonna be useful when we have the credit card. There's a couple different ways we can do it. But in essence, when we enter the credit card information, especially if we don't pay the credit card off all at one time, we want to be able to track that information we want. Track it by date. So what we really want to do is enter it into its own kind of register and then pay off what we have so that we can still show the balance do while entering all the transactions that we have occurred over the time period. So if we select this icon, we see something that looks a lot like a bill or a lot like a check and in which we have the information up, top the purchaser. We've got the date, we've got the amount, and then we can enter the expense. And what this is going to do is it's gonna increase the credit card charge, meaning our liability for the credit card charge each time so we can put we can put in one expense. But we would have to keep on saving them if we were to go through our credit card statement . In other words, if we were to enter our credit card statement, we would have the statement, possibly at the end of the month, we would have a bunch of charges that are all of different dates within that month. We can go through the statement and put in each of those charges by putting in who is going to the date of its charge, the amount and then the expense here and then save and new. And we can go through our whole credits card statement. And by doing so, it will increase the balance by the amount of charges we enter here. Then we can go in and write a check for however much we want Teoh and write the check to, say, American Express or Visa and have the other side of the account to go here. And in so doing it will reduce the credit card down Teoh, whatever balance is still Dio. So I'm gonna close that out and try to explain that a bit differently. If I if we close this out, that's gonna be this icon. If we go to the register and I'm gonna go to the register up top and go to banking and use register and we can go to the credit card. I'm going to select the visa in our case Visa credit card. And okay, this looks a lot like the check register. And like I said, every every account has a register. If we were to enter some transactions into what the screen we just looked at, what would happen is we'd see another line item for each new transaction. So you can imagine that's just entering another line out. And for every transaction on our credit card bill, the bill here within increase their just keep on increasing until we get to the balance on our credit card statement. And then when we pay the credit card statement what we would dio let's go back to the home time and we would write the check here, we'd write a check and the check would be going. Teoh visa in this case and the account then would be not a particular expense, but would be that credit card feed, meaning it would be the visa account that we've just been posting to. So when we write to this check, then say we over $1000 say we paid 600 of it, it would be going to the other account that visa account. And if we went back to this check register in Visa, we would then see the payment here for the 600 bringing it down to the balance now dio of $400. So the credit card accounts can be a little bit confusing t track within QuickBooks. But if you use this process, you could actually enter directly here rather than if we go to the home tab. Rather than putting all the data into this process. You could go directly, Teoh the register the visa register and do the same type of activity entering each charge on your credit card statement here, just like you would in a check register. And then when you make the payment, it'll it'll make a payment over here and bring the balance down to whatever balances on your statement. By doing that, you're tracking both what your payments are, and you're tracking the charges and you're tracking the charges not by when you paid them, but by date, when they actually happen by going through the credit card statement and entering that information. So that's the credit card statement there. And so that's gonna be ah, the icons within the banking section of the home page 8. 1.27 Home Page – Company Section QuickBooks Pro 2018: Hello. In this presentation, we will be taking a look at the QuickBooks home page, specifically the company section of the QuickBooks home page. If you've been falling along with us, we will be continuing with the get great guitar problem. If not, that's OK. We will be looking at the homepage, specifically the company section in this presentation. If you have the backup file, you can restore that by going to the file and restore. If not, that's OK. We were working with the Home page rumor that we will be looking at the View tab open here . I usually like to have that opened by going to the view and open window lists. Onley thing opened in this tap will be the home page homepage found at the company and home page. We're looking this time and the company section. Last time we looked at the vendors, the customers and the employees section, looking at the flows within those sections. Those to me are the most important things on the home page. By far. The company's section has some other items that are useful a lot that are used a lot and therefore they warrant being on the home page. But at the same time, there's other places to get to these, and I tend to default to the other place to get to these, although there are other places to get to the vendors, customers and employees icons. I tend to use the homepage for these because they have a nice flow chart here, and that helps me. But the fact that these I don't often go it just in terms of a flow chart. That's why I tend to just jump to them using the drop downs rather than the home page. But the items here are important and relevant, and that's kind of why they're on the home page. At least a few of these are, and one of them will be the chart of accounts. That's gonna be the chart of accounts are list of accounts, and so if we click on the chart of accounts, we will see these items when we set up the company. Depending on the type of company we set up, QuickBooks will give the option to give us a chart of accounts, and it's good to go through, then look through that. We will do that at a later Time notes. You can also find those, and I'll typically go to the chart of accounts by going to lists and chart of accounts. So that's gonna be the same item. Gonna close this back out. And the next item here that is really important is gonna be the items and services. So the items and services another kind of list here that we're gonna have over here, and that's gonna be the thing that drives us these items of are the items that try of us for the service items and the inventory items. When we make sales, we're gonna need these in order to generate invoices in order to generate sales receipts. This is gonna be our list of invoices and our list of services and some other items like sales tax down here. Another item gonna close that up. Note that, of course, when we opened these, they are opening in the open window and we could talk all back and forth to these going back to the home page. Over here, these two icons, the chart of accounts and the items are going to be the most used or most important within the accounting process. we then have the inventory activities. This will be relevant if, of course, we are selling inventory rather than being just a service company. And this will help US manager inventory adjust quantity value on hand. We then have our order checks and forms. This. We would need to be set up with the bank in order to order the checks through the bank and note that when you when we do this, it can be very useful to have that set up because then we can order checks and we can print the checks through QuickBooks. So the checks would still need to be pre ordered because we need the pre ordered check numbers on them as one of our major checks in terms of internal controls and then what we would if we were to use QuickBooks to print checks. We would put those pre printed checks into the printer and out print the amounts on them in that format, so we would still need to order the checks in that process. We're not gonna be ordering checks in this presentation. What we'll do in this project is we will be just processing the checks. I'll talk about how the Czechs would then be entered when we get to that point, and then we're gonna assign check numbers, too. Ah, the process on that would be as if we were writing the checks outside, manually writing the checks or doing it in some other process and then entering that data into the system. We didn't have our calendar here. I'm sure everybody uses a calendar, of course, but it's useful to use the QuickBooks calendars. Fourth, certain things QuickBooks can give you those alarms and settings in terms of win things or do would win certain things that need to happen. So this will be the QuickBooks calendar here. And if we take a look at this, this is what the QuickBooks calendar looks like. 9. 1.28 Home Page – Employees Section QuickBooks Pro 2018: Hello. In this presentation, we will be taking a look at the home page of QuickBooks Pro 2018 concentrating on the employees section of the home page. If you've been foaming along with us, we will be continuing with the get great guitars problem. If not, that's OK. We will be looking at the home page and looking at the employees section of the home page. If you have the backup file to this point, you can select the file Tam and open the backup file that will take us to the same point. We also have the open windows. It's tab open here to get there. You go to the views and open window list. We have the home page open in the open windows that can be found in the company tab and the home page. We have before looked at the home page and concentrated on the vendor section, the customer section, and now we're concentrating on the employees. That section the employees section will concentrate in on the pain process of employees and the pain of the liabilities. Four employees. If you don't see these icons, you probably don't have the payroll portion set up within QuickBooks, and you'll have to set up the payroll in order to see these icons. There's at least three different types of payroll settings that could be used for QuickBooks three paid payroll settings and one that is going to be a free setting. If you were to process Pedro for any significant amount of employees, you'd want to use the paid version typically because they will help you with the with holdings. Calculating the with holdings in terms of Social Security, Medicare, federal income tax and then on often differs in terms of the state taxes. So often the more expensive plans might doom or in terms of having different states and or multiple states. And it gets more complex because, of course, the states have different tax rates, whereas the federal tax rates are all the same, so we can process the federal tax rates across at least the United States. If we got different states in different countries, then that gets a little bit more difficult for the southward to calculate. If you do use the free manual version, you will sit still, see these icons and we can see this whole process. It's just that when you're actually process the payroll, you would have been calculate for each employee what the with holdings were, and that's doable. But it does get tedious after of a few employees. In any case, we've got the employee section with these three icons. It's gonna walk us through this process, as we have seen in the vendor section and the customer section, it starts off with the time entry. This could be a useful feature in that we can use this kind of as a time clock, meaning we can assign our time per employee in this time clock and kind of track hours, whether they be billable hours or non billable hours. And we can use that to then generate the paychecks when we process the payroll. It's possible to use this and or not use this within the payroll process within. The employee process is not required. In other words, for us to enter the time into this process in order to process the payroll, some companies might into the time other companies might be completely salary based, so they don't really have the time that they need to enter in order to process the payroll because they get paid a fixed amount each time, and other people might process that information outside of QuickBooks and then just use QuickBooks in order. Teoh enter the employee data just depends on how you would like to work that. Then we have the pay employees. When we're asking when we are going to process the payment of the employees, this would be the icon we would use. And again, a lot of companies have different options. Four pain employees they may use QuickBooks. You may be using something outside of QuickBooks. You may be using 1/3 party vendor, in which case you would have Teoh get back to QuickBooks and enter the data Anti QuickBooks of it. You have the information in terms of ploy employee expenses and the employee liabilities for your for your data to make your financial statements correct. If we go into the pay employees section, you will see the items in terms of processing the paychecks. And if we were click on any of these items, what will have here will have the pay period, the period end and in the Czech date, and then we'll have the check number and then we'll have our list of employees. And if we take a look at the employees within the list, if we check them off and take a look at an employee within the list, we will see some of the detail here. So this is gonna be a salaried. Employees will have the salary, and then we'll have that with holdings from this particular employee giving us the net check here we're using at the free version, the manual version of QuickBooks payroll processing. And when we work this, it's actually really good for an example problem to use the manual version because the tediousness of actually calculating out the with holdings will show us what the software is doing. Ah, and then we'll be ableto work that out. So we have here. No, with holdings at this time will calculate that at a later time this will be the net check. Then over here, we're gonna have the employer with holdings, and this will be the amount that the employer has to withhold on the employee wages. We'll talk more about that as we go, but closing this back out point being once we process this payroll will have everything set up, meaning it'll it'll debit. The payroll expense accounts are increased. The expense account. It will increase the liabilities. It'll track who we owe. It'll track that we were, Oh, the Fed money and the state money after we get that set up properly, which will mean that we're going to set up the employees and we're gonna have to set up some items in terms of, ah, items for the payroll items such as, When do we pay employees and hourly rates and the salaries? And who do we pay in terms of payroll taxes? So once we get that set up, however, QuickBooks runs very well and will take a look at that as we go. We're then going to see this icon here, which is the pay liabilities. And that, of course, is going to be the the icon that will help us to track what we owe. When we pay the employees, we have employees taxes that that accumulate upwards Social Security, Medicare, state taxes, food to have federal unemployment tax, and then the pay liabilities is gonna help us to track that information and pay off those liabilities in the correct time period. So when we selected this icon, it's gonna help us to basically write a check, decreasing the bank account and then lower the liability, writing the check to the proper ah liability and then track that information recording the reduction in the proper liability. We will see much more of this, of course, when we set up the payroll Adams when we set up the company and when we looked through the reports, what would be jumping back and forth to these icons? Toc these icons? These will be the driving icons when we select these items. These are the things that QuickBooks uses in order to generate the financial statements. Therefore, when we look at the financial statements and we and we drill back on them and try to see how they're created, how they're being made, we will end up going back. Teoh these icons the processes within these icons 10. 1.30 Reports QuickBooks Pro 2018: Hello. In this presentation, we will be looking at a report within QuickBooks Pro 2018. If you've been following along with us, we will be continuing with the get great guitar problem. If you have access to the backup file, you can restore that by going to the file tab and open and re storm. We currently have the open windows list on the left hand side. Recommend having that open. The way to open that is go to the view dropped down and open windows list Onley thing open at this time is the home page. If the home page is not open for you, then opened the home page by going to the company drop down and home page. This time, we're gonna be looking at reports within QuickBooks Pro 2018. Just given an overview of what reports are reports like many things, has more of a specific meaning to quickbooks In them. Reports are gonna be the end result. Reports are going to make things that will be generated from the data that is typically input from the screens, everything that's input from the screen, including the bills, the pay bills that create and voices that receive payments that deposits and so on will be used to generate that reports. Within those reports, the two main reports being the financial statements that in result for most financial accounting, when we think of financial accounting, when we think of the end result of what are we doing within QuickBooks? We are creating the two financial statements, the main to financial statements, which will be of the balance sheet, and the income statement, which QuickBooks calls the profit and loss statement. Eso those are gonna be types of reports within QuickBooks there in the report's section, and then all the other reports really are are things that typically are going to build on or give more detail to those main reports that balance sheet and the income statement. What we'll do now is we'll take a look at that in products some of those in products. Some of those reports, and then we'll go back to some of this input items over here later on, and we'll see how these then will be used in order to help us to generate those in in reports. And then, of course, we'll go through an example problem will start entering data, always going back from this information to the reports to see what is happening. There's a couple different ways to open the reports I later on. I'm always gonna be using the drop down. That's the easiest thing to me. I think it's the fastest way to go there. We don't need to have an open window tab in order to do that, and that is just selecting the drop down. Go into the appropriate field and then you'll have your other lists over here in the appropriate field Now, this can look a little daunting, however, because of all the drop downs and dependent on different types of computers you're using. Maybe the drop down interface with all these drop downs is not the ideal center. And it also might be easier just to navigate around another format. So the other formats to look at will introduce here is going to be the report center. So if you go to the drop down and just select of their report center, it's gonna break it down and in a nice visual format here and that'll give us a good format because it gives us the same options, in essence, as the drop down on the left hand side. But then it gives us a visual format and it gives us a lists format. So typically, I like the lists format. But if we don't really know what report we're looking for, the visual format over here with this four squares is really helpful. I'm gonna maximize the report center over here by selecting this, maximize a couple nights, other options within the report center. Obviously, when we run to the report, we'll just run it with this icon here, and that would run in this case, the profit and loss report, which is in the company and financial. We could also list the more info item here, which you can't really find in the drop down, and that will give you a little bit more info against you. The visual again gives you a little description. How much money did my company make or lose over a specific period of time? That being the description for the profit and loss, closing that back out? We also have the favorite item here, and if we select the favorite item, then it should show up in our faves over here are favorites, and we should have that item here. If we uninsulated, then it should be removed from the favorite items. So if we go back to the standard, that could be useful. In order to have the favorites would give us a little quicker time. Teoh use that sets a helpful feature and then we have the help feature over here we go throughout the learn more about to this report with the help feature and that will give this dialog box. And we could go through this information and search through the dialogue box for any particular report closing this back out. You'll note that we do have the tabs up top. We jump to the favorites, just a second to go. But we also have the memorized tab. And if we memorize the report, then we can put it here and again. That could save some time, which is nice. We've got the favorites, which we looked at. We put one there, then we took it out of there and then we've got and that could save some time as well. Just have those reports that we just used all the time and if were you looking at some kind of abstract reports, Great place on the memorized report. If we're putting together a report, that's a bit different and we want to make sure that it's there all the time and know where to go instead of recreating. It's all the time. A great place to have it. Recent. We're gonna have the recent reports here, things that have happened recently and contribute. These are reports that are generated by into it and they have the rating down here. So we have a profit loss by month, quarterly profit and loss. So these are gonna be kind of get some recommended type of reports that are gonna be in the contributed items. We will be working mainly with the standard section over here in the standard section and within the standard section. Then we have all of these sub categories on the left side. So you could go through all these sub categories and generate these reports. The main reports that bounce sheet, the profit loss will be in the company and financial right there. The main report that you want to have all the time that's gonna be needed every time you make the financials is going to be this profit and loss. So if we generate that first weaken selected this icon here and generate this report the data, I'm gonna have a beginning and Indian date someone select Tam. I'm gonna say no one, no. 1 to 1 January 1st 2000 to 21. This is going to be the year we will be working in. That's the what we have to do in a problem like this is basically pick a year. That is not the current year to work through these and we're gonna go through 12. 31 to 1 note. This is the easiest and fastest way to type in the date, rather than putting dashes or anything else like that. And then once you select tab, it selects 12-31 Dash 2000 and 21. So here's the profit and loss report again. QuickBooks sees it in the report's section, even though it's we might call it a financial statement. This is the financial statement, Teoh. So I mean, if we were to think about in terms of accounting, recall these part of the financial statements and we would call this financial statement the income statement. QuickBooks is gonna find it within the reports, just like all the other reports that we generate with the data and it's gonna call it at a profit and loss. So you gotta kinda keep that terminology in mind if you're talking to your CB area tax prepare, their probably comfortable with the profit loss at this point. QuickBooks being so. It's such a popular thing, but they're probably going to call it on income statement, and they're probably gonna call this financial statements when we're talking about these two main reports. This, of course, having the income and the expenses and our net income will talk more about it later. Go back to the reports on the open windows and take a look at our other main report, which you have to scroll down a bid. You got to go down quite some ways scrolling down to all the different types of profit and loss reports that you can go through to see these, and we got the income and expense reports all the way down to the grass reports, and then you will finally see a subsection saying balance sheet and net worth. That's what we want. That's the other main report. It's almost faster to get that by going to the drop down company and financial and go into the balance sheet. Report it almost Certainly It's faster, however, if you had this in the in this list of you in my d fast in that area as well, and you could put it into the faves the favorites by selecting this Adam here. But we'll click on this, we're gonna run this report and take a look at what it looks like. Note. It only has one date here because it's as of a specific point in time. So we're gonna say this is as of we'll make it 12 31 to 1 tab December 31st 2000 to 21. This is the other major financial statement, which we find within the report section that being the balance sheet, that having our assets, liabilities and equity, we'll go more into the balance sheet and and how it works later. But this is just an overview of where to find it. These are the two reports balance sheets, profit and loss. You almost want to have those open all the time. Whenever you get in the practice of this, whenever you enter something, whenever we enter something into the system into, ah, the home page, whether it's an invoice, whether it's ah, receivable, whether it's a bill, whether it's a pay bill, we want to then go back and forth between here and these two financial statements and see if we understand what is happening. And the better we do that, the better will understand how these things work and the better will be able to understand how to set these things up through the lists that will set those up. Now let's go and look at some of the other reports we have. I'm gonna go back to the Reports center here. Now we'll let you go through. Some of these other reports won't take a look at all of them, but some of the main ones that will be working with will be the cut in the customers in receivable section are the accounts receivable reports. We have an accounts receivable aging report and we got an accounts receivable detail report and that's kind of really back up. Who owes us money. We could say who owes us money by how past do are these? We could say Who owes us money by the detail. If we scroll down, we cannot. We could see that we also have some graphs there. And if we keep scrolling down, you'll see a section called The Customer Balanced Detail also ah, youthful report and that'll give us three accounts receivable by customer, in essence. And so let's run that report and take a look at that. So we'll say run the report and we could change the date. But I think it defaults to the most current data that is there if there is no date chosen. And let's check that if we see that 9 10,074 and we go back to the balance sheet here, we then see the 9 10,074 in Receivable. So I'm gonna So this is really backing up the balance sheet. Like we say, most of the other reports are really going to support. The main to financial statement reports the balance sheet of the profit and loss going back to the customer balanced detail, and I'm gonna close this back out and then we'll go back to reports pick one other section just to get an idea. You could go through these and get a get a better fuel for For all this information, the sales information job time vendors Let's take a look at vendor reports and the same idea. We'll have the aging, how old it is in terms of who we owe scrolling down just to get an idea. These will look, Maura, these reports later, but if we scroll down, we get the vendor balance detail. Same kind of idea. If we run the report, it's going to support once again the balance sheets. And we only have this one item here in terms of vendor that's owed at this point. If we go to the balance sheet, 1200 should be a liability back to come back to Ballachey in the open windows. By the way, back to balance sheet open windows, we go down the liabilities. Here's the accounts payable. There's the 1200 so that's just to demonstrate. We're gonna go back to the the vendor. There it is there, back to the report center Report Center. That's just to demonstrate that some of these air gonna be there really supporting those balance sheet and income statement reports. The customer who owes us money, Who do we owe money to the vendors to sections? Very important. Very reports we run often purchases reports here. We've got the inventory. If we have inventory, also a very useful area to have. We'll take a look at that more in the future. We have the employees on payroll. If we run employees and payroll, this is gonna be an important area as well. We can have a lot of detailed reports, and QuickBooks has a lot of different options with the payroll reports, which are great. And then we have the banking reports and three accounting and taxes. This has some of the stuff that we may not. You may not be as familiar with most people. Probably normal business folks might be staying away from the accounting and taxes stuff because it has things like debits and credits on the trial balance. But it's a really good area to go to its got the General Ledger, and this is really where you get all the detailed stuff. So if you really want to get reports that actually show you the detail of what is happening . This is where we have to go. The main report that accounts will work with in terms of a summary will be this trial balance. So if we were accountants and we knew debits and credits and we were comfortable with them , rather than having the balance sheet and the income statement, you may just want to have this trial balance open. If you're if you're in accounting and you want to see what's going on with every transaction, every time we do something to the homepage, we may want to have this trial bounce open and the other two reports, or instead of them, Teoh and see what has happened into this trap bounce. Every time we enter an invoice every time you write a check every time we enter a bill, then we have budgets will take a look at that later and then lists report customer phone lists, customer contact lists. That's an overview of the reports what the reports look like. Most of the time when we go the reports, we will be going to them through this drop down section through these items here. I think it's a little bit quicker, but this is a great option. Have remember that what the options here are in terms of memorizing reports, having the favorites and some of those options within the report center. 11. 1.35 Forms QuickBooks Pro 2018: Hello. In this presentation, we're gonna talk about forms within QuickBooks pro with 2018. If you've been following along with us, we will be continuing with the get great guitars problem. If you have the backup, you can restore that at the file and restore here. There's a presentation showing how to do that. In a prior presentation. We have the view tab open or the open windows tab open which can be found at thieve. You drop down and open that windows Is tab on Lee Open window at this time is the home tab which can be found at the company dropped down and the home page. We are gonna be talking this time about forms. Forms are going to be crucial types of information within the QuickBooks. And again, they kind of have their own term. When we think of QuickBooks and we think of forms were really thinking about a lot of these driving documents within the home page, the bills, the invoices that receive payment that creates sales receipts. All these things are gonna be types of forms and typically we can think of them as printed forms. However, they're also really important to see within the QuickBooks system because whenever we look at the data, it's typically going to be driven by forms, meaning when we enter the data, unlike what we do when we think about like theory in terms of accounting classes, which we do with debits and credits forms are the driving documents that really enter the data, that the data is driven by the input of the forms, and then QuickBooks uses that information to create the journal entries that we kind of learn within the financial accounting. That's why these forms need to be set up with the lists items here, and that's why that's one of the more complicated items to set that up. It's also why once set up, the forms are easier to use. It's easier for us to enter the forms and then just let QuickBooks do the calculations in order to generate the financial statements based on those forms. In order to look at that, we're gonna open up the balance sheets and the income statement and jump back and forth from them to these forms a bit to get an idea of what we mean here, going to select the drop down, up top for their reports. Scroll on down to company and financial, and I typically start by going to the balance sheets, I'm going to scroll down all the way down to the balance sheets of second half of that to drop down and select. Okay? And then instead of changing this date, I'm going to check the date the customized report up there where we will have a date range selecting this item and that will help us to drill down on any particular item we want to drill down on and see the detail from at data range. Perspective of that date range being 0101212 That's January 1st, 2021. The year we will be working in and 12 31 to 1 December 31st 2000 and 21. So january 1st, 2021 to December 31st 2021 we will then select. Okay, so there is our balance sheet. I'm gonna open up the profit and loss as well. So we're gonna go to the reports up top, come down to the, uh, company and financial, and we're selecting the profit and loss standard the 1st 1 same dates in a tab over here and select a 101 to 1 January 1st 2021 to 12. 31 to 1 December 31st 2021. So there is our profit and loss. Now, if we go back to the homepage, then we can see that some of these items will be used to drive that profit loss. And these are gonna be the forms. So when we when we see the forms from this side, for example, if we were to see a bill and we click on here, we're going to see a bill looks a lot like a check. If we look at a prior bill, then here's one for Edison. We generated the bill. 648 is the amount and the other side going to the utilities here and note there's no debits and credits here. We're not making a journal entry. We're not telling any account to go up or down. Specifically, what we're doing is just filling out. In essence, this form and this form, then, is what will be used in order to generate the financial statements. If I close this, this was a form 6 48 and we go to the profit and loss and scroll down to the expense section and look for this utilities item here. That's where it was at. Here's the utilities amount. I'm gonna use the quick zoom feature of QuickBooks and just double click on this great feature will get a double click, and we're gonna go from the end result back to what was used to generate it. In this case, there's the bill right there on to 28. There's our bill and you could see the account type. That's what's being used to drive it. That's what's being used to create these financial statements. Double clicking on this 6 48 will give us the bill. This is why every time if we really want to understand the system, whenever we create a form invoice bill check, we want to think about what is this going to do? What's this going to do? The financial statements cause these are the things that are making the financial statements. So this is this is the bill. We're gonna close this back out. We're gonna close that back out. If we go back to the home tab, then you can think of a lot of these types of ideas items as in a similar way. So when we have the pay bills, that's gonna be checks. Basically, when we do, the pay bills were writing checks, so we'll look at that when we look at the checks feature down here. Well, let's look at it now. We have the right to checks future here, and here's an actual check. And, of course, if we go back to a prior check and just take a look at one back to the prior, check this one for to the Internal Revenue Service. And it was for 614 and it was for Social Security. So that's gonna be the item. And, of course, the checks or what will be used to make the financial statement what it's gonna happen. Cash should have going down by this, and the other side of it will be going Teoh the Social Security Ah, payroll item in this case. So let's close this out. And if we go back to the balance sheet and we go to the checking account double clicking on the checking account and we scroll down. We see some of these items. I think this was the payroll check we were looking at here, and we'll see that It says paycheck here. Other tax of checks will just be called the check. So they do specialize the different types of checks. But either one of them like this. Check here. Of course, if I double click on that check here, it will also be a check a check form. And that's what's gonna be used to drive it. So a lot of times, when we decrease the checking account, it's going to be done. Not with just like a credit to the checking account, as we would in financial accounting. We'll see the form even if we enter the data in a different format. Meaning if we enter the data directly into the register, we're typically like it was in this particular example. This wasn't actually entered into a check. It was entered into the register. QuickBooks will still use the check form. Teoh, show that data. So we're gonna close that back out. Close this back out, scroll back to the home page, see what else we have here. We then have the customer section. The other types of forms we have are they create invoice, typical form. We click on it. It's a deceptively deceivingly simple looking, for if we go back, Teoh back to an invoice. It looks like a very simple form, and it is. And that's the beauty of it. We could make an invoice very easily. I can have someone at the check register or something, or someone making invoices and mailing them out without having much idea of what is going on. However, there's a lot going on with an invoice and the invoices. What's being used to drive, how the how the forms are created. We'll look at the invoices later, how to make them as a lot harder than out. Then how to enter the data, teaching someone how to enter the data. Not too difficult, making the format to enter the data more difficult and analyzing what's happening to the financial statements and what the invoice. They're actually doing a bit more difficult to ask. Well, so no, what? We have got the item. We've got the inventory item. We've got the rate, a lot of things gonna happen with his envoys. One is gonna The accounts receivable is gonna go up because it's an invoice. And that means people with money when we generate it and we're gonna sale, that's going to go up by the amount of the sale. But we also had to remove the sales tax. So we're gonna have a sales tax payable is going to go up from this invoice. And there's also a number that can't even be seen here in this in that we're selling inventory a guitar and at the phone Les Paul in this case and that has a cost of goods sold reducing the inventory in a perpetual inventory system and recording the related cost of goods sold to it. Though that's all happening with an invoice here. And we'll get into what? How that happens later on, when we create the invoice, but notice the actual data input not too difficult to do. We don't need any journal entries in order to enter all that stuff. Once set up, we just need to enter the invoice thean voice, then generates all that information. If we close this back out and we go, for example to the profit and loss and take a look at one of those many accounts affected by an invoice such as the merchandise sales zooming in, double clicking on scrolling down. We could see the major items here are gonna be the invoices. Better gonna be dealing with this. So here's a Here's a nimble I'm not sure if this is the same one, but it looks like it could be It's the EPA phone here, so we'll double click on that. And there's an invoice. Right. So those are gonna be the things that are really when we drill down on the data, these forms are what we will see and driving the data dried. I'm driving the data input driving what is really happening within the system. Closing these back out. Going back to the home tab. We also have the receive payment. Ah, this is gonna be an item we're gonna click when we get the payment. Isn't something that we typically print out, but it's still acts like a form within QuickBooks mean, if we go back, we could see this item of the receive payment item here. This is something that we're gonna use when we get the payment and you're not gonna generally print out the receive payment. But it really acts like a form in that it's going to be used in order to create the journal entry of the receiving the payment and the reducing of the accounts receivable. So, for example, if we close this back out and we go back to the balance sheet and we open up, say the let's just go into the UN deposited funds and double click on that, we'll see these items that says Payment on it and that's gonna be the received payment form . If we If we double click on that, it'll be driving these forms, so that's gonna be another thing. It's another form that we're just gonna be using to drive QuickBooks. It's what's used in order to help us make these financial statements. These are the source documents the source forms, closing these back out, going back to the home time back to the home tab. Hopefully and then we have the ah create invoice are create sales receipt. We live tweeted the invoice before. If we click on this, it looks a lot like the invoice, so you'll forgive me for getting them mixed up. If we go back one here we have the same type of layout. Accepted a sales receipt. And that means we're gonna get payment at the point of sale rather than it going to accounts receivable. All else is pretty much the same meaning we have. Ah, sold inventory in this case. And that means that we're going to get we're gonna get cash or in this case, a check. We're gonna credit sales for the 4500. Well, we didn't have inventory here. This is rental income. So that is rental income. It's a little bit easier to have the rental income because all we're gonna have is the check, and then we're gonna credit the revenue, and we don't have to deal with sales tax, and we don't have to deal with the inventory. But if we go back a few more if we go back to another one Ah, this one is something with inventory. We have the same situation that we did with the invoice with this sales receipt in that now that we're selling inventory, we've got the sales tax and this is also generating cost of goods sold and the reduction in inventory as well. So I'm gonna close this back out. Then we got the record deposit. So whenever we record a deposit, it's gonna look like this screen here. We'll see the screen every time. So I'm gonna close this back out and go back to the balance sheet. And then again wherever we put this deposit going into the checking account, Even if we go directly into the register, it's gonna say deposit and what that means when we click on it, it means that form, that input screen will show up. That's the screen. No matter where we put it into the system. Even if it were a journal entry or if it will possibly knowledge, I might be a journal entry in up. But if we put it into the register, it will typically still generate this form to drive the transaction of a deposit into the check in. And I even think even with a journal entry, it will probably still do. I'm not for sure on that, but we're going back to the home page. That's going to be that deposit here going down to the payroll. These are gonna be the input items as well. So whenever we click on the payroll, this is basically going to generate a check at the end of the day, and we already saw what the check looks like. Once we process the payroll, we will end up with payroll checks, and that will be driving the checks than being the forms that will drive the payroll process. So remember, in summary, the concept of forms are gonna be really important. Many of these items within the home tab or what we basically think of as forms when we look at them that we see them as things that we can print out. But the keys to them isn't just that we can print them out. The keys to them are that these are the driving factors. These are the things that we have to put the data into. These are the things QuickBooks will use to generate the financial statements. These are the things that will tell us what exactly those generated financial statements are and how they were created through the naming of these particular forms. When we drill down on the detail of those particular forms, 12. 1.37 QuickBooks Pro 2018 Lists (1): although in this presentation we're gonna take a look at lists within QuickBooks Pro 2018. If you've been continuing along with us, we will be continuing with the get great guitars problem. If you have access to the backup, you can restore the backup. I go into the file tab and restoring the backup, we're gonna open the open windows or the view Windows tab by going to view up at the top and open window list. First item, therefore week. And once we do that, we can see the open windows. I'm gonna close everything but the home tab closing any other open windows we have open on Lee having now the home tab open. And to get to the home tab, we can go to the company file and home page. This presentation we're gonna be looking at lists and lists is kind of a technical term within QuickBooks, meaning more than just a list of items in that it's gonna group lists into the drop down here. So we're gonna be looking at these and these are gonna be really important items in that they're often the items that are driving a lot of the functions that we see here on the home page, meaning the lists are where we do the set up process, so that when we select these items for the day to day date data input, it's a lot easier than these Data Day data input items will be run and driven through the making of the lists, so these lists are often things that we have to do in the set up process and get them correct. And once those air set up correctly that being often the most difficult part the actual processing of these systems of these cycles the vendor cycle, the payable cycle, that customer cycle the sale cycle, the employee cycle will all be much easier to dio. What do we have? Under the lists? Main list will be the chart of accounts, followed by the item list. We've got the fixed asset item list. We're not going to spend time on with this. The price level list, not spending time on with this sales tax code list, will touch on that. That's going to give us the sales tax. If there is a sales tax within the location that we are at, will have to set that up within the list. We have the payroll item list. Those are gonna be the main lists. We want to take a look at here, starting with the chart of accounts. Now, clearly, the chart of accounts is going to be something that we will have to set up. These are the actual account names, and they're going to always be set up in terms of ordering in assets, liabilities, equity income and then expense. More specifically, within the assets we have the bank accounts followed by the receivables, the accounts receivable, followed by the other current assets, then the fixed assets than the other assets. Then we go to the liabilities, starting with the liability of accounts payable liability accounts types notice these air, not account Cesaire account types. The actual accounts are over on this side. Then we have other liabilities. Credit card account types, other current liabilities, long term liabilities, equity and income type accounts. The names are gonna be over here, so note that is not in alphabetical order. It's in order by accounts type and then within each account type, we are in order by alphabetical order. If you don't understand what these account types are That's OK. We're gonna walk through how to set those up, and QuickBooks allows us, ah, process. When we set up the probably QuickBooks file, depending on the type of company, we have to set up the chart of accounts for us and at least give us a starting point with which to work. But we really need to have some understanding of what these account types are in order for us to put together the system to make the day to day data input much easier. If this system isn't set up correctly first, then the Data tae data input is much more difficult. Also note that we could use account numbers over here as well. That gives us a little bit more control within each accounts. Type in the order in. It can also be a bit more complicated to. So if you're not, if you don't understand these account types, you may want to stay away from accounts and numbers because it's very likely that we will number the accounts incorrectly or in a way that doesn't makes sense. Let's take a look at another list. We're going to select the drop down and take a look at the item list. Item lists are often overlooked there a huge component in the day to day process and getting everything working within QuickBooks often overlooked in terms of how QuickBooks works. Because we don't really see the items as we dio the chart of accounts, we all know that there's gonna be a chartered account. When we create the financial statements. Those are accounts on them. The items, though, are the things that are driving normally when we make things like invoices and sales receipts. So they're gonna include our sales items, including our service items if we make service sales and our inventory items. So whenever we make an invoice, we have to have this item. If we have the items set up before we make the invoice, making the invoice is very easy. All we have to do it set up the invoice. We don't need to know anything. We can hire someone to make the invoice. Not a problem if we don't have the Adams set up. Invoicing. Not so easy. We got a deal a little bit more understanding. Even with the item set up, we're gonna have toe. Really? See what it's doing in order to understand the financial statements and in order to set of the items up, we're gonna have some understanding. We need to have some understanding of what the financial statements will result in. When we do something like create an invoice, create a sales receipt. So don't worry about that. We're gonna get into that later. This is one of the really key components, Teoh. Understanding how QuickBooks works is setting up. These items were gonna go back up to the lists up top going back to the lists. We're gonna skip down to the sales tax code items, sales tax code items and within the sales tax code. This is a breakdown specifically of items related to two sales tax, like a value added tax. And that will change depending on location dependent on state or country we are in. We'll have to set those up and be able to apply them or not apply them, meaning when we make an invoice. Sometimes, for example, merchandise might be applicable to sales tax where we will have to apply sales tax to it and then the other items. Such a service items may not be applicable to sales tax, and therefore we would have none for the service items. So we'll need those four invoices and sales receipts as well. Going back to the drop downs growing back down to the payroll item list. The payroll item list. Another crucial crucial list if we are running payroll and the payroll item list will make the payroll process much easier and possible without the payroll item it list, then the payroll process not doable or very much more difficult. So we need to set up the items that this if the Adams air set up properly, then the payrolls pretty easy to process through. But you'll note within the payroll process. We have a lot of these items, including we've got whether we're gonna pay salary hourly. We also have the withholding information in terms of Medicare, Social Security, federal income tax, and we'll also have if we're in different states or different countries. Different state taxes and those ones often vary from state to state, and we have to be very careful to make sure that we are putting in the proper tax because it could vary the federal taxes such as Medicare, Social Security those two are national taxes in the US and therefore QuickBooks can pretty much put those together. And we're pretty sure our nose but state to state taxes. We could have some of the items that we want to make sure that we're checking what are specific, Um, rates are in our state and for our particular company. Depending on the type of taxes that we are putting together, we might have some other items that are being used within the payroll process to to help us process the payroll and take out whatever necessary with holdings are needed throughout the payroll process. Very, very important part again, one of those parts that we have to really kind of understand a bit in order to set them up once set up. Then we can allow someone to run the payroll process who doesn't fully understand the process too much, right? They don't need to really know how to understand what is happening to the financial statements or how the withholding zehr happening did to process payroll. But in order to set up payroll in order to really understand how the financial statements are being generated, then we need to have a better understanding of that and we will go through this when we set up the payroll process. Will take a look at some of these items how these items work, how to calculate some of this stuff. Other lists we have. If we go down to the list, we have some other list names and we other. We also have a list of vendors and profile lists those So we've got the sales rep bliss. We've got this customer type list, the vendor type list, the job type list. The terms. List the customer message list so you can take a look at some of these other lists as well . But the principle lists we will be working with when setting up these accounts and setting up QuickBooks in general will be the chart of accounts, the item list and the payroll item list. In particular, those air driving lists those air really important items, those air necessary things to know to set up the QuickBooks account. Those are things that we will go over those who think that we'll get a better understanding of once set up those air things that really allow a user who doesn't understand those things very well to then do the day to day per do with the day to day process, which we can see just through if we go back to the home page. The flow charts that allows us these lists being put together properly allows us do you go through these flow charts and basically do the day to day tasks, whether we are working in the vendors payable section, the customer receivable or sales a section or the payroll section of the home page entering data? 13. 1.40 Help Options QuickBooks Pro 2018: Hello. In this presentation, we will go through QuickBooks help features within QuickBooks Pro 2018. If you've been following along with us, we will be continuing with the get great guitars problem. If not, that's OK. We're gonna look through the help features within QuickBooks Pro 2018. If you have the backup file, you can restore the backup file by going to the file tab and restore the backup. As we've seen in a prior presentation, we have the open Windows list here open in order to open the open Windows list. Select a lists. I'm sorry. Select the View and the open Windows list, the only open window being the home page at this point to open the home page of the company tab and home page. Typically, the starting point of every presentation will be the home page. Here. We're gonna look at the help items within QuickBooks Pro. It's going to be useful to see the help that is available within QuickBooks and note that there's a lot of help outside of QuickBooks as well. Because QuickBooks is such a large and program that's used by many, many people, we can find support if we just did, say, a Google search on a particular topic, some of it being good, some of it being not so good, some of it being current, some of it being not so current. But we can often find a lot of information a lot more than we may be able to find from some other Softwares just because of the widespread use of QuickBooks and that could be very useful. There's also a lot of support with people that are knowledgeable within QuickBooks that could provide support and again, probably more so within QuickBooks than other types of software just because of the amount of views in the number of companies that are using the QuickBooks support. So keep that in mind, we're gonna look here at the support within the QuickBooks program. If you wanted to contact QuickBooks specifically to get QuickBooks report from support from into its say over the phone, you typically have to pay for that type of support. So we're gonna look at the report that's gonna be within QuickBooks, that stuff that they have the forms they have to set up the help desk that they have set up and just note that there's also There's also a lot of support out there with people that professionals that are experts within quickbooks that you can seek help from. And there's folks that that there's a lot of information that you could do searches on. If you have a particular question about a particular function, you may be able to find that through searching around in terms of a Google search somewhere outside of just the QuickBooks program. We're gonna look at the help tab up here. A lot of information in the help tab we're gonna select first the QuickBooks desktop help, which can also be found at if we select F one. And it looks like this and it looks like the normal search feature. So if we were to type something in here, we'd have the normal search item. If I wanted a question about an invoice of some kind, then we're gonna get the hyperlink type of list, saying find an invoice about an invoice troubleshooting invoice problems. I'm gonna choose that one troubleshooting invoice problems. Invoice didn't change. After customizing it change. A re occurring, memorized invoice cannot create an invoice from a purchase order. We're gonna do that later. That's gonna be good. So we got that bear. Okay, so that's that. We're gonna actually use this later on to set up the manual payroll. And so just give us a preview of what will happen when we do that. It's going to be exciting, keep us motivated. It's gonna type in manual payroll. And there's gonna be a many different payroll options, as we've discussed. Ah, a little bit and we'll discuss more later. But we can set up the manual payroll through QuickBooks and has a nice process in order to do that. So here it is. It's process payroll manually. If we select that, I come says without a subscription to QuickBooks desktop payroll, which means we don't want to pay any money for it. So if we select that, then we have the manual set up. And it's actually very useful to do that because because we get to actually put in the withholding amounts manually and calculate them and really see what is actually going on rather than just having them populate automatically when you pay for it like that. So it's good to practice Pruitt with, so we'll see that later. That's one of the searching options we have here. So it's pretty useful searching option that we have and you're gonna go through here anything with a hyperlink, those of the types of things that we can jump to going to scroll this and close this and see what else we have within the help drop down. We've got the new features here. So the new features in 2018 we'll take a look at these at a later presentation. At least a few of them. Ah, the dual screen is one of the great new features. If you have two screens that you're currently plugged into on your computer, you can now have two screens availability and that's that's very useful. Where some of these other icons here are options. We will take a look at later. So, uh, but if you want to go through those, they are available there. Gonna close this back out, gonna go back to the help time. We also have these support looks a bit different than the QuickBooks, a desktop help. If we select a that, then we can type in something like payroll once again to see if they contrast ing of that and we get some more options. Something like we have some videos, sometimes within the payrolls Here is like a video here, So you get some different types of format that would from help than you would just from the normal help search screen, which can be very useful Going back to the help drop down. See what else we have within the hope. Drop down. Um, that's the support. Find local Quikbook Dec's desktop expert so you could look for, you know, searched through the expert. You may have to pay for expert help, but like I say, there is a big community of people that are experts within QuickBooks. Send feedback online so you could send the feedback Internet connections set up new business checklist. If we go for the checklists, we have a nice checklist of what QuickBooks would think to be, Ah, how what we need to go through to set up a new business could be very useful to see what quickbooks Thanks. So it's I would think if we're going through a new business, we could go through these items, conceive your business structure your business, prepare all necessary forms fund your business. This goes a bit outside of QuickBooks or a lot outside of QuickBooks, just in terms of setting of QuickBooks. But it is a useful checklist tohave and one that's worth going through if we're setting up a business just to see if we've got everything checked off, ready to go? We've got the help. Time back to the help drop down. We've got the year in the guide. Also quite useful. The year end being a great and exciting time for the bookkeeping process. We have the task to prepare for filing taxes. So we've got things such as reconcile all the bank accounts, verified petty cash, make your year in the cruel adjustments closure books. So just, uh, but retained earnings and all that great stuff. And then, of course, we've got the 10 99 and the payroll, so we'll take a look. Atmore. Some of those options some of those things that we get to do at the end of the year as we go through our project, more items in the drop down. If we scroll down, we got the ad QuickBooks services, So if there's something within quickbooks, I can add on that. We need Teoh add to the QuickBooks features. Then we can look through this icon something like payroll or something that we need to update with app center. Find more business solutions so you can look through the APP center update the quiz Quikbook QuickBooks desktop. So if we have a current version and we're looking to update the QuickBooks, we could then look through that option, manage my license by additional user licence sink license data online. So we want one. If we're If we're thinking about our licensing options, of course, we can go through these options here by Quikbook Desktop Premier. That's gonna be a different version of QuickBooks. So there's gonna be basically three types of ah versions. And if we needed to believe we thought we needed ah, step up, then we can go through this option to do so Reset into it. I d settings. QuickBooks. That's desktop private privacy statement. If we want to take a look at what that was about, automatic updates could tell you what the automatic updates do. QuickBooks is a program that's gonna update all the time. So every once in a while, when you open it. It's got probably, ah lot when you open it going to say, Do you want to update the file? And it's good to allow the updates from time to time. If you do allow the update when you allow the updates, note that even if you have the same version of a backup file within QuickBooks, um, you might have to update the file. You know, Teoh, open up a backup file that was done before the update had happened. But any of any back of five. That's a QuickBooks file that is 2000 18 and usually before we can update to the current version, no matter what the back up option is. QuickBooks Desktop Usage and Analytics study and about QuickBooks desktop Desktop Pro 2018 might be something worth taking a look at and going through it here, and that'll be it for the help options 14. 1.45 Print & Export Reports QuickBooks Pro 2018: Hello. In this presentation, we will print and export reports to excel within a QuickBooks pro 2018. If you've been continuing with us, we will be continuing with the get great guitars problem. If you have access to the backup, you can restore the backup at the file. Drop down and re storm. We're gonna open the open windows tab or section or list by selecting the view tab on the drop down and select in the open window list that given us the open windows. I've closed everything on Lee Toe. Have the home tab open within the open windows. In order to get to the home tab, we go to the company dropped down and home page. We will take a look at some of the printing options and the export options for some of the major reports starting with the balance sheet. So what? Take a look at the drop down of top. We're going to go down to the company and financial and scroll down to the balance sheet. Gonna change the date to 12. 31 to 1. So December 31st 2021. We didn't have our balance sheet here and we're just gonna take a look at some of the printing options within the balance sheet. There's a few different ways we could get to the printing options. We have the print icon here in the short list so we can print the report or print as a PdF and use that option to print as a PdF. We can also have the print option from the file drop down. If we're used to seeing the print option in the file drop down, we have the print report and print as a PdF. So if we select one of those items going to select the print option here and print to report, we have here what might be a familiar layout. Too many people that have used Microsoft Office product some of the office products looking similar to this in terms of a printing future. We have these settings we could choose the printer that we have, so if we drop down, we can see the different printers that air set up. Here's my main printer. If the pdf writer is not working for whatever reason, or sometimes when you have a different report, it doesn't have that print to pdf option. If you have a pdf printer such as a cute PdF printer writer, which I believe is free, then you can actually print to a pdf file. And that could be really useful within QuickBooks and with other Softwares as well. Ah, we have the layout. We can have it portrait, which the balance sheet typically would be, or landscape. And this is gonna be a great option if the report doesn't fit on one page wide. In terms of columns, we can change it to landscape and have it to fit on the one page the range of the reports. We can choose a range here. So having pages from one page do another page rather than the entire port Really useful when we're doing a long report such as a general lecture type report? Ah, we have the page breaks option, and then we've got the fit reports to one page wide or one page high. This 1st 1 in particular is gonna be really useful because if the report doesn't fit on one page wide as many reports will not, then we could force it to do so with this option, without otherwise, we have to kind of manipulate the cells in order to get it. Teoh fit to that To that to those dimensions. We then have the margins tab over here, and that will give us some margins. Options, Teoh, Just the margins on the document going back to the settings. Tam, we have a preview option here, so if we look at the preview, this is what it should look like when we print this out. The top of this has the options here. So print zoom and the clothes options we're gonna close, that's back out. And those are gonna be the main printing options. So I'm gonna close this back out. I'm gonna choose one other report, one that might have a few more columns that we might want to adjust with. We're gonna go to reports on the drop down. We'll go to customers and receivables, and we will go to the, um, customer balanced, detailed report. And this one's gonna be a little bit wider. It's probably still gonna fit on one page, but I'm just going to show the how we can adjust this in terms of the landscaping and adjusted to fitting on one page and use some of those options within the print feature. So if we go back up to the print reports here and we go to report and way take a look at the preview, we can jump back and forth from the preview. Now it does print on one page wide here. So if this was if this was going to another column, then that's something we would want to adjust for. Sure, if I closed this back out and close this and let's assume for whatever reason, we had this these columns very wide, and there's gonna make these wide columns for demonstration purposes. And then if we go to the print option up top and print report and then go to the preview, you'll note that some of the columns are not on the same page Now what we could do what we should do. I'm gonna close this back out is go back to the report and not just the columns that's going to be the best way to do it. So it doesn't distort the size of the report, but we could also go to this fit fit, report to one or weaken first, try to print it landscape. That's what we should do. First printed landscape. Then check the preview. And then if it still doesn't do, it's still not quite there. We still got these other columns on the other side. I'm scrolling through this report. Then I'm gonna close this back out and use the other option which says, fit report to one pages wide, fit to one page wide and then preview. And now we have it on one page. Now, of course, the text is quite small here, and what we would like to do is avoid that by adjusting the columns first. But before using this option as a last resort, gonna close this back out. So that was gonna be the printing options. We could also have the exporting options. That's what we're gonna use Ah, lot here. So we're gonna use the exporting options here, saving the documents to our exporting them to an Excel sheet. Just remember, when you look at the print options, we can print it to a printer. We have the option to print as a PdF file, which could be very useful. And if we don't have that option on some reports that you can print to a pdf. Still, if you have a pdf printer so meaning if you go to reports and you have a cute pdf printer, for example, which is a free pdf printer you can download. Then you could still print as a Pdf Very useful option. Next thing we're gonna do is export this report to excel. So this gonna be this icon right here That's gonna be very useful. We could export to a current workbook or weaken export to a new workbook. We're going to make a new workbook and put this sheet to it. So we're going to select the Excel and create a new worksheet, and it will then open up this option, create a new worksheet. Do we want it in a new workbook or an existing workbook? We will choose a new workbook this time and we're gonna go ahead and export that should open Excel should export this and create a new tab with that information on it. Here it is a couple things when we look at the report here. The thing is great about a report here is that we can then have different tabs and we can export to the same notebook as we will do when we go through these problems. And it's gonna be really useful to have that, because then you can really keep all your data in one section and you can you can actually email it with one report rather than 10 PdF reports. You can put it all on One Excel document. You can print the whole Excel document as pdf forms if you'd like to do that format as well . So it is really useful feature to have a couple little things that it does when you do export. Two. Excel Note. If we look at the formulas here, we have the number of format here if you go to the totals and actually does total up the cells for you. So we are actually using a formula. So if you were to change any of these numbers, you can change them. And again, very nice feature, because it's really useful sometimes to want to change the numbers to put them in a different format. Within Excel, we have MAWR ability Teoh do some estimates or work with some numbers on some projections. What not outside of excel and we just export the data and and do what we need to do with it . And so it's a really useful feature. So it is summing up here and the other options that are kind of unusual. So it's got the split feature on when we automatically export it mean if I scroll down, I got the split screen there, and I've got this split screen when I go this way. So those cells stay the same. In other words, eso I'm gonna I usually turn that off because it does some funny things from time to time. When we go, you know, try to print these reports to turn that off. We go to the view, tam. We go to the Windows Group and we select the split, so I'm gonna unspool it the screen and that removes the split here. We can also name the worksheet. We just call it balance sheet here and note that we may not see the header. We don't see the header right now, but there is ahead or we can go to the If we go to this little icon here, which is called the page layout icon, we can then scroll up and see that the header is there. So when we printed, it's just that it's in the header section. That's why we can't see it in the normal view, going back to the normal view. We see the Excel sheet, same kind of printer options. This one fits on one page wide, so we're okay. But if it had not, then we can adjust it toe landscape and and do all those kind of printing options to make it an optimal printing process. Going to go ahead and save this. Now I'm going to say file, save as browse. We'll go to our desktop. I'm gonna make a folder on the desktop and call it, get great guitars problem. Put it in section one, and I'm just going to call it Section one reports. So save that there. When you say yes, it's gonna be macro free and that'll be that. Close that out. And so that's gonna be how you save reports and some of the printing options we will be using as we work through this problem 15. 1.50 Backup Data QuickBooks Pro 2018: Hello. In this presentation, we will create a backup file forward QuickBooks Pro 2018. If you've been following along with us, we will be continuing with the get great guitars problem. If not, that's OK. We will be creating a backup file in this presentation. If you currently have this files backup, you can restore it first. Go into the file tab and the restore, as we've seen in a prior presentation. We currently have the open Windows list open here. In order to open that, we want to go to the View tab Open Windows list. We currently have the home page open. So if you want to see the home page open here, go to the company and home page. This will typically be our default setting what it will look like. Every time we go through these presentations, we are going to back up the file activist point first, want to just mention, of course, that the backing up of the files is very important. We do want to keep a separate backup file for a couple different reasons. One is that it can save. Obviously we're going to save the date in case there's a problem with the data, and we wanted, then save it. Teoh a different location in order to more have some more security. I'll talk a bit more about that later. Another reason we want to back it up often times. It's a way for us to exchange the data. We could use a backup file to give to our C P a. Firm or attacks prepares at the end of the year. We can back up files to help us with adjusting. Journal entries could be very useful to be able to back up and restore data. It's also just very nice to have the backup to have saved, as if a specific point in time. And this is something that this type of best top version actually has that the online version doesn't have, because the online version doesn't typically have a backup, as the desktop version does, because it is backed up by the into its systems, which are usually backed up better oftentimes than what we could do in terms of ah, local backup. So you're not typically gonna lose your data if you're using the online version. However, you can't really save the data as of a particular point time or or try to stop at this point in time and see what happens if you do something and if you get it wrong, you just restore it back to that prior point in time as easily. Because you can do that with with a backup setting so we can restore something. We can run something. We could test something out. And if it doesn't work, then we can restore the back that we could get something to our accountant and see what they do and and keep another back up and see what the differences are once we get it back after any adjustments are made, many reasons for for the backup. But the main reason, of course, is just to make sure that we have a backup of our data. And in order to do so, we want to make sure to back the data up and hopefully a different location. I would suggest either a cloud based backup or another hard drive that you could then remove, possibly and and actually change, um, from day to day Sillitoe, so that the actual hard drive is not physically with the computer or that we have multiple hard drives that we can possibly take home or put in a different location in the event that there's something like a fire or theft that would not only take the, um, the file but would also take the hard drive. Of course, the backup could also just back up in case there's just corruption in a particular Quikbook file. For whatever reason, then we can back it up a zlotys. We got the backup. Doesn't matter where it is. We can back that up and restore it back to the location that we had the backup good idea to back up the file. I mean, I would do it mainly any time I do something new. So I'm getting the practice of backing up the file whenever I do something new to the files and was pretty much every time we open the file. But at least once a week, once a month, for sure you want to back up the data when you do back it up, it usually will go to the same folder, and once it does, it'll kind of delete some of the older backup so it will go through a system the default system being that will create a new backup. And it will try to delete the prior backup so that you're not taking up massive amounts of space in a in a particular system. Also note that the backup files are gonna be zipped files, so they're not the same as a QuickBooks file. You can't open them directly. You got to restore them to open them. However, the back of fire ALS files are substantially smaller because of that, Because of their zipped nature, they're compressed nature. So that's gonna be ah, big benefit note there. Still fairly large, however, and you can't usually. If you have any extensive data on your program, you still can usually, um, say email the email. Um, data limits are usually lower than the size of many backup files, depending on how much data we have in QuickBooks. So it's gonna be some of the options within QuickBooks going for the process. We're just going to go to the file tab up time, and we're gonna back up the company. We want to create a local backup, so we're gonna create a local backup meaning local to us. Like that computer, something local to the computer. It's gonna not to go online. You can look into the lot online options for backing up the information. I'm gonna back it up here to a local backup meaning again, something that is found on our network. So we're gonna go next, and then we'll give you this browse option. I'm not gonna go through a lot of it. I'm gonna keep the default options here. But it says, um add the data time of the backup. So this is really nice because it will actually change the file by the time you back it up . And, of course, when you look at it, you want to know when it was backed up, says limit the number of backup copies to this folder to three. And that's useful, too, because that's gonna tell it when you have more than three, it's going to say I don't want toe. Do you want to keep backing up to this file? Or would you want us to delete the oldest one and therefore give you some more room for the newer ones? Very useful online and local. Remind me to back up when I close my computer s so it's gonna be good. Good to have to, because we do want to have the reminder on there. But if it's bugging you, then you can turn that off. Um, that says select an option to verify that our company data is okay. When you save complete verification recommended, I would go with the recommendation. Then we're gonna go and browse the computer to find where we would like to place of this backup. You first get this drop down kind of format, which isn't quite as user friendly. Once you select on area, however, it will then go to the more familiar screen. So you actually pretty much choose the location, like, two times. So we're gonna use this drop down method first, I'm gonna go to the get to create two guitars, select the drop down I've got a section one and I'm just gonna put it right there and I'm gonna put it into So I'm gonna select this folder, selecting that folder and then I select okay, and then okay again. And then it says, Hey, you know, you just your data file is on the same hard drive. Is the place where you're backing it up and well, that's not wise or, in other words, will read the message. You've told us to save the backup copies to the same hard drive to see Dr that holds your company file. We do not recommend this. Instead, we recommend that you save it to a different drive or to re removable storage device to avoid losing the backup due to an unexpected hard drive failure. So it's telling us, Why are you backing it up to the same area where you have the information? We might have a reason I have the reason because it's a presentation or we might be sharing it in another case with somebody else, and we might be backing it up for our c p a firm T take a look at it or some other reason. But typically, QuickBooks has a point here, saying it's probably better to back it up, at least to an external hard drive that then saving the problem of if the hard drive dies. For whatever reason, that's the point of the backup that it's on a different hard drive, and then you might want to have that different hard drive to be switched to hell. It's and have a different location. Possibly take a few of them home and an alternate. The hard drives, maybe have three hard drives and back them up three times a week and take the other one's home. And in so doing, then possibly you have multiple locations in case not only the hard drive crashes, but there's a fire or there's a theft in the office and you have another back up at some other location. So we're gonna go ahead and say Thank you, QuickBooks, But I'm gonna use this location and we're gonna say Save it now and we're gonna keep that as the default and say next. And then it goes to the location again. The same one I just asked you to butt in a nicer feature. So if you select this drop down, you'll see that it went that same location of desktop get great guitar Section one. So it basically telling us, Here it is again. Here it is that you really is really where you want it, not because it doesn't agree with where we put it cause it's on the same place, same hard drive. But that's just the way QuickBooks will do it. It will tell you to put it this somewhere first and that a rose type format mapping. And then once we hit save it will go to this format again. And we can change the location if we want to hear and or change the name default name is gonna be the name of the company, and then it gets the backup date, which is very nice. Note that the file type is a Q B B, a backup file that will be different in the data file. It'll still have this green icon here, but it will say it's a backup we already have. This is actually a backup to already have one backup here, but if the actual file will be not, a Q B B file will be a different type of file. It not being a backup, it being the file we are using. So we're gonna say, Save that, and it will then back up. It could take a bit of time to back up, especially if you have a lot of data. Um, within the program. It is a fairly fairly large program to back up. Once we have completed the backup process. We typically get this message saying QuickBooks has saved a backup of the company filed to get great guitars. And there is the location we're gonna say, OK, that is great. If we then look at the location I'm gonna select. Here's where we put it and we put it in the section one. I'm gonna make this a bit smaller like this. Now, a bit bigger. We put it in the section one. And here is our information. So here are the flowers. So here's the backup file that we have here. It is a backup file. Ah, and it's it's gonna be indicated by the back of file. The file type will also say it's gonna be a backup file as opposed to the actual company file here, which is the company file. And it actually says company filed here. So this is a is a Q B B file. If we were to see the extension, this is gonna be the company file. If we wanted to restore this this file, then we'd have to go through the restoration process. When we do go through the restoration process, then it will only have the data up to the point of this back up. Any new data that will be input after that backup time period will not be included when when you restore the backup. So if you do make a backup, you doom or information after that point and then you restore the backup, it will just restore the data to the point that the that the backup was made. 16. 2.10 Balance Sheet QuickBooks Pro 2018: Hello. In its presentation, we will take a look at the balance sheet within QuickBooks Pro 2018. If you've been following along, we will be continuing with the get great guitars problem. If not, that's OK. We're gonna take a look at a balance sheet, discuss what a balance sheet is and go through the components of of the balance sheet. If you have the backup file, you can restore the backup file as demonstrated in a prior presentation, by going to the file tab and restoring. We currently have the open Windows list open over here. In order to open that, you can go to the View tab and open Windows list there, and we have the company home page Open the company home page found at company and home page on the drop down first item. There's gonna be our starting point every time when we go into the QuickBooks program, and we this time are going to be looking at one of those fundamental core core financial statements that being the balance sheet, the balance sheet will be found under the reports, although it's often called the financial statements of its although it will be a report. It's really the main report. It's gonna be our financial statement report at the end results the product that we're gonna be making when we enter all that data. It's the thing we're going to be using in order to make decision making. It's the thing that's gonna be wanted or one of them. When we get any kind of loan, present our information to, ah, creditor to the tax preparers and what not So we're gonna select this report, by the way, to the tax preparers they may or May. They were definitely want the profit and loss. They may or may not want the balance sheet, although it's they're tied together in some ways, as we will see. So we're gonna go to company and financial, and then we're gonna scroll down Teoh the balance sheet standard balance sheet standard. That's gonna be the one. Now I'm gonna change the report by changing the date range up here instead of just the point in time. We'll talk about the that why there isn't one point in time, but we'll go to the customized reports first, changing the date range that date ranch being from 0101 to 1 January 1st 2021 2 12 31 21. December 31st 2000 to 21. We're gonna select. Okay? And here is our report. So that's gonna be the standard balance sheet. We're always gonna be going back to this where I was gonna have it open. We'll have it open often times when working through the problems within the open windows list. Because everything we do on the home tab, we really want to check where it's gonna be affecting oftentimes the balance sheet almost all the time. When we select something on the home tab, it's doing something to some balance sheet account. The balance sheet account is our double entry accounting system in bed. If we think about the accounting equation of assets equal liabilities plus equity, that is the balance sheet. We have the assets, we have the liabilities and we have the equity. So this is the statement. We want to have some idea of how to read. We want to have the format of it. We want to be able to go back and forth from the data input to the balance sheet so we'll go over just some basic components what a balance sheet is and one of the components of it . How can we maneuver around this balance sheet? Then we'll talk about some other items in terms of using the balance sheets and features, and customization is to it in a future presentation. The typical balance sheet on Lee has the one date here and a lot of other art forms. We will have a date range of beginning and an end. Here we see the normal balance sheet title, which is as of December 31st 2021. What it does not say is for the year ended or the month ended. And that's because really, it is on Lee as of a specific point in time. So when we go to the end of the year for getting our balance sheet ready to take to our tax preparers or what not? Then note. The income statement is reporting what's happening over time. The balance sheet, however, really doesn't need a time frame doesn't need. We don't need to know the fact that this December 31st 2021 is what we want to be as part of our reporting package for the year of January 1st through December 31st 2021. This same point in time would be the same if we were just reporting the balance sheet as of the day or the week ended December 31st 2021. This is a point in time report reporting where we stand at this point in time and there's really, in essence, there's nothing we can do about it at this point in time. This is This is where we are at. If we want to know how we got to this point, then we have to look. It's a mother reports some timing reports, the main one being the income statement, which QuickBooks calls the profit and loss. If we go through the balance sheet, it is again our accounting equation. So if I compressed the components, its assets and liabilities and equity, there's our accounting equation, and you can compress the components by hitting this or selecting this little triangle. And so we're gonna make it large again. We're going to go assets, equal liabilities plus equity. That's our entire balance sheet. Then we break the assets down into current assets are most typical. Current assets are gonna be our checking account assets, and here we will have one checking account. That's our cash count. That's our main account on the balance sheet. Probably the first account we think of when thinking of the balance sheet. And it is as the point time, meaning this is what we have in cash. As of this point in time, we don't need a date range. In order to do that, we can basically check here. That's what we got at this point in time. That's what should be in the bank. Of course, there will be outstanding checks and deposits, and we'll have to reconcile it. But in essence, that's what we have. And then we'll have the receivables. That's gonna be what people owe us. As of this point in time, we've got the other current assets. These they're gonna be other assets, are really close to cash or relatively close to cash convertible to cash within a year's time period, or will be consumed at least within a year's time period. And so we've got the inventory Prepaid insurance. UN deposited funds will talk more about those particular accounts as we go, and then we've got the fixed assets are long term assets also depreciate. Will assets could be called property, plant and equipment as well. We have the furniture and fixed furniture and equipment here, and then we've got the contra acid accumulated depreciation related to the furniture and fixture this what we bought it for this. The value that it has gone down by at this point, we then have the total assets. This is gonna be our check figure to see that assets equal liabilities plus equity to see that the balance sheet is indeed in balance. That's gonna be our asset side. So I'm gonna go ahead and I'm gonna compress this right now so we can focus in on the liabilities and equity component now. So there's our assets liability and equity should tie out to that same number as it does here. If we compress that, we say liabilities and equity is the same number. And the beauty of using QuickBooks is that it will always be the same number. The frustrating thing about using QuickBooks is that when we enter something that we think makes sense but puts us out of balance QuickBooks will not let us enter it until we make a transaction that actually works in that it's in balance. And so that can be frustrating. If we think we have everything right and we don't and we don't see why it QuickBooks won't let us post an entry. Why won't let us? Because it's telling us we don't want to let you make an error. We want you to keep posting something. So these two items assets always equal liabilities plus equity. In order to do so, every transaction needs at least two accounts, and it needs to affect the accounting equation in such a way that this balance works. Gonna expand this back open again? We've got the liabilities, the current liabilities, including the accounts payable. That's what we generally start with. And that's what we owe to our vendors. We've got the credit card payment. This is where we're gonna track what we owe to the credit card company. Visa MasterCard. Typically other current assets these air things do within a year's time period. So we have a loan payable current portion, meaning we owe this loan within a year's time period. We all that back within a year. Payroll liabilities? Well, our employees payroll liabilities and sales tax payable. Or possibly build being payroll light bills being taxes that we owe on with holdings to the government on. And then we have the sales tax payable. Or this could be in a cruel probably in a cruel. This isn't a cruel that we have a payroll liability and then we have the sales tax payable here, and then we've got the total current liabilities. Then we have the long term liabilities thes air, things that are gonna be do within a longer period, then just one year. So this is a loan that we took out, and this portion of it is not going to be paid back within 12 months, but paid back and a period more than 12 months. And so that will be that item. And that's our total liabilities. It's very useful to have our current assets here and compare those schooling back up to the current liabilities, or at least to cash, because this is an indication of will we be able to pay off our current debts so we can't pay off the current debts with property plant equipment? Very easily. We can pay them off more closely with our current assets and even more closely than that, with our basically are quick assets, meaning the receivables we expect to receive soon and our checking account. So comparing these liquid assets to those liabilities, which we owe relatively soon the current liabilities being due within a year, very useful calculation, very common calculation, a calculation that we ourselves should be looking at, and a calculation that when we get financing from my bank or when people look to invest are definitely going to be concerned with. So that's gonna be that. And then we have the equity section down here. This is, ah, kind of the most confusing port of the balance sheet, often time and in some cases, the most important meaning that when we are describing what's the most important number on the balance sheet, it might be easy for us is that we might say, Well, it's total assets, possibly, or maybe cash. But really, if there's one number to say how the company is doing what the company is doing, the value of this company at any particular point in time, it's the equity section, the total equity section, meaning in this case, the 1 49 to 30 to 92. That's the value in theory of this comes of this company, and the way we know that is because it can be calculated note are double entry accounting system is assets equal liabilities plus equity. We compress this again assets equal liabilities plus equity, and this this number is pretty useful to us, but this number is not very useful to us, except that it's in balance. Other than that, this number doesn't tell me much mawr other than it matches the total assets and therefore our accounting equation is in balance. This number is useful, but what's more useful than that is to readjust its accounting equation to assets minus liabilities equals equity. And that tells us that this equity section represents the assets with company owns minus the liabilities third party that the company goes to equals the equity section net value in the company of the value that we'd as the owners couldn't realize or have value in, and we could realise it in cash if we were to sell the business. In other words, the total assets of 2 28 8 89 56 minus the liabilities of 78 8 56 64 equals the net value of this company, that total equity section of 1 49 to 30 to 92. So, in essence, this is the value of the company. Now we can't. Obviously, we can't just go spend that money. We can't. We can't just go spend it because or just draw it out because most of our assets are not in the form of cash. We're in business here. We don't just hold things in cash. Cash isn't going to help us make money. What helps us make money? It's spending that cash and buying other assets that we're gonna use to generate revenue. So a lot of our assets, in this case, in the form of furniture and equipment, we're buying music equipment. A lot of our assets are typically going to be an inventory. We'll have a whole lot in the inventory right now, and then we've got the receivables. These these are things that our assets, but they're not cash. They're part of the normal process of business, however, and therefore if we were to liquidate the company and, for example, sell the equipment for 100 for in this case, 102 to 25 or whatever the market value is. That's what we think. The value isn't based on our estimates. Then, Ah, we can take that cash and then pay off the current liabilities, minimizing this or all the liabilities. And then once we pay off all the liabilities, we would be left with just the equity section. So in a minute by minute, see this? So here's just the equity section, so assets minus liabilities equals the equity section. So what is in the equity section, then? We've got a couple components. This is a sole proprietor and therefore, in a sole proprietor. We have what's called the owner's equity account. If it were a corporation, well, if it was a partnership, we'd have to break out this equity into multiple partners. If it were at corporation, we would have a retained earnings account and a common stock account. The reason those air different is because the sole proprietors owned by just one individual and we just have to really roll everything into that one account Onda and understand that that account is gonna be applied out Whoever owns a business. If we're dealing with a partnership, then we're talking about the net value of the business. And the two partners were gonna have to have some allocation in essence, need to allocate the net value of this business between the partners within the business. So we're gonna have an equity section or a capital accounts for multiple partners, then it for a corporation, it's a bit different. The total equity, remember, is always the same. So what? No matter what type of entity you are in, all of this will apply in that where the total equity is the same and that it it is the assets minus the liabilities. But in a corporation, we're gonna have to break out the fact that all owners half stock and the stockers all equal. That's the point of of a corporation. And therefore, what we're gonna break out in the corporation is not by individual owner, but by what type of equity it is meaning. Is it an original investment that original issuance of the stock which would be common stock. And then it will have retained earnings, which is the amount of earnings that are retained over the process of doing business, which have not yet been given back to the owners in the form of dividends. So we'll talk a little bit more about that as we as we go through eso that's gonna be this is gonna be our owner's equity, the main account this represents for a sole proprietor both of the initial investment and the accumulation of revenue over time, minus most of the draws except for the draws in the current period. The thing that's kind of funny about QuickBooks is that it actually breaks out both the net income and the draws on the balance sheet for the current period. That's unusual, but it's kind of nice. So in other words, when we go to the income statement, as we will in a bit, we'll see that if we make the income statement for the same time period, meaning the year ended 12 31 January 1st through 12 31 then we'll see that we had a loss of 1063.8. And so on the balance sheet. QuickBooks combines that QuickBooks shows us that and sit, and it breaks out that component a little bit on Orthodox but can be useful when we when we try to tie these accounts out. Then we've got the owners draws. And again, that's something that's gonna be on the balance sheet that oftentimes on the balance sheet would be just combined into the owner capital. But it's going to show us, in this case, the breaking out of what the owner drew out for personal use over the time period that we are given here, which is January 1st through December 31st. So this is money that was drawn out from the owner reducing the total equity in the owner's equity account. So this is an example. That's just a quick overview of what the balance sheet is. I'm gonna make it extended out here. Here, This Is that what the balance sheet is? What it goes over, we're gonna always have the standard balance sheet open. Whenever we go through problems and going back to the home page over here, we're gonna we're gonna inter bills. We're gonna pay bills, we're gonna create invoices. We're gonna create sales receipts. All of those will have an impact on the balance sheet, as we do those items were always going to go back to the balance sheet. Look at the end result that QuickBooks is generating automatically and then drill down on some of this and see what we actually did, which is which is great. This is kind of like what we do in auditing is that we started the end product often times and work backwards to see what is happening. So we can hear we can actually input data and then go back to the end result and drill back on that data so we can we can see the data from the from entering the data to the end result, and we could see it from the end result and going back to, in this case, the point that we entered the data from the home page that is very useful. That is very useful. We should be able to see if we can see the process going from other data input point to the end product and back from the end product to the data input point. That is huge to understand. And if you work in a theory class, you may have an understanding of it with debits and credits. If you work with software, then you can get a better understanding of how to do that same concept with forms and how to get a better understanding of forms. I'm gonna close this back out back to the balance sheet, and next time we'll take a look at the profit and loss of the income statement, and then we'll go ahead and do some customization to the balance sheet. 17. 2.15 Balance Sheet Display Options QuickBooks Pro 2018: hello In this presentation will be taking a look at the balance sheet display options within QuickBooks Pro 2018. If you've been following along with us, we will be continuing with the get great guitars problem. If not, that's OK. We'll be taking a look at the balance sheet report and the display options. If you have the backup up to this point, you can go to the file tab and restore the backup, which is done in a prior presentation. We can't have the open Windows tab open. You can open the open windows tab or list by going to views. Open Windows list currently have the home tab open. In order to open the home tab, we go to the company dropped down and home page. We're gonna be taking a look at a balance sheet in this presentation and look at the display options within the balance sheet. In order to do that will open a balance sheets, but I go into the reports of dropped down after the top, scrolling down to company and financials and then scrolling down once again. Teoh balance sheet standard. We're gonna change the date to the year end we are working on that being 12 31 21 or December 31st 2021 there's gonna be the standard format of the balance sheet. We're gonna take a look at some options we have up here in the customized report field before we go there. Note that we do have This is nice little option here that does let us toggle back and forth between an accrual method and a cash method. That option in prior QuickBooks versions, was up here in the customized report field. As we will see, it is still there, but it's also here. So if we wanted a quick conversion to in the cruel versus cash, we could do that. Now. These two conversions remember that if we're on a cruel version, that means that QuickBooks is doing its best meaning it's recording revenue. When we recorded an invoice and expenses when we make a bill rather than when we happened deposit that's going into the bank in terms of revenue or check going out in the terms of expenses. However, I note that just because it says accrual basis here doesn't mean that we're perfectly on an accrual basis. We have to be mindful that it's just means that QuickBooks is using its best tool to drive it in the format of an accrual basis using an invoice for revenue recognition rather than cash being received. We still have to make some adjustments to make it on a perfect a cruel. But these could be useful toggles to go back and forth between the accrual method and the cash method. We're then gonna go up here to the customized report Customized reports up top, and we get this window. Now, there's gonna be four tabs here. We're gonna be spending our time with the display tab and look through the options within of the display tab, the first being the dates drop down. Now, we have a dates drop down up here, too. And we have this these options over here within the dates dropped down. So if there's something within this drop down, we can do it. But before going into a report before going into the customized reports, So what do we have? We have the custom date down here. That's because we I custom Lee put in the 12. 31 2021 US working in the future. However, if we were working in the current time, then we could use a lot of these options would make a lot more sense. We have today giving us the data for today. This week, um, this week to date, this month, this month to date this quarter. Now some of you might be saying, Hey, this is a balance sheet. It doesn't make any sense for us toe have these week to date month to date. It's only as of a point in time, as of in this case, December 31st 2021. But it's good to have the date ranges, sometimes on the balance sheets, not because we're going to report it on the balance sheet or show it within the balance sheet report. But if we want to drill down on that data and take a look at what's behind that data, it is useful toe have, ah, report that's gonna have a range. So these are the standard ranges. We get the fiscal year. We've got the fiscal year to date the fiscal year to date yesterday last week, so these will give us that the normal time ranges and again. If we're working in the current day in the current time period in time, then all of these normal date ranges would make sense. Of course, we're working a problem that is in the future, and therefore we have to have a custom date range in order to put that custom date. Now, when we put this date here and no, we only have one option for the date here, and that's because it is a balance sheet and we don't have one option. We have the date range option here, which again might seem unusual to most people that have, you know, studied accounting. They're going to say, Well, you know, I only need one date and that's what a balance sheet is. But again, when we drill down on this information, it will be useful to have two dates. For example, if we put 0101 to 1 January 1st 2021 to 12 31 2021 then we drill down on some of the data. Looking at the detail, we will get a transaction report similar to a general ledger that will give us that detail . There rather than us having to change the date range when we go to the G o or the transaction report. That's that's often very helpful, can save a lot of time. We see this report basis toggle once again the cruel and basis. This is where this toggle that we looked at before traditionally has been in QuickBooks. They have not removed it still there, and it's also here to for a bit easier usage. Then we have to display columns by and we can have the totals or these various options. Now, if we're only have one point in time, then the balance sheet will just need a total. But if we choose a range, this would be one reason that we would want to use some other option. And then and then it could allow QuickBooks to do some other defaults. So before we show that first, let's take a look at this range, I'm gonna I'm gonna cancel what we did before me, and I only have this one date and cancel this out. Then if I want to see the detail behind this checking account, QuickBooks has a great zoom features. I'm gonna zoom in and It only gives us that one day. It doesn't give us any activity because it only has that one date. And I would have to change the date 20101 to one. Possibly, Uh and that will give us the information from January 1st 2021 to 12. 31. So if I close this back out then and we go back to the customized report and we change this from 0101212 12 31 to 1, however, and select. Okay, then if I double click on this data, it will give me that the data without having to first change the date range. That's the point of changing those date ranges so that you can really go in and not have Teoh change this report this transaction detail report, which is basically the general ledger type report showing us the activity that backs up and creates the amount within the checking account. So I'm gonna close that back out. That's the That's the one big reason to use that range. I'm gonna go back into the customized report big reason to use this ranch number One reason in my opinion, but it could also be used for us to display, say, multiple months. So if I want this to show, not just the year ended, but I'd like to see multiple months on one report the way to tell Quickbooks to do that It is a Hey, here's a range that we want, But we want you to show multiple months. So in this drop down, we don't want just total we want to see by month. So that will tell QuickBooks. Okay, we want this year by month, I'm gonna say OK, and QuickBooks then gives us the month ended. Now, what this means is, as a balance sheet report, it means that we're giving the balance as of the end of each of these month time piers at each point in time at the end of these months. And so that's gonna be That's how weaken quickbooks the information or tell QuickBooks Hey , this is what we would like to see. Multiple months on one report going back to the customized reports. We can't, of course, do that for different month ranges. Eso 1/4 a day, a week, whatever we would like to do so It's a very nice option. If we go back to the total option, we will still have this date range up here. But when we display it, it will only show the as of December 31st for that one time period. And again, it allows us to drill down, however, and see that detail. We didn't have these options down here We have. Ah, and we have the previous period the previous year. This is how we're gonna tell Quickbooks to say, Hey, this is the balance sheet report. What I would like to see is this report year and then the previous time period, because I would most likely have to I want to see a comparison between those. So, for example, if I chose a year here, it's gonna pick the year before that. If I choose just a month. However, let's say we chose the month of February, so we're gonna choose 0202 to 1202 28 to 1. I'm sorry, 0201 do one. So february 1st, 2021 to February 28 2021. That's gonna be for that month. Then, if we go down here and choose the previous period, it should take that month and the previous 1 January. So it's going to show the current month and in the previous month of January, when we select okay for this report for Go. OK, we've got February 1st and then January on the comparison. If we go back to the customized report, you might be saying, Hey, there was a similar option If I have this date range. If I had this date range from January to February 28 and then shows the monthly format, it would show a similar thing in that it would have the two months there to show in each month. What's the difference between this? Well, one point of having this option here is that we can also have the change here. So I want to see this period in the last period this month and the last month. And then tell QuickBooks give me the difference between the two. Tell me what the difference is. If we select that, then QuickBooks will give us the amounts here for the current month, prior month and the change. So in this case, February 28 995 56 minus that 94 3 41 17 gives us the change of 4006 54 13 9 That could be useful. Of course, If we go back up to the customized report, then we might also want the percentage change. So that's gonna tell us we want the two periods. We want the difference between them and then we want the percentage change. If we select that item and OK, then we get this this next row here, and that could be useful. If we're comparing something like McDonald's to like our burger chef, we have a small burger shop to McDonalds. The dollar change wouldn't be enough for us to see because they're gonna make a lot more money. But the percentage change, maybe something that could give us information. So to calculate that we take the difference. 4654.39 divided by the previous month. In this case, 94341.17 means there's I 0.0, for nine. If we multiply that times 100 to make it a percentage that gives us the four points nine round in here to 4.9%. That's meaning that we have a 4.9% increase, and that is something we can compare it to people and companies that have different, ah, dollar amounts in total revenue. But we can still compare the percentage changes, and that could be very useful for go back up to the customized reports here. That's gonna be the previous period. We can do the same kind of thing if we just want to go to the previous year. Now, if we would have selected the entire year that would, you know, that would also work in terms with the previous period. But if we select the previous year here, we can do that with just basically one click rather than multiple clicks. For example, if I had 12 31 to 1 to 12 31 to 1 the same year end and we select previous year, we're gonna say OK, and it gives us the December 31st 2021 the prior year, just without one date, meaning I could have just put the data in here and then shows the previous year. And if I go back to customize report it's gonna have just that one date and then I could just shoot the previous year and it will say, Okay, I'm gonna take the previous year from this year and we can have the same options of change the dollar amount and change the percentage and say OK, and it will give those options as well going back to customize report this year. Of these options of the change, there is what we call a, um, horizontal analysis where we're comparing last year to this year this year toe last year and look at the increase in decrease in the percentage increase in decrease. If we want to see ah, vertical analysis, we can see the percentage of columns by selecting this item, and we're going to say OK, and that will give us the percentage of columns here. So this is gonna be a vertical analysis, and it's useful to have this because we can then make a comparison basically saying Okay, how much of the total assets is the checking account? 98 95.56 divided by the total assets 2 to 8089.56 gives us the 4.3. If we multiply it times 100 we kid before 3.40 So that's what we're saying. Here is the cash is 43% of our total assets. Accounts receivable is four or 5%. About of our total assets. Inventory is 50.6 prepaid insurance, 4.4. This again useful because we could compare this to other companies and say, What? What is their percentage of cash? They might have a lot more or less cash than we dio, but what's their comparison between how much cash they have to their total assets? That's often something that could be useful for us to do some comparison since, um, benchmarking. If we go back to the customized report up top next time, we're gonna take a look at some other options, including the Filter Tab, the Header and Footer Tab and the Fonts tab 18. 2.20 Remove Date Time From Reports QuickBooks Pro 2018: Hello. In this presentation, we will talk about how to remove date and time stamps in reports such as the balance sheet within QuickBooks Pro 2018. If you've been following with us, we will be continuing with the get great guitars problem. If not, that's OK. We will be talking about the formatting of reports such as the balance sheet. We currently, if you have the backup file, you can restore that by going to the file tab and company restore the backup, as has been seen in a prior presentation to have the open Windows tab open, go to the view tap up top and open window list, giving us our open windows. I'm gonna close everything at this point. Except for the home tab. Only thing open at this time is the hometown. In order to open up the home window, go to the company dropped down and home page. This will be our starting point Every time when we take a look at the QuickBooks products, we are now going to format a balance sheet in a similar way. All reports can be formatted in that we can remove the date and time. Let's take a look at how to do that. First, by making a balance, sheet it by going to the reports drop down up top, going to company and financial scrolling down to the balance sheet. I'm gonna change the date right here to 12. 31 to 1. And there's gonna be our balance sheet as of December 31st 2000 and 21. We're then going to go into the customized report and take a look at some of the options here were mainly concentrating on just removing the time and date stamp. I'm gonna move this down a bit. What we're looking at is this item over here, whenever we print the report, it's gonna have the balance sheet. It's going to give us the date over here. We want this date as of December 31st. We may not want tohave the time stamp here and the date here which is automatically generated. Nice to have but may not want it all the time. In order to remove it, we're going to go to the header and the footer tab and we want to look through these options here. Here's the subtitle date and here's the date prepared. So we're gonna remove the date prepared, the time prepared and the report basis. And that should be these three items right here when we then select. Okay, we should do. Those should be removed. So we're gonna say OK, and we have now removed those three items. 19. 2.25 Balance Sheet Fonts & Numbers QuickBooks Pro 2018: flew in this presentation, we will be taking a look at the fonts in numbers Options within the balance sheet. Four QuickBooks pro 2018. If you've been following along with us, we will be continuing with the get great guitars problem. If not, that's OK. Okay, We're going to take a look at the fonts and numbers options within the balance sheets reports. If you have the backup file, you can restore that by going to the file and restore. As we've seen in a prior presentation, we have the open windows open here which you can open by. Go into the view tab, an open window list. We also have the company home page which can be found at the company dropped down and the home page giving us the home page starting point. We're gonna be looking at the balance sheet, so therefore we will open a balance sheet by going to the reports drop down company and financial, selecting the balance sheet. And I know what we have gone through this process of opening the balance sheet multiple times here. But this should be basically routine. Every time we opened the program. We want to basically go to the home page. We wanna have see this page. We have the same starting point. We want to be able to open this balance sheet automatically. So we're gonna go to that, and then we're gonna tab through this against could change the date to 12. 31 to 1 December 31st 2000 and 21. Then we're gonna go to the customized reports option up top customized report we've taken looking at the display we're gonna take We've taken Look at the header and footer. We're looking at the fonts at this point of the fonts options. Now, this is gonna be just How do we like to see the report? In essence. So we have the change and fonts. Four. We can change these various areas within the funds, so they columns and labels Do we want to change the columns labels? Do we want to change with Rose in the fund? Once we pick one of these options, we can then go to the to the change font item here, and we'll see kind of a familiar font layout where we have the fonts on the left. Here's the area. Was the default. If we go through these items, we could see some different font layouts. And this could really give us some customization. It customized feel to this information. So if we chose, say something that would look very different like this and ah, effects. We have to strike out here and the underlying there which could be useful in different parts of this text. And then we have the colors. We could change the colors completely for want of a different color scheme. Again, let's do something that will stand out. And then we have the bold and ah, changing the size. So if we change the size significantly, we would have something such as that and saying, OK, I'll change all related fields. I'm going to say yes and then we have this item. If I'm gonna say OK, we could see how that we would display on some substantial changes in thes options here, So I'm gonna go back Teoh the customized reports. We're gonna go back to fonts and numbers. Clearly, that change didn't look too great, so we wanted to revert back to the original settings we could select Revert, and it'll take us back to the default settings. If we select okay, then we'll go back to the default. Obviously, if there's any problems, we could just close the report as well and reprocess that report, going to file tab and going down to the report and then just create a fresh report if we do anything that's terrible here. So we're gonna go back to the customized reports and we're going to go back to fonts at numbers. Then we have these options over here show negative numbers. A lot of people have a lot of different preferences here. Ah, when I worked with Excel, I know that I tend to like the parentheses look. So when we have a negative number toe have the parentheses, that's something that is useful to me trailing not, I don't know that Maybe that's useful that some people That's not how I'm used to seeing it . I like kind of the parentheses, but bright red can be useful as well if we want to have the red text in there. I know that's gonna be something that's done oftentimes with People's Excel sheets past strong preferences, according Teoh, the text type. We might want to match that here within QuickBooks and you have the ability to do so if we want to go to show all numbers. This is a really good option as well. If you want to say divide by 1000 meaning we want to tell her reader. Look, we're you know, we're putting it in thousands here, so we're gonna remove some zeroes. If we have some reports that air substantially long in terms of big dollar amounts, we might want to put it in thousands. So divide by thousands. Let's such as this. If we were to do that and we look at this report and we've got the 98 995 if I say okay, we're down to 99. And if it's by thousands, we have this little icon here says accrual basis numbers in thousands, meaning that was rounded to 99,000. And you're supposed to just know it's got three zeros there for the thousands. Then we're gonna go back to the customized report up Tom fonts and numbers. We removed the thousands. We go back to the fonts and numbers. Now you'll note that when we have the thousands here, if we have the thousands checked. When we looked at that report, it had pennies on. It's still so we had we divided by 1000 down here, and then it still had pennies like it still has sense even though we're reporting it in thousands. So if we do pick the divide by thousands, we probably also want to say, Don't show the pennies if we're dividing by 1000. If I mean, if the $1000 amount is not significant than the pennies aren't you would think that would kind of be part of the default. But it's not. So we want to go divide by 1000 remove the pennies. And if we do that, then these the sense will be removed. We're gonna say OK, and now we have no sense there, too. In that we have no change. European reported. We have no pennies in the numbers. So hope of the report does, however, make sense in that we're talking about 99 1000 about we're gonna go back to the customized report, we're gonna go toe fonts and numbers and then we can also do that if I if I don't divide by 1000 and still want to remove the sense, then we're gonna say OK, in the pennies. So there it is. Ah, and we have No, we have no change in their for that as well. So it's gonna be the options if we go to the customized those are gonna be the fonts and numbers. Options worth taking a look at were worth working through this we can really change the image and the impact of a report, depending on the different styles we have. Changing the styles within and report that's in QuickBooks can give someone un impression of that. We know more of what we're doing just by changing a few things. Just by changing a few fonts can kind of impressed some people. It can be taken overboard, however, do not get silly with it and have, ah, crazy fonts that don't make any sense. But a little touch here and there can go a long way in terms of impressions in terms of people seeing and recognising or feeling that someone has better control over their QuickBooks reporting and and therefore applying that most likely to their overall knowledge of QuickBooks 20. 2.30 Balance Sheet Header & Footer QuickBooks Pro 2018: Hello. In this presentation, we will be taking a look at the header and footer section of the balance sheet within QuickBooks Pro 2018. If you've been following along, we will be continuing with the get great guitars problem. If you have the backup file, you can restore that by going to file on restoring the backup. We currently have the open Windows list open. You can open that by going to file and open window list, and we have the home page open found at company and home page. We're going to take a look at the balance sheet here, looking specifically at the header options. And in order to do so, we will open the balance sheet by go into reports, drop down to the company and financial scrolling down to the balance sheet standard. We're gonna go to the dates and change the date to 12 31 to 1 December 31st. 2000 and 21 were then going to select the customize report option, and we're looking not at the display tap, but this time at the header and footer tab. We've looked at the display tap in a prior presentation. We're gonna go over here to the header and footer. A lot of options in terms of how we want the header and footer to appear. Here's what it looks like at this point. There's the header there and we have Ah, the company name. So that's going to be, of course, up top on the header option. We also see the icon here in the company name. We could change the name. It's typical that that would be the default that we would want the company report. We might want to change the report title in terms of the balance sheet to something something standard. So for Monta just make a balance sheet number one like so then it would change that item. The subtitle subtitle here eyes gonna be as of December 31st again if we If we wanted to change that in some format, if we just wanted perhaps, uh, the date without the as off we could delete that out, and then we could say the date prepared and we're gonna have this information the date prepared could be in separate formats for the preparation date, the time prepared and the report basis. Those are these items here and we could remove those. If we don't want them on our report. Oftentimes we might just say, you know, I'd rather not have those two Ah print header on the page after after first page. If it's two pages long, do we want to keep repeating this on the second page or not? Default is yes, but we can have the second page to not show that the header on each page that page numbers We could have the numbers on each page in different formats. The extra footer We might wanna have another foot. Or we might want to put say that the name of the person printing the report, perhaps so we could put a name in there and then we could put print the footer on first page. So we have that the printing option for the footer on the page. Then we have some alignment options up here. So note the alignment up here. The default were in the center. If we select the alignment, we could check it out and see if we say a line left that's going to give us the alignment over here on the left side. So if we were to do that. If we kept the time stamps that it would push them to the right side. We're gonna delete those and just remove them. So if we see that, then if I say OK, then now we have that get great guitars without the balance sheet. We call that number one here just to make that little change instead of as of we changed the sub title to December 31st and we moved it, of course, over to the left side. So those are just some examples of what we can do it. So it's much more useful sometimes to change some of these names and what not when we start running other types of reports or have report, such as the profit and loss, which we might just want to call the income statement. And then we're gonna go Teoh, customize up top again. Let's just take a look going back to the header and footer tablets, some of the other options in terms of the left line. If we go to the right a line that, of course, would be on the other side if we take. If we say OK, there's that option there. If we go to the printing layout, then if we were to print this report and we want Teoh got a report and then preview, we're gonna preview it. We get this preview option and down below at the bottom of this preview option, we can see the footer I can get there. We could see the foot or here at the page, and then Eric Smith is the on the on the foot or tab. So those are gonna be some of the options that we have within just the layout. When I close this gonna close this going to go back to the customize, gonna go back to the header and footer Those just gonna be some of the options. Some of the most useful options is to change this report title to change the subtitle and remove these dates. If you so choose to do so. Also very useful toe Have that that foot or if we do want to put some extra information into the footer of a report. Okay, now, later, we'll talk about memorizing reports such as this. If you do have a format that you really like and you want to save, then it might be useful to save and memorize those reports that you can go back to them and not have to recreate them every time, and we'll talk about that in a future presentation. 21. 2.35 Comparative Balance Sheet QuickBooks Pro 2018: Hello. In this presentation, we will create a comparative balance sheet within QuickBooks Pro 2018. If you've been following along with us, we will be continuing with the get great guitars problem. If not, that's OK. We will be generating a comparative balance sheet. If you have the backup file, you could go to the file tab and restore that backup file. We currently have the open windows list open, which can be found at the view and open windows. And we currently have the home page open that found at the company and home page. We will be recording a balance sheet now or creating a balance sheet and a comparative balance sheet at that. By selecting the reports dropped down up top, we're gonna go to company and financial and scroll down to the balance sheet. The balance sheet itself will be the starting point that we're gonna use in order to create the comparative balance sheet. We're then going to change the dates to 12. 31 to 1. The period that we want to be working in December 31st 2000 and 21. We're then going to go to the customized report up top, and we go through some of these options. Now, we only have the one date here note because it is as of a specific point in time. But in order to make the comparative balance sheet, we're gonna change this to the range. And I'm actually gonna make it the range of 0101 to 1. And we're just gonna make it two months. I want to compare just two months, and that's gonna be Teoh 12 02 28 to 1. So january 1st, 2021 to February 28th 2021 We're gonna have the accrual basis, and then we're gonna have to display columns. All I'm gonna do is years. I'm just gonna change this Teoh to change it to a month. And that's going to say, QuickBooks, we want you to take these two time periods and just split them and just show them at the month and meaning. Show me the November January 31st month in and the February 28th month end. That's gonna be that split up here. I'm going to say okay, and then we'll go back and see some other changes will make before we print this report. So here's that information that January in the February, we're gonna go back to customize reform. And then if we go through some of these other options, we're just gonna go to the filter option, going to keep that standard. We're gonna go to the header and footer. I'm gonna get in the practice of removing these time and date stamps. So we're gonna go ahead and take away the date prepared just to get used to doing those items. We might want to put a name in the footer so we might want to get in the practice of doing that. So when we when we print this out, we'll have have that they're so those air. So some normal things that we could we could add here. Now, in this case, we may want to not just call it the balance it because it's a comparative balance sheet. So this might want to change the actual report title to a comparative balance sheet comparative balance sheet, and that's gonna change. The name here will keep the alignments the same and the fonts we're going to keep the same here, so I'm gonna go ahead and say OK, and there we have it. So now we have a comparative balance sheet to be in the title, and we've memorized, and so far we've saved that. We've changed that title and now we can look through this report and we have that nice comparison from January and February we will go ahead now and export this report. So we're gonna export this report to the same location that we exported a balance sheet too . So we're gonna exported to an Excel sheet that's been created prior to this. So we're gonna go to the Excel up top, create a new worksheet. It's kind of interesting that it's so. I mean, the QuickBooks gives us this option first because you would think would be you choose the workbook first. Meaning what actual Excel file do you want? But we're gonna put the worksheet within the workbook first and and then we're gonna choose the fact that we want an existing workbook. Locate where that workbook is the actual Excel file by selecting brows and we've got the drop down. I'm going to go here. Mine is in section two and I want this section two reports we started making. I can click on that and say Open or just double click on it as I typically do. And then we are going to export that information. It should then open up Excel, create a new tab within Excel, export this information to that new tab within Excel. And we're gonna do they customized options The normal things we typically dio once we export this report one being that I'm gonna drag this cell to the right because I wanted in order this when we made last time, I want this to the right of it. I'm just gonna grab it and drag it to the right. We're gonna rename it, and I was gonna call it comparison balance sheets. I'm gonna start abbreviating because we don't have too much space there. Terms of the name and there is gonna be that Typically Then go to the view tab of Top Windows Group removed the split screen and then I like to look at the page layout view to see it, how it might print and also to see the header on it. So that's this little box over here page layout view. We see the header is here, and it looks like it's gonna print on one column. Why, that's good. Back to the normal view. Gonna go ahead and save this like so and say yes and close this out and there's the comparative balance sheet. 22. 2.40 Summary Balance Sheet QuickBooks Pro 2018: Hello. In this presentation, we will create a summary balance sheet within QuickBooks Pro with 2018. If you've been following along with us, we will be continuing with the get great guitars problem. If not, that's OK. We're gonna talk about how to create a summary balance sheet. If you have the backup, you can restore the backup by going to file and re storm. We have the open Windows tab open, which can be found at the view and open Windows list. We also have the home page open found at company and home page. We're gonna be looking at the summary balance sheets and in order to look at the summary balance sheet first, want to compare and contrast it to the balance sheet Most typically used the one that we have been working with the standard balance sheet. So let's open the standard balance sheet first and then work some comparisons by Go into the drop down up top for the reports selecting company and financial and going down to the balance sheet. This is the standard balance sheet. We're gonna create it as of the date of 12 31 to 1. So here's the date. December 31st 2021. We have the standard balance sheet. Now you'll note that the standard balance sheet has a lot of detail in it. Now we can compress some of this stuff and look at it in terms of less detail, saying Here's all the current assets or compress some of these items to see less detail. But many times we might want to give someone we might want to just not bog someone down if I don't want to box someone down with too much information, especially if I have set up an account that has a lot of sub categories, or in order to process my information, there's Sometimes I want to get to the accounts and have a lot of accounts so that I know exactly what is going on so that I can see what's happened, especially if it's something like investments down here. I might have a lot of subcategory of counts cause I'm tracking each individual investment and I would like to see that detail. But if I'm giving this information to someone else, it's quite possible that I do not want to overwhelm someone else with all that detail. And instead of just compressing that detail and summing them up, we could print some other report. Another report of summary balance sheet, which will show less detail, be less overwhelming to somebody else. And really, in order to know which reports do you need, you got to know who your audience is, And it's really important to know your audience is because sometimes some people want a lot of detail. Sometimes they don't. If you're going Teoh, some especially like some business owners or managers, and you want to just get the information to them and they want the bottom line. Then we don't want a lot of some categories, so we're just going to give a summary. But we'll have all this up categories ready in another report, most likely once they start asking questions, some power, a particular line item. So we're gonna go down here and go to reports in order to get a summary and go to the company of Financial and then go to the balance sheet summary. And by contrast, if we look at this, change the date Teoh 12 31 to 1. We see we have a lot less information here, meaning we just got the checking account accounts receivable and the other current assets. If we compare that going back to the balance sheet where we had the checking account in the checking account area than the accounts receivable than the other current assets broken out into the sub categories. And again, if we had more detailed into more detailed accounts, it's gonna go on for quite some time in terms of the detail. And if we go back to the summary, this is This is nice and neat and easy to see. It's a very it's almost too compressed now. If we give this to somebody, then that's often a good starting point. And it's often something that we could say. Here's this and then be ready for them to ask any more information to follow up with with the more detailed balance sheet so we can break down any information that is needed. Gonna go up to the customized report up top and Isam customization here. We're gonna get into the habit of first going to the filters than going to the header. I'm going to remove the date prepared time prepared, report bases and go back to the font, and we might want to get in the practice of put in a name down here for if that's something that we want just always getting a practice of. It might be something that we just want to have a foot or all the time in some format. And then the Fonz, I'll keep the fonts the same and okay, gonna go ahead and export this to excel. We already have an Excel file open. So we want to just put it to a new tab on that same Excel file by go into the Excel, drop down, create a new worksheet. It's gonna go into an existing workbook. But we want a new worksheet and we're gonna say OK, and here is our creating new work sheet. We want it in an existing workbook. However, so we'll select that item, then will browse and we're gonna look for that workbook. I'm gonna slick the drop down, get great guitars Section two And I'm just gonna We could click on it and open I'm gonna double click on it and then we'll x court it And that should open and New Excel sheet open a new tab Put this information export this information to that new tab once it's done, will do our normal processing in that we're gonna pull this tab over to the right hand side . So it's an order of when we generated these reports just by clicking it and grabbing it and dragging it on over. Then I'm gonna double click on it to change the name. I'm gonna call it summary balance sheet, something like that. And OK, and then I'm going to go to our normal items up here and go to the view tab up top windows and unspool. It's the screen and then just check out down here, go to the page layout view to see if it's gonna print the way we would like it. And if we go there, we can see. We do have the header here and it's laid out. It fits on one page. It looks nice. Of course it should. It's a summary. So we're okay there, So I'm gonna go back Teoh the normal, and there it is. And then let's save that and say OK, and close that. And there is the summary balance sheet 23. 2.45 Memorize Report Group QuickBooks Pro 2018: Hello. In this presentation we will talk about how to set up reported groups so that we can later make custom reports and memorize them to those reports groups making it easier for us to go back to those memorized reports instead of resetting them up and reformatting them within QuickBooks pro 2018. If you've been following along with us, we will be continuing with the get great guitars problem. If not, that's OK. We're gonna be talking about how to set up groups four memorized reports so that we can go back to them very easily. If you have the backup file, you can restore that by going to the file and re storm. We currently have open Windows Open, which can be found at the view tab and open Windows list. We also have the home page open found at the company and home page. We're gonna be talking about the reports center here, so we want to at the end of the day be able to make custom reports, change the header to the reports, changed the title to the reports, change the font or whatever we would like to do and then save that report format into a group that we can easily find. We'll talk about how to memorize those reports later. First. Now we want to talk about how to set up a place to put those memorized reports a custom place, a place of our own. In order to do that, we're going to go to the reports up top and then go to the report centers. We're gonna go that first icon, the report center. And here is our report center. And we have the tats of top of defaults to the standard reports. Typically and what we're looking for are that memorized tab. We want that memorized section. So we're going to go to memorized reports. And here are is our memorized reports. We've got banking, checking custom vendor employees and vendors. What we want is a custom reports center, and we just want to make it our report. Who could put it by name? Or just call it something like my reports or has different categories of reports where we would like to group different reports, reports, possibly that we will be saving monthly or yearly and and we could put names to them accordingly. I'm gonna go to the edit memorized list to select this item. Gonna go ahead and maximize the screen so we can see what is currently there. If we maximize this we see, here's the memorized reports and these are the default reports. We got the account reports, the balance sheet, the G o, the general Ledger that banking that company and these air, the sub categories and the reports within those sub categories. What we want to do is make a new category, and we want to make that category. Whatever we want it, we might want to make it by Corley reports or monthly reports or something like that or just a generic name, such a czar name or my reports. And so that's what we're going to select. We're gonna just make it my reports. I'm gonna slip this drop this drop down here, but I'm gonna Mitt. I'm gonna minimize the screen so we can see that dropped down in the window. So I'm gonna go back here and say, this is memorized reports, and then what we want is a, uh, new group. I'm gonna create a new group, and we're gonna call that. I'm just gonna make a generic name my reports and say OK and that if I maximize this again , we'll see. We have my reports. Now, whatever you name, yours is gonna fall somewhere else because it's in alphabetical order. And if we don't like some of the reports in here than we can customize this field and make it custom just to what we would like in the field and kind of remove some of this other stuff. But here's gonna be that my reports and we could put whatever we would like within the my reports. So what we'll do later is will create some report. We will create some custom reports and then save them to the my reports and show how we can go back to those. And it can save us a lot of time because it could save us time in terms of not having to change the font. If we like the fonts to be different if we like toe have brackets around the fonts, if we like, be titled to be different even if we wanted to save relative ranges and a comparative report or something like that, customize the title, any of that stuff all that stuff will be saved here and then all we have to do then is changed. Basically, whatever the update is to most likely just the dates after we pick a customized reports said him. So in the future, we're gonna we're gonna make some custom reports, and we're gonna put them to this location once again. This location is if we closes back out and we closed this back out just to get back here, we're gonna go to reports we're gonna go Teoh the report center, and then I'm gonna make this full screen. We're looking for the memorized reports, and then we're looking down by the sections that we want. So if I If I make this a listed format, we then see our breakdown here of the information. We don't see the subcategory of my reports here. There's no reports yet there in the mind report. So if we went to the edit memorized list, then we see it is here. And that's what we're gonna apply this information out as we start to memorize reports in the future 24. 2.50 Memorize Report QuickBooks Pro 2018: Hello. In this presentation we will talk about how to memorize a custom report to a custom location and then retrieve those reports from the custom location within QuickBooks Pro 2000 and 18. If you've been foaming along with us, we will be continuing with the get great guitars problem. If not, that's OK. We'll talk about how to memorize reports. If you have the back of file, you can restore that by going to the file and restored. And we have the open windows list opened found at the view and open window list. Currently have the home tab open found at the company and home page. We're gonna be looking at a custom report. Will be generating a balance sheet, doing some customization to it and then saving that custom format report so that we can return to it very easily. So we're gonna go straight up top to the reports center selected that dropped down. Go to the company and financial scroll down to the balance sheet. Here is our balance sheet. We will change the date to 12. 31 to 1 tab over December 31st 2021. We're just gonna do some customization here and then save this report. So we'll go to the customized report and let's change a few of these options. We're gonna go to the filters. We're gonna go to the header and footer Tab up top. Let's just remove the time that report and the print header that's going to remove these items here. We might want to just have a custom footer, and we might want to change some items on the fonts. If you go to the fonts tab, we may want parentheses. We may want red numbers for ah, for negative numbers, and we may want to say, Remove the sentence so we'll have those items here once we have those selected were going to say Okay, and this will be our work Custom report Every time we go to the balance sheet, we may want it in this format, and rather than go through those changes each time, we can memorize this item. Now we've already set up a group for the memorized groups in order to review that. We've seen it on a prior presentation how to do that, But let's take a look at where we put those groups. We're gonna go to the reports up, Tom, and we're gonna go look at the report center and within the report center. We're going to the memorize tab and it's not showing here. We created one called my report because there's nothing in it yet. So if we go to the, uh, edit memorized and make that large, we see it here. My reports, that's where we want it. We want to save it into that subcategory group. So we're gonna go back to the balance sheet that we have created, and we're gonna go up to memorize. We want to memorize this report and we want to memorize it. The name we could call it a balance sheet. We might just want to call it balance sheet custom. It's a custom balance sheet save in memorized group account shared this report template with others. We're going to save it to the memorized group. And then we have this drop down to select them. Many of these air, the defaults of the accounting, the banking, those of the default groups given by QuickBooks. We set up a new one called my Reports. So that's what we're gonna put this information My reports. And then we're gonna say OK, once we have saved a report, then we can go and find the reports by going to the reports. Drop down looking into the report center and within the Report center on the tabs section. We're looking for the memorized reports and then and the memorized reports where we want to go down to. We set it into the mire reports, so mine reports, and then we have the item for the balance sheet within the my Reports section. We have the customized options down here so you could take a look at running this report and or change the dates before running the reports. Like any other type of report to run, it's just select the A run item in order to run it, and we can have the new report with different dates and what not with the same report setting without having to recreate those reports settings 25. 3.10 Profit and Loss QuickBooks Pro 2018: hello. In this presentation, we will take a look at a profit and loss statement within QuickBooks Pro 2018. Explain a little bit about what the profit and loss statement is and how it ties in and fits into the other main statement that being the balance sheet, if you've been following along with us, we will be continuing with the get great guitars problem. If not, that's OK. We will be discussing a profit and loss statement and what it is and how it relates to the balance sheet. If you want the data file. If you have the backup file, you can restore that by going to the file and restore. As we've seen in a prior presentation. We do have the open windows open. You can open the open windows by selecting the view dropped down and open Windows A list we have currently the home page open in the open windows, which can be found at company and home page. We're gonna go to the profit and loss statement and take a look at the components of the standard profit and loss statement. Think a bit about how to read the profit and loss statement and how it fits into the accounting process. We're gonna go to the reports, dropped down to do that and scroll down to company and financial, selecting the first item that being profit and loss standard, we're gonna change the date range. Note. There is a range meaning we have a beginning and ending date a from and to date. In other words, selecting 0101212 That's January 1st 2021 Teoh 12 31 to 1 December 31st 2021 12 31 to 11 more time. Hopefully, I did it correctly. Note this format here 12 3121 fast is where to put the information. And once you select tab, QuickBooks will then make the appropriate dashes and add the 20 for the 2000 and 21. So it's a bit quicker to do if we if we go through that process. In any case, here is the profit and loss. Now, for those of you in ah, accounting theory, you know, that learned accounting practice, you probably think of it as, of course, an income statement, and that is the first thing I really want to point out, because when you talk to the accounting department of the CPC firm or on auditor or anything like that, possibly adding to that list a creditor on investor, they are often gonna ask for an income statement. Now, most of them they've worked with QuickBooks for a while. And if you say working with QuickBooks or probably say, Look, I profit loss, okay, but the terminology normally is going to be used as an income statement. We need to know that that's gonna be a profit and loss statement. First thing we need Teoh understand if we want to change the title from the prophet lost to an income statement so that we don't confuse others who have asked us for income statements . We can do that by customizing the reports here and changing the title and the header here from a profit loss to an income statement right there. So if that's something that would be useful to you someone, it can help, because I know when I first started working with people from learning just accounting theory and and what what the financial statements are learning. The software is a bit different just in terms of terminology and anything that can help make the terminology better for all involved. Those working within the data input into QuickBooks and those who are doing some kind of analysis in terms of auditing or possibly banking or the year in help with financial statements. Making the terms easier to understand is always good. We don't have the major components being the income and expenses. Now this income statement is, of course, broken out because it's a merchandising company to more sub categories than just income and expenses, meaning we're gonna break out cost of goods sold, that the cost of the inventory that we're selling, and that's gonna be our biggest expense with relation to our merchandise sales. That's why that's oftentimes gonna be pulled out separately as its most important expense. Then give us this subcategory of growth profits, and then we have all other expenses and then the other other income and expenses down here , and this might be useful. If we use these little compress items here, we can see these just by category. So, for example, if I compressed this category here, we just have the ordinary income and expenses and the other incoming, expensive meaning. This is, in essence, the net income from normal operations from the business. A loss in this case. And this, then, is going to be things that aren't really part of our normal operations, meaning in this case, financing for interest expense. That's something that if we hadn't had to finance that, it would be more not part of our normal business. And that's why we're gonna put it underneath and say, Tell our creditors, Tell her readers tell whoever we're giving the financials to that This is just a financing charges now. It wouldn't be there if we didn't need the financing charges, not part of our normal operations, not part of our normal income and expenses. If we expand these again, I'm gonna expand these back out, and then we we, ah, minimize just the income section cost to get sold expenses and the other income the's air, the major categories we're looking at. So we're looking at income, and if it's just a service company, you're just gonna then have expenses, really? Is your only other type of category getting you down? Teoh Net income, or net ordinary income before the other items which in this case would be, ah, other income brings us to the net income in the case. Of course, as we said before, as that's sent before the merchandising sales, we're gonna have a subcategory all we're doing all we are doing is having kind of a pit stop along the way to net income or net loss in this case. In other words, instead of just going from income minus expenses to get Teoh net income, we're gonna stop off at cost of goods sold. And that's going to give us a subcategory of gross profit, calculated as income minus costs of goods sold. It's also might. It's worth noting as well that we might be calling this another context. We might have learned of this account as a revenue subcategory, income revenue, those They're gonna be interchangeable terms when going through QuickBooks here as well. Then, once we have this gross profit, we can subtract out the other expenses that normal operating expenses to get net ordinary income. In this case, a loss note. QuickBooks is not changing. The term here is not gonna It's not seen that this is a loss and then changing the wording , the verb ege here and then we've got the other income and expenses. This is gonna be the stuff, not part of our normal operations. But we want to keep it outside. Meaning I want to tell the reader they This is what happens from just normal operations. This is stuff that wouldn't be there. That's not part of our normal business. If it hadn't been for certain circumstances in this case, the circumstances needing financing and required us alone to have happened, and then we're gonna have the net income. If we bake, break this out further by category. The income category atop just selecting the income category typically will have a sub category. In this case, we have three income areas. A lot of companies may only have one. We may only have one income type account because that's what we normally do. We just sell merchandise. Then all of our income is from selling merchandise, and so we only have one income account. We're gonna have way more expense accounts is typically the average business. She's gonna maximally show this for a second. The average business has a lot more expense accounts than they do income accounts, however, the total of the expenses we hope, will be less than the total of income. And that's gonna be ah, that's the point. That's what we're looking for. But the number of accountants will typically be less and oftentimes just be one when we think of the income account, or which would also be called revenue. And if we're thinking about normal terminology in terms of accounting terminology, we have here the merchandising, sales, selling merchandise, rental income for the equipment and then service type income. These of the categories usually given or these two are gonna be categories usually given by QuickBooks, meaning. If we set up the company as a merchandising company in which a company where we sell merchandise inventory, we typically have an account called merchandising sales that will be generated. We can change the name if we want. That's the default for a merchandising company within QuickBooks. If we set up a company that does services like bookkeeping, ours or law firm or something like that, it usually just calls its service. So I mean service income here and again. We could change that to tax services. We could have different sub categories, types of income, types of services provided. And then I'm gonna make that smaller and go to the cost of goods sold. That's really just gonna be one line item, typically for the cost of inventory that we sell. And it's going to be calculated through the driving of when we sell him and toward bite and voices gonna make that a bit smaller and go to the next. Now the gross profit, then, is just that pit stop along the way. It's gonna be income minus costs get sold, gets this gross profit. Then we have all the expenses. Now, these air gonna have a lot of different categories and it could have ah huge varying variety of categories, depending on the type of business and the type of people running the business in terms of how significant or how many sub categories we want. Some people like to have things very detailed in terms of a lot of sub categories because they want to see every little component. And other people are happier to see more of the big picture and and they don't have as many sub categories of components and might group more into smaller lists of accounts meaning At the end of the day we come out to the same net income or the same total expenses, but we could have more or less sub categories. Showing those groupings of expenses really depends on the type of business and how intricate we were going to be getting in terms of our analysis of the expenses that we want , Teoh have shown. So know also that there's a lot of expense accounts here. And if we don't have account numbers, then within this expense account area, it's it's grouped in alphabetical order. So that's just going to be the default grouping. It's not by the amount. Obviously, this amounts gonna be a lot larger. If we had accounts numbers, then the benefit of account numbers is we could then a sign account numbers in some other fashion, and they would then be static. When we add new accounts, we would know where to put them. But if we don't know how to use account numbers, that could weaken really mess things up using account numbers because we can just number incorrectly or not, give us room to put other accounts in places where you will want to put them. So we're not gonna be using account numbers here just just for that reason. So if anybody has a questions on how to set up the account numbers we could, Tim, we might take a look at that at a later time. Thes They're gonna be the type of expenses that are normal operating expenses in the business. So we've got the bank service charges, depreciation insurance, interest expense, Internet expense, miscellaneous expense, office expense, payroll, these type of things that most people, when they hear something like utilities of the phone bill, we usually think of utilities expense. We think of that as monthly expense. Of course. Here we're talking about expenses that air off the business expenses. They are expensive because there something that we consumed in order to help us generate revenue in the future in accordance with the matching principle. And that's what expenses are. And then after the the expenses, we have total expenses here, gross profit minus those expenses gives us net income or, in this case, a loss. And if we take that number, then minimizing this minus the other expenses, which in this case is just interest in Actually, this is income, not expert interest income. So in this case, it's not financing. As I said before, it's actually increasing because its interest income we are earning again, not part of the normal operations up here, but something that's outside. So therefore, this is our net income or loss from operations. There's our net income in terms of interest income, and that'll give us our net income at the end of the day's against Still a loss. QuickBooks is not changing the terminology to, say Net income e although we do clearly have a loss now that we've looked at the components , let's give an idea of how this gets put together. If we if we open the income statement these If we drill down on this data, it's gonna give us normally invoices and sailors. So we have the invoices and we have the sales receipts here. If we double click on this data will get those invoices and ah eso Here is the example of that invoice. So know what we can really do is go to once again the end result, the financial statements and go back to the source data very useful to Dio closing this out . Closing that out. If we go to the hometown, we're really going back to this item. And this item, those air two major components to creating the income statement. This is the source document that allows us to generate the income statement. Understanding the relationship between envoys between a ah and A sales receipt and the creation of the income statement very helpful. And we will continually go back and forth when we create those things. Then we're gonna go back to the profit loss. The same would be true for these, although their service items if I close this and I opened up the cost of goods sold double click on the cost of goods sold. We have, Ah, the data which is gonna be invoices, sales receipts. Once again, clicking on an invoice. We see this amount now, this amount here, none of these amounts tie out to the amount we saw on the cost of goods sold transaction report. And that's because really, QuickBooks is storing this data even though it's not showing it on the report. We'll talk about how quickbooks of doing that. How to set that up. Very important to set that up to get things working properly, closing that out. So here's the 400. We didn't see that on the invoice, however. The invoice. Who is generating this 400? So we'll see how to do that later. It's gonna be great. So we'll close that out and we'll minimize this again. Then we'll go to the expenses and same idea for the expensive. If we go through some of these expenses, such as the telephone expense that would be generated, as we would expect from a bill or check. And if we double click on one of these way, see here a check and one skin, that's going to be the source document. If we went to the home page, back the home page over here in the open windows and we would just wrote a check. This is where that's been generated, or this is one place we can generate. A check type form going back. Teoh, Uh, the detail gonna close that out. We're gonna go back to the transaction, and we can do the same for the bill by double quick on the bill. There's the bill closing that out. Closing that out back to the home page. Here's here's the Bills item here. So when we enter Bill, that creates expenses. So those were the things that are going to drive that. And as we build this as we go through the process of building these items, we will go through and see how that happens. I'm gonna go ahead and minimize this and minimize that note that the net income here over loss in this case is 1063. How does that relate to the balance sheet? That balance sheet, which is the double entry accounting system, Let balance sheet, which is assets, liabilities and equity. How does this fit into that balance sheet? In order to see that we're gonna go to that reports grueling Back down company and financial will take a look at the standard. Let's go ahead and take a look at the standard balance sheet. We're gonna change date to 12. 31 21 And if we scroll back down to the bottom, we should have in the equity section this net income er and loss in this case off 1063 08 we go back to the profit loss we had the 1063 08 back to the balance sheet. That's the 1068 308 So that's what's words getting. That's how it's tied out. It's part of the equity section. In other words, the balance sheet shows where we stand. As of a point in time, this component right there is showing us what is happening over time. In this case, the last year, that being the loss component of the total equities, that's what's being contributed to the total equity contributed to the Net. Assets contributed to the calculation of assets minus liabilities equals equity or assets equal in liabilities, plus equity or, in other words, the way we're looking at it. Assets minus liabilities equals equity because we're concerned with this equity section, this equity section and that net income being part of it right there 26. 3.15 Income Statement Custom QuickBooks Pro 2018: Hello. In its presentation, we will put together a a custom income statement within QuickBooks Pro 2000 to 18. If you've been following along with us, we will be continuing with the get great guitars problem. If you have the backup file and you can restore that at file and back up as seen in a prior presentation. If not, that is OK. We will be taking a look at a custom income statement. How to customized in income statement. We currently have the open windows list open in order to open the open windows. Let's go to the view tab up top and open Windows list. We currently have the home tab open in the open windows of the home page and that's gonna be at company and home page. We're gonna create a custom income statement and you may be asking what is an income statement with regard to QuickBooks? There is no such thing, and and you may not be asking that You probably know that the income statement is the profit loss statement, and what we're gonna do is we're gonna make a profit and loss statement, and then we'll customize it. And one of those customization is will be changing the title from a profit loss to an income statement to make those happy that may be asking for an income statement and rather see the term income statement in the title. So what we will dio will go to the profit and loss. We're gonna scroll down Teoh Company and Financial, and we're gonna go to the profit and loss statement here a report. Once we have the profit and loss open, what we're gonna do is make some changes to it. So we're gonna go to the customized reports up top and we'll change the date here and it's gonna be 0101212 12 31 to 1. So that's January 1st 2021 to December 31st 2021. Now the only thing we're really gonna change here, it'll be a couple changes. We're gonna go to the header and footer tab and we want to change this profit and loss. We would like to call it an income statement, and that's gonna be a typical chances. Might be something that you might want to memorize have a memorized report for because there could be some individuals who will just prefer that name. And it depends here. You're getting a question from If you get a creditor, you get an outside C p a. Firm. Um, they may be more cut accustomed to using the term income statement, and they probably know the idea of a profit and loss, and half are aware of QuickBooks and the naming of it. But just to make things as easy as possible to make things as smooth as possible, it may be good just to call this an income statement and change the name right there. Income statement, and that will make things easier for people. And then we're going to say date prepared. I'm going to remove that. That's going to reroute, move, removing these items, the date prepared, the time prepared and the report basis. We may want to get in the practice of putting that footer. Um, whatever the foot we want, whether it be a name or or whatever we want in the Footer customized the report and then we're gonna keep the fonts as is. So we'll keep that as is. And then let's see what we have here. We have the name and then the term income statement for those that would like to see that one other item we're gonna go back and set up is we're going to remove this sense here. So we'll remove the pennies from our were a report by going to customer customized reports . And we will go to fonts and numbers and just remove the sense here. So this will be our customized income statement. They have everything else, we're gonna leave the same. We may want to memorize this report by going to memorize and save in a certain group. We made a group last time, called my Reports. So we'll put it into our custom grouping and save that by doing that, then we'll have the name change saved. And we could just pull this report up from the custom grouping and not have to make the adjustments for the sense and the name and the removing these Adams on the side. I'm gonna go ahead and friends. This report now. So we're gonna print this report out or I should say that we're going to export it to excel . We're gonna export this report to excel. We're gonna export some reports. Also in some future presentation. This is the 1st 1 we're gonna put in this particular excel sheet. So we're gonna make a new Excel sheet. We're gonna export this to a new tab within, Ah, the excel sheet that we make. So we're gonna make a new work sheet clicking the Excel and new worksheet, and then we're gonna put it into a new workbook. So I just need to say we just need to go export, and it should open up Excel. It should create a new tab. It should export this data to that new tab. Here it is. Here's our information. Couple things we typically need to change. And that's where I like to change. At least we're gonna go up to the view tab up top. We're gonna change that from the windows to the split. We're gonna unspool it the screens, in other words, because it because it always splits whenever we do this and I don't want split, so we're gonna split it, and then we're gonna go down here from the normal view to the page layout view with this little icon. Just check the title is there with the income statement. That's what we changed. The major change we had. Looks like it fits on one page is very nice. Looks good. So we're gonna go back to the normal view over here, and then we're gonna change the tab name. I'm just gonna call it income statements, Something like that. And that will be that first time saving it. So we want to make sure we put it in the location where we know where it is at. So we'll go to file and we'll go to save as we'll go to browse, and then we'll check out what we got here. I'm gonna put on the desktop and scroll down Teoh where I want to put it in, get great guitars going to make a new sections. I'm gonna right click and make a new folder to put this in and I'm gonna call it Section three and we'll double click on that. And then all the colored section three report. That's what we'll put it. I'll say save their Yes, that Okay. And that's where where we will have our income statement will save some new statements to this same document on some new tabs in a later presentation or possibly a few later presentations, and it will be great. That's gonna be it for the income statement. 27. 3.20 Comparative Profit & Loss QuickBooks Pro 2018: hello. In this presentation, we will take a look at a comparative profit and loss statement within QuickBooks Pro 2018. If you've been following along with us, we will be continuing with the get great guitars problem. If not, that's OK. We will be looking at a profit and loss statement and how to make a comparative profit and loss statement. If you have a backup, you can restore the backup by going to the file tab and restore, as has been seen in a prior presentation. We currently have the open Windows list open, which can be found at the view dropped down and open Windows list. In the open Windows list we have, the home page can be found at the company dropped down and home page. We're gonna be making a custom profit and loss, really looking at the custom settings in the profit loss. However, this time we're looking for a comparative profit and lost. In order to do that, we'll start off with the standard profit and loss by going to the reports. Drop down, up top go into the company and financials, selecting that first item, that first item of profit and loss standard. We're gonna change the dates to the range of a 101 to 1 January 1st 2021 to 12. 31 to 1 December 31st 2021. This is where we're going to start off. This is our profit and loss are profit and loss is in essence, QuickBooks balance sheet, or QuickBooks, income statement. Profit loss equivalent to QuickBooks income statements where we have income, which is also could be called revenue and the expenses broken out into cost of goods sold and other expenses. Bottom line number on the income statement or profit and loss is net incomes. And here's the net income in this case being a loss scrolling back up. What we would like to see is a comparison of two periods in this case, two months. We're looking for January and February. Those are the two months we would like to compare. In order to do that, we're going to go up to the customized report option up top and we're gonna keep We're gonna change the date range a bit. We're gonna make it ah, to the second month that we want to see and that might seem a little unusual. And before we look at that, let's explain that. Ah, bit, cause there's two ways to do this. We could say it's from January to February 0 to 28 21 for the two months January, all the way through February and instead of having the total here, and if we were to see the total Weaken say, Okay, there's the total. It doesn't give us two months of a breakout. It just gives us the total of what's happening in terms of sales from January through February here. And that's not what we're looking for. We are looking for two separate reporting periods for the month of January and the month of February on the same document so we could say custom and then change the total Teoh month. By doing that, we could say OK, and that will actually give us that break out of January and February, and that's great. However, it doesn't give us the difference, and that's what we would like to see now. We would like to see a comparative of not just the two months, but also see the difference between them and a percentage break out the percentage increase in decrease. To do that, we're going to go back to the customized report and I'm gonna make this just for the month of February. So we're gonna make it for the later month in which we're looking to have, ah, comparison of January, February, the later month in February. So I'm gonna make it as a vote to go 1 to 1 February 1st, 2021 to February 28. That's important to understand. We're gonna change this back from month to total, and then we're gonna go to the previous. So now we're going to say, Hey, this is the month work in. I want you to take the previous 30 days, and so it's gonna say, Okay, we're just gonna take the previous 30 days. If we do just that, then take a look at it. We see a similar layout, except it doesn't have the total column, and it puts the later month first the later month and then this and then the Sooner month. Now we're gonna add the Difference column to this calculation. So we're gonna go back up to the custom reports just going to say I want to see the dollar change now and OK, and now it takes February minus January and it gives us that dollar change. And of course, if we were to calculate this out, all it's doing is taking the to five year zero minus 2467.4, giving us the 30 to 60. Next. We want to have the percentage change. The dollar change is great for us, but it may not give us a complete perspective. And if we were to compare to another type of companies, say we're a small burger shop and we're comparing ourselves to McDonalds, the dollar change will not be comparable. Will not be, ah benchmark able to the dollar change that McDonald's might have. However, the percentage change in income could give us some information, some knowledge in order Teoh do better decision making. So we're gonna go to customize report and we want the percentage change percentage change and then we're gonna say OK, and there we have this other column And what that all that is doing is it's taking now. We just calculated the change of 32.6 divided by the previous month, which is 2467.4 gives us this point. 013 If we multiply that times 100 we get 1.32 There's the 1.32 and that's that's what we are looking for. So there's like there's a 1% increase here, and that percentage increase is something that we can then compare Teoh to other companies and that will give us some some useful information. We're gonna customize a couple other things. We're gonna go back to the customized report up top and do some of our normal customization now. And that's going to be going to the header and footer. Gonna take off the date prepared Time prepared that report basis So we don't see this information showing up that's gonna be removed, and then we're gonna add the footer, just, uh, just to add a name to the footer, which might be something we want to be in the practice of doing, and we will then save that. So there we have this. This information is gone. We have that there. We're gonna go ahead and export this information. Now we have already set up on Excel documents that we want to export this to win exporting a prior income statement, and we're gonna export this, then to an existing Excel document. To do that, we will go to the Excel up top. We're gonna create a new worksheet, even though it will be in an existing workbook. Say, Okay, New Excel sheet, and then we want to go to an existing workbook. So I'm gonna click that item we're gonna brows and then look for where we want to put it. So I'm gonna go Teoh this folder. I'm in section three and I called it just the section three reports Select that we could select open. I usually just double click on it, and then we're gonna export that report. It should then open that exist existing excel file export. But this information to a new tab on that existing excel file ready for us to then manipulate the data, do the standard things we have to do in order to manipulate the data. The first being to drag this to the outer column. So it put this before the prior report we made I was gonna grab the tab at the bottom, drag it to the end and then I'm gonna call it. I'm gonna double click on it and call it something like the comparative. He and l Then I typically go to the top. We're going to go to the view time gonna go to the Windows Group, gonna unspool it. The pains unspool it pains. Then we're gonna scroll down and we're gonna go to the, uh, page layout. This little icon right here, just a double check. We select that, that the header is in the header section, and then it prints out on all one page and it looks nice. Everything looks nice. Looks like it's gonna print Well, so we're gonna go back to the normal view and save this information. That's gonna be our comparative income statement on the Excel sheet and go ahead and close that back out. And that will be that for the comparative profit and loss 28. 3.25 Vertical Analysis Profit & Loss QuickBooks Pro 2018: Oh, In this presentation, we will take a look at a vertical analysis, profit and loss statement within QuickBooks Pro 2018. If you've been following along with us, we will be continuing with the gate Great guitar problem. If not, that's OK. We will be looking at a profit loss or an income statement and a vertical analysis within of the prophet in laws or income statement. Do you have access to the backup file for this data? You can go to the file tab and restore that information as has been seen in a prior presentation. We currently have the open Windows open which can be found at the view tab and open window list. And we have the home page open found at the company dropped down and home age. We're gonna be starting off with the profit and loss reports and doing some adjustments to its in order to arrive at a vertical analysis, profit and loss. In order to do that, we will go to the reports drop down, up top, scrolling down to company and financial, selecting the first item that item profit and loss standard. We're going to change the date range from No. One, No 1 to 1 January 1st 2021 to 12. 31 to 1 December 31st 2021. What we're gonna do this time is note that this is it going to be our normal income statement. We have the revenue or income accounts. We have the cost of goods sold and the gross profit and the expenses and the bottom line. Of course, net income. What we want to do now is see this information not just in totals but in a vertical analysis of vertical analysis typically comparing everything Teoh the revenue it line. So we're gonna compare everything on this financial statement to the revenue line. The reason that makes sense in some cases, some way it makes sense is that we're having a goal of the business of the revenue generation generating revenue, making money, earning revenue. That's the goal of the business. What we want to do is see how everything else relates to that goal. What percentage of revenue is everything else in relation to the goal of the business? The revenue generation? The revenue also should be the largest number on the income statement. It being calculated as revenue minus expenses. So typically there will be less revenue accounts. But they'll be larger numbers in terms of revenue because that's gonna be our major goal, as opposed to expensed type items. The goal of expenses are too be consumed to help generate revenue. The only reason we have expenses, of course, are that we're consuming something. We're consuming an asset or in current, a liability with the goal of achieving revenue. So therefore, we want to see what the relationship is between particulars, expense items and that goal of achieving revenue. In order to do that, we're gonna go to the customized reports up top customized reports, and we're gonna go down to these atoms down. And now we looked last time at the previous period and the percentage change in the previous period. That's ah horizontal type of analysis. Comparing the change Teoh Ah, what happened in the previous period, the percentage increase and the percentage decrease in this case, however, we want to see more of a vertical analysis and in order to do that, we're gonna be back over here into the percentage of income. So we're gonna look at the percentage of income analysis Note. We have these four items different a bit from these two atoms is giving us the dollar change the percentage change horizontal, this giving us the percentage of income. That's what we'll take a look at. That's what we will be using at this time. And okay. And so now we're going to see that this total income here, that's gonna be 100%. The components of income are gonna be compared to that 100%. So if we were to do some calculations here, which is always a good time, we're gonna take this account, for example, that account right there calculator back here. And that's gonna be the 4967.4, divided by the total income of 19275.4. And that gives us the 0.257 Or if we multiply that times 100 gives us the 27.77 or 27 or Tessa, 25.8 25.8 that the item here now that's gonna be this comparison. We can also do that for all the expenses, too. So it's often very useful for us to see how the cost of goods sold lines up to total income . Total income oftentimes being just merchandising income for a merchandising type of company . In that calculation, we have the cost of goods sold at 3950 dividing that by the income 19275.4. And we get that. And if we multiply it times 100 to make it a percentage, we're gonna say 20.49 or 20.5. So there's gonna be that information and we could do that for all the expenses down here. So it's just picking expense. We've got this expense selected in the insurance 917 divided by the 19 275 And if we multiply that times 100 we get that 4.8%. So if we go through this, we can really get a quick view at okay, what's the percentage of income? How important is this to us? Generating are our income. And if we weren't to make a change in terms of trying to increase in this case, the net income with loss, what some of the components we can change. And obviously if we look at this line. Items over here cost to get sold is high, but it should be high. It's gonna be really high compared to the merchandising sale. But we have some other types of income and therefore this number may not be as high as it would be otherwise in a merchandising company which was getting most of its money for merchandise. But we also see that, of course, the payroll down here is 60%. So that's gonna be a big line item that we have in our financial statements here. So it just gives us a quick vertical analysis, a quick run down. These numbers are also numbers that we could compare to other companies and similar industries. For example, if we're small burger shopping, we're comparing to McDonalds, we could not compare that the totals in terms of what they spend or what their expenses, for example, insurance. But we might be able to compare what their percentages compared to the revenue or what's there compares in a payroll compared to their to their revenue or their cost of goods sold compared out, these numbers here can be comparable to entities of different sizes, and the total numbers cannot be comparable as easily two entities of different sizes. That's why one reason for the vertical analysis that being very useful, we're gonna do a few more customization is and then export this report by going to the customized reports up top. We are going to go to the header and footer, removing the date, prepare the time prepared and the report basis. We're gonna put in the footer Eric Smith for our name there. And that should be it will save that. There's the report. We're gonna go ahead and export this to Excel. We have been doing this in the past with prior reports and already have an Excel sheet set up, and therefore we will be setting this up on exporting A to that same Excel sheet. To do that, we will go to the Excel dropped down. We're gonna create a new worksheet, and we're gonna put it into an existing workbook. Existing workbook browsing for that's workbook. Finding that workbook which is right there, it's already right in the right. Sam in section three. Go right there. Section three. We could select open. I usually just double quick on it and then we're gonna select the export option. It should then open that existing Excel workbook that was already there prior to this exporting of this data create a new tab within that existing workbook. Once that happens, what we will do is the normal adjustments, which will include pulling that new tab to the end. I wanna have it after the other reports that we have made so far. So I'm just gonna grab that hold to the end, and we're going to make that a I'm gonna call it pervert. Uh, he and L something something abbreviated that will fit there. And then I typically like to go to the top and go to the view tab and unspool it in the windows. Pain unspool it that. Then go down to the page layout down here. Page layout view. Take a look at the page layout. See that the title is up there as it should be. It all fits on one page, like it should. Looks nice. Looks good. So we're gonna go back to the normal view here and save that information, okay? And then we're gonna close this report, and that'll be it for, um, the vertical analysis, profit and loss 29. 3.30 Percentage of Expense Profit & Loss QuickBooks Pro 2018: Hello. In this presentation, we will be creating 8% of expense profit and loss within QuickBooks Pro 2018. If you've been working along with us, we will be continuing with the get great guitars problem. If not, that's OK. We're gonna look at a profit and loss and a percentage of expense format of it. If you have access to the backup, you can then restored by going to the file and restore time. We currently have the open Windows Open, which can be found at the views and open window list, and we have the Home page open, which is found at company and home page. We're gonna be, in essence, customizing a profit and loss reports or financial statement showing the financial statement in a percentage of expense format. In order to do that, we will start off with the standard profit and loss by going to reports up top company and financial. Looking at the profit and loss standard, we're then going to change. The date ranges from a 101 to 1 January 1st 2021 to 12 31 to 1 December 31st 2021 we now have the income statement or the profit and loss starting with income otherwise known as revenue. And we have the three revenue accounts cost of goods sold, other expenses, bottom line of the Net income statement being net income or, in this case, a loss. We're here gonna do a customization in terms of a percentage analysis. The typical vertical analysis will be a comparison of everything Teoh total income. That's because the total income is really what the goal is. Our revenue generation, I should say, is what the goal is of, Ah, the company. Meaning everything we're doing here is going to be in order. Dio generate revenue, meaning we're expending expenditures down here for the purpose of us achieving the goal of generating revenue. So that's often a way that we will compare things now. There's another, less common way to format the information, and that's to compare everything to total expenses. We could say OK, especially in terms of the expenses here, the expense items, which one of these expense items is the largest expense item in relation to total expenses . In order to do that, we will go to the customized reports up Tom. In a pre previous presentation, we looked at the previous period, the dollar changed and the percent change. That's the horizontal analysis. We looked at a percentage of income, which is a type of most common vertical analysis comparing everything to the revenue or income items. This time we're gonna do a percentage of expense. So we're gonna say percentage of expense, comparing all the line items to expense items. So we're gonna say, OK, see what happens there and if we see what happens, we should see that the net income is actually greater. It's 110% which we would hope to have happened because when we compare the income to the total expenses, we would hope there's more income. So if we do that, we and we know where the 100% is, it's right here at the total expenses. So when we do the math here in terms of the comparison, we are taking everything compared to total expenses. So we're taking this case the 19274.4 divided by the total expenses here of 16638.48 And that gives us our 1.15 or if we multiply it times 100 the 115% that's gonna be this number . Now. This is a little bit deceiving because note that when we took a look at all, the expenses were really taking a percentage of the normal business expenses, not the expense of cost of goods sold. Eso so note that this 100% here is taken into consideration the percentages of all of these amounts. In other words, let's do some math to it. If we got the 35 35 divided by the 1638.48 that's going to give us this 0.2 or if we multiply it times 100 we're going to get the 2.13 if we were to Ah, and that's gonna be the 2% here, so we got 2%. If we were to add all these up. This column here it's the 35 plus 2 +775 plus +917 plus +2596 plus the 1 80 plus 80 plus 2 500 11562.48 plus +27 25 plus 2.268 That gives us. That's what this 16 6 38 48 is. So that means that this 100% is 100% or 16 6 38.48 divided by 16 38 48 16 6 38 to 48 or 100%. And that means that this 9 3050 is not included in the total expense line that we are comparing everything Teoh. So it's gonna be important to note that we are come. If we do compare this 9 3050 to this number, that's how they're getting this over here. That's 3950 divided by 16638.48 That gives us 2 23 times the 166 times 100 gives us the 23.7 that that's the 23.7. So, in essence, this gives us a good comparison, especially in this column. Erin, there's a group of expenses were trying to say of these expenses. What what's the biggest expense in here? One of the relationships in terms of our total expenditures and here Of course, we see the payroll is gonna be the largest type of expenditure, and we could take a look at the relationships of the other type of expenditures. When we look at the cost of goods sold, it's gonna be a big number as compared to the total expenditures. But this total amount, the 9 3050 is not being included in the total expenditures. When we do that calculation, when we look at the income, we are really comparing the income Thio, thio this number down here and that's a bit of ah less connect less solid connection as well were the biggest connection we can really look at in this type of comparison is going to be the comparison of the related or expense items within the expense section. So we're gonna go ahead and do a little bit more customization, and then we will export this report by going to the customized reports up Tom and we're gonna go to the header and footer. We're going to remove this subtitle that date prepared the time prepared. We're gonna add the sipped title or the extra footer of Eric Smith, and that's what we will have their and I'm gonna say OK, and now we're gonna export this report to an existing Excel workbook we have been working on by Go into the Excel tab up top with Excel, drop down, upped up and go in town to create new work sheet. And we want that new worksheet to be within an existing workbook. So we'll put it in the existing workbook. Make sure we are going to the correct spot by going to the browse tab. That's the one we want. Section three reports so we could select open. I typically just say double quick. We're then going to export this item, and it should then open excel. It should create a new tab with an excel. It should export this information to that new tap within excel. Once that happens, we are going to do the normal types of things that we have to do every time we create a new report, including repositioning the new tab, these air, the other reports we have created thus far, we're gonna go ahead and grab this report, pull it to the last report being made, and then I'm gonna double click on it, and we're gonna say percent. Let's say something like percent of expense, P and l. Then if we go up top to the view tab and we look at the View tab, we're gonna go to the Windows Group and we're going to select the view tab. Then we'll go down here to the page layout to view and see what the page layout looks like . We scroll up, we see the head or their That is good. That's what we want. Going back to the normal view, then, Ah, that will be our information. We're gonna go ahead and save this and close this, and that will be our report. 30. 4.10 Sales Graph QuickBooks Pro 2018: Hello. In this presentation, we will take a look at preparing a sales graph within QuickBooks Pro 2018. If you've been following along with us, we will be continuing with the get great guitar problems. If not, that's OK. We're gonna take a look at how to create a sales graph. We currently have the homepage open, which can be found at the company and home page. If you have access to the backup, you can restore the backup at the file and restore Tab. We also have the open windows open, which can be opened at the view and open window list. We're gonna be looking at how to create a sales graph report in this presentation. In order to do that, first we're gonna go to the report, dropped down, and we're actually gonna go to the report center and find it within the report center. So let's select the report center and we should be on the standard tab here. We could change the view to a list, but if we're looking for a graph, we might want to keep the visual here. Be easy to see the graph once we find it. So we're going to scroll down here to the left hand side and we're gonna go to the sales item. So we want to go to sales, and then we're gonna scroll down and see if we can find this graph. There it is. Thesis Ailes graph. So we're gonna get the nice visual of the sales. So when we present sales, clearly it's nice to have a graph. It used to be. We have to, you know, export the information, possibly to excel and create the graph or what Not now, QuickBooks, of course, will have this feature, and we can create thes nice graphs and implement them into our presentations if we so choose. So we're gonna go ahead and run this report. I'm gonna maximize the screen up top, and you'll note that the layout looks a little bit different here. And you'll note, of course, that there's no information, and that's a little worrisome. But that's because, of course, it's a date thing. It's a date problem. We don't have any information in this current date range. You'll note there's no date range up at the top. It's that's a little bit different of a layout. So what we're gonna do first, of course, will be to change the dates. So we're going to select the dates and I'm gonna make the dates from 010121202 28 to 1. Main in January 1st, 2021 to February 28th 2021. Then we'll select. Okay, And here is our graph. So we've got the bar graph and the pie charts here. Now, the bar graph, of course, only has the two months in it, so it's not Ah, very signature. If we have the whole year, it would be a much more populated bar graph. And then we have the pie chart down here, which is gonna be that a nice visual. And it breaks out the information at this time by item, meaning the inventory items that were so that we have that we're selling or the sales items that we have if their service items as well. So we see here in this case, our biggest item being the rent for the music Jodi guitar lessons, Angela, guitar lessons. So here's the lessons here and in the sales of the e l. P the while cab, the GSB these they're gonna be the actual equipment that Qatar's that we are selling in this example. In order to save this information, we note that we don't see the normal export in information up top to export two Excel. We do have the printing option up here, and but we don't also see the print to the pdf, which might be useful. So what we're gonna do here is show how to print this with a external PDF printer. So you have to download a pdf printer and then print it in that format. The reason want to show this is because it's very useful for something like this and any type of program where it doesn't give you the printing option, and you need to print it somehow or doesn't give you a safe to pdf option, and you would like to save it as a pdf. So in order to do that, I'm gonna go ahead and say the print here and then I have the drop down. This is gonna be my normal printer if I select another printer. If I have a printer that is a PDF printer such as the cute pdf writer If you look that up, you can download that printer and it'll put a driver in on your computer so that you can print to, ah, pre pdf planter. And then by selecting that once we select print, it will print to the pdf printer. So I'm gonna go ahead and say, Print that and, ah, then it will print and open up a pdf file, and we're gonna save this somewhere. So here's a little saving screen. I'm going to scroll down and put it on the desktop and go down to where we want it, which is the get great guitars problem here, and I'm going to put it into a new section. So I need a new folder and I'm gonna call it Section four and there's that. And then I'm just gonna say we'll call it the sales graph, and there will be that information. If we were to open that up, then we can go find that and open it up and see what it looks like. We're gonna open up the sales graph, and here we have it. So there's our sales graph here in a pdf format, so clearly you may want it in some other format. You can, of course, cut and paste it. I would recommend using something like word if you were to cut. Pay something like this. And there's a nice option within word to cut and paste in all the XO, um, Microsoft office programs, which is a screenshot. So if you wanted to select a screenshot and either pick the screen or ah, screen clipping, this is one way you can get this information easily into something like a power point without without too much work, you just screenshot it and the power point as well as word. Microsoft Office products typically have that that feature, which will allow us to cut the screen and paste it fairly easily. The other option we have here note that this is going to be sales by item. We may also want sales by customer, and they give us a nice little toggle up top to go to the by customer sales. Same sales number, same sales total. This total is what would be on the profit and loss four sales, and now it's just broken out by customers. So music store stuff. Our biggest customer, Lynn Jackson, Jill Gonzalez, Penny Jones, Star Lee in that order going down in terms of the sales and get this nice chart once again , I'm gonna go ahead and print this out. We're gonna say print and we're gonna print it once again to the pdf just to give that example and print that, and we should then get the pdf option. And I'm just going to call this sale we shot Price. Should have been more specific sales craft by, ah, customer here. And then if we save that, we get the sales graphite customer in this format. Ah, and that will give us just a pdf just to give us an idea of how we can get this data to be exported or in some other format. Clearly the clipping that screen and keeping the color eyes a nice option to have as well if we're gonna put this into a presentation 31. 4.15 Income & Expense Graph QuickBooks Pro 2018: Oh, In this presentation, we will be taking a look at a income and expense graph within QuickBooks Pro 2000 and 18. If you've been following along with us, we will be continuing with the get great guitars. If not, that's OK. We will be looking at an income and expense graft. Do you have the backup file? You can restore that by selecting the file and back up. We currently have the open windows list open, which you can find at the view and open window list and the company homepage open at company and home age. We're gonna make an income and expense graph. In order to do that. We were going to select the reports dropped down, and we're gonna do this from the report centers. We're going to select the A report center At the top. Here is the report center. We want to be on the standard tab. We currently have the view in terms of the little icon view the grid view, as they say, and we are in the company and financial section. We're gonna scroll down and just find the graphing areas within the company and financial section scrolling down. We have the profit and loss information. We have the income and expenses next, subcategory, scrolling down through the income and expenses. We see the income and expense graph. So give us a nice visual of the income and expenses. We're gonna go ahead and just run this report like so run the graph and I'm gonna maximize the screen here and you'll note that nothing is here, which is a bit disturbing, disturbing point. We're going to go ahead and select the date range and change the date range from 0101212 We're gonna make it 02 28 to 1 or January 1st, 2021 to February 28th 2021. We're going to select. Okay. And here is going to be our graph for this two months, a bar graph format showing us the total sales. And then this, of course, is going to be the income and expenses over here. And then we have the pie chart showing the total over here and then giving us the expenses where we have the payroll expense. They cost a good sale. Sold utilities, insurance, depreciation. In this format, payroll by far being that largest expense at this time, the total expenses here, the 20,006 13 should tie out to the total expenses on the profit and lost. If we want to check that out, we can go to the reports, scroll down to company and financial and profit and loss change The date range from 0101 to 1 to 12 022 28 to 1 January 1st 2021 to December 28th 2021. And if we look down with the expenses, we've got Thesixties een 6 63 48 If we go back to our graph Ah, we have the 20. Why? Because we're also including the cost of goods sold here, which is, uh, an expense as well. Let's see if we can add those two up and look at the total. We've got the 16663.48 and the cost of goods sold at 3950 That should be the 20,006 13. That's gonna be our graph here. So it's important to note that when we are presenting this information because we want to know that there's a nice visual. We also want to know how they tie out to the financial statements. So that's gonna help. This is gonna tie out note when we don't see anything to export this to Excel. And the printing options are a little bit different in that we don't have a print to a PdF file option, and therefore we could still print to a PdF or weaken screenshot it and so and put it into a presentation in that format. So let's look at those two options. First, we're gonna go to the print and I'm gonna change the printer to this cute pdf printer. This could be downloaded. Ah, And that way, if you don't have the same as a PdF option in this program or any program, however, you do have a print option. This is a great way to save it as a PdF. So we'll go ahead and save that, and then we'll get the option to save it as a PdF. And I'm gonna call this expense graph here and just say that to the location I am at. That's where we want it. And if we were to open that up, then, Ah, it would look something like this. So here's our graph. Clearly, it doesn't have some of the options in terms of color and whatnot. So if we wanted to put it into a power point, we would probably want to have ah color scheme in there. And I suggest using something like word to put that in. There are power point, obviously, and then going into the insert and screenshot and that'll give you if you select the screen clipping, you can get a clipping of just what you want. If you just want beside him over here. And we want the clipping that something that you can easily put into your presentation in that format, that could be very useful. Now it is possible to convert this graph. It is an income and expense Teoh not showing the expense here but the income. If we go to the income side of this item here now we have the income, and it's it's in income by account. So we have this services that merchandise the rent Ah, and the interest income being that groupings of income that we have some most of our incomes from the service followed by merchandise and then rent eso That's gonna be this item and it's by account right now. We could switch it to bi customer as well. Go ahead and print this out. So we're going to the same thing. I'm gonna go to reports or I'm gonna go to printing up top. We're going to select the pdf printer and go ahead and print that and we'll call this the income graph. We'll save that as the income graph. And it will look something like this as a PdF IQ. And that's just to give us an idea of how to set up those PDS really can be useful to use something like that. If we were to see this in terms of by customer, we would see it by customer. And here we are, the music store stuff, the Lin Ah, and the Jill the genie in terms of our customers by income. And so this is going to be this information again. I'll go ahead and print this one out as well. So we have them all there and print, and we're going to say that this one is gonna be again. I should probably be more specific income graph by customer, so that will be this item. If we were to look that up, it would be here and and again I would I would recommend using word and clipping these or or doing this in a Power Point presentation. Second, so you can clip this information and put it where you would like and that, once again, is in the insert clipping. You got to make sure to have the other window open or the prior window that you had open, and it's just if you could choose the screen, but then you got a crop it. Let's do it that way this time, if we choose the screen knows you have all this information here, and if that's the case, you probably don't want this on the side and this on the top, and so you could crop. And that's what we used to have to do all the time before we have that. That's that snippet type feature. So if we go ahead and crop it, we're going to go into the picture tools format and then size and crop this information, and then you could just take these little handles and crop um so whatever we think is appropriate Such is that, And then we have a nice little image there and that will work for us. And that's another way that we can We can get this, this information to export and workforce within a presentation. 32. 4.20 Sales by Customer Report QuickBooks Pro 2018: Hello. In this presentation we will be creating a sales by customer report a report that breaks out to total sales by customer. If you've been following along with us, we will be continuing with the get great guitars problem. If not, that's OK. We will be generating a report for worst sales by customer. If you have the backup file, you can restored by selecting the file dropped down and open or restore company. We currently have open windows open found at the view and open window list Onley thing Open home tab found at company and Home Tab. We're gonna be working with the reports that we're gonna be looking for a sales by customer report. Therefore, we're going to select the reports here. I'm gonna use the report center for this item. Report Center can be found through the drop down as well, but we will be working with the report center this time. We are in the grid format rather than the list format. We are in the standard reports here and we're looking for sales items. We want to break out our sales data in more varied information in this case, sales by customer. So We're looking at the sales by customer. We're gonna look at the summary this time rather than the detail, and we'll just go ahead and run this report. We're gonna make it large, going to the top and make it large. And we're gonna change the dates. The dates gonna have a range of a 101212 Let's make it over to 28 to 1. So that's Ah, January 1st 2021 to a February 28 2021. And then we have a nice break out by customer of our sales data over that time period. If we scroll down to the bottom, we get that 18 7 75 40 which should be something found on the profit and loss. Remember, all other reports were looking at are really connected to our main reports. Typically, our financial statement reports those being the balance sheet and the income statement. So let's just check that out. Let's see how that works. And we're gonna go to the reports, drop down down to company and financial, and take a look at the profit loss and see if we can tie this report to it, and we're going to say this is as of 0101 to 1. Same date ranges 02 28 to 1 January 1st 2021 Teoh February 28th 2021. We have the income down here of 19 to 75 40 19 to 75 40 back to the open windows, the sales by customer and we're showing 18 7 75 40 Note. We are $500 off. Let's take a look at why that might be. Why might that be? It could be that we possibly have recorded something to a sales revenue item without a customer, and that could be something that happened. How could that happen? Let's take a look. If we go back to the profit and loss and we look at the detail in the merchandise sales by zooming into that data and scrolling down, we see this item down here. This looks like suspiciously like that $500. And unlike all the other names here, which are normal customers, we've got the New York State sales tax, which is actually a vendor. We typically Oh, and what this is is that the journal entry we made in order to adjust for the fact that there was an invoice that was created after our cut off date 7 28th day of the financial statements out for which the work had been done before in March. Therefore, the income was recorded in the Thean. Come was recorded in March. The work was done in February and therefore we have this adjusting entry and no customer was applied to the suggesting entry. If we double click on this item, then we see here, here's the split. Here's that customer right there. But note we put it to the accounts receivable and we did not put it to the sales item. So this is gonna be the issue, and this is going to be the problem with the Justin entries. They make the financial statements correct as of the end of the time period, but they could cause some issues like this in order to fix this issue. What happens is we reverse the adjusting entry as of the first day of the next time period . Ah, and so this this adjusting entry will then reverse out. And if we scroll down a bit. We can see that. We can see that item here. We could see it reversing right there. And and so those two, those two are going reverse each other out. So instead of making any adjustments to this, I'm gonna close this back out. We will just recognize the fact that there's a $5000 difference due to the adjusting entry . And in order to see that adjustment, we're gonna go to the the date after it has been reversed and just go. One more date up, Teoh Indian date of the first day of the next time period. 31 21. And if we do that now, we're at that 18 7 75 40 And so that Justin entry has been reversed. If we go back to our sales report and we we could make this date as of 0301 21 just to match it out. And now we're at this 18 7 75 40 That then matching what's on our profit and loss. 18 7 75 40 Those two should tie out. We should be able Teoh, run this report back to the sales pipe customer and be able to say that that report is tying outs to the profit and loss statement. Here's a break out of the sails by customer. Now we might want to see this by month as well. And we could do are typical with kind of adjustments that we've done in the past. By customizing this report out top and we have the date range from January 2 Ah, the end of Martin begin of March. Let's change this date back, Teoh. February 28 and then we're going to select the total column. I'm gonna make it total by month will make it total by month. And that will give us a nice little comparison between the two months, so we'll select Ah. Then we'll make a couple Merchant will go back to the header and footer. We're going to remove the date prepared time prepared report removing these items and we could put her are you know my name down here? If that's something just to keep us, uh, keep it reminder that we can do that. You might want to do that and say, Okay, and then now we have our comparison of January February broken out by customer. All right, so let's go ahead and export this. This time, we're gonna export it to excel. As we've seen in the past, This is the first export we have done. Therefore, we're gonna create a new worksheet and a new workbook and put this to a new workbook. So we're going to say new workbook and export. It should then open up Excel, creating new work book exports this information to a new worksheet within that workbook, meaning a new tab within that workbook. It's gonna look at something like this will make our typical adjustments to that. Ah, we're just gonna change this tab name. Call it sales by customer. Something like that. I typically go to the top and go the view tab Windows. Pain unspool it. The pain. So that doesn't do anything funny for us. Check out the printing options and see that it's printing on one page. And what? Not by going to the page layout down here. A little icon, we can see them. The title is there. It looks like it's printing on one page. Looks very nice. Therefore, let's go back to the normal view at the bottom. Normal view and save this report. We're gonna go to file, save as browse where we want to put this report. Well, then scroll up. Going to go to the desktop for my reports, and we're gonna go in. Teoh, get great guitars were in section form. It's going to call it Section four reports and say that information there. Yes, and close that out. And that will be the sales by customer summary report. 33. 4.25 Sales by Item Report QuickBooks Pro 2018: Hello. In this presentation, we will create a sales by item report within the QuickBooks grow 2018. If you've been following along with us, we will be continuing with the get great guitars problem. If not, that's OK. We will be creating a sales by item report. If you have the backup file, you can restore by going to the file and restore current open windows open Can open open windows by going to the view dropped down open window list and the home page is open and found at company dropped down home page. We will be working with a sales by item report. In order to work with that report, we will be going to the report Center found At reports drop down first item the report center. We can't find this too by going to the drop downs here, but we're gonna be looking at the report centers for this section. So we'll go to the report center here and we want to be I'm currently in the grid format. You may like the list formats going a little bit more compact, but the grid format gives us a good little visual here as we go through these items, make sure you're on the standard tab. Sometimes it couldn't go to these other taps and you will be lost. Why's it looked different? Because we need to be on the standard tab. At least I do that quite often, and we're gonna go down to the sales item here. We're in the sales information. We looked at the sales by customer last time. We might want sales by item, meaning inventory items, meaning the things we actually sell and or the services we provide. We want to see a breakdown of what types of things that we provide are pulling in the most sales in terms of dollars. So we'll scroll down. We're going to scroll down to these items past the sales graph to the sales by item reports , we have a summary and a detail available. We're gonna take a look here at the summary report running the summary summary report for sales by item summary. And there it is. It's I'm gonna maximize the screen here, maximize that screen, and we're gonna change the dates. 2010128202 28 to I'm sorry to one it should be one more time. 01 01 21 Teoh 0 to 28. 21 January 1st, 2021 to February 28 2000 and 21 is what we are looking for. What we're doing now is we're breaking out our sales numbers and we're breaking it out by items in this case, those items either inventory items or service items. So if we look at a report of the sales report on the income statement, we could take a look at this number. Here's our total 18 7 75 40 Where does that tie out to our core financial statements are balance sheet and income statements should be on the balance or the income statement also called the profit and loss. If we want to check that out, which we dio, we're gonna go up Top reports drop down, go to the company and financial profit and loss first report. We will then change. The dates were going to say it's gonna be from 0101 21 Teoh 0 to 28 21 or january 1st 2021 to February 28th 2021 we then see our total here at the 19 to 75. Slightly different if we go back to the sales by item, which is the 18 7 75 And if we go back once again to the sales and lost, why it is that it's our a Justin entry we made at the end of the time period. Double clicking on this merchandise sales will see this 500 now that that was reversed. What happened is this sale was made in or recorded in March And what? That's when the invoice was made. And therefore, when the sale was made, we'll talk more about this as we do the adjusting entries. We pulled it back into this time period. And then we reversed it in doing so, making the financial statements right on accrual basis as of the end of the month and then reversing it as of the first day of the next month. So if we change this date the second date of this transaction report to one day after and say OK and refresh, we see, Then we reversed it here. Those are Justin entries and our reversing entry. So what we're gonna do is we're just gonna recognize that I'm gonna close this out. I'm just gonna recognize that by and check it by saying I'm going to change the date here to one date after after the reversing entry has been adjusted. And now we're back to that 18 7 75 40 and that then matches what we have here. So in essence, I'm going back to the profit and loss. What we're doing is we're breaking out this number by detail. We want to be ableto basically say what? The difference is if there's an adjusting entry, that's kind of throwing his software so that we can tie this information out to the name, reports the financial statements and explain the difference for them. And we could look up with that 5000 who it was applied to, of course, and adjust our reports in that format. So in any case, we're gonna go back to the sales item summary, which we've broken out by item. So these air the inventory items we have, and so we got the quantity and the amount, the percentage of sales that's gonna be the this divided by the total sales So if we were to take a calculator out just to see what these numbers mean, we're taking the 1500 in this case, divided by the 18775.4 that gives us this number. If we multiply that times 100 to make it a percent about 8% about 8% that's where the percentages are coming from. So it gets a nice vertical type of analysis in terms of the proportion of each item that were selling in this case, an EPA phone, Les Paul guitar, the proportion of sales to total sales. And then we've got the price information. When we're selling inventory that cost to get sold, the average cost of goods sold and, um, the gross margin and the gross profit, so I won't get into too much detail on that right now. We're just basically looking at the sales information for the most part, and then the service information is a lot easier, for All we do is services we don't have all this. Other information tends to be cost of sales. We could do the same proportion here in terms of in this case, 3800 divided by the total 18 7 75 means that a large proportion was from Jodi's guitar lessons. So guitar lessons here are accounted for 20% of our total sales, and we have the average price range there. So let's be a useful, useful report to try to see what are the things we're doing? Well, one of the things that generate the most sales should tie into our profit and loss statement. As it does. We're gonna go ahead and export this report to excel. We already have a current Excel report that we have been using for this section. Therefore, we're going to export it to that current Excel report. So we're gonna go to excel. We're gonna create a new worksheet. However, we're gonna put it to a new on existing workbook and existing workbook. We're gonna select that item. We're gonna browse and see if we can find that existing workbook that we would like to be going to select the drop down. I'm gonna go to my get great guitars were in section four. There it is. That's the one we're gonna go. I could select open, but I'm just gonna double click on it and there it is. Then we're gonna export. It's gonna open up that Excel file. It's gonna export this information to the Excel file in a new worksheet in the existing workbook. A new tab, in other words. And then we'll do our normal type of adjustments once we have this data, meaning it often puts this information and out of order. So here's the last report we made. I'm gonna go ahead and pull this to the right hands on, and that's where we wanna have it. And we're gonna call this by sales by item. Something like that, then typically would go to the view tab up top. I'm going to go to the Windows Group and unscripted pains, and then we're gonna go down here to the layout to see how it's printing. See if it looks okay for the printing on the page layout and it doesn't look OK. It's not OK. This isn't okay, because it's something. Other columns are on two pages, so we're gonna have to make some adjustments there. And we do know that the header is up here and that's that's nice. That's what we want. So we're gonna go back to the normal view, and then it does show us kind of the page break items which were kind of odd locations for the page. Right now, we need a couple ways we can fix this. We can try to make this at landscape View and see if that does the job. So we could go to the page, uh, layout and orientation on the page set up and make it landscape and see if that does it doesn't quite do it. We're still a little bit off here. We're. So if we go to this view, well, even if we go to the last one, which is the page break view, it'll show us very clearly that we have a page break item right there and, um, that again not acceptable because it's going to report that on a totally different page. So we'll go back here and see if we can adjust anything more typically. What we're gonna just now is we can make all these items either go away. These columns that have nothing in them weaken delete them, or we could make him a little bit smaller. And maybe you want to try that I'm gonna try. I'm holding down control. I'm highlighting all these non adjacent cells and maybe we just Then I'm putting my cursor right in between here, so it looks like that Not like that, but like that, Not like that. But like that. And then I'm just gonna make them a a little smaller, see if that does it and will make him really small and really small. And there we have it. So now it's on one page, but that's it's worth doing that and checking that out, we're gonna go ahead and save that. It's already where we wanted. I'm gonna save that. Gonna close that you have the same information. Same kind of problems if you print this report out in a pdf file or just a printed to print it. And if we do that, if you go to the print, you got the same information. If we preview, it's not on one page wide. And so we have the same kind of tactics we could use here to fix this. As we have an excel, we can close this out and we could go home. How about it's already we already have it on landscape. So we've already done that. We could try to go back and adjust the column. This meaning I could close this and try to make the columns a little bit smaller and see if that hurts the data, See if it if it makes it so the data's unreadable, and then keep on going back to the print option and report and preview and see if the data is all on one page. If it's not, doesn't look like it's, it's probably not gonna make it here with that adjustments unless we put some time in Teoh adjusting possibly the fonts and just, you know, keep making those file those columns a little smaller so we could go down here and just kind of cheats. We could say, Why don't we just fit it to one? Call him wide. I'm not really concerned about how many Collins told it is, but I like it to fit on one column wide. I don't wanna have to second columns printed over there, so I'm gonna say Preview that and know that makes the text a bit smaller. It's not as nice because of that, cause it won't match other forms but it's all on one page wide. That's important for this type of report. So we're gonna say, OK, that's how we would how I would recommend printing Matt. 34. 4.30 Accounts Receivable Aging Report QuickBooks Pro 2018: hello and its presentation. We will create an accounts receivable aging report within the QuickBooks pro 2018. If you've been working along with us, we will be continuing with the get great guitars problem. If not, that's OK. We will be creating an aging report within the software. Do you have the backup file? You can restore that by going to the file and open re storm. We currently have the open windows open over here. By selecting the view and open Windows list, you can have that open as well. And we have the company foot tab or company page open found at the company dropped down. And the home page. We're gonna be looking at the A R Aging summary Gonna be a crucial report when we're trying to see who owes us money and how past do it is in what kind of collection action we should be doing in order to get any accounts receivable outstanding balances paid to do that. We're gonna go to the reports, drop down. We could go to the ah customers here and locate these reports. But we're gonna go from this section to the report center report center I'm gonna go ahead and maximize this report. Over here we are in the grid formats that we see him in a grid format. Here. We're looking at a customer report on a our report accounts receivable reports. Therefore, we're gonna be in the customer section. Note that to go to the customer section, we must be in the standard, tad rather than the memorized favorites. Recent or contributed tab. And then we'll see the customer receivables on the left hand side within the customer receivables. The first item is the A R. Agent reports Avery important reports because it will give us that indication of what kind of receivables are not gonna be possibly collectible or which ones we want to spend most of our time on collecting. And we're gonna go down here and run this report. This report is a balance sheet report and therefore reported as of a point in time, therefore, only one date the point in time we will run. This four is 02 28 to 1, otherwise known as Ah, February 28th 2021 and we'll have a report like this and the total of this report that's 11,000 to 70 form this being a subsidiary type report should match out to our core financial statements Are core reports those the balance sheet and the income statement or profit and loss this shootout, then to the balance sheet report for accounts receivable. Let's check that out and see if it doesn't. We're gonna go to the reports up top. We're gonna go to company and Financial. We're gonna scroll down to the balance sheet. Here is the balance sheet, and we're going to change the date to once again. Go to 28 to 1 tabbing over tapping across. There's the accounts receivable. So the accounts table is 11,000 to 74. That's how much people owe us. We want to know a few different things about that Number one who owes us that money so we can try to collect on it. And how past due is it so that we know which people we need to concentrate on which accounts read to concentrate on more to collect those past due amounts. If we go back here to the a r. Aging, we have the 11,000 to 74 that then, in this 11,000 to 74 broken out by customer. Here, here's the totals by customer. Here are the customers on the side and we also have it broken out by how old it is. So we have the current portion. These are things that if our terms are like 30 days or not past 30 days, these air past do so. Our most important amounts are gonna be this one. And these This is kind of a funny item here because what's happening is is way had a reversing or deposit, possibly four string music. We'll talk more about that later. But in any case, then we have the 30 to 60 to 60 to 90 that past due amounts nothing in those categories at this point. If they were in that category, then we would be more and more likely to say that this might not be collectible, and at some point we would have to write that off and say that we're not going to be able to collect those items. We're gonna go ahead and export this report to our Excel worksheet for this process. We already have an excel worksheet that we have been working on. We're gonna export this to a current workbook. In that case, we're gonna go to excel. We're gonna create a new worksheet, but then put it to an existing workbook. So we're gonna go to an existing workbook, locate that workbook. It's probably going right then right now, because we went there last time. Looks like it's in the correct location. That's the one we want. We could then open it or just double click on it and export gonna open up. It's so it's going to create a new tab for this information exporting this information to that new tab. Then we will do our normal type of adjustments that including bringing this to the outer colonies air. The other worksheets we've done up with this is the current sheet. I'm gonna grab that and pull it to the right So we have it over here, and this is going to be an A r aging, and that is gonna be that information. Then I'm going to go to the View tab up Top view tab in Excel. We want to go to the Windows Group and unspool it the screens. So we have unspool it screens, then go down to the view options down at the bottom. We've got the normal view. We've got the page layout to view selecting page layout view. If we scroll up, there's our header information. It's all printing on one page. So it looks like we are okay with this report going back to the normal view, that will be our information. We're gonna save this report and OK, and then close this and that will be the accounts receivable aging. 35. 4.35 Accounts Payable Aging Report QuickBooks Pro 2018: Hello. In this presentation, we will take a look at an accounts payable aging reports within QuickBooks Pro 2018. If you've been following along with us, we will be continuing with the get great guitars problem. If not, that's OK. We're gonna look at the accounts payable aging reports. If you have the backup file, you can restore that by going to the file and open or restore. We currently have the open windows tab open found at the view and open windows Tam and the company home page found at company and home age. We're gonna be looking at a report for the accounts payable, aging, and therefore go into the reports drop down. It can't be found in the vendor section, but we're gonna be working with their report center. So we will select the report center. We are looking at accounts payable, so we're gonna need the vendors. But first note, I'm gonna make this maximize this. We are in the grid format so we can see the little grid format here, and we are on the standard tab as opposed to memorized. Have favorites Tab. We're gonna scroll down to being in the payables relating to vendors were looking for vendors and payables, and we're gonna select this first items, the payable aging. We'll select the payable aging, and we're gonna change the date to. In this being, a balance sheet accounts urgently one day we don't need a range. We just need an as of date that as of 02 28 to 1 February 28th 2021. If we scroll here, there's gonna be our age and report. We don't have a lot of activity in our data here. We only owe EPA phone as of this date. That 1200. This is gonna be a breakdown of the accounts payable. It's important to know how this fits into our major reports Are major financial statements those being the balance sheet in the income statement. Otherwise, no one is the profit and loss. So we're gonna select that we're gonna go the balance sheet that should be on the balance sheet accounts payable By selecting the reports, drop down company of financial scrolling down to the balance sheet standard, and we'll change the date Teoh 02 28 to 1 February 28th 2021. We're looking down on the liabilities section. Here's our accounts payable. What we're doing is we're seeing that accounts payable. That's who we owe typically to vendors in this case, we buy guitar. So our vendor, our main vendors, being EPA phone our distributor And that's gonna be who we owe to. If we go back to the AP aging summary, then we see that that, of course, will be the total here breaking out who we owe that total to. In this case, only one ah person or one company EPA phone. It is current what we're saying here or it's within 1 to 30 days. So rather than being current, it's in 1 to 30 days. Eso is past due, so we gotta think about pain that this will break out our information very important when you're in the payables section of the accounting process, many people spend basically their entire job basically looking through a report such as this and trying to manage who the payments should be paid to first. Obviously we would have in a large company we'd be dealing with possibly a lot of tables, depending on the type of industry that we are in and deciding which payables we need to pay for. 2nd 3rd and so on. And this were report will, of course, help us manage that. That process. In that information, we're gonna go ahead and export that note to, however, that you can drill down on this information. So if I want to know more information about that 1002 I can use the zoom function and scroll down. Say, Well, what happened with this? It's a bill. So it's gonna be a bill, and I'm gonna scroll down on that or zoom in on that. And then it should provide us with the actual source. Document that source document in this case, a bill to EPA phone that is up past. Do Here's the date of the bill when it was entered into our system. Ah, here. Is that going to be the due date? And that, of course, being the date on which the aging is based. So we're gonna then close this back out, close this back out. We're gonna export this information to excel to an excel file that we have currently set up already, and we're just gonna export this to an existing workbook in and new worksheet by selecting the Excel icon up here. And we want to create a new worksheet so we will create a new worksheet and we're gonna put that into However, an existing workbook, we will browse for that workbook and there it is. It's going right where we wanted this time. So it's right, there's I'm gonna click on it. We could select, open or just double click on that workbook that we have already created and want to create a new worksheet within double clicking on it, exporting that item. We will then see it opening up. Excel, Excel will be open with the prior information in it, then create a new tab. That new tab having this information on its here is that new tab. Here's the prior task we have been working on. We're gonna drag this to the right hand side, just grabbing the tab to the right, dragging it to the right, and we're just gonna double click on it and call it a p aging. And then we'll go scroll up top. We're gonna do our normal adjustments going to go to the view Tam Windows Group unspool it the screen. Then check out the page layout to view scrolling down the bottom. This little icon right there, that page layouts and we see that we have the the header in there and the information's printing on one page. That looks good. So we're gonna go back to the normal view, and that's what we would like to see. Some gonna save that and save that and close that. And that will be the accounts payable. Aging Summary report. 36. 4.40 Accounts Payable Graph QuickBooks Pro 2018: Hello. In its presentation, we will be taking a look at an accounts payable graph within QuickBooks Pro 2018. If you've been following along, we will be continuing with the get great guitars problem. If you have the backup file, you can restore it from the file tab and restore. We currently have open windows open found at the view tab dropped down and open Windows list. We have the home page open, which is found at the company and home page. What we're gonna do now is look at a report, a type of report, that type being a graph still in the report's section. However, therefore, we're gonna go to the reports, drop down. We're gonna take a look at that report center report center and we want to be and I'm in the grid format so we can easily see the graph that when we find it and we are end the standard view. We're looking for a payable graph and therefore we're dealing with vendors people that we owe money to vendors and payables is what we will then select for this graph scrolling down until we find a graph. And there it is There's the accounts payable graft, Beautiful looking graph. We're gonna go ahead and run that report for a nice pictorial view of what's going on and what happens. There's no data. Why isn't there any data? Because we need to change the dates. So any time something looks funny Probably a date issue. We probably need to change dates. But before doing so, we're gonna go and maximize the screen by maximizing this screen here, then go back over here to the dates area, selecting the dates area. Now the accounts payable is a balance sheet account and therefore, as of a point in time only meeting, then one date rather than a date range rather than a beginning and Indian date will select first the date of 02 28 to 1 uh, February 28 2021 say OK, and we get a very boring graph here saying that between one and 30 days, and that's because we're pretty current and paying our bills were fairly proud of that, although it is pretty early in our business, so so we only have this. We don't have too many vendors. In other words, that we old money to add to this point only the EPA phone, which of course, is our major vendor. And we owe them 1200. If we want to make this look a little bit more interesting, we'll choose a different date. So we're gonna go back up here to the dates and we're going to choose the date of 02 15 21 . Hopefully it just a little bit more interesting of the graph. So we'll choose February 15 2021. And we just get a little bit more more color here because now we Oh ah, up a phone and we owe Fender. Now, that total then, is gonna be 3 1068 That should tie out to our balance sheet account for accounts payable. If we want to check that out, which we dio, we're going to go to the reports, drop down up top and scroll down to company and financial, and then scroll down once again all the way down to that balance sheet. Standard are standard form and we will change the date. Teoh, remember, we change the date, so it's 0 to 15. 21. Gotta have the dates, right? If it's wrong, it's probably a date. Issues probably not QuickBooks fault. It's probably our date fault of not entering the correct date, probably my date fall. So we're gonna say accounts payable, and that's gonna be 1368 And that is the amount on our graph. Important to note that Important to note that because if we're talking this, we have a nice colorful graph in our presentation. We should be able to if asked and possibly if not asked even to explain what the graph is doing other than to be a nice, colorful thing within our presentation. It does tie out Teoh information on the financial statements. If we were to select one of these items here, we can oftentimes drill down on the information in this that giving us a breakdown of EPA phone aging reports. So how much we owe EPA phone in terms of an aging reports, Everything's current as of the 15th. So we're good. Everything is great. Yeah, but that's a nice little future there. We're gonna close this out. Give us some quick some quick graphical information that we can take. We put into our presentations to put them into our presentations. Note we don't have an export. Two Excel as we have seen in the past and our options. We have very few options up here. We've got the date we've got. The print cannot print as a pdf, but we can print to a pdf printer. And so I'm gonna go ahead and do that. I'm gonna print here, and I'm gonna find the pdf printer. Now, if you don't have one, I do recommend downloading something such as the cute pdf printer or something, so that in this program and any other program you have this option. So I'm gonna go ahead and select that printer. We will print it to their and then I'm just going to rename it. It's gonna be gonna call it 80 graph and save it. And then, if we were to open the AP graph, as I will here we got a PdF file of it. So that's just one way we can take the information down. If we wanted to make a nice, um, presentation within a power point or something, we can just copy and paste that. And so here's a Here's a power point presentation. If I have a new slide, all we need to do is go to insert and weaken, go to this nice screenshot item here and just print to the screen. And there we have it. And so if I if I was to print the whole thing, if I printed the whole thing like this and said there we have it, and then and then they give you this other kind of little options over here when you're in power point. But I'm gonna close that now If I said hey, this top portion is pretty unspent. Tacular honorably. Need that. We could go ahead and go over here, crop it and say, I don't want this and we could do that, and then we could make this a little bit larger if we wanted to do so. We could also say, Hey, this little icon here not very helpful to us, we could go ahead and crop that out if we wanted cropped that out. We might even say, Hey, this titles not too impressive there when it we just cropped that out and make our own title, possibly, and we could even go so far as to say go over here and say we would like Toa have not have the white background on him. We can go to remove background and just in order to get what we want here, we've got to go toe Mark, keep and I'm gonna keep this item. Keep that. I don't want to make that go away. And there we have that. And then we get just just a floating pie chart, just a floating pie chart, and then we can add the key. If we want screen cast, add the key. And I know I'm doing this fairly quickly, but just to give you an idea of how to get this information into a presentation, there's the key. If we wanted to add the title, we can just make our own title in our own box. If you want to say AP graph, and then we can change the font of that. Go to the home tab, make some bold ish funds. I'm going to change the layout, make it, make it, you know? Yeah. And, uh, dark blue. And how about we make the text of it larger so we can you know, we could do We could do something like that and just really get this information there so they keep. The point is that this information we can we can capture this information in multiple ways using screen casting or using just copying and pasting the screen clipping the screen and manipulated it in a bunch of different ways. Really good information to have and using that pdf printer option really useful to use on this format and any any type of software that doesn't give you the option to save as a PdF . 37. 4.50 Accounts Receivable Graph QuickBooks Pro 2018: Hello. In this presentation we will take a look at and accounts receivable graph within QuickBooks pro with 2018. If you've been working along with us, we will be continuing with the get great guitars problem. If not, that's OK. We will be looking at how to create an accounts receivable graph. We currently have the open windows list open which can be found at the view tab Open Windows list. We also have the company home page which can be found at the company dropped down and the home page. If you have the backup file, you can restore that by going to the file dropped down and restore. At that point, we are currently going to be looking at the graphing options and that's going to be in the reports settings. So we're gonna go up to the reports, drop down up top and select the report center within the report center. We will have the grid format, little picture icon formats. Here we are in the standard tab and we're gonna scroll down on the left hand side considering we're looking for accounts receivable information to the customer and receivable section on the left hand side. We're just going to scroll down until we see a nice little image of a graph. That's the one that we're gonna be working on. It's gonna be in accounts receivable. Graph scrolling on down. We see this accounts receivable graph right there. That's going to give us the next pictorial representation of our information very quickly. So we're going to say, display that information, nothing's there. What happened? Why is that the case? Because of the data ranges, we're going to change the date ranges. But first, we're gonna maximize this, but maximizing this icon and then we're gonna go to the date ranges and hopefully change the date and something will then appear the accounts receivable. Information is something as of a point in time and therefore there's only one date here. We're gonna make the date. Oh, Teoh, 2102 28 21 which is February 28 2021 we're going to select, okay, And there is our information. So here's the accounts receivable and on aging type format current past due and so on and so forth. We have a nice, healthy, aging report here, and that most of it is current, although this is a fairly new business. So there hasn't been much time to have passed you receivables with the data set we have so far. In any case, we also have the pie chart down here. Given a nice pictorial representation of the information. And over here we have, of course, the key showing who owes us the most Lynn Jackson on the receivables. Gonna call Lynn pretty soon, probably later today, and see if it's gonna give us some of them what they owe us there. Appreciate the sales, Owen. And then we have Jill and Jenny's star Deanna, and so on and so forth. Given us our break out over who owes us money. What is in accounts receivable? That total, then 11,000 to 74 should match what is on the balance sheet under accounts receivable. If we want to check that out and we do, we're gonna go to the account the reports up top. We will scroll down to the company and financial scroll down to the balance sheet, and we'll change the date to go to 28 to 1. Same date February 28. We're looking at this information here that 11,000 to 74 going back to the receivable to report. We see the 11,000 to 74 Very important to see that, because when we do use this information, we want to be able to tie it back to the financials. We want to show more than just a colorful graph and say, you know, this is what it's going to and why we have this data here. Note that you can zoom in on on some of this information. It will give you some details. So if we double click on an item here, it will give us some grass in this case for music store stuff. Given us an aging report for that particular client for close that out on, we select another client. We can see that we select land will get an agent reports for Len. So here's this. It's all still current, so we're not too worried about land so far. So we're okay there, so we'll close that back out. That's gonna be this information. We're gonna go ahead and print this now Note. There's no X exporting to Excel. So what we're gonna do is print it. I'm gonna print as a PdF and then show how Teoh, how old We can cut and paste it into something like a power point or word documents so we'll go ahead and print. And again, there's no printing option to a pdf typically here in this as there is in some other options within QuickBooks. If you have a pdf writer such as cute PdF, which you can download, then that's another way that you can do this. I highly recommend having some type of PdF writer so that you can print things to a pdf really helpful for this program and many others. So we're gonna go ahead and print that, and as a PdF, it's going into section for That's where we want it. I'm just gonna call it a our graph a our graph and save that. And if we were to open that which we will do, it will look like this. So here's the graph. That's what we have. Now. If you want this in color, of course than in a presentation, then we would want to put it in some other type of format. I'm gonna open up a power point this time All Microsoft Office products typically have some type of feature. Teoh allow us to just cut and paste really simply and power point maybe one of the most common areas. We want the graph. So here's a nice blank sheet and we can Then go ahead and insert and go to the screenshot, and I'm gonna go to the screenshot. Now, this is noticed. This tab is right behind what I'm working in. That's what we needed to be. It needs to be the recent thing open. I can't have five taps open in front of it or want to get there. And so we're gonna go screen, capture the screen. And if I just want this key and this Ah, this item there, I can select that now if I make it a little too wide. So here I have this say I Let's just just say that we had this on a background that possibly was, um ah, black background. Then maybe we want to get rid of his blank area over here or even crop it. So just note you got a lot of fees, click on the item and you go to the format. You could then crop it like this and then pull this into the inside and give some cropping . If you wanted Teoh, eliminate some of the added colors in the background to you could go to that same item and remove background, which gets a little bit more tricky. And then I'm going to say, Keep the area. I want to keep all this stuff. I want to keep that stuff and that and I want to keep my key here gets a little bit more tricky to keep the key. Yeah, I won't do the whole thing. If you do that long enough, you can keep you can keep the key, and it's a little tricky to keep the title. You may have to actually add a new title, but note that we have some kind of features like that. And if this was an issue on this side to keep the key note that she could also just screenshot it again and just take a new key like so put it right there and put it wherever you want. If the title if the title is a problem, then we could just remove the title and just say we don't want the title and and then put it and then put a title up here and anywhere anything you want. So there's a lot of options to to make the color. And just from the copy and pasting it from the from the features you have within were documents and Microsoft office documents, same options in PowerPoint and Excel and in word. 38. 4.55 Custom Comparative Profit & Loss QuickBooks Pro 2018: Hello. In this presentation we will make a custom comparative profit and loss within QuickBooks Pro 2018 taking some of the functions we have seen in prior presentations and making a custom profit and loss with them. If you've been working along with us, we will be continuing with the get great guitars problem. If not, that's OK. We're gonna be customizing a profit and loss and looking at some of the functions in so doing, If you have access to the backup file, you can restored by, go into the file tab and restoring that information. We currently have the open windows open to open the open windows, go to the view tab and open window list. We also have the home page open which can be found at the company dropped down and home page. We're gonna be looking at a profit and loss and customizing that profit and loss of using some of the features we have seen thus far to do that. We're gonna go to the reports and drop down. We're gonna go to the company and financial, and we look at the profit and loss of standard more than going to change the date range to a 101212 bullets. That should say, from 0101 to 1, which is January 1st 2021 to 12 31 to 1. And this will be the starting point of our information. It is a profit loss similar to an income statement or the same thing as an income statement . We have income or revenue, those income accounts. Then we have the expenses, including cost of goods sold and other expenses and ultimately arriving at net income. What we're gonna do is we're gonna customize some of this. We want to show two months of activities, so we're gonna show January and February, and we'd like to show some percentage change or vertical type of analysis with those as well. To do that, we're gonna go to the customized report up Tom, and we're going to go to the January through February. In order to do that, we're gonna say, Keep the first date January, and I'm just gonna go through 02 28 to 1. So we've got January 1st, 2021 to February 28th 2021. Next. What I'd like to do is change the total column, Teoh. See, just the months. So I'd like to see a month by month comparison. We're not gonna do it by going to the previous month, as we've seen in a previous report where we had the month of the whole month of February February 1st to February 28th then shows the previous period. What we're gonna do here instead is take the the total and change it to the month, and we'll take a look at what that does first. If we select that, then of course, we have January in February in the total. The nice thing about this type of form rather than the previous analysis or the difference between the two, is that we have the January 1st. It's an order by what came first instead of the most recent month. And that's just a matter of preference on how we want the report to set up. And if we and then we have the total rather than subtracting the two, this is a total in report rather than a step traction report. Then we're gonna go back up to the customized reports once again and We can't use the percentage changes here because, of course we're not going to go to the previous period. That would give us a previous period type of calculation. That's not what we want. What we could do over here is we could do some of this vertical analysis type of calculations. We could have the percentage of income or the percentage of the row columns. I'm gonna choose percentage of income. And if we look at what happens with that calculation, we now have the January and February and we have the percentage of income, and that's going to give us then a nice calculation for each of these items in terms of a vertical analysis. So we can see the 2467.4 as it's compares to the total of 2975.4 in the same column, and that gives us the 82 times 100%. That gives us the 82.9. If we were to go down here to say this 15 and see that we're comparing the 15 divided by the net at the total income of 2975.4, that gives us this number. If we say times 100 we get the 5%. So we're doing the vertical analysis in each of these categories. And the nice thing is that it also gives us the total category for January and February for the full time period. Same kind of vertical analysis. For example, if we took this this amount here to expense 917 over this 19 to 74 not worse. Number seven, divided by thin 19 to 35.4 gives us this. Never Times 100 gives us the the 4% the 4.8%. So that will be this calculation. That's what we have so far. What we're going to do now is we're gonna do some changes to the per to the amounts here. We're gonna remove this sense. So let's do that next. We're gonna go up to the reports and we're gonna remove sense by go into the fonts and numbers and we're going to remove the sense here and say OK, and so now we see the information without the pennies involved in it. Now we're gonna do some of our comparisons in terms of changing the name I'm gonna make that February comparative income statement, and we'll just take away some of this information as we have been doing. So we don't not printing the date in the in the month and the accrual method. So we'll go at back up to the customized reports we're gonna go to the header and Footer tab, and this time we're gonna remove the date, the time, the report basis, and then we'll change the name and city just profit in laws we're gonna call. It's ah, February comparative income statements. I'm just gonna copy and paste. That's enough to have seen in the spell and that. So it's gonna be February comparative income statement and that will be showing once we select okay and that will remove these items and give us a new title. So we're gonna say OK, so February comparative income statement. There we have that, and we have removed this information so there's gonna be our custom report here. We're gonna go ahead and save this or export it to I Excel Sheet. We have already created by going to the Excel, drop down up top and create a new worksheet. And we are going to put it to an existing workbook. Existing workbook browse to find that workbook happens to be going to where we would like it. That's great. We're gonna select that's and either select open or just doubles quick on it. And then we will export this information. It should then open up Excel, export this information to a new tab within Excel. And when it does that, we will then do our normal changes, including moving the Excel tab to a new location to the in location, and we'll do some adjustments to the view scream. You could see that we have a few tabs open here. Now that we've done, I'm gonna have to move over by selecting this item. We've got so much work we've done so far and then we're gonna grab this sheet, I'm gonna pull it all the way to the right and we do some normal cosmetic work here. We're gonna go to the view tab up top. We're gonna go to the Windows section and we're gonna unspool it the pains and then we can rename this. Gonna double click on that. It's gonna call it Feb Comparative income statements. Something like that something short that we can't fit on the tab section. Then we're gonna go down here to the page layout and see if everything looks okay. This little icon and it looks, ah, like that. The headers there, that's great. But this information's on a Did we have this information on a different road? Now that column is on a separate sheet. You may even want to go to this tab. Over here will go to the last tab page break view. If we select that, it will give us this really small kind of window. But if I can, I'm making this larger by going 215 over here, and that will show us exactly where the page breaks will be. And that's useful for us because we really don't want to print this out. If we gave this to someone, it printed it and have this column on another sheet, that's that's kind of not acceptable. That's a little that's a little ugly. So what we're gonna do is we're gonna fix that. There's a couple ways we can do that if we go back to the normal view, we could do that by going Teoh, the layout and making this orientation rather than portfolio. I'm in the page layout where on the page set a group, and we could change it from portfolio to landscape. That would be the traditional type of fix, and that'll put it all on one page. The problem with that is that sometimes if you're all your other reports or portfolio and you print that landscaped and then you have to turn the page when you go through the staple pages, and you might got to decide which way you want the landscape thing to go if it wants toe how you want to stay put in there so you might also, if it's if it's pretty close, want to keep it portfolio. So we might want to keep it portfolio like this, and then just try to adjust the columns, For example, we might just try to get rid of all together these columns that have no data in the middle . But I just highlight in the whole column and just a leading those and see if we can keep it all landscape. This might, or we could make these pretty small right. We could have tried that, but I'm deleting them already started here, so I'm gonna finish that. It looks like if we delete all those Ah, we'll have Well, it'll be on. It will be on a call in there. So that's, you know, a couple options. We can have to do that. And once we have that, it'll fit on. It'll fit on a pay. So the point is, you wanted a couple different adjustments and see what what form? That will work best. And then we're gonna go ahead and save this information. Save that information. Close this out. No status. If we were to print this report out from QuickBooks, I made these columns a little bit wider just so we could make sure to see this example by selecting the side of and make a bit wider. If we were to print this, we might have the same printing problem. Meaning QuickBooks does not necessarily just make it print on one page. We talked about this a little bit earlier, but it's worth looking at. If we were to print it from here and go to ah report and we didn't if we didn't have this check Mark checked, it might be checked from previous printings. But if it's not checked and we say go ahead and preview it, then it we could have on multiple pages here and the same type of thing weaken the same type of procedures that we can go through to get the printed look good We don't want We don't want to give that to somebody that it's printed like that. So what will Dio is that we could change it. The landscape here. We don't have as many options on eliminating Rose, but we could We could make the rose smaller so that we could say Preview that and see what happens in that Well, almost do it on. And then, of course we can go back. And if I didn't want to do that, if I want to bring it back to portrait the way we had it before and and close this out, we could try to make these rows smaller. And that's one way we could We could fit on one page, go to customize report and weak. I'm sorry, closed, head back out, go to friends reports and see if that brings it brings it down to one page, which it does if it if it doesn't, we could try Teoh do other things like change the font, which we talked about before, which would be in the customize and fonts we could That would change the font sizes. And if that doesn't work, of course, the last case Resort is to go to customize. And then I'm sorry, if you could, a print reports and then fit it to one page wide, fitted to one page wide. You don't want to do that for the land unless it's a last resort. Because once you do that, it's gonna change the size of the font, and it won't. It won't look exactly the same as prior reports, but at least we'll get it on one page so that it will be on one page, and that will be better than having columns on another page. And so that's how that's a couple things we can we can look at and work through When printing these reports, 39. 4.60 Export Balance Sheet to Excel QuickBooks Pro 2018: I flew in this presentation, we will be covering the exporting of a balance sheet within QuickBooks Pro 2018 to excel. If you've been following along with us, we will be continuing with the get great guitars problem. If not, that's OK. We're gonna talk about how to export a balance sheet to excel. If you have the backup file, you can restore it by going to the file and re storm. We also have the open windows open. You can open this by going to the view tab and the open window lists, and we have the home page here that can be found at the company and home page were first gonna open the balance sheet and then work on exporting that to excel, selecting the reports drop down, up top going down to company and financial and scrolling down to the balance sheet. Gonna then change the dates to 12. 31 to 1 December 31st 2001. That's what we will be working with. We're gonna export this to a excel sheet. This will be the first Excel sheet. We will have the first tab on the Excel sheet that we will have this report and therefore we're going to create a new workbook book in order to export this information. So we're gonna go to the Excel dropped down, up top, and we're gonna create a new worksheet. And then within that worksheet, we're going to place a new workbooks that's gonna have both a new workbook that's gonna be the actual Excel workbook. And then it will go to that new worksheet within that workbook, and we're going to just go ahead and export it and that'll just open up the program automatically and export this information to it on a new tab within it. Here it is. We're gonna do our normal customization here. One is it has the freeze panes here. So I'm going to remove the freeze panes by going to that review or the View tab, the Windows Group, and then split somethingto unspool it the pains. And then I'm gonna change. I'm gonna check that the header is the way we want it. So I'm gonna go down to the layout to view by selecting this item here the 2nd 1 page layout and you'll see that the header tab is up top and we have the split is gone. So that looks like what we want. We're gonna go back to the normal view, and here is gonna be that information. I'm gonna double click on the name of the tab, rename the tabs just balance sheet, and then we'll save this. I'm gonna save this item goto file and save as browsing go into the location we want, which mine is gonna be on the desktop were too many things and get great guitars section to where we're gonna put this. I'm just gonna call it section 22 reports and OK, saving that and there is that I'm gonna close that up, and there it is. We have saved the balance sheet. We're gonna be working on some other reports and other variations of the balance sheet now , and we will then save those to that same Excel document on new tabs. 40. 5.10 Multi Monitor, Dual Screen QuickBooks 2018 New Feature: Hello. In this presentation, we're gonna talk about a new feature within QuickBooks Pro 2018. That being multi monitor support in essence, allowing us to have to monitors within QuickBooks having dual monitors and over. In order to set that up, you do need to have two monitors set up on the computer, meaning you physically have to monitors that are set up within the computer and you could switch back and forth from the screens to the two monitors. Once that is set up, then QuickBooks now allows us within 2018 and QuickBooks pro Teoh put information on one monitor and put different information on the other monitor within the same quikbook file within the same QuickBooks program. And I think we could see a lot of potential when we have this type of ability that, being that we can have, for example, information on this side where we're entering data and possibly information on this side where we are receiving the data. Even within the same report, for example, we might have a check register over here, and we might have some data a bill over here helping us toe enter the data. Both those things within the QuickBooks program, but now being allowed to be displayed on different screens so we can see them at the same time. We also might have over here balance sheets, let's say and then over here we have the transaction report. But we might have over here something like a bank reconciliation and then on this side we might have the check register to go through and verify some of the stuff within the bank reconciliation. We could just have the balance sheet on this head and the income statement on this side, a lot, a lot of opportunities, a lot of potential here. So we're going to see how this is going to be set up, set up very easily. Once we have the dual screen set up physically, it's easy to set up QuickBooks. Then, to use those tools to screens, we will be working with this data program and in order to set this up, all we need to do is go up to the View tab and we're gonna go to switch to multiple monitor mode. You can also selected control all to delete, So if you're going back and forth between multiple multi monitor and one that will be a nice a shortcut to have. Once I select this, I'm going to try to capture the entire screens of the The size will go down, but we'll try to see what we can do within the screen capture in order to see what can be done with two screens here. When you first set this up, you will get an option to set up two or three screens. So it is possible to set this up with not only two screens but half the three screens to be set up. I believe that is the limitation. You can have two or three screens within this screen sharing option. Here we are in the multi screen mode, so I have two screens open here. This is going to be on this side. I have the home tab and I'm decide we have a blank tabbies are two separate screens now within the screen capture. And let's just see a couple things we might want to do with this. To see how this can work. If we go to say the balance sheet or the uh, let's put the balance sheet on this side of just have some open windows over here. We've got the balance sheet here and let's say we want the income statement on the other side. We could, of course, just drag it over there. We could take this income statement, drag it to this side and then snap it on this side of the screen That's on a totally different screen. Snapped this side on the screen and now we could see our reports side by side weaken, demonstrate our reports side by side the other way. We could have moved that. I'm gonna move this back over, and if we snap this back here, the other way we could move it very quickly is to use this item here. There's this new icon that will be right at the top of the reports. If we select that, it will just move it right over to the other side. We could have it full window or not full window, as always. And then, if we make it, maximize it within the QuickBooks screen, it'll snap it just to the screen that we are typically on so that we can get an easy comparison between these two screens. Some other options here, of course, is if we wanted to say, We want to drill down this checking account. What if we wanted a double click on this checking account and actually opened up in the other screen? But here's here's the detail there, and we might want to snap that to the other screen and have that open. We may want to compare some of this detail within the transaction report to, say the checking account the General Ledger and have this open on this side and work through some of our data. See if we can take anti Some of this information Teoh our transaction report the 15 in the 15 the 3 16 the 3 60 take anti some things out. So there's a lot of options here. This could save a lot of time to have something like this set up within Quikbook. Note how the screen share will work. It typically works. It'll basically always work that we're gonna have the main screen on the left hand side, so when you open it up when you go to the full screen, it basically just opens across the two windows. However, instead of just extending the screen so you can move this around between the two windows. It also allows you to snap it on this side. So in essence, the programme extends to the two windows. It works from left to right, So the left being your main screen, the right to be in the secondary screen. You can move these windows of these screens around through the two windows, and you can also snapped them in place within the two windows. And really, it just gives you a lot more room for you to be working within the two windows to be having two things open at the same time to either display them to someone else to check your work or to help you with the data input. 41. 5.20 Cash Basis Accrual Basis Toggle Feature QuickBooks Pro 2018: Hello. In this presentation, we will talk about a new feature within QuickBooks Pro 2018 of that being the cash, a cruel toggle feature that feature available in reports such as the balance sheet and the Income Statement, where we can easily toggle back and forth between an accrual method or a cash method right on the face of the report without going into the customized section. In order to do so, we'll take a look at what that means and a quick kind of description of what is the Cash Nick rule method And how would that be useful to us to be able to go back and forth between those two reports? Here is our data set within QuickBooks Pro 2018. We've got the profit and loss open for a current year, a time period or a time period. And what we have here, what we're looking at is this feature up top the report bases switching back and forth from a cash to accrual basis. Now, when we look at this, you might think, Well, why would I need to do that? Considering the fact that when we make reports, we want to be consistence. That's a financial standard that whatever we choose, whether it be cash or a cruel is something that we wanna have consistent through that reporting period. But and that is true when we're reporting outside for formal reporting. But it may be the case whether we be on a cash or accrual basis, that we want to see the other format for internal reporting purposes. And that's when this could really be useful or one area when this can really be useful. Remember what those differences are? It's just basically, when we're gonna be recognizing income and expenses. Do we recognize revenue and expenses? At the point in time, we have earned the revenue and incurred the expenses, or at the point in time we receive cash and make cash payments. So typically, the accrual method is gonna be the method that will be generally accepted in terms of standards. But the cash method could give us a cash flow report that can be useful as well without having to go basically the cash flow statement so it could we could have contexts even if we were using accrual basis, where a cash format could be useful for us to use. If we take a look at the difference within this profit and loss, we could see what we have here. We got net loss of 7 54 on the default being the accrual basis. We've got the sales of 6 2075 If we switch over here to the cash basis, we will see some changes here are we now have two types of revenue. We've got this unknown uncapped ago rised revenue that bringing the total revenue up to a total income of the 22. 18. And, ah, some differences in the expenses that changing the net income. So there will be gonna be differences within these two methods. And it's useful to go through those that if you were to double click on the accounts and drill down on the detail within the accounts, you can also go through the cash in a cruel in these particular accounts is well, and see what? What the difference is gonna be there. So we're gonna close out of this. If you do have older versions, note this was in older versions. If you go up to the customized reports feature, then you could go to this cash versus a cruel in the display tab here. So, really, this is just making it a little bit faster for us to toggle back and forth between the cash and cruel system. It's really nice that once this data is within QuickBooks, QuickBooks can compile that data using either a cash method or in a cruel method. It's worth noting, too, that when we look at the accrual method, if we go to the home tab over here, the driving factor that's really gonna usually be recording these sales, it's gonna be the invoice. So when we look at the at the profit and loss going back to the home back to the profit and loss under the A cruel and we have take a look at the merchandise, then the driving factors. If the invoice in the sales receipts as opposed to, of course, if we're on a cash basis, the driving factor is going to be the point in time that we received cash on the cash basis when it closed this back out on the expense side. If we will go back to the home tab, the driving factor will typically be when we enter a bill or if we wrote a check directly those, they're gonna be the forms that are gonna be really the driving factors on accrual basis to trigger win. Ah, the expenses are often going to be recognized. And so it's useful than be able to note that. Remember the rules going to be We recognize revenue when it has been earned. When we look at the software, the software, just from a technical logistical standpoint, needs to record it at some point in time. That's usually the point of the invoice for the software. Typically, that's going to be closer to the point time that it was earned. It is possible, however, that the invoice goes out at a later date, and we have to make an adjustment for that and typically on the expense side. The form that's going to drive is when we enter the bills. That's gonna be the form that drives when the expense goes in. If were entering a bill for on expense and not basically the check time, the time off payment 42. 5.30 Past Due Stamp Invoice QuickBooks Pro 2018: Hello. In this presentation, we're gonna talk about a new feature within QuickBooks Pro 2018. That being the past due stamp on the invoice as indicated here, the past due stamp will be a stamp that is generated within QuickBooks For those invoices past due past the due date of the terms of the invoice, it's a fairly straightforward feature. However, there are a few things that we want to take a look at one. Where's that passed? Do going to be at to How can we use that to help us on the processing side on the book keeping side. And three. How does this past due stamp prints out and does it to print out to our customers if we are printing out an invoice that is past you? And if we wanted to remove that past due stamp, is that possible? When we are sending out an invoice that is pasties, we'll take a look at those questions As we go. We are in QuickBooks were in the get great guitars practice problem here, and we're gonna look for an invoice that is past due and comparing contrasted with an invoice that is not so first, we're gonna go into the invoices here. Just try to find what's gonna backtrack to the invoices. Now, if we select the back arrow, we're gonna go through a series of invoices. Note this one doesn't say, Of course. Passed. Do. It is not passed. Do the net 30 terms that date being in the future. In this case, we're working this problem in the future, but we're gonna go back. This one has been paid. We see that item here that has been indicated in prior versions of QuickBooks. If we scroll all the way back to the invoice on invoice that has passed to do, such as this one, then we would not see that it has been paid. Obviously would not have that. And therefore it would also be passed. Do, given the fact that it has passed the Net 30 terms, given the date of the invoice in this case at 10 11 2016. So therefore, one, it's past the due date. Past 30 days from the invoice and two, it has not yet been paid, and therefore we're gonna have this past due. Items show up on this point of the invoice Now, if we don't do anything else to the default settings, the QuickBooks will put it here. But it will not actually print it when we print the invoice. So it's a good indication for us in that way. Then, if we are as the bookkeepers entering data, we can easily go into the invoice and have a quick note saying this invoice is past due telling us that it won. It hasn't been paid to its past, the date and a very quick and easy format. If we were to printed, I'm gonna go up to the printing here and show a preview we're going to print. And I'm just gonna show that preview note that we don't see any indication here or anywhere on the invoice for that past due indication within the I'm gonna close this invoice back out and go back to our QuickBooks. If we would like the past due stamp to be printed out, we can do so. So if we are in the invoice, we would have to go to the and were in the main tab within the invoice here if we were to go to the formatting tap. The second tab over and customized the data layout. We're gonna customize the data layup in the formatting tab. Then we're going to get an item that will show up here. Now, if you're only in the QuickBooks template, it might tell you Hey, you need to copy the template. You can't change the template, and then you make a copy of the template and have your customized type of ah of invoice. And then you can go down here to the options. Well, then select the basic customization options, basic customization options and within the basic customization options, we see a check mark for the print past due stamp. So we're gonna go ahead and select that print past due stamp. OK, that's OK. And then we're gonna overlap here. Obits. That's what it's telling us. But we have the past due stamp, and that should be on the printed form. We will then say OK and see if that is indeed the case. Gonna say OK, here. Closing out of that Once this feature has been set up, we get this nice little option within the invoice. So when we are looking at the invoice, then we have the past do visible on prints and email for this invoice and we convince Turn it on and off. So if you click on here, believe that's going to turn it off, so I believe it is on. Now let's test it. We're gonna go up to the print of feature up here, and I'm going to go ahead and preview and C, we have that passed do right there. So the past do is now being printed. If I was to close this and close that and then toggle this to the two off and then print the invoice preview, then it's back off again. So we have a nice little toggle feature to turn it on and off, and we have the permanent indication that there is a past due invoice. So how could we use this then? It could be useful if we were going through a report for the receivable reports. For example, if we were to close this invoice, if I was to go to reports and we're going down to a company and receivables and we're in, let's say the customer balanced detail and in this case we're looking for Anderson here and we're seeing that thes tie out. I see. Okay, there's an invoice. There's a payment. There's an invoice. There's payment. Here's an invoice. I'm not seeing a related payments to it. That happens to be the amount due. Mm. Let's take a look at that at that invoice. That's pretty old invoice in comparison to everything else and see what's going on. And we get that immediate indication. Well, I don't see that it's been paid, and I see that it is indicated that's past due, and we get that immediate feedback then and there. We could send out the head in that email immediately or send it Teoh somebody Teoh check on this or give a call on that. So it's for our purposes. It's gonna give that immediate feedback for the for sending them out. It also will send out that information 43. 5.40 Search Chart of Account QuickBooks Pro 2018: Hello. In this presentation, we're gonna take a look at a new feature within QuickBooks Pro 2018 that to be in the search chart of accounts of feature. We're gonna look at the chart of accounts and see what this search feature can do, which is to search through the chart of accounts and we'll take a look at where that could be applicable when we would want Teoh use this feature in practice. First, let's look at the chart of accounts and see where this feature is at. We're gonna go to the lists at the top and we're gonna go to chart of accounts. Now, this is a fairly small QuickBooks file, so there's not a whole lot within the chart of accounts. But if we're working with a substantially large company, there could be a lot of accounts that we are dealing with within the chart of accounts. And even when we're dealing with this size of company, there is still a fair amount of accounts to go through to lick Look through the search feature is gonna be up top. So if we were gonna go through here and look through the chart of accounts, and we didn't know where something was at Weakened basically used the search feature and search through, and it'll limit those types of accounts that are there now. The great thing about this is that it gives you a bigger window of the limitations on these chart of accounts. And that's the big benefit, because when we're looking at some other screens, the auto fill population allows us to do a similar function. But there's limitations within the screen. So if we're kind of in the ballpark, if we have a lot of a certain type of expenses, but possibly their broken out by region, then we could type in the type of word that we know, for example, if we know we have insurance. But we have a ton of different types of insurance based on location and based on different types, then we could type in insurance. We could see all the things that are going to be related within the same window. Now, when does this become necessary? Win with this option, Be needed any time we're putting into a new account, any time we're looking for an account and we're having problems, when would that typically happen when we're making an invoice, possibly most of time, probably when we're writing a check or entering a bill. So let's take a look at that. If we were to go over to the home tab and we were going to say, write a bill or write a check, I'm gonna just go write a check down here. And we were to think about who is going to and save him. I know it should be someone somewhere in the ballpark of an expense. I don't know where that is, that when we select this drop down, we get a pretty decent list. We've got our full list here, but this windows a bit smaller, two bit less easy to search round. We could start typing things that in here if we started typing insurance. We do get a breakdown of the insurance, but it's a little bit less detailed when we see this is window as it is when we go to the full list. So if you wanted to go to the fullest, if that isn't enough, if we're not narrowing down what we would like to see, then we would then go to the lists up top and we go to chart of accounts and use this search fixed feature, and that would give us a bigger window, a bigger idea and easier able to find these accounts again. It would be a lot more relevant if we were talking about a very large chart of accounts that's gonna have a lot of accounts with similar names and possibly very slight difference his in terms of basically the numbering and or the word in of those accounts. So we wanted to make make sure we're getting the right one. That's when this feature would be most effective. Note also that if you want to make this feature a little bit quicker to use, you get if you're gonna close that out if you're back at this check and you wanted to say whom this feat this screen is a little too small. I would like to see the full screen of my chart of accounts so that I can toggle through that and do that a bit quicker. Rather than going up here, you could use the key stroke of control A, and that'll take you directly to the chart of accounts. If you have your open windows over here on the other side, you can talk, go back and forth between these chart of accounts and the Czechs fairly easily and and use that feature fairly well. 44. 6.05 Set Up New Company & Preferences QuickBook Pro 2018: Lo in this presentation that we will start a new company file within the Quikbook. We will be running a store and the store will be selling guitars. First thing we'll do, is it run QuickBooks by double clicking on the desktop icon. Once QuickBooks is open, you may see a window like this. And if you have have been working on prior company files than those could be listed here, giving you a shortcut option to open those directly, you may also be taken directly to a company file that was prior worked on the last one that you were working on. Either way, if you open a prior company file or if you opened this window, we could go to the same icon in order to start a new company directly from that area. We can also use these buttons down here, create a new company, open a restore, open a sample file. We will be creating a new company here. I'm going to show you how to do that. However, with the drop down, if you follow along with the PDS over here, they will have ah, a little bit more zoomed in picture and we'll try to keep zoom out pictures so you can see the full screen when we're actually working with the program. So the pdf next instruction is to go to the file, drop down and go to new company back to QuickBooks will do that. We're gonna go to file, and we're gonna go to new company, starting up a new company file. Once you open this page up, you get something that's looking at something like this. Now there's a few options we have to start option here, which will basically take us through an interview process. We have some other options over here that opened existing file, which would open a file we already had. We wouldn't want to go through this process to to do that typically convert Quikbook data. So if we needed to convert to the data, I convert other accounting software. So if we had software somewhere else and we're tryingto export that into year, then we would use that process set up on behalf of someone else or advanced set up. We're going to start a new company from scratch, and so we're gonna go to the start up now. Note that if you are having a running company, and you need to put that information into QuickBooks. Although you have prior financial data, we could still run a similar process and basically put that information in as of this point in time, meaning you would basically take the last financial statements of the last financial data. The financial data you have. As of the point in time, we're gonna start quickbooks up and put that in as of your beginning date. So we're gonna start the set up process here. First we have the email and the user password it not. We could enter this without a password, but you really want to put a password in there because it does protect the data. Just remember, make sure you put that password somewhere secure so that you haven't when you go back to it , it can be a problem if there if there is not a password if you forget the password. So make sure that that is secure as you put the password there. Next, we're gonna input the company data, including the business name, the industry, the business type. Then we'll have the EI in number and the address Note that the read Asterix here means that these are required fields. So if you're setting something up really quickly, then those are the ones you really have to have and of the other ones. Of course, if this is a long term business that you're working with a lot probably want to enter this data. The address in the city and whatnot will be used when we start formatting documents such as invoices such as bills. Here's the data we will be using here. So if you want to follow along with this example, we're gonna say we're getting great guitars. The industry will be the retail shop or online commerce. You can select this icon here to help you find that we're gonna be a sole proprietor rather than a corporation or a partnership. We're gonna use this E i n number. Remember that the E I N number is really just the tax identification number. It's kind of a Social Security number of the business. If you are a sole proprietor, it may be the sole security number. You may want to leave it blank if that's the case, but it will be used in some areas, including, like 10 99. If you have employees, this is a required field. If you don't have employees, then well, if this If you have employees, it's a required field to fill out the W two's, which you'll need to dio with some type of EI in number. If you don't have employees, you may still want to get an E I in number s so that you can issue 10 99 without having to put yourself security number on it. That's an issue. Ah, just t go to the IRS to get any i n number. Then we have the business here and it's gonna be the address. 244 West 23rd. We're gonna be in New York and the ZIP code 90011 Gonna keep the phone blank for now. And that will be that next we will create company. It will take a little time to load up the company. We are going to start a new data file, so it's basically creating an entirely new QuickBooks file. At this point, we currently have this update. QuickBooks will give you some updates as we go through this and the updates could be it things offering you something like a payroll service or something like that, or just telling you what the updates are. You do wanna add the updates from time to time eso that you're, you know, the most current with the QuickBooks software. It is something that if you're connected to the Internet and you should be, then you'll get continual updates within the QuickBooks software and continual service packages and whatnot that will update the software as we goes. That's what we're basically saying here you may get some other pop ups such as this one, which is get paid faster payments, payroll at checks and supplies, all great stuff, but not stuff we're looking into at this time. They are stuff that you could looked into at a later time. You will probably see more information, more pop ups basically related to, you know, these types of items. As you work through this, These are items that air that are useful both obviously payment methods, setting up payroll, something that we discuss and will continue to discuss and save time with printing in terms of having checks and order and checks are all things that could be very useful to half, but right now we're just going to be working with QuickBooks itself. I'm gonna close that up. QuickBooks does offer the tour. We've taken a look at some of these items before, but when you set up a new file, I'll give you a bit of a tour here that you could walk through and see through that. But again, I'm gonna go ahead and close this out. For now, QuickBooks will typically open toothy home page here. Just gonna check a few things. So first, I'm going to go to this drop down. We're gonna go to the lists, dropped round and take a look at the chart of accounts, lists and chart of accounts. Just the note that the chart of accounts that we have here now this chart of accounts with generated by QuickBooks by choosing a shop, a retail shop note that if we were a service company and we chose a service company, we would get a different list of accounts. Now, if this this is a pretty basic list of accounts, so choosing the type of industry you're in will give you a new idea. If you're not used to basically account names. Or if you're worried about setting up an account type as an expense versus and an asset, then this will give you some account names, and you want to try to stick to those as much as possible. If we're within the industry that you have picked, then they usually pick pretty good account names. If you were to name them yourself, then it might be better in some ways because you can get more specific in terms of exactly what type of expense accounts you want to call them. But if you use the standard accounts here, they're gonna line up more often to standard account type categories, which could be good for benchmark it. It could be good for making financial statements. It could be good for the, um, the tax returns, because it will tend to group them in accounts that people like accountants recognize more clearly. But there's pros and cons to that clearly because they may not be accounts that you recognize as clearly. And if you're running the business, you might want to name an expense account something specific to you so we can add expense accounts as we dio and that custom expense accounts. We might have Maura counts here than you need in terms of these types of industry. So you could go through these and we could actually delete some of these expense accounts on some of these accounts overall, if they're not something applicable to the particular business, typically the expense accounts would be the ones where we have more expense type accounts than any other type of account. Put again, generally not too bad of a list. Good thing to start with. That kind of limits our ability toe to make mistakes by by adding accounts in the wrong category or something like that. I also always like to go to the view tab up top and go to open windows and open window of list. And now we could see the windows that air we're currently working with at this time. The next item of our instructions on the pdf is to go to the adjusting preferences. So we're gonna go to the preferences here and look through all these preferences and see which ones we want to keep and which ones we want to change. In order to do that, we're going to select the drop down for the edits Drop down and go all the way down preferences just as it has in the power point slide in the pdf slide. And then we'll see these preferences icons gonna pull this over to the top. Now, if you take a look at the pdf, it'll zoom in a bit more. I'm gonna try to keep the big picture screen here so that Ah, we could see that the big picture and where we're actually at in terms of QuickBooks as a whole. So we're gonna start out here, we're gonna go up all the way up to accounting preferences. Notice of it. On the left hand side, we have all these different categories and then on the right hand side, we're gonna have often times two tabs and and go into these preferences within each of these categories. So we got a lot of preferences, so we'll go through these. We're gonna start with the accounting preferences. We have two tabs up top. We've got the my preferences, and we've got the company preferences. Obviously nothing here in the my preferences, we Then we'll go to the company preferences. So if we look through these what the 1st 1 is used accounts numbers. Now, if you're good with account numbers, I highly recommend using account numbers. But if you've never used account numbers, it's really easy. Teoh, Miss. Number your accounts and therefore the numbers rock should be out of order, and they'll be pretty much useless if they're not properly numbered. So properly numbered accounts mean that all the asset type accounts should be have the same sequence, and then all the liability should have the same sequence. And then all the equity should have the same sequence and and so on, so that it will be an order of assets, liabilities, equity income and expense. Then, within those categories, the number sequence will then number in accordance to the number categories rather than alphabetical order. So notes that the numbering is basically the second thing that does the ordering system, the first being the account type and therefore we have toe create the numbering system in accordance with that with that type of warning system, you're not familiar with that. You can just not check the numbering system and it'll still order it in terms of assets, liabilities, equity, income and expense. But within those categories, it'll order by alphabetical order. The problem with that is that every time you create a new account, it'll shuffle up the accounts in accordance with alphabetical order were rather than some other method that might be better in terms of which accounts are used most most often possibly might be a better method. And then we've got required accounts. We wanna have that checked use class tracking for transactions were gonna have that unchecked, automatically assign general journal entry numbers. That's typically a good internal control type thing. So it's gonna automatically number every time we make a new journal entry in order, ah warn when posting a transactions to retained earnings. This is typically another thing that we want to keep in as the default. When we have retained earnings, we don't typically post to retained earnings or whatever account we're closing out to, whether that be the capital account or retained earnings. If we do have something posted, there is usually something funny happening. So it's kind of good to see the warning here that she really just the account that the system closes out to. So then we get so we're gonna have a warning. If transactions are 90 days in the past now we're gonna This is a good warning. Typically, toe, have we're gonna delete to this warning because for this purpose is, we're actually gonna be working out in the future just so we can work through this problem . So we're not gonna be working in the currents time. We're gonna be working in basically a future time, and therefore, these would be very annoying in this problem. So I'm gonna check these If you're following the date ranges we are using than unchecked these if you're not for other preferences and keep those checked next will move down to the bills here. So I'm gonna go to the bills on the left hand side bills. And when it says, changes save changes, Do you wish to save them? We're going to say yes because we just save the changes to the prior tab and that will save them. Remember that you still do have two tabs up top or currently in the company preferences tab rather than the my preferences. And here we have bills are due 10 days after the receipt. That's a pretty good on default to have something to keep the bills there warned about duplicate bill numbers from same vendor. That's a good checked 1/2. So we'll go ahead and keep that paying bills automatically used credits. We're not gonna have that automatically use discounts. We're just gonna keep the defaults within this item here. Then we're gonna go to my preferences and there's no items within my preferences. There are no preferences here, So we're gonna move on to the calendar within the calendar tab. We have once again have the my preferences and we've got the company preferences were basically going to keep the defaults as given in the calendar. And then we're gonna move on to the checking here. So we've got the checking account. We're going to start with the company preferences. So when the company preferences side and we're basically gonna keep the default for most of these, we have printed native print account numbers on the vouchers, defaulted as unchecked. We're gonna keep that change. Check data date when non clearing cheques is printed. We're gonna keep the default. Start with payee field on Chek were gonna default that unchecked. Warn about duplicate check numbers. That's a good safety toe have. So we're gonna keep that checked. If we duplicated check number, we're gonna tell ourselves that auto fill. Um, payee account number in check. Memo s. So this is also a nice thing. Toe. Have this auto fill as we go. It's going to save us time as we move forwards. That's a good thing. To have select default, account to use open and create checking accounts were not going to set the defaults at this point. This could be useful in the future in order to save time. So you may want to look at that in the future. Bank fees view and enter download transactions expressed mode. Create rules automatically is always ask before creating rules. We're gonna keep the, uh, the preferences there, the defaults, and we're gonna go to my preferences. When we select the my preferences we have. We have the open write checks, the open pay bills, open the pay sales and open the make deposits. What we're going to do there is we're looking toe, have the actual checking account our main checking account to be used. But we haven't entered the main checking account yet. So at this point, in time. We're not gonna put anything in the checking information and we're going to move on to We're gonna skip ahead, Teoh, The General Tabs. We're looking at the General tab and we have the once again to tabs up top my preferences and the company preferences. We're gonna keep most of the defaults. So presenting inter moves between fields a pressing enter moves between fields, we'll keep that as unchecked. These are gonna be preferences that may move faster through QuickBooks with keystrokes. So if you're you know, you have preferences in terms of tabbing through data or pushing enter to get through data . Ah, that could be useful. T just be a little bit faster. Next one automatically open drop down list. Win typing That one's gonna be checked off here. That will be a little bit quicker again to see that auto fill feature and then be able to see which the list is and pick it as we see it. And then the next one is beep win recording transactions. Some people really like that. Some don't. But if you don't have that, sometimes it's possible to not have fully recorded the transaction and not be aware of it and move on to another screen and that, having not been recorded automatically placed decimal point. So some people like the decimal to be to be placed in there all the time, and some people like to type the decimal in there every time. So that's Ah, that's one of those type of things that if you move to a different computer, that someone else has that on a different setting it can be. You get used to whatever said in your on in my experience and then the next one says warn when editing trend when editing a transaction, typically a good check toe have Ah, if you are experienced into you and you feel that when you edit a transaction you don't need a warning, you can uncheck that bring, bring back all one time messages we're gonna keep that is unchecked. Turn off pop up messages for products and services probably want that unchecked, but there might be some good like services that they do provide. And the payroll is gonna be one that typically comes up a lot, saying what do you want to have checks? Do you wanna have other top of billing options and credit card options, which are all things you may consider in the future. Then we have showed show tool tips for ah. Clipped texts were to keep that checked, warn win, deleting the transaction or unused in a list. We typically want the warning just to double check ourselves when we delete something. QuickBooks does let you delete more things than other accounting software. Would eso you and an extra warnings? Probably good automatically recall information. Automatically recall account and transaction information. Pre Phil accounts for vendor based on past entries. This can save a lot of time because it'll kind of tell you what we did last time, which is probably typical to close what will happen this time. So it's a good default. The have typically default date to use for new transactions. Use the last inter date or used today's date. You may want to choose either of these. We're gonna keep ours with the last entered date, which is gonna be helpful considering the fact that we will be working with transactions in the future. This is it. It also depends. I mean, if you're always working in the present, this would be a good option if, however you you, you know, wait till they like you have a business where you're entering the data from a, um, the bank statement or something like add or entering it monthly. Then this option would be more useful. Keep custom items information when changing items in transactions will keep that as asked and then go to the company preferences. Company preferences show show portions of an hour. We're gonna keep the minutes here rather than the decimals always show years and four digits will keep that Never update name information when saving transactions save transactions before printing. So we're going to say, rather than having to hit the safe, ah, button each time, it's always gonna save it and then print it and then log off every time a user closed the company or exit QuickBooks. So we're gonna have it log off every time QuickBooks is exited or closed. Next, we're going to skip to the items and inventory, and this gives you kind of Ah, look at what we're gonna have in terms of items and inventory, because because when we look at items when we think of items were thinking of inventory now . Purchase orders and inventory Inventory purchase orders are active. We're going to change that. We're going to say it is. We're gonna use purchase orders in this example problem to see what those purchase orders can do and how they are used. And then we'll keep these here, so make sure to make that change. We're gonna warn about duplicate purchase orders. Were gonna warn if not enough inventory quantity is on hand. Then we're gonna go over to the my preferences. We have no my preferences. So then we're gonna move on to the next item. We're going to skip down Teoh jobs. Let's go down to jobs. Not skipping. Ever gonna say yes. We're gonna save that change that we just made to the inventory items. QuickBooks must close its open windows to change this preference. So I'm gonna say, OK, go ahead and close the open windows to change the preference. And now we are on the jobs preference. My preference is we're gonna keep that the way it is. Then we're gonna go to company preferences, and we're gonna keep the the ah pending the awarded. We're gonna keep that in progress. Closed? Not awarded, and we've got the Do you create estimates were going to say yes, Do you? Do you progress invoice. We're going to say no. And then we're gonna do you due process invoicing? No. And then we're gonna warn about duplicate estimates were going to say yes here. Now, if your if your information is different here, it's probably because we had not checked that items on the inventory tab and or we didn't select the same type of company in terms of a merchandising company. If we had checked off the same type of company, this is probably gonna be the defaults you have at this point. We're going to skip through some of this stuff the multiple currencies, the payment on. Then we're gonna go down to the payroll preferences, payroll preferences and within payroll preferences. I'm in the company preferences tab. We're gonna keep the full payroll. We're gonna have the recall of quantity field on checks, recall our field on paychecks and job costing an item tracking for prey. Check expenses. All those be checked. We'll have the first name checked at the bottom here. We're gonna start. We're gonna talk more about payroll as we go through this and how to how to set up payroll . We will do the manual payroll system. We're not gonna be implementing any any of the pay payroll services, although those air something that we will want to consider and discuss As we move through, we then have the my preferences tab. And there's nothing within the my Preferences tab. So we're gonna move down, Teoh the reminders reminders in the my preferences tab We've got just show reminders list win open a company. I'm going to say no here. I'm not gonna keep that. I'm not gonna check it out and keep it as the default. That might be something, however, that some people really find a useful toe. Have the reminders pop up every time they open so that they have an idea of what they're doing. But we are going to be using a company filed within the future again. And therefore, the Reminders tab are gonna cause us more problems than help at this point. So here's all the reminders. Now again, a lot of these could be very good to use in practice, However, because we're working a practice problem. Our dates are gonna be different or off, and we're gonna have to be moving into the future and back into the past so that we can dio on extended problem with an extended period of time. Therefore, we're gonna turn off all the defaults. So if we go through their checks to print, show the summary again, that would probably be something that could be useful. It would give it, give you a reminder and, you know, pop up to show you that paychecks to print so again that could be invoices, credit memos to print overdue invoices. It might be useful to know almost due invoices. And then we've got sales receipt to print. I'm gonna say no invoices to reorder bills to pay, memorize transactions, money to deposit purchase orders to print, and ah, to do notes against some of those you might want to look into for your own purposes. For purposes of this problem, we're going, we're going to remove those. You may want to keep the defaults. Defaults would be typically ah, good recommended settings. If they start to get in the way or no, you are, you find them as not being helpful. Then here are where you find them in the preferences tab. Here is where you turn them off within the preferences tab. We're then going to go to reports and drafts and we're gonna save those changes. We have just made reports and graphs. I'm going to start from the my Preferences tab where we're gonna have ah prompt me to notify report options before opening and report. We're gonna keep the default at a Ndjeng. When a report of a graph needs to be refreshed, We're gonna keep it as prompt me to refresh. Actually, I'm gonna change that one. I'm going to say to that one that we're gonna refresh automatically and so that it'll refresh automatically. So whenever we go and change data and then go to a new report, it'll refresh that automatically, without prompting. Next, we're gonna go to the company, preferences up top company preferences. We're gonna keep the accrual basis here. So the difference between the a cruel and cash basis you could take a look at those differences. Typically, you want the accrual basis for a couple reasons. One is that you might have accounts receivable or accounts payable that you want to track and those are both accrual accounts. So for those purposes alone, the accrual basis might be something that you want to keep as the default. But there is the option to go to the cash basis as well. What this mainly means is that we are reporting revenue and expenses. Either win. We did the work mainly basically win. We issue the invoice in terms of QuickBooks, or we're going to do it when we ah, when we record the cash and it's gonna be the made major difference between those Teoh types of reporting settings. So if you've got any questions you want to ask your your accountant, Terry, uh, your SEPA on that to see if which of those would be better. But ah, cruel is the default and considered the more accurate method most of time aging report age from due date. So we're gonna keep that there. That's gonna be for the A R accounts receivable aging and the accounts payable aging. Want to try to run reports to see you know how old things are in terms of how past due payments are, for example, Teoh vendors or payments to us from customers. Report reports that show items by name and description rather than name on Lee. We're gonna keep that as the default and reports show, account by name only, statement of cash flows. We're not gonna get into any more the default within the statement of cash flows at this time. These are all, of course, within the company preferences. And we've taken a look at the my preferences we're gonna move down to We're gonna skip sales customers. We're gonna go Teoh sales tax, and we're going to save changes that we have made within sales tax Two tabs we've got the my preference is nothing there. Therefore, we're gonna go over here to the company preferences and we're going to say, Do you dio charge sales tax? We're gonna change that. We're going to say yes. And we're going to say the sales tax item, I's gonna be here and we're gonna pick the item. It's gonna be sales tax items, and that's gonna be the item that we're gonna have sales tax name, and then we're gonna pick the default for the sales tax amount. Now we're gonna keep things fairly generic here. We're gonna call it the sales tax. We're gonna keep it. The sales tax, We're gonna have the name be, I mean, 5% being the percent that not being the actual percent, but the percent will use just for an example problem. To show the demonstration of sales tax. Clearly, it will be different from state to state as sales tax is a state tax. Next, we're gonna have to select the agency. So I'm gonna go ahead and select a new agency. And this is basically just the vendor where we're gonna pay the sales tax. No, I'm just gonna give it a name so that we can basically record the sales tax as we go. This would be who were writing the check for once we collected the sales tax that whenever we make a sale and we have to charge sales tax, we're gonna collect the sales tax and then pay it here again. This will change from state to state. So I'm just gonna keep this generic and call it New York State sales tax just to have the vendor that you were gonna pay in this process. So when whatever state you're in, you got to figure out who you know, who you're paying yourselves tax to and then how much the rate is, and then we're gonna have to be able to collect that and then pay that to defender that being the government agency involved for the collection of sales tax, I'm not gonna fill out any of the other information. And keep this nice and generic note that we have the address here, the payment set in just like we would for the vendors. And we'll see this more once we get to vendors. This is it. Just a typical vendor window that will work with as we go. So there we have that we're gonna say, OK, and sales tax will then be set up the rest of the sales tax. We're gonna keep within the default settings. So we have identified taxable items as t for tax. But when printing Ah, when do you own win? Do you? Oh, sales tax as of the invoice date on their cruel method and that's what we're gonna keep keep with. And then when do you pay the sales tax? We're gonna pay monthly within the sales tax? We're gonna collect the sales tax tax throughout the month on sales we make that are subject to sales tax, and then we're gonna make the monthly payments based on those collections that we have made to the vendor that we have just set up. So we'll see that process as we As we move through this, that's gonna be it. However, I'm not gonna go. We're not gonna do any more on the preferences. So finally, we have completed all of those preferences and can now move forward to setting up our company QuickBooks file further, make sure that make all existing customer taxable make all existing non inventory. I'm gonna say OK as we move out of there and that's gonna be it for the preferences. 45. 6.10 Setting Up Items QuickBooks Pro 2018: CLO in this presentation, we're going to set up inventory items within the QuickBooks inventory items often having to do or principally dealing with, in this case, the types of inventory. We will be dealing with types of guitars before we actually take a look at creating the items first. Want to take a look at what we're trying to do here? I'm gonna go to the company tab up top, and we're gonna open up the home tab. If you do not have it open up yet at this time and within the items, what we're really trying to do, what we going to mainly is going to set up the inventory items. Those are gonna be some of the more complex things that we have to do once we set up the inventory items. In other words, we will be much better off, and the next things we need to set up will be less complex. So if we have a create invoice when we're going to invoice a client safer purchase in this case of a guitar, if we open up the invoice, then that is where we're gonna invoice the customer here and we're gonna have then on item here that says items that's gonna be the item list. That's what we need to put in place here. The items then will be calculated to have the rate and the amount that we will then charge . And then these sales tax charged on that. Now we could, of course, create the items as we go. But this is typically something that we want to create before and then something that then can be set up. And every time someone opens up another invoice, they can just select the appropriate item, and then the rate will appear as it should, and the sales tax will then be calculated, all as it should. As we go. If we are able to get her items set up correctly, we'll have a drop down and we'll have our items here. All we have at this point, then sales items were looking for those inventory items. That's what we're gonna work on now we're gonna try to set up a bunch at the same time again. If we have one item by one item, we could set up the items as we go at this time, we're gonna try to set up multiple items. We will set up multiple items at one time in a kind of a bulk system. So let's see where to go. In order to do that, the power point instructions or the instructions in terms of pdf file says to go toe lists drop down, and then we're going to go to the items lists. You can also find it on the home tab. But I think this is the best way to go because it's gonna be available no matter where you are at it were what windows are open. So we're gonna go to the lists dropped down, up at the top, and we're going to go to the items for the Adams under the lists. Drop down now. Mine opened it up into the smaller window. I just gotta maximize the window. Obviously, we have multiple windows open at this time. We only have the three items, these air, the default items that were put in place by the fact that we were a merchandising company with inventory. We put our crystal right in the middle. Here we can we can extend this sale. So not like that. But like that cursor doesn't look like that, but like that, hold down, left, click And we can extend this cell to Seymour of these items. Pdf instructions then say that we're gonna go to items at the bottom and we're gonna go to add items. So that's what we're gonna add throughout the items, this kind of a drop up rather than a drop down. We're going to go to the items and then we're gonna add items. So we're gonna add item. We're gonna add multiple items, so I'm gonna go down to add edit multiple items, so add edit multiple items and we're gonna enter multiple items at the same time. We should see a screen such as this pop up once we're here. We have a couple different selections in terms of the types of items that's gonna be within the lists here. So what we want are the inventory items that we're going to start with service items. So we're going to select the drop down and we're gonna look for service items as opposed to inventory. Port items were gonna go service items next. What we're gonna do is customize these columns. We want to have these columns to be customized to be as easy as possible to put in the data for multiple items that we will be in putting at this time. To do that, we're going to go up to the customized up top. So we're gonna customize the columns. Once we have this, we're gonna customize the columns in accordance with this list. So we have the name, the sales description, the purchase description, the sales price, income account, sales tax code. In order to do that, this is the full list on the left hand side, and we want to pull those over into this list. Now, if the item is in this list and not over here, we will add it. If the item is over here, but not and we don't want it over here, then we're going to remove it. And if we want to order these items, which we will, then we'll select the item and move them up or down with these toggle tags here. So we have started off with the the item name, then we're looking for the sales description, so I'm gonna see that over here. I'm gonna pull that over by saying ad and then move that up by saying we want to move it right up until it's underneath the item name. Then we're looking for the purchase description That's not included in our chosen column. So we're gonna select it here and add and then move it up. So we're gonna bring that up to our third item, and then we have the sales price. We have that here. I'm gonna go ahead and move that up one. Then we have the income account gonna move that up one, and then we have the sales tax code gonna move that up one. And I'm going to remove then this item here not included in our list. This then, will be the the horizontal representation of the headers. Item name, sale description, purchase description, sales price, income code, sales tax code. So we'll say. Okay. And there we have item name, sales, description, purchase description, sales price, income, tax account, sales tax code. Now what I'm gonna do, I'm gonna try toe maneuver the the size of the columns a bit, so I'm gonna make this one a bit larger and once can you want to be right on those three dots and then hold down the left click. Ah, the purchase description probably needs to be larger. The sales price could probably be a bit smaller and then the income tax Ah, can probably be small. And we have that sales tax code. That should be good. How we get to practice a bit of data injury here. So we're just gonna enter this data exactly as it's showing here on the pdf file. We're gonna enter the item, name the sales description and in the sales price, the income tax account and the sales code. Remember what we're entering our get our service items related to basically a guitar shop. These air kind of some generic names, some of them. But we're looking to have some service items so we can practice both service items in terms of invoicing and item lists for service companies, such a severe Brooke keep bookkeeping service or if we did any kind of service without inventory, repair shop or something like that. And then we also want to look at some of the inventory items so that we get an idea of both of those items. So this is going to be the service item list so diagnostic it's gonna be a diagnostics. We're gonna say $68. I'm not sure what exactly diagnostic is on the guitar or exactly how much would be charged for that. But we're gonna have that item here. We've got our service guitar, full service. We got the partial service Guitar service 100 the tune up. So that's what we're gonna be listening. In terms of the service items available, the income tax is going to be here in terms of the income account. What that means is that when we record this, we're gonna increase the income accounts of service. So that's our revenue account or a income account. The other side, of course, when we invoice will be accounts receivable. So the journal entry or the transaction when we use these items will typically be in the form of an invoice, and it will debit the accounts receivable or increase the amount that people owe us. And it will credit the sales or service income, which is a revenue or income account increasing the income, increasing net income. And we're going to say that the sales tax code will be just tax, So I'm gonna put this information into our data on QuickBooks. Note that as we enter this service data, we're actually gonna type in the word service here. And we're gonna have to add this account because as the merchandising company, we didn't have this service account, the service income. So we're gonna select Tab to set it up. It's going to say, Do you want to set up? This is not on the list set up. We're gonna set it up then and we're gonna add this account now the account type will just be the default of income. That's correct. It's gonna be accounts name. We're just gonna keep it at the service, and we're gonna keep everything else of the same here. We're not gonna mess with the tax lines at this point, and we're going to say save and close. And that service item once set up then will be what we're gonna use all the way through all the rest of the items as we move forward. Okay, so I think we have everything in there as we should, according to the directions here, just listing out the data input again. The only thing other than just data input would be the service item. One thing to note, as you do data input within Excel. I mean with Excel, too. But within QuickBooks and a lot of database programs, it using the tab function Teoh go through can be a very much quicker to go through. You could hit return in some items to go through as well. But the tab is something that usually goes the horizontal way, and it's pretty much universal for most database programs. So instead of using the mouse, you may want to get used to doing that. When we have to do things such as this, this next piece will be the longest piece of data injury, and then we'll have less state entry. After that, we're not going to save the changes. I'm gonna save changes and we got four items have been saved. That is good. That's what we need. Next, we're going to do the inventory parts. So we have these service parts, these air for service items. Now we're going to select the drop down and we want to go to the inventory parts. We're looking for those those parts of inventory things that actually are physically sold the guitars in our gaze We will see a new sheet. Remember that that the other sheet did not go away. And if you want to verify that, note that if you have the open windows open, as I have suggest having all the time by going to the view tab and have the open window list here, then we could go toggle to the item list just to see that those items have been set up. So within our items list, if we were to go later on to the sales and then lists will get the same list and we can see now that we have our sales items, here are total sales are tuneup sales tax our tune up here partial service, our and the diagnostic. Now we're gonna go back. I'm gonna toggle back to it. The screen that we were at this is the add edit. Multiple items. We have our inventory ports drop down, we're gonna do the same thing and adjust these titles to be the best we can dio for the optimal input data for this type, when he's gonna have a couple more things we need, because we're gonna have to have the cost of goods sold as well as the sales price. The cost to us as well. It's just what we're selling for. So we're gonna go ahead and customize the columns once again, Back to the pdf will show us the columns that we want. So we've listed I'm here and we've listed him over here. So we've got the item. Name the sales description. The purchase description, but costs now. The sales price, the cost of goods sold accounts. Ah, the income account. The asset account. The sales tax account quantity on hand. These will be the items once again at the top on the horizontal. Once we finish this up in order to get something over here over to there, which is the columns that will represent the Orica horizontal columns, we will then add them. If something's over here that we do not want, we will remove it. And in order to adjust the columns in terms of ah, top to bottom and therefore left to right in terms of when we finish, this will go the TA going up and down items here. When looking at QuickBooks, I've got the item name. Then we're looking at the sales description is what we would like. So the sales description is over here. I'm gonna go ahead and add it. That will put it at the bottom. And then I'm gonna move that up. T the second number two spot. So I'm putting. I'm gonna make it go all the way to the top and then down one. So we've got the item name sales description, and then we need the purchase description. One skin that's over here. I'm gonna move that over. We're gonna add that I'm gonna make it go all the way to the top because I can't see the top. And that's just the fastest way. And then move it down, Teoh. The third item purchased description. Then we have the cost. Gonna go ahead and move that up one. And then we've got thes sales price. I'm gonna move that up. One. We have the cost of goods sold accounts. I'm gonna move that up. One. We've got the income account gets right here. I'm gonna move that under cost of goods sold, and then we've got the assets account is gonna be moved up under the income account and in the sales tax code. I'm gonna scroll down here. Sales tax codes gonna be down a bit. There it is. Okay. Sales tax code. We want to move that up. So move that up. We want it to be under acid account. That is the assets account income account. Ask itself tax code and then the quantity on hand. I'm gonna go ahead and move that up under the sales tax code, and then we'll remove these. But I'm going to remove this. Uh, remove that Max removed. Reorder. Ah, removed. And there we have it. So this is the order that we got. We got the item. Name sales description persist. Purchased Description, cost, sales price, cost of goods sold. Account income account, acid account sales tax code quantity on hand. I'll give some description of that as we go to the next screen. But when we do that, these will then appear at the top in terms of our headers of this data that we will then input. So we're gonna say Ok, there it is. We've got the item name sales description. So the item name pretty self explanatory. How the sales description is gonna be similar the purchase descriptions gonna be similar, and then we're gonna have the cost. And that's the new thing that we're gonna need when we sell inventory, because we need not only the sales price, but what we purchased it for. I'm gonna make it a little bit smaller because I don't think we need that big of a cost line sales price. That's what we're going to sell it, Force That, of course, will be higher than the cost cost of goods sold Account. That's the income statement account representing the expense of us selling. Something gonna move over here with the toggle at the bottoms. I'm toddling over. We got ah, sheet that's longer than one screen. So we're going to talk, go over So we'll mix Meow, minimize it as best we can to see as much on one screen, it's possible. And then we'll toggle over and then we've got the income account. That's gonna be the revenue accounts. So when we make a sale, we're gonna increase revenue, and we're also gonna increase cost of goods sold. And when I click down here, populated cost to get So for us guessing that that would be the account. And of course, that is correct. And then we're gonna scroll back over here and say we have the asset account. That's gonna be where we store the inventory as an asset before we sell it. That's gonna be an inventory asset account on the balance sheet. And then we've got the tax. That's gonna be the tax code and then the quantity on hand, how many we currently have at this point in time will be the quantity that we will have on hand back to the slide directions here. We're gonna be putting this data into this information note that this would all be on Ah one ro. So obviously this would go through one row and that would connect to the top row up top. We're gonna put it on to portions of the slide so we can see ah, zoom in a bit on this information, Give a bit of a description as we go through this information, note that when we look at this top item, we have the item name. That's just gonna be a short name, kind of an abbreviation, so that we can get a quick look and not have to spell out the entire name. We do want the sales description and purchase description, those then being what will then be on the invoice when we make them. So make sure to type those in there so they do show up when we make those. Then we've got the cost. That's we're gonna be what we purchased it for. That's kind of like the new thing here. The thing that's not on. Ah, the When we have a service type thing, we don't have a cost. We just have the sales price. Then we have the sales price. That's gonna be what we sell them forward. Therefore, the sales price minus the cost is what the net income will increase by. When we record a sale of this first item, the cost of goods sold is going to be the cost income statement accounts. So that's the typical income statement account. When we sell something the expense of the inventory that we're giving up in order to help us generate this sales revenue, then we have the merchandise sales. That's what we're gonna call the sales account. So when we record this 500 sales, it will go into merchandise inventory. The 400 then goes into cost of goods sold. The difference between the 2 100 is what net income will increase by inventory asset. That's gonna be the asset account, and that's going to be on the balance sheet. So in this case, we're gonna have one item of inventory at the 400 costs one item of inventory at the 4 80 cost and so on and so forth. And that dollar amount then will be listed on the balance sheet under inventory Asset. And then we'll have the tax here, quantity on hand. That's how many of each of these items each of these guitars we have. And then we're gonna put this information in as of the date of 12. 31 to 0. That's gonna be basically the end of the year that we're gonna close, and then we're going to start on January as, um, the following year on 21. Now, of course, we're working at a date. That's not gonna be the currents date. And the point of that is that we're gonna have to go forward in time, so we're gonna have to have some other date. So we're not gonna be working in the current date, and so that's just the nature of these type of problems. Eso be aware of that as you input this data. Now we're gonna input this data into the information. Note that as you do this, you will have to do some toggle ing because not everything will be on the same screen back to QuickBooks. What I mean by that is note that we're we have information. We have this bar down here, so if we go back to the start, we're going into the information along here and then go all the way over to this side as we enter this data. So it's best to have the slide in front of you and try to enter as you go, and then use the tab function as you go cell to the first line opened this spell everything as we go. And then I'm gonna select tab, second line, EPA phone, less whole tab, and then I'm gonna type the same thing. Tab for 400 tab. 500 self price. Tap cost. Conciliatory their tab. We got the income account. Ah, the income account, which is going to be the sales. We said merchandise sales and that should be in there given if we selected the merchandise inventory account. And then we've got the asset account they gave us inventory ass. It was what they guests and their correct sales tax. We're gonna have that quantity. We're going to say we have one, and then we need the date and notes that what I did is I did not include the date on the line item. So I'm gonna go back to the custom columns, and we're gonna add the date. So I've gone ahead and moved that over. I don't believe that was in the prior slide in the video will be in the prior slide when you're when you're looking at it, when you're going through this, so your slides will have that input. I don't think this was scroll down, so we couldn't see it all on one screen. But there it is. At this point, we wanna have the date there. It may not be essential cause if we don't have the date, it'll take the default date. But we do want to note that working with these problems were typically going to be working in the in the future. So we want to be careful with the's date items date then will be the 12. 31 to 0 for this item. And then I'm gonna go ahead and do the same thing for the rest of the items. Just going through this and see what we have as we go. All right. I think we have everything in there as it is showing in the slide. So this is what it looks like at this point in time. Note that your screen may differ a bit, but depending on the size of each cell, eso you can manipulate those just Teoh, see what we have there. So I'm gonna scroll back over here slowly. This is what we have at this point in time. Hopefully, it looks like what this lad looks like. And then once we're done with that, I'm gonna go ahead and save that. So we're gonna say, um, save these items, save changes. Six items have changed, so I'm gonna say OK, six Adams air changed. That is good. Then I'm gonna close this window, and that should take us back to the item list. If it does not go to your open windows item lists or drop down list item lists, and you should then see those list of items. Now, we've got our guitars in there. We've got to. Our totals are quantities here, and then we have the price listed within the item list. If you want to just double check this information, you could go to reports up top to see where this will show up. Remember that we have these components on hand at this point. Therefore, they should be on the balance sheet self ago. Two reports up top. We can go on, verify that we're gonna go to the company financials and we're looking for the balance sheet. Now, if it doesn't show up, remember you you have to manipulate the dates and make sure we're in the same date range that date range 12 31 to 0. And there we have our inventory items noted that if we want to see more detail, we can drill down. We could double click on that, or auto zoom is what they call it, and we could see these inventory items. These, then, are the items that we have just input. If we double click on those. We go back to these input tap. Now note it's not gonna go back to the multiple input screen. It's just going to show the one by one input items screen. But if there was an air a problem, you could just drill down on it and we can adjust the amount of the quantities as needed. If there If there's something that is not correct, If this item list does not look the same as this item list, then we could go back and we can tie this stuff out and make it to correct. Now we're gonna go ahead and print a report, just the practice print in the reports here as we go, and that's gonna be this item list. So we're back to the list on this side item list. We're gonna go to the item at the bottom, select the drop up, actually gonna go to reports are reports at the bottom, select the drop up and or drop down. Well, the drop down is not being visible on the screen. Here, let me fix that. We're gonna scroll down a bed here, reflected They dropped down and we got to go toe item list. And here's the reports. That's kind of a quick report. We can get to note that we could find that report in the report section and reports and find it there. But we just got a quick report. I'm gonna go ahead and export this to Excel practice export, And we could print it as well. Note that when we exported to excel, then it will go into a ah formatted worksheet events we have looked at in the past. So we're gonna export two Excel. We're gonna create a workbook, and then I'm going to say we want a new workbook. This is the 1st 1 and I'm gonna say this is gonna be section I'm gonna call this section six, so I'm gonna pull this back over There is our work book. And so we have this information. Now, if we were to print this note that it is printing on this line, we want to fix that. I'm going to go to this and say I tim list and then just go ahead and save that. I'm going to say file, save as browse, and I'm gonna put it on the desktop and we're gonna put it down here in our folder. I have too many things on the desktop. Get great guitars. And I'm gonna put this in a new folder. I'm going to call it section six. This is where we're gonna put that item and everything will be in that section as we go through these. So I'm gonna say save and features cannot be saved. My croquet There we have that eso that's gonna be it for entering the items. Next. And data input will not be as intensive as most of this note, though, that the items are the thing that really gives value because those are the things that drive a lot of the forms that will be working with within QuickBooks. 46. 6.15 Customer Setup QuickBooks 2018: Hello. In this presentation, we're going to set up customers within QuickBooks 2018 back to the QuickBooks file. We will be continuing on our problem with the get great guitars. We have input some data in some prior videos, So if you want to start at that exact point in time, then you could restore the file. If you have access to the backup file, then you can go ahead and take that back up file, restore it so that whether you did the prior's information or not, you could start at the exact same point and see exactly what we're doing from this point forward. In order to do that, you would need the backup file, and then you wouldn't have to restored, as we've shown in a prior video, in essence, going to the file tab going Teoh open or restore and then locating that backup file. If not, then we'll just practice up updating our customers going forward, and you can see how that is done here. There's a few different ways we could do this, but we're going to start off going to the customers up top and get into the customer centers. We're gonna go to customer center, Note that you could also get there within the home tab down here. If you're in the home tab, go to customers. But if you go through the drop downs, that's usually somewhere. You can do it universally, and that's for me the best way to do it then. So we'll go to the customer center. Here we are at the customer center now. Our goal here is if we're starting out at a new company to enter multiple customers at one time, assuming we have some customers that we will all want to enter at one point in time and do that as easily as possible. In order to do that, we're gonna hit the new customer and job icon. Drop down right here. And if we were only had one customer, we would be here at the new customer. If we have a job, which we'll talk about later, we would go here. If we have multiple add multiple customers, as we will do here, then this is the easiest way to do so because we will get this input screen that we have seen Ah similar screen before. When looking at items and that will give us our headers at the top. And we can then just put the information all in at one time at in this format. Now, in order to do that, we're going to customize the headers again because we're just gonna put some basic information in here. We can put more or less information in the actual format, but however we want to set it up, we want to get these headers lined up exactly as the information that we have that we're then going to input. We're then gonna select the custom customized columns up top in order, Teoh, realign these columns. So we're gonna say customized columns and I'm gonna customize the columns in accordance with this slide image over here. So we've got the name of the company name, the customer balance and the opening balance. That's all we want at this point in time. And the main purpose of this at this point in time is to try to transfer for already doing business. Try to transfer mainly these beginning balances in there by customers so that we contract accounts receivable within our QuickBooks file. That's our main goal. So we'll select customize columns and there we have it again. We got the name up top. Then we want the company name that looks good. And then all we want is the customer balance. We have all this other information here. We're not gonna put it in at this time. We're just gonna have the name and the company name for our three customers. You may want to keep some of this information. Whatever information you need to input for in your own purposes. First name, last name, the phone number. All that could be good information. We're gonna keep it simple here. Just putting in the beginning balance is therefore I'm going to remove this. Remove this. Remove this. Remove this main phone. Remove. Remove all of this and we're looking for the balances. Next, we would like to add the customer balance, so that's gonna be over here on this side. Here's the customer balanced there. We want to go ahead and add the customer balance, and then we want the date as well. The opening balance of date. And here is the opening balance date. So we're gonna go ahead and add that those of the four columns we're gonna work with. So I'm gonna select, okay there. And then we have these four columns up top. That's what we need, and so will enter this information here. So we've got the name. I'm gonna just enter the names and the information as it's given in the slide Anderson guitars. And we're going to say that we have no company name will keep the cult actually at a company and your son Tars. And then we're going to say that balance is according to our data here, 5000. Now, if we leave the date, whatever the current date is, it probably will be OK, because we're not. But we're not going to start entering the information until 2021 just to work in the future , to keep everything in one point in time. That's not in the current point in time, because we will have to go in overtime here, and therefore we're gonna try to enter everything as of the end of the prior year, 12 31 um, 20 and then and that's gonna be the end of the prior year. And that will give us the beginning balances when we start in January 1st 2020 once. That's what we're going to try to do here. Then we have Jones again. If you if you put the current date, it's not gonna hurt because we'll still be. It'll still be there all the way up till so the date that we actually use. But what we're thinking here is we're gonna put everything in there as of the last day of the prior period before we're starting the records for the current period. Then we've got Jones guitars and that's gonna be Jones tars. And they owe a 7500 for the customers. Same date, 12 31 to 0. And then we've got Smith guitars, very original names, Smith cars. And we have 8000 same date 12 31 to 0 there as well. That's all the information we're gonna put. We have these three vendors that are through three customers that always money. At this point in time, we will go ahead and save the changes. Then we have three new customer records. That's good. So we're gonna say, save that and ah, so there are records, and so I'm gonna close this, and when we go back here. We can see then that we have our three names here and the balances that are now due to us. So now all we're gonna do is we can check that and check that on the balance sheet just to see what is going on in terms of financial statements. And then we'll print out the customer report. Teoh, just give us some idea of the report as we finish this up now notes that we're using that beginning balance icon. So the books are gonna have to do a journal entry in order to do that. So note what's happening here is we're saying people with money, the account meaning that people with money, it's called accounts receivable. So if we go to the balance sheet will note that we should have the balance of the eight. The five the 75 added up together on the balance sheet as of 12 20 ah 12 31 2000 x one, 2000 2020. And then we should also have an aging account in terms of the receivable so we can take a look at that. We're gonna go to the reports up top. We're gonna go to company and financial. We're gonna throw down to the balance sheet standard and see what we have now, of course, when we don't see anything, we get worried and we say maybe it's a date problems. So we're gonna put the date here 12 31 20. And so there we have our receivable here. If we want to know what that receivable balances that 20,500 weekend, use the drill down item or the auto zoom item and there's our three components right there . If we wanted to, then adjust those. If these were not matching what we have here on the screen and you wanted to go to the data , we can zoom in once again to the source document and note that it takes you to a source document in this case, which is an invoice. Why would it do that? Because when we put in a beginning balance, we have to assume basically that an invoice was then generated. That's why people always must money typically meaning the type of form that four QuickBooks generates. The accounts receivable is an invoice, typically. So it's gonna go to the invoice, not our multiple data input screen here When we when we drill down on this information and note also that it's not putting the balance to sales, it's putting it into opening balance equity. So I'm gonna I'm gonna leave this. I'm gonna go back out to the balance sheet and note. So we have accounts receivable here. We also have inventory and those air to assets that we just put in without putting in a journal entry. And we know that assets have to equal liabilities plus equity. Or if we don't know that, just note that that's the accounting equation that QuickBooks must abide by and for it to give us the ease of us not having to kind of know Deputy credits not having to do journal entries. QuickBooks is basically just throwing that stuff into a balancing accounts that you note that we have net income here or the equity section, including net income of 20,500 opening balance of 8 2096 That net income is being generated from the other side of this of this receivable, and the opening balance was was generated when we put the inventory in there. We may have to make an adjustment for that at the end of the at the end of the time period because we want to put that into one equity account. So note that the ease that QuickBooks gives us by entering these beginning balances is nice . But there's also a downside to it in that it's just going to force the other side of the journal entry, which, in this case, they put into net income or opening balance equity, which will roll into, um, whatever account they're gonna retained earnings or capital or opening bounce equity we're probably gonna want Oh, look at that and give a little more time in terms of what do we want that actually to be rolled into otherwise or equity section could look a little bit messy, so we will deal with that later in this time period. At this point, I'm gonna go ahead and close this and you have modified the settings on the report. I'm going to say no for now. We're back here in the customer center if you need. If you're not back here, you can go to the open item window. If you're not using this open item window I would go to view and go to the open window list , and then you'll see this open item window and you can talk back and forth between your open windows, which is very useful, and or you can go to the customer center and then go back to your customer center. Here. Within it, we can see once again, our individual balances would like to print a report with those individual balances. So in order to do that, we're gonna go to the reports up at the top. We're going to go to the receivables, report customers and receivables. These being the customers and receivables. We've got the a r aging, as we've seen before, the a r aging detail the customer balance summary. We're gonna look for the customer balance summer. We're just gonna look at this one for now to see those balances and export that report to excel. So here we have it. Note. There's no date range here, so it's going to give us these balances. As of the latest date in this case, they gave it to us as of 12 31 20. That's what we want. That's what we're going to export two Excel. I'm gonna export Teoh the same worksheet that we used in a prior video. You can if you want export to a new worksheet. That's fine. Just to show that just to show the data here. So this is how we could export it. We could print it as a PdF or we could export it. Here we will be export in. We're going to create a new worksheet in the existing workbook. So we're gonna select, create new worksheet. But once the next screen pops up, we're not gonna go into a new workbook, but put it into an existing workbook. Then I'm gonna find that workbook by browsing. And hopefully I don't have too much of a mess here and we could find this thing. So we're gonna scroll down Teoh. The get guitars were gonna be in section six and I'm gonna put this Excel sheet there, so I'm gonna double click on that. That's the one we want gonna go ahead and then export this item to the Excel sheet. It should then open up the Excel sheet and add the new tab. That new tab, including this new information. There it is, Now I'm gonna put this tab after this one. I'm just going to click on it and drag it over, and then we're gonna name the tab. I was gonna put customer balance for short. There's a ring when I'm gonna hold down control and and scroll up. Or you can use this item down this up a bit this side. I'm down here just to make a little bigger so we can see it. That looks like the correct data. Therefore, I'm going to save it. It's already at the location. I want going to say the following features cannot be saved. The macro free workbook. OK, I'm going to say that's okay. And then we have that information gonna close that up. And that is how we can enter the beginning balances in a new company for the, um, customers that with money into the receivable account and where that information will be shown on the balance sheet 47. 6.20 Set up Vendors and Beginning Balances QuickBooks Pro 2018: Hello. In this presentation, we will be setting up vendors in QuickBooks Pro 2018. In prior presentations, we discussed how to download QuickBooks, how to set up the preferences, how to enter items and customers. And now we're gonna move to vendors. If you haven't seen those prior videos, that's okay. We can start here from the vendors just to see how to set up the vendors and work within the vendors center. If you're working along with the problem and you have the backup file, you could then restore the backup file at this point. And that way you'd be at the exact same point we are. Even if something went wrong in the past. If not, then we'll just learn the vendor center information how to enter multiple vendors at one time. If you wanted to restore the data file than you would want to go to the file tab and then open and restore Ah, the company as we've seen in the past. And that should take you to the same point we are at here. Once we open this up note, the first thing I would recommend is going to the View tab. All the time and go into open windows. I like to have just so you can see it. It always starts with these tabs to short cuts on the left hand side. Those are not as helpful to me as having the open windows tab. So I like going to the view tab and go to open windows list, and then I'll give us what we are currently have open that we are currently working on. Usually the default is the home page. I'll keep the home page and make it a little bit larger here. Okay, so the next item we're gonna do, we're gonna enter vendors. Now, we're assuming that we have started a new company and we have a list of vendors, some vendors that we want to enter into our system here and put those vendors into play. So vendors then, of course, of the people that we purchased from the people that were buying stuff from in this case typically inventory in our case and our example that being guitars within the vendor within the home page, you could go to the vendor center by going up to a vendor's up top and to the vendor center . But I always recommend going to the drop down because you can do that at any point within the system. So no matter what is open, if it isn't the home page, you can always go to the vendor up top and go to the vendor center. So once again, that's vendors at Top Vendor center. Now this is gonna look similar to the customer center. Except, of course, the difference being We have vendors similar layout because it's the same thing in reverse customers being people who owe us money vendors being people who we owe money to. And therefore we're gonna need a list. In the case of customer centers who owes us money. In the case of vendor senders, who we owe money to and therefore the set up looks much the same with both the vendor and customer center. We're gonna go ahead and just enter one vendor. At this case, that's gonna be the EPA phone, and we're going to start off, meaning someone who buy. We buy guitars from in this example, and we're gonna start off doing this mainly because when we start the new company, we want to input the data for those who we owe money to at the beginning. So we're gonna enter beginning balance and let QuickBooks calculate that Beginning balance fours. Let it do the journal entry for us without us happen to do debits and credits and let it do its thing in the simplified way. So we're assuming here that we have a vendor as we started up a new company and we owe that vendor we owe that to vendor $15,000. We want to put that information into our system without having to do anything complex or a journal entry. In order to do that, just put in those beginning balances. In order to do that, we're going to go Teoh within the vendors, and we're gonna go Teoh the new vendor. And instead of adding multiple vendors as we did with the customers, we just need one new vendor because we're only gonna be doing this with one vendor at this point and eso then we have this familiar a vendor center. Now all I'm going to do is put in the phone and that's who we owe. Owe the 15,002. That's kind of the our vendor. Now the main thing we want to do there is. We want to have the beginning balance of the 15,000. And I could put the date here at the 10 5 because I'm gonna be working in a future date. But I'm gonna put the date right before the year that we're starting with the 2021 somewhere put in 12. 31 20. And that's because we're gonna be working this problem within the future here. And that's just the nature once again, of working through these types of problems. And therefore, we're going to say that this is the last date of the year before the year that we're gonna be entering data into its gonna be 2021. What will be working with That means that this 15,000 will be on the books as of the end of the prior period and therefore on the books at January 1st of the current year 2000 21 that we will be working with now the company name. I'm just gonna put the same name and most of this other information I'm not gonna input at this time. We will be dealing with more vendors at a later point, so we can put a lot more this information in, typically when we're writing the bills. Of course, when we're writing checks, we need the name of the vendor that we Oh, it's the main thing that we're going to need, um, and we and depending on whether or not we'll be using the billing option within QuickBooks and printing out which we typically may not be, be using it for mailing out, said a bill back to someone who sent us a bill, we would want, of course, the the information in terms of the address and the phone and what not? We're not gonna put this information at this point. We're just going to set up the primary purpose here, which is to put that beginning balance in without having to do a journal entry. When we set up the new company, we'll look at some of these other options at a later point. Note that we do have the options over here on the payment tab. These they're gonna be payment options, the terms, normal terms of payment within the vendors. We have the tax settings, the vendor, I d account settings, and additional information. So we're gonna move forward with just this beginning balance and see what QuickBooks does with that at this point. So we will say OK there. And here, of course, Within the vendor center. Then we have the EPA phone 15,000. Now, the question here is, what is QuickBooks going to do with that note that we basically are showing here that we owe 15,000? What's going to be on where they're going to show up on the financial statements? Basically, if we go to reports up top and look at one of our main reports, we're going to see that reports drop down up top. We're gonna go to the company and financials, and we're gonna scroll down Teoh the balance sheet and see what to QuickBooks. Try to see what QuickBooks did with this. Now, if nothing shows up, then we're gonna change the date. We're gonna say it's probably a date thing and we're going to say 12 31 20 is the date that we entered this information as of and we see here, we've got the accounts payable of the 15. That's what we would expect we over the 15 in accounts payable to the vendor. And the question here, then is the reason that was so simple to do is because we didn't have to do the full journal entry. What's the other side of journal entry? We increased one account of liability here. Something else must have happened and note that net income is dumping it somehow down here into the equity section. And QuickBooks is basically doing that for us. It's doing the other side of the entry. So let's drill down on this 15 and see what it looks like. We'll get back to the data sources is called, zooming in on it. So auto zoom, I believe, is the proper name. So we'll double click on this 15 and see where that is going, what they're gonna take us to. They're going to call it a bill, of course, because the bill is typically the type of document used in order to have a payable. Although we didn't Inter Bill, we just entered the beginning balance. QuickBooks uses bills as that driving component, and no to the memo account is opening balance equity. If we double click on that 15 again, we see the bill. So it's gonna enter Bill and again notes that the memo amount is gonna be the opening balance equity account. That being the other account, that we are taking this too. It's got it here into aunts are uncanny arise expense. And the meme memo is opening balance. So it put the this information into a journal entry one taking it to accounts payable, increasing the amount owed and the other side being the uncapped ago rised expense. So it just kind of dumped it into that uncanny arised expense. That's the journal entry that was made. That's basically fine for us because we're really starting this system up in 2000 and 21. So the fact that we put this in the prior year in an uncanny dries expense is Okay, let's take a look at that a bit further. I'm gonna close this. I'm gonna close this. We're back to our balance sheet. We see this here gonna go back to reports up top, and we'll go to the Company of financial. Look at the main other one, which will be the profit and loss similar to the income statement. It is basically the income statement for QuickBooks and we'll put the date range here. I'm going to say 0101 Ah, 22 12 31 20. And remember, we entered that data the 15,000 into the 12. 31 no, we have information here. We hadn't. We haven't entered anything in here. But we have uncapped arised income, and we have uncanny arised expenses. Why? Because in the prior video, we had put in, ah, beginning balance and accounts receivable which quickbooks put into uncanny arised income. And how we put something into the beginning balance for, ah, vendor and that put it into accounts payable and the other side went to this expense account. This income statement makes no sense to us if we wouldn't want Teoh report on categorize income or expense. But by s putting this in there as of 12 31 it will roll over Teoh the next year properly, and we won't have a problem as of 2021 going forward, we're not worried. About 2020 in terms of the income statement were basically worried about only the balance sheet that we have that amounts that we owe. And in order. Teoh have the simplicity of QuickBooks to just set this up without us doing debits and credits or journal entry or having to accounts do one thing, we could just enter the opening balance. QuickBooks will dump it into the other account, that being uncapped ago rised. And as long as we're basically just looking for the beginning balance sheet and not the activity in the prior here we are. OK, so this once again makes no sense. However, not a problem, because we're not using QuickBooks for 2020 were only setting up the information as of 12 31 20 so that we can then have a beginning balance. Correct. As of first year, we will be working with which is January 1st, 2000 and 21. So that's the goal of this process going to close this back out, and then I'm gonna go back to the vendor center one more time, and then we're gonna print a report of the vendors to go back. Teoh the vendors, then notice we have our talk going through the open windows on this side. That again, if you don't have open, it's in the view tab and you want to go to the open windows there and or we can close out the balance sheet that will take us back to the vendor. I'm gonna go ahead and say no, don't memorize that. And so we only have the one vendor. What we'd like to see is a report that would show these vendors. And so I'm going to show that, and we're gonna export that to excel with all of our other chapter six or Section six stuff . That's gonna be great. So we're gonna go to the reports tab up, Tom, we're gonna go down to the company financial, and actually, we're not going down the company and Financial Excuse me. We're going down to a vendor and payables where we have the a p a. G the a p 18 detail the vendor balance summary. That's what I'm going to deal with right now. That's what we're gonna be working with at this point. The vendor balance summary. And that is, as it would assume to be, as it is named a vendor balance summary. That is who we owe. We only know this one individual company, the 15,000 note. There's no date range. So it's basically taking the most current information in there. Which is, of course, in the future. So QuickBooks is picking this up, assuming the most current, which in this case, 12. 31 20. And we're gonna go ahead and export this information. We could save this. We could print it, we could print it as a PdF, we could export it. I'm gonna go ahead and exported to a workbook that we have already set up and show you. So it's how we can put all this into one particular workbook. In order to do that, we're gonna go to Excel over here, and we're gonna go Teoh, create new work sheet that's worksheet within the workbook. And then once this opens up, we wanted not in a new workbook but in the existing workbook. When we have created in the past, if you have not created one, you can go ahead and put it into a new workbook that would then open a new workbook and put it there. But we're gonna go ahead and browse and see it, what's already going where we want it to go because we've done this a few times. but we're gonna go Teoh this item. It's on the desktop and it's right here in the section six. That's what We're gonna be placing this into something. Double click on that and there we have it, and then export. Once that happens, it should open up this pre existing excel worksheet to that we have set up in the past and enter a new tab. There it is, a new tab. Now it put it right in the middle of these other reports I have previously worked on in this sheet one and we have previously worked on. And we're gonna Dragon is I'm gonna drag this to the right. I'm just going to click on it and ragged to the right and have it over here that I'm gonna double click on it and I'm gonna say vendors of skull offenders about that. There we have it. Now, I'm gonna make this a bit larger here, so I'm holding down control and scrolling, or you can use your tab over here and just making a bit larger. And that's that. That is that report. Note that if you want to see the header on these reports, you can go to the print preview type options or the page layout type option down here. And ah, it'll then go to the page layout and you could see the header. So there is a header on it, as there is in the report back over here. You can also see that on the file tab. And if you go to the print icon, you'll see the preview, which does indeed have, ah, header and and the dates at this point, which you could ah keep or remove, depending on your preferences. Note. When we went back and forth that put these items there and as we've discussed in the past, you can go Teoh the View tab in order to remove those. And those are gonna be the split screen. So for some reason there's a default toe. Have those split screens you can go ahead and remove that, and then we want to save this file and then once again, what we have gotten so far as we've done the item lists, we've done the customer balance and we've done the vendors for our new company data that we are now being put into the QuickBooks 2018 program 48. 6.25 Set up new account & Enter Opening Balances QuickBooks Pro 2018: hello And this presentation we will be setting up new accounts within a QuickBooks pro 2018 . We will be continuing with the file we have been working on in past presentations. If you haven't seen the past presentations, that is OK. We can learn just to set up new accounts within here. We're gonna be working with you. Get great Kantar's program we've been working with. If you have been following along and or would like to start at this point and have access to the backup file as of this point, then you could restore that and be starting exactly where we are at as of now. In order to do that in order to restore the backup as we've seen in the past, you want to go to the file tab and you want Teoh open or restore and then find the backup and restore that? If you don't have that, that's OK. We're just going to see how we can enter a new account information. First thing were opened up to the last place we were at, so I'm gonna go ahead and close this window here. When you first opened the program, you may be going straight to the home tab or whatever was open in the previous time period noted that I always recommend having three open windows tab open. That's hopeful to me to see how many things we have open and to toggle back and forth between them. In order to do that, you go to the view tab up top and you go to the open windows tab that will show you which windows are open for me, that only being the home tab. Now we're gonna go ahead and enter some or accounts here. We started a new company that companies selling guitars. So we have merchandise inventory. We entered some items that was done within the item list. Those items related Teoh inventory items. Now we're gonna entered accounts, so we want to enter some more accounts. You may just want to enter a few accounts. If you do that, if you're just looking to enter a couple accounts, you could do that while you enter data. We will do that at a later time, but if you want to enter directly and see the chart of accounts and see where you're putting it, especially if you have account numbers, and you want to know exactly where you need to place these things and what the names of the account and the categories of the accounts are. It's best to go to the chart of accounts, the list of accounts, as QuickBooks calls it, and that is under the lists. There's a couple different ways you can get to this lists place. You could go there through the home page as well. But this drop down, I think, is the best way to get there, because you can get there no matter where you are or what window is open within the program . So we're gonna go to lists and then we're gonna go to the chart of accounts. That will be our major list of this, of course, then is the chart of accounts that we are using. It looks kind of like a trial balance in that we're gonna have the account names. We do have balances over here, however, note that it only has the balance sheet balances the permanent balances, not the income statement, because it doesn't know what date range for the income statement accounts, so it can't really put income statement balance is down here. The main thing we need to see here, though, however, is the account types. Now, this is really important because the account types are in order by type of account, meaning it's gonna have, like the balance sheet first and then the income statement accounts, meaning the balance sheet has assets and then liabilities and then equity. And then the income statement accounts have income and expenses getting even more specific in that, then we generally start off with cash because that's our most liquid asset account and then accounts receivable. That's our second most liquid asset account. Here we have, other than other current assets and then the long term assets, fixed assets and then other assets those. And then these are gonna be other long term assets. And then we have the liabilities, starting with the payables accounts payable, and then the current liabilities, other current liabilities, anything other current other than accounts payable. And then it's gonna be an order by equity income and then caused a good co sold accounts, types and then expenses. So these air not accounts, names these air the account names. These are the account types. These are the things most confusing to most people that are setting up QuickBooks. And if we don't get these right, then there could be problems, meaning things will be out of order. And we have issues. If you have account numbers, note that these would be on the left hand side if you're working. If you're good with account numbers, I recommend using them. If you're new to QuickBooks and you don't I know how to set the number and system up, then probably not want to use them. Note, however, that QuickBooks will still order the accounts in order of the accounts type first assets, liabilities, equity income expense and then these ordering within their before the accounts number. So if you numbered, for example, accounts receivable 1000 and then service revenue number one, it wouldn't put service revenue on top. It would still put accounts receivable on top it first ordering by the order of the accounts and then by accounts number. What the account numbers do do, however, is order something like all these expenses in terms of numbering order rather than alphabetical order within the sub troop of expenses. So, as we said things up, we want to keep that now in mind a bit. Now note that we picked a, um, type of industry, which in our case was, ah, merchandising inventory in industry. And that meant that QuickBooks set up a lot of this information for us and meaning It gave us a list of accounts not too many, and and they're somewhat in alignment with what we would think we would have for the accounts for that industry. So that's a good place to start. If you want to create your own accounts. That's nice, because your own accounts can give you some more information exactly about what you're looking for. However, if you set up your own accounts, it's likely that it might not match up to kind of, you know what on accountant or like the tax code would assume would be the normal categories. That's not necessarily bad. It might be. There's pros and cons to that. But if you want to try toe tryto make your thinking more in alignment with the standard category that are out there, then you might want to choose whatever industry you are in. QuickBooks will then set up a chart of accounts based on the generic account names of that type of industry, And then we can add or subtract what we think is most significant, typically adding expense accounts at that point for the expense accounts that we think are most significant to our particular business. If there's a particular name that we really identify with and we want to track something in accordance with that expense name, then we will have it. So in our case, we're gonna go through this and add a few different accounts. And the first account we will add is going to be the checking account. Note that we don't have a checking account yet. So we're gonna add that in order to do that, we're gonna go down to the bottom. It's a little bit unusual. We gotta drop up kind of window down here and we're gonna go Teoh a new account, and we're just gonna enter one new account, will enter them one at a time here and say new now within the checking account. We know the checking account is, of course, an asset. But note that is breaking this down into more categories than just assets. We want to make that the bank account. So there's gonna be specific items within the bank account, particularly the register, the bank register that we will be using. So we're gonna select that. That's gonna be our item there. And we could call it the bank name for a Bank of America or Chase or Wells Fargo. We would put that name and possibly the last four digits of the number so that we can identify it within our QuickBooks program. We're going to be very generic here and just call it the checking account. And so that's gonna be our major checking account. That's basically all we need. We don't really need a description too much. We could have the account number we don't have to have. It depends on what are functionality will be within these accounts. We're just gonna put basically the account name. That's what we're gonna track this information tax line item that will be applicable if basically you're combining quickbooks to ah program into it does integrate with some tax programs, and it'll kind of be able to link up to those tax programs, but it is not required to have the tax line. We're not gonna mess with the tax line at this point. What we do want, however, is to enter the beginning balance because we're assuming that we're starting this business where there's money already in the bank and we want to put it in there without having to do a journal entry to do anything funny. Ah, and therefore we have this interview gaining balance option. It's only really there when you first set up the account. So if you're opening a new business and you're setting up the checking account and you want to put these beginning balances in there and let QuickBooks just do whatever it does to the other side of the journal entry, then we're going to set up the beginning balance. We're going to set 25,000. That's what's in there. And note that when you do this, you want to check basically what's in there as of the last date before the period you are starting. So in our case, we will be working in 2021 January 1st moving forward. That's what are work problem will be working with of. Therefore, I want to enter the state prior to the current period that we're working so QuickBooks will just throw it in there in the beginning. Bounce will roll forward as of January. I don't want it messing with the income statement. Therefore, I'm gonna put it in the prior year of 12 31 0 12 31 2000 Again, this being a problem, that's gonna be work in the future. Because that's kind of how it has to work when we do these things. Therefore, they the time period we will be working on is 12. 31 2001. We're putting this date in there as of 12. 31 2000 and eight prior to it so that QuickBooks will just put it in the checking account and it'll roll forward to what we want as of January 1st of the current year 21 the year that we will be working with. So we're gonna say okay. And that's the main thing we want there. You know, I'm first gonna hit saving close, just to see what this does. We could hit saving new, because we will be entering more data. But I'm going to say saving clothes just so we can tell. Ah, and note that it's going to give us a pop ups. One stop services save time. Your financial institutions, you could serve free. These So we're gonna get QuickBooks is basically given. It's kind of an offer of what we can do now that we have basically a checking account here . These will happen from time to time. I'm going to go ahead and close this. Ah, for now. Um and we can look at that later. But we've got the checking account here and notes the balance, then over here. So we've added that balance. Where did the other side go? We'll take a look at the trial balance to see where that went. But for now, this is what we want. We want that beginning balance to be showing their next we're gonna enter another new account in the next new account will be a credit card account. So we're gonna do the same thing. I'm going to go to the drop up at the bottom a little unusual, but that's where they put it. Drop up and then we're gonna scroll up Teoh. Ah, new. We're gonna have a new account. And the new account of this time we will have a credit card now, a credit card, meaning we owe something that's a liability Accounts. However, they have a special one here. So instead of putting it into, like, current liabilities down here, current liabilities, we're gonna put it into the special credit card. And what that does is it helps us to track that balance because we'll have this separate credit card register that we can track. And if we're not paying off the entire credit card every month, it makes it a lot easier for us to track what we're paying how to expense those while still not paying off the entire balance. So there's gonna be the credit card that we want and we're gonna say, Continue on that. We're gonna set up the credit card as we're going to say it's just a visa again. We're gonna be very generic. I'm not gonna put it in any subcategory the sub categories just so you can take a look at if you would like to. Some people really like the idea of sub categories. We might have a generic category, for example, of credit card, and then put a list of the credit cards if we have more than one within that subcategory, and then QuickBooks will group it there, and it'll also you can minimize the group's too, So you can play around with options like the sub categories as well. But we're gonna put it into just the visa. This is our our one credit card. Again. I'm not gonna put a description. We're gonna keep it simple. You could put the accounts, that card number. It's not required for us to to work through it here. So if you don't need that data in there, you don't have to have it in there again. The tax line is gonna be something specific. If we were to be working with especially or would work best if we were working with some of into its other software and integrating that software, that tax preparation software. Otherwise, we will print out the financial statements at the end of the year and create are far taxes from them. What we do want to see here is gonna be this opening balance. The assumption then that we're starting this business. We already have a credit card, a business credit card that we have a balance in. We want to put that balance into the system here in some way without having to do debits and credits without needing the journal entry without doing anything funny. So we're gonna use the opening balance function, and we're gonna go ahead and enter that balance date within the credit card amount that opening balance being 1000 that we're gonna put there and again, this problem we're going to be starting with 12. 21 the year that we will be working in, therefore on 2000 21 January 1st, 2021 the the period where we are going to be starting the foot. More information. Therefore, we're gonna put this in as of the last day of the prior period 12. 31 20. That's what we want. So it's in there is off the last date, and then as of January, we're gonna be starting the new timeframe, and we're gonna go ahead and say okay with that, and then all the information, other information is there again? I'm gonna say save and close just so we can see what happened. And once again, it's gonna say you want to set up this I'm gonna say no gonna close that. And then we have the credit card that we have just set up. If we scroll up to the top, here's our banking. And here's our credit card. There's the 1000 that is owed on it. Next thing we're gonna do is set up a long term liability at loan that we Oh, we're going to do that by once again. We're gonna select in the drop up, and we're going to go to the new here. So we're gonna have a new account, and this time we're going to have a liability is gonna be a long term liability. That means it's do over a year. So we took a loan out from the bank. We owe the bank money, and we have the principal amount of the loan that we owe that we need to put on the books. So we're gonna go ahead and put ah loan Now there is a loan option here. I typically put the loan into the long term liability, however, so I'm gonna continue with that that method. I'm gonna go down here and we gonna go. Teoh. Ah, long term liability of the loan. That means it's gonna be alone. That's gonna be do over a year's time frame and keep that there as opposed to short term, which is gonna be due within a year. And then we're gonna go ahead and continue with that and our major thing we want to do once again, the account name. We can put the same loan payable. We could put a long term liability or a long term loan. I'm gonna call it loan payable. Payable to me means it's gonna be a liability. Something we owe. Not gonna put it into any subcategory. Ah, it's gonna I'm not gonna put the description or account number. We're gonna keep all that. What we do want to do, however, if put the beginning balance once again assuming that we're starting the company owing money at the beginning, wanting to set up that balance without having to do a journal entry, but letting QuickBooks do the work for us by put it in the 22,000 here, the date last date of the prior period. It's going to set things up as of the first day to the period were working in. So we will be working in as of January 1st 2021. Therefore, we're gonna put this data in as of 12. 31 20 tohave it the last day of the prior period. So I'm gonna say OK on that and once again, save and close and it puts it right there. So there is our loan for this item and eso We're gonna enter one more item and that's gonna be fixed. Assets gonna be furniture and fixture notice. We have, ah, furniture and fixture here. So we have that amount. What we would like to do there is just add the balance then to that amount. Note that the reason we have that account, however, is because when we set up the the chart of accounts, QuickBooks already put that information into the into here, assuming that the business were in being in merchandising business would have the fixed asset account, the fixed asset accounts, type of furniture and fixture. So if we were to have furniture and fixture we were to be setting up, it would be the same process. However, we would be putting it into not an asset, just the dream general at general assets, not general current asset, but into property plant equipment, A specific asset category one that depreciates over time. So since we have this in here, we're just gonna go down. We're going to select that account. Of course. First, and then we're gonna go down to the account and we're going to go ahead and edit that account because what we're trying to do here is put the beginning balance into this amounts without having to do anything silly or do anything difficult or hard. Which would be Ah Teoh, enter a journal entry. We're trying to just have QuickBooks put the beginning balance and do the journal entry for us. So therefore, we can just go to the Inter opening balance. We're gonna enter that balance as of the end of the prior year that we're going in before the year that we will be working in so they balance for us will be 75,000 and we're gonna put it into 12. 31 to 0 so that as of January 1st 2021 the year we will be starting to put information into it will already be rolled over and ready to go. So we're gonna say OK there and once get all the rest of the data Looks good. We're gonna keep that as is and say save and close their that balances Note. What we're not doing here is we're not putting balances into the income statement accounts . Those air timing accounts of those only happen over time. We typically want to start our business. As of, you know, one time period going forward. We don't typically want to go back and try to enter the income data for prior years. If we have to do that, then we're gonna do that a different way. We're probably gonna go to the bank statements and enter everything in as we go. But if we're just starting from this point time moving forward, which is the best option if that is a non option available, you could do that. Now, if you if you need the QuickBooks to inter prior data in order to track your prior data in order to see if that prior date is correct, then I would take your bank reconciliations and enter that going for. But we'll talk about that at ah later time. For now, we're just entering the beginning balances This is where we are at. You can go through this chart of accounts and see if there are other areas where you think you have a beginning balance and ah, and see if you need to add that there's going to balance sheet items, those they're gonna be the assets items and the liability items, typically the ones we will be starting with. Once we have that then will be putting all the rest of the data the activity data into the system. As of the current period, we will be starting within our case, that being 2021 January 2021. Now that we have this information, we're gonna go ahead and print this out in a report format. We want to take a look at a trial balance of this time, so we're going to take a look at trap outs that will give us our list of accounts and balances for them. So in order to print a trial balance, we go to the reports up top and we're gonna go down to accounting and taxes, and then we're gonna go to a trial balance. I'm gonna change the date ranges. I'm gonna go from 0101 20 we're gonna go to 12. 31. 20. So january 1st, 2022 12. 31 2020 and then we'll see our balances here. So we got the checking account. 25,000 accounts receivable. Inventory furniture, ah, accounts payable Visa loan. And then we've got these three, which are kind of funny looking down here, but that's kind of the price we pay for the fact that we haven't had to do any journal entries. We injured all of this data without a debit or credit without having to accounts for any entry with just entering beginning balances. That drawback is that as we did that, QuickBooks basically put this information into kind of random accounts into the other side cause there's two sides to each account. So when we entered 25,000 the checking account QuickBooks had to do something with that other side of it. And let's see what it did with it. If we double click on the checking, we see the activity here, and, uh, I'm gonna say 25,000 won't let me double click on that. So I believe where it put it was opening balance equity. So check that will go down here to opening balance equity and see this activity. And let's make this date range a little bit older, see if it's a date thing. So we've got this information in here. So this this is all the information that basically we have the inventory parts that they put to the other side went Teoh the opening balance equity. When we entered that inventory, we didn't do that this time. We did that in Prior video. The visa went here, though, when we put the visa card in there, they put it into this opening balance equity of the other side of it, that is, the loan payable the other side. The 22 went into this account and the furniture and fixture went into this account. So I'm gonna close this back out. Ah, the other The other count. I'm going to say no, that it will put things. Teoh is gonna be this uncanny arised account income and uncanny arised expenses. So let's put that into context. Let's take a look at an income statement just to see what it's doing here, and we're gonna say reports. We're gonna go down to company and financial and we'll look at a profit and loss and I'm gonna change the date range. 20101 2022 12 31 20 and note. Here's where put that other uncapped ago rise 20,500. Put it into uncapped arise income. If I double click on that, if we drill down or auto zoom on that, then we see this information here the ate the 75 and the 5000. That's where the 20,500 is from those being the receivables. In this case, it looks like those so that receivables from the beginning balances. When we put our customers in in a prior video, I'm gonna close that up. And then we've got the UN categorized expenses here at the 15. So point being that this statement makes no sense. But this is the statement. This is the price we pay in order to enter those beginning balances. And it's not worrisome to us. Reason being is because we're not gonna be dealing with anything in 2020. We just want to make this balance go forward in 2020 so that the balance sheet amounts will be four. Be correct. As of 12 as a January 2021 the year we will be working with I'm gonna close this back out, and that means that we all we need is this equity account basically to be right, as of January the next year. Now, we're probably gonna change this this equity and just just kind of put it into one account , one equity account rather than having multiple accounts, these income statement accounts and will roll forward. For example, if we went Teoh 0101 21 0101 21. Then note that we don't have those uncanny Gore's accounts because those are income accounts and they rolled forward into the owner's equity, as we would expect. We do still have this opening balance, which is not, you know, nice, not what we really want. So we'll probably just close that out to the equity, and we will then be okay, so point being these amounts are all correct. That's what we want to see. That's what we want in the balance sheet. We're not worried about the fact that QuickBooks kind of dumped the other side of the journal entries into these uncanny arised accounts because we're not worried about the past the income statement in the past, we're starting at this point in the future. We want our balance sheet correct and then move into the future and create our income statement as of this point forward. Also note that I have made an error on the on the date of checking account. Here is not a problem, so I'm not going to fix it. But I want to show you the problem with the date problem that was done here and what the effect is on it. So if I close this back out, we note that we had this checking account 25,000. That's what we want. Gonna double click on that and then I'm gonna change the date. I don't see the activity here, so I'm gonna change the date to go way back in time on the beginning. Balance, Teoh, like 1995 or something, just to see if I put the date sometime way in the past and note that I put it in in 2000 instead of 2020 again that if I had the the alert on that would have told me that it was in the past, they would have told me that with an alert as I did that, but notes that because I turned those off because we're working in a date range outside of the normal date range, it's very easy to put the wrong date in there. It's not gonna affect us here because we're still gonna have that 25,000 on the books as we start moving forward. But if we want to change that, if we want to look at where that data input is, weaken double click on that and we see that it formatted, then a deposit slip. So when we put that beginning balance in their, it formatted a deposit slip and it put the other side into the opening balance equity. So I'm gonna go ahead and change this from the year 2000 to 2020 and ah, there we have that and then save and close that. And then we'll close this and note, then that if we go back into this opening balance equity and we have the date range from? Let's close this. I'm gonna change the whole date range again. We'll change the date range back 20101 22 12 31 20. And then I'm gonna double click on the opening balance equity. And then there's that 25. So this will then give us the list. So it wasn't showing up in the past. The point being is because it was in a prior date. But this will give you an idea of the other side of what's happened. It's gonna be somewhere in the equity section, and, um and ah, we'll have to deal with that up a little bit later, Will fix that. I'm gonna close this out. I'm gonna print this for now. I'm gonna print this and I'm gonna export it. I should say exported. To excel to the worksheet we have prior set up for this problem. This would be how you could export it. You can print it. You can save it as a pdf. We're gonna practice exporting it to a workbook. A workbook in this case, we have already set up. If you have not to set one up, then you go ahead and export it to a new workbook. So in order to do that, we're gonna go to, like the Excel Tab we're gonna say, create new work sheet, but it's gonna go into the same workbook. What? We're gonna say it, click on that, and then we're gonna get our options and we're gonna put it into an existing workbook because we already have one We're working on in this Siri's. It's already going in the right spot. But of course you would then browse for that Excel sheet. You're looking for minors right here. Section six. That's what we want. Gonna double click on that And then I'm gonna go ahead and export and then Excel will export. It will open up that Excel sheet. It will then export the information to a new tab within that Excel sheet. Just like that. Note that we have worked on the item list, that customer balanced the vendors, it put the new sheet kind of in the middle. So I'm gonna pull it to the last part here, and I'm just gonna call, I'm gonna double click on it. Changed the name called a trial balance. Beginning balance. So it's the trial balance with the beginning balances. So I'm gonna put that there, and then I'm gonna make it a little bit larger. I'm gonna I'm gonna hold down control and scroll up. Or you can go over here to the plus item, make it a bit larger, like so. And there is that This is the information we have taken a look at and put together so far. We will continue with this as in the future presentations. 49. 6.30 Adjust New Account Balances QuickBooks Pro 2018: Hello. In this presentation, we're going to set up and adjust New Balance's. Once an account has been set up for the first time within QuickBooks 2018 we will be continuing along with our comprehensive problem. If you've been working along with us and that is great, if you have not, that is okay to you could take a look at this and see how these beginning balances would need to be adjusted for any company. We're working with the project of get great guitars. If you've been working along. And if you have access to the backup file and would like to just upload the backup file at this point in time to make sure that we're not missing anything, even if there was an error, even if we've been working along with us, then you can do so. If you have access to that backup file that would then be. Once you have that you'd go to the file tab as we've seen before and restore the backup file open or restore. If you don't have that, that's fine. We can work through this and just see how these beginning balances would need to be adjusted the story where we are at. At this point, we set up a new company. Our new company is Get great guitars. We sell guitars. We've put in all the beginning balances into our worksheet using QuickBooks beginning balance option in prior videos. If you have questions on how to set up a new company and how to put the beginning balances in there, take a look at the prior videos. Now the issue is that prick. QuickBooks does a good job of us not having to use debits and credits, not needing to know too much about accounting in terms of debits and credits in order to set up the accounts. However, there is a bit of a cost to that, and there is something we do need to understand when we set up those beginning balances and a format to to use that could maximize QuickBooks ability. Teoh set up these accounts without those debits and credits, and that is that we put in all the accounts as of the first day before the new period that we were starting, and now that means that it's going to roll over and everything should be good. As of the current period. So what we're gonna do now is we're gonna go to the trial balance, which is kind of like a list of accounts and see those accounts in order on and and then take a look at some balances. We may want to adjust in order to correct some of the errors or some of the issues that may have happened by QuickBooks being able to quickly input this beginning data. So let's do this. We're gonna go Teoh. Now, if you don't have the view tab open, note that I like having the view tab open over here so that we can toggle from window to window. The only window open at this time, the home tab. You can open this up by going to view and open windows. And that way we can see what we have open over here. As we work through this, we're gonna go to reports to see what accounts we have. So I'm gonna go to reports here. We're gonna go to the accounting and taxes. We're gonna go to the trial balance and see what is in the trial balance. Now. We entered all of our data. That's being a project in the future because we have to work within this time period. And remember, we're going to start the company and inter new data as of 2021. January 1st, 2021. We entered then the data as of the last date of the prior period so that as of the current period that we're going to start entering data, we'll have all those beginning balances will have rolled forward correctly. So this is the date that we entered the data in as I'm gonna put 12 31 2012 31 to 0. We went through and entered all of our beginning balances as of this 12 31 to 0 balance. And ah, therefore QuickBooks put in all this information and the beginning. That's what we actually put in the checking account. Beginning balance No. Two accounts, no debit and credit. Just to be gaining bounce in the checking account, we entered all the customers and put in 20,500 from the three customers. I believe here and again. We didn't do that with a journal entry. We didn't know need to know debits and credits. We entered the inventory account here in terms of our products that we so and that we have on hand. As of the time we started this business again, we just put the beginning balances. We didn't put a journal entry in. We put the furniture and fixture. We put the vendors meaning we listed the vendors that we have in our case on Lee One. And the fact that we owe that vendor $15,000 again. No journal entry, just that amount. We had a credit card. We just put in the credit card balance. The loan we just put in that balance. That's what we owe as of this point in time. And then we have this stuff which, if you just put in this balances, we would have no idea what this stuff is. This is the other side, Mrs the other side to the journal entries that QuickBooks created as we picked up all of these accounts. This, then, is what we really should adjust in order to make our financial statements correct. If you don't, it will all be kind of inequity. And it won't. It won't be too bad. Your your c p a or your accountant at the end of year when you do taxes could probably pick that up and adjusted and know what is going on. But if we want to clean this up, clearly, we should not have this uncanny arised income and un categorizes expenses. Those air wrong. And this opening balance is not an account we typically have. That's Ah, that's basically QuickBooks plug account. That's QuickBooks saying I don't know where to put this, and we just put it in the opening balance. So that's what's happening here now these two were not too concerned with cause note, this is as of 12 31 20. That's the date before we're really going to start. We're not going to really start entering data until 21. And once we go to the next day, the current year that we're going to be working with these two amounts will then roll over or close outs to the equity account. And I'm going to show you that in a second. So I although this is very strange, it's not gonna bother us because we're not gonna use QuickBooks prior to the year 21. Although we entered all the data in as of 2020 because we did so in order just to get the balance sheet accounts to be correct, not the income statement accounts, because we're not worried about them prior to that date, these air income statement accounts, they will then be temporary accounts. They will then close out. So I'll give an idea of what I'm talking about here. We're gonna just change the date to the year that we will be working on S. Oh, this is gonna be 0101 21 and we'll make this 0101 21. So january 1st, 2021. This is the first day of the year that we actually want to work on and know what we have now. It disappeared. Those two balances disappeared. Those uncanny authorized income and uncounted arise expenses. Those temporary accounts, those income statement accounts, those income and expense accounts gone because they've been closed. Where did they go? How are we still working here? Why did QuickBooks need those balances? Well, it needed those to be in balance for our accounting system, and it closed them out to the owner's equity. That's where it's going to roll out the temporary accounts after each year, and it did that automatically, so that's great. We don't need to do anything to that because now we're fine. As of the first date of the foaming year, however, we still have this opening opening balance equity, which we would like to get rid of here because this is not typically used. We really just want this owner's equity account. Now. This is a sole proprietor, so we're gonna assume we only have one owner in this case and we only need to have one equity account then that representing the amount, the book value of the company, the amount the company owes them back to the owner or, in other words, representing assets minus liabilities. So we really just want that one equity. If we had a partnership, then we'd have to equity accounts, and we'd have to worry about we'd have capital accounts in essence, and we've set up capital accounts and try to track who the net value the net worth. The assets, minus the liabilities is then owed to in terms of the two partners in accordance with the partnership agreement. If it was a corporation. Then we'd have a retained earnings account that would be similar to this owner's equity account where we're gonna roll over all the net income balances into. So in this case, all we want to do is move this amount here. Now, Typically, the best way to do this is kind of difficult to avoid journal entries in this case. So I'm gonna go ahead and do a journal entry here, taking this 79 8 96 pulling it out of here. And I'm gonna put it into this owner owners equity accounts so that we no longer have this kind of weird account this count. We don't really want to see this account that represents We kind of don't know what we're doing, Really, Which is this opening balance equity? So we're just going to get rid of that? We want to put it into the equity, So I'm gonna do that with a journal entry will see what a journal entry looks like here his first time. We have to actually use a journal entry in orderto set things up to really get it proper and note that this is a credit. So we need to make it go down. So I'm going to the opposite. I'm gonna debit that amount. So in order to get to the journal entries, we're gonna go to the company tab, We're gonna go down to make journal entries down here, make journal entries. And here is our journal entry form. Quick, quick. Now automatically assigns numbers to journal entries. I'm going to say that's great. Say okay. The date of our journal entry is then gonna be I'm gonna make it the last day again, just like we did with all the other ones. 12. 31 2020. I'm gonna keep their account number there. Journal entry number Note it made to journal entries prior to this as we entered are beginning balances. That's fine. We need to debit the opening balance equity to get that going down to zero. I forgot what the number is, but luckily, we have our open balance windows open here, and we can toggle back and forth between the making and journal entries and the trial balance. So we'll go back to the trial balance, and I'm seeing 79 eights 96. So I'm gonna go back to the make journal entries. We're gonna say 7989 That's kind of funny. Now I hit the plus button. That's not good. 79896 tab. So let's check that one more. 979896 Trial balance 79896 Okay, it's going to go into the owner equity, so I'm gonna go to the second tab Owner Equity. And if you start typing in there, of course it'll fill in for you. There's gonna be the owner Equity. There is our debit and credit. Now, don't worry if you think and I'm going the wrong way, I don't know what debits and credits are. What if I do this backwards? Then we'll go back in. QuickBooks is very, very, very lenient in terms of adjusting journal entries After you do that, unlike other accounting software which would want an audit trail and not let you delete basically anything, so we're going to say which is could be good, but we don't get in that. But any case you could adjust this afterwards, so we're gonna say save and close, and it's going to say Look, we're posting to retained earnings, which is unusual. Do you want us to do that? And we're going to say yes, we do, because this is the set up process. Once that is done, then note that the only the owner capital goes down to zero. And, ah, the owner's equity then is increased to the 85 3 96 Now, this looks more like what we would like typically to see. We just have that one equity account that representing the assets minus the liabilities. If something happened, if there was an error or something went wrong in that process, if this balance does not to go to zero, then we could just double click on this, change the date range to some time in the past so that we can see the activity. There's the activity. And then we're looking for this journal entry. Believe this is the last one. We did bring it to zero. This is a running balance of the activity. And so if we double click on that using the zoom, the auto zoom feature and we get to this account now, this is the ledger for every account kind of has a ledger. If you want to see the actual journal entry, then on you could work it for here. You can see the decrease here, and then it went to owners Equity. QuickBooks tries to do this so that we don't need to know kind of debits and credits. But the increase in T creases almost as confusing as the debits and credits. So it might be just easier just to double click on the general journal. And then you'll see the journal entry. So here it is, and you can then change it again. And if you went the wrong way and you put a credit in opening balance and you can change it and go the other way, do you want to see the prior three journal entries? You can go backwards. We go the prior journal entry and see what's there. And it's saying No, prior. Well, here's here's to ah, furniture and fixture. When we entered the beginning balance in furniture and fixture, it entered a journal entry and enable that one when we entered the loan balances within prior videos. By the way, of course, it entered visit data. So there's that. I'm gonna go ahead and close this out, and I'm gonna close this out and I'm gonna close this out and you can see that it's closing back here. I'm going to say I'm going to stop this from happening by saying Don't to display this message in the future and say that and then we're back to the trial mouse. And now all we have open is the home and the trial balance. All we haven't changed is closing out the excess equity accounts. As of the first day of the current year, we actually want operations in and put that amount into the only equity account we want as a sole proprietor. That being the owners equity accounts now, we're gonna go ahead and export this form this ah, to excel, as we've done in the past, it is possible to print this as a PdF or um, or to print it. But we're going to export it to excel to the same workbook that we have been working with in past. If you have not been working with a workbook in the past, have been following along, you can open a New Excel workbook. The export feature can be very useful. We are tracking the tabs as we go in the file that we're working on within the section to export Two Excel. We're going to go to the Excel tab up top. We're gonna create a new worksheet. Although it will be going to the same workbook clicking on this item next that will pop up . We have the create new worksheet, but we wanted to be to an existing workbook. Then we're going to select the area that we have it going to. It's already going in the right area because we've done this before, but we want to browse. We want to find the Excel sheet that we wanted to go to and click on that. And then it's gonna open that we want to export to that excel sheet. Then once we do that, it should open up that excel sheet. It should export of the data into a new tab within that Excel sheet takes a little bit of time. But then it pops up like this and there we have it. So this is what we've done so far. Notice it, put the new sheet kind of like right in the middle. I want I want to bring it over to the end someone just gonna click on it left, click and drag it to the end like that. Then we want to rename it so I'm gonna double click on it and I'm gonna call a trial balance adjusted a d. J. And so it looks just like we had before. Last time we left off of the trial balance that was unadjusted. And now this tab, we have a try bounce that we've adjusted now, making this basically zero gonna make this a bit bigger. I'm gonna hold down control and scroll up, or you can go over here and we're gonna make a little bit larger so we can see it there within Excel like so. And that is going to be that that's our first basically journal entry that we we were forced. Teoh use a journal note that we're trying to do a lot of this stuff without having journal inches without needing to know debits and credits. And QuickBooks puts together a lot of systems for us to do that, including us being able to enter these beginning balances without needing to accounts or debits and credits. It is also possible with the use of registers it would have been possible for us to use registers to do what we did in this particular transaction. But in this case, I think the registers are as complex, if not more so, than using just journals. The registers. There's a register for each account, and we saw them briefly, and they look kind of like the same thing as the check register. The thing confusing about registers is that when you're not talking about the checking account and you're talking about something like the Opening Balance Equity Register, it gets confusing on which it is it going up or down. And when you're closing it out to another equity account, including being in this case, the owner's equity, it's just is difficult to know whether it's going up or down as it is to guess whether we're gonna temperature credit an account. So in any case, this would be the last step you'd need to do if your step, if you're working on setting up new accounts, this would be the last thing you need to do to really clean up that that problem that will happen due to the fact that QuickBooks is trying to help you out by by not making you correct journal entries. If you don't do this, then it will look kind of messy. Won't look as professional, but your accountant could probably figure it out at the end of the year. But it is something that could clean things up and look to make things look up more professional as we dio. 50. 6.35 Payroll Set Up QuickBooks Pro 2018: hello and its presentation. And we're going to set up a QuickBooks system four QuickBooks pro 2018. If you have been following along with this project we've been working with, it gets great guitars than that would be a great if you have not. That is okay. You can see how we're going to set up a QuickBooks payroll system within this project. So far, we've set up a new company. That company being get great guitars would be the name are gonna be selling guitars and doing some service as well, both having merchandise and a service company. As we move forward, we are now gonna add payroll. Main purpose here is not to go through all the payroll systems that QuickBooks has. QuickBooks has a lot of payroll systems, but to see the manual payroll that we will then set up and then set up some vendors at some actual employees within that manual payroll system to see how it is set up and then talk a little bit about the different types of options and why you may or may not need different types of options within the payroll system. If you have access to the backup file up as we go through this and want to start at the exact point where we left off from the last point, then that backup file then could be restored by going to file and open or restore, as we have seen in the past. If you don't have a backup file or you haven't been working along with this, that's okay. We can just look at what we need to do for payroll again idea, setting up a manual peril. So what we have done, we've got QuickBooks up and running. We didn't set up the payroll yet, and now is the time that we can put that payroll in place. You can put payroll in place whether you used a paste system or basically the manual payroll system that we will be setting up at a later time. So when you install the QuickBooks, you may not feel up the pressure. It's gonna ask you if you want to have a payroll system put in place when you install and don't feel that, that's the only point. Time that you'll ever be able Teoh set up the payroll. You can set it up at a later time. You do want to be careful, however, as to when you set up the payroll. It's nice to set him up at the beginning of the year, or at least the beginning of the quarter, so it lines up to your quarterly and yearly payroll statements. Ah, but once you get up and running, if you if you then at a later time need to set up the payroll and we don't have it within the QuickBooks system, that's okay. We can then go set that up. Now, if you look down here in the home page and I would open the home, it's probably opened to the home page. But if it did not, you can go to the company and in the home page also noted that hours have the open windows section open over here that's in the view tab, open windows. So if you don't have that open, I would then open that and then we can toggle through and we could see what is open. The only thing opened at this time is the home page working concentrated down here on the employees section and note that nothing has set up and you can tell by the fact that we only have the time enter and the turn on payroll. If you click this icon, you're gonna get some options for the payroll. And there's gonna be different types of paid options for payroll. If you choose basically, ah, cheaper payroll plan. It will kind of do a lot of the federal with holdings, meaning it'll do self security and Medicare and federal income tax withholdings. And if you have more advanced settings than you can typically have, the state will be better and better tracked within the states, the states being more difficult for QuickBooks because, of course, there's more of them. It's not all standardized as so security, Medicare and Federal income tax typically are. We're not gonna go through those different different payroll set up systems now. We could do some more research on setting those up later. What we want to do now, it's set up the manual payroll system as if we were going to put the Czechs in their manually and actually calculate the the F. I TIF, federal income tax, the soul security and the Medicare. Now I don't recommend actually doing this within within a business to to set up the manual system and then have to calculate the payroll. Unless you have help doing that well and and or a very little few amount of employees. Even if you have a couple employees, then it's probably worthwhile to either pay for the payroll system. And even then, if you have over five employees or so it might be worth your while. Teoh outsource the payroll to something like a paychecks on 80 p or local payroll service, which basically does it for you. And then and then we could just enter the payroll journal entry. What we want to get from this, however, is what's going on with payroll in terms of what's What's the process that we have to use to set up. And then what do we need to get from payroll in terms of the employee information? Have the set up so that we can add the employees to see what the employee information looks like and then see the calculations within payroll, and that will give us a better idea of how we want to set up here on what we want Teoh do with do with Pale. Do we want to pay what pay for it. Do we want to outsource it? Do you want to try to do it manually just so you can see some of the paid options? If you click on that item, it'll it'll take you to some of the paid all options here. So it's 14 months. 22 a month, 79 a month. Easy paychecks just enter hours, automates tax calculations paid by check or free direct deposit. Then we have the more advanced features here. The electronica. We file the W two, which is nice for the advanced featured Some some that are in the higher pay bracket include payroll tax forms. That's the nine forties in the 9 40 ones I believe. And then we have the 79 a month, which is, uh, we file and pay taxes for, you know, tax penalties and whatnot so you could take a look at those. Note. That payroll is somewhat complex, so you want to compare these prices. If you have a substantial amount. Employees Teoh what could be paid for an outsourcing service such as a T, P or paychecks or some other. The local services such as that payroll is becoming very specialized of ah thing. And ah, lot of companies are specialising in it. So in any case, we're gonna close this up and we're gonna go to the help menu. We're gonna manually set this up, and we're gonna go to the help, and we're gonna go to the QuickBooks. Help search. That will be the first option, QuickBooks, a desktop help. So we're gonna click that. We're gonna get to get the help icon here. We're gonna type in here. We're gonna type in manual payroll and enter and see what pops up here. We got processing payroll manually. That's what we're looking for without a subscription to QuickBooks desktop payroll. So we're trying not to pay for anything. We just want to set up our employees, and we want to see everything manually set up. So we're gonna say manual system once we then have that we're going to go to manual payroll calculations. This item here. So we want to click on that hyperlink there. And then once we have that, we're looking Teoh. If you are sure you want to manually calculate the payroll icons, click here, and that's what we want So we want to set up company file to use manual calculations. So we're gonna set that up once we do that. This bottom portion, the employees abortion should then change, Show us some more items. Those items, including ah, pay employees icon and it pay liabilities icon s. So let's hope that happens as we click on the set. My company file and we're gonna say OK, and there we have it. I'm gonna close this window and we now have the wintertime, but we also have to pay employees and then we have the pay liabilities. So these are the two items that we're going to need in order. Teoh, perform the payrolls. Now we can enter the employees and weaken go through the payroll process. And QuickBooks will still give us the system to pay employees, which is basically just going to say, Here's your hourly rate times, the times, the number of hours. But but then we're gonna have to, of course, add to it and manually calculate the with holdings, which is the difficult part of payroll. Not too bad for the federal with Holden's, because we have, you know, so security and Medicare pretty straightforward, and then we've got federal income tax could be a little bit more confusing. But as we get into states, and if we have multiple state issues in particular, then it becomes an issue that we want to probably have some type of paid service at some point fairly quickly, within a fairly limited amounts of employees. 51. 6.40 New Employee Setup QuickBooks Pro 2018: flow. In this presentation, we will go through the process of setting up new employees within QuickBooks Pro 2018. If you've been following along with our problem, that's great. We will continue with it. If you have not, that's OK. We're still gonna be putting information in terms of a new employees. So if you're looking for that process, we can see what happens within that process. If you're following along with us, we are on now that gets great guitars is the store that we are setting up. We sell guitars, and if you want to have the file exactly where we left off after the prior presentation wears, we have set up the company and then entered customers and entered beginning balances and actually set up the payroll and now are at the point of entering employees. Then if you have the backup file, you could then restore, just to make sure we are at that exact point. And if you made any errors in the past and we'll be starting at the same point, So if you have the backup file, you can goto file and restore the backup file, and then we'll all be on the same page. If not, and you just want to see how to set up company new employees within a company within QuickBooks, and then that's that's fine, too. We will work through that note, however, that last time we went through the set up of payroll. So if the last presentation, we actually set up the payroll, which is down here, we are currently in the home tab, by the way. And, of course, if you don't have the home tab open, you go to the Company Preferences hometown. I also recommend having the open items window open on the left hand side by going to view and then go into the open window list. That way we can talk all through the open windows of the only open window at this time, the home tab within the bottom of the home tab. We see the employees kind of format here. Of course, we could enter time, and then we could pay employees, and then we can pay liabilities. So this, of course, would be the normal flow. That's the beauty of the picture here. That's the nice thing. A nice set up that we have on the home tab within QuickBooks, however, note that many times people don't often don't always use the time entry option that would be similar to clocking in or recording the time calculation. The nice thing about it is that it ties into invoicing and ah, and a tie. And so when you into the time kind of in a time sheet format per employee, it will enter the time. And it also put that into any kind of invoice if it's relevant. If we put jobs into there and it'll it'll create the payroll as well. But there's external software that sometimes people like to use outside of QuickBooks to do that. And you don't have to do that in order to We could put the time that was worked for the week into the payroll system. Also note that there are different options. There's at least three different options, and we're using the manual option here, which is kind of like 1/4 option for payroll. The three different paid options very in terms of how how much you gonna pay and how much you're gonna get. Obviously, And the basic version really, uh, comes down. Thio Thio How much is going to be automated with, um, the system the federal taxes. Typically, QuickBooks has an easier time with because they're standardized across all the states. The state taxes can be more complex. If you're thinking about whether or not Teoh run payroll through QuickBooks or run it through an outside system, you want to discuss that with your C p A or someone to advise you on that, I would get 1/3 party advice on that as well as talk to the payroll individuals. Just so you have, ah, third party independent, objective opinion, along with the vendor that you thinking about such a paychecks or E D. ADP, which are great tools. But in this case, we have the manual system set up. So when we make new employees, the system's going to be pretty much the same. No matter which type of payroll we have set up, whether we have the three different tier paid versions or the manual version, we're gonna have to basically set up the same you know, customer information. How do we input that data? We need items in terms of our the hourly. Are they gonna be salary and then set up their page, Um, their wage information, which we typically would get their wage information, what we agreed on and then their marital status and the exemptions that we get from the W four. So note that, of course, that type of information, a lot of it you're gonna have to basically agree on beforehand. What's that with the pay rate gonna be? And, um, is it gonna be hourly or salary? So we're gonna basically give that information here and then and then in terms of just the IRS, we're not gonna get into too much in terms of what's the requirement for setting things up ? But the W four is is going to be a standard type of form that will help us to calculate the exemptions for new employees. So this is often where we can think of. We're getting of this type of information from the W four, which will provide the number of exemptions. It'll help that first name, last name address, city, state and ah, marital status, which are gonna be the required information that we will need when we are entering this data for new employees into the QuickBooks to start off. We're going to go to the employee center Now, you could go to the employee center down here in the home tab. But I like to go through the drop downs because no matter what's open, you can always go through the drop down so you can find the same place here by going to the employees and then the employees center. And here we have the employees center. And now, of course, we're gonna enter new employees which would be listed on this part here and then give some information about the employees that were currently selected on Over on the right hand side , we need to enter a new employee. So we're gonna go up here, we're gonna have new employees, and we're gonna into the data for a new employee. Now note just a quick overview over the tabs here. We have quite a bit of information that we gotta put in to here, so let's just given observation of what we're going to be dealing with, and then go ahead and start entering the information. You want to have all the information in front of you before you start really doing this? Because otherwise you're gonna get Cathy information in. You have to run around and get the rest of stuff. So obviously a lot of the stuff we would get from the W four b a good resource toe half. You have that you probably have the information needed to complete this. We're going to get this information from a slide. So we have our prior slides and our instructions, and I'm just gonna fill in this information in accordance with a set of instructions from a slide. So we're gonna need the first name. The last name that would be on the W four. We're gonna need print print as that'll fill out automatically. We need the Social Security number that will be in the W four gender W four I book. That should be on there. We have the date of birth. We need the marital status that will be on there and ah, citizen and status there. And then we're gonna have Teoh disability. This is this is stuff that we don't always need. So we're not gonna be filling it out in this case, Eso that's gonna be the added information. And then we have these three tabs on the left hand side address and contact. Additional information, payroll information. That's kind of like the key one. We're gonna have to get Teoh. And then we got the employee information. So let's take a look at those. We've got the home address. Obviously address here, State, We've got the phone number. Some of these are not going to be required fields in. Some of them are fields that we will not be filling out here. Although it is a good place to enter this information. So it's nice tohave This is information within your database program. If this is your go to place, of course, in order to have contact information or just another place that is convenient to have it, then you want to make sure to put you want. You want all that information in there. Obviously, Then we way have the additional information, and I'm going to skip that and go to the payroll tab. This is where we're gonna enter the, um, how often we pay them. Do we pay them monthly? Bi weekly. Ah, the interruptions Weekly, semi monthly, quarterly or annually. Of course, the most common options are gonna be weekly, biweekly, semi monthly and monthly now the difference between semi monthly and bi weekly can be a little confusing because you would think they would be kind of the same. But they're slightly different. They're gonna actually result in different, different pay periods because if we pay a bi weekly, we pay every other week where a semi monthly we pay basically in the middle of 15th in the end, so so semi monthly we would take 12 times to we'd be paying 24 times. But if we pay ah semi weekly, we're paying every two weeks. In that case, we take the number of weeks which would be 52 weeks and we basically divide by 2 52 divided by two. We actually 26 pay periods, so that's a bit confusing. There's a slight difference between those two, So just the mindful if you're thinking about those two once again, if you're talking, if you're talking that you're gonna pay someone twice a month than your pain, there's 12 months times 2 24 payments. If you're gonna pay them every two weeks, then there's 52 weeks in a year about and you're gonna pay them it. Divided by two you get 26 so note they're not exactly. They're not exactly the same in terms of the number of papers. And therefore we'll have different results when we do the calculations. Ah, that's gonna That's gonna be the major information. The added employees info. We'll take a look at this as well. Date higher original hire date and so on and so forth. These are gonna be the primary information. Personal address, payroll information. Okay, so back up to the personal minutes going into this data in accordance to a new employee as if we have the sheet. I'm just Internet from our data sheet, our pdf file. Some is going to say Adams, their first employee, That's how they told us to spell it there or not exist. But that's what we have on the form. So that's what we're gonna have here. And Social Security we're going to say. And obviously this is not actual information for anybody. Ah, uh, have that's that's just fictitious fictitious name here. And we're gonna say they're single and knows I'm tabbing through this information. So no, when I finish the name just for one tap through, that'll take you to the Social Security tab through the gender tap through date of birth tab through marital status and tapped through citizen of basic, the drop down horns. Hopefully, yes. That'll make things nice and easy, and then we're gonna tap through and ethnicity. This is not this an optional field. I'm gonna leave it blank for now. And the rest are gonna be basically not required for us to get going and actually process and run the payroll again. If you're If you're setting this up, you want you want to talk to your accountant on it and what? Not in your CPI. And make sure you get it all set up. Ah, for whatever requirements for whatever state you're in. But we're just going to get the things set up so we can run and see what the payroll looks like in a manual processing system. So the next item we're gonna look at will be the address and again working. It's gonna take this information from the W four from our pdf file one for 23 2nd streets were going to say, and that's going to be New York and yes, stays and zip. 10003 and I'm not gonna enter the added information again. It's great to have this information. I would put this information if you have it available, but it's not a required field in order to process the payroll. Typically you do need, ofcourse the required fields of a soul security and the address and what not? Then we're gonna go to the additional information. I'm not gonna put anything there. I'm gonna go to payroll info. So pero info and ah, the schedule. I'm not gonna put anything in the schedule. What we do need is to choose the payment frequency, and for this individual, we're gonna pay them monthly. That's the agreement, and we're gonna pay a salary. So note that we're gonna have to set up an item if we don't have one set up already. If we do, it would be in the item list. So note if you go to the lists over here and go to the item list, this is where we can we can enter the items We entered the information here prior to this not related to payroll, but related Teoh inventory items. But we're gonna we're gonna try to go back over here. I'm gonna close this back out. It's gonna close this out. I'm back here. If we have your open windows, I'm in the new employees. If you don't have open windows open view open open windows. You can see what's open. We're gonna go ahead and list out salary. And that, of course, means that we're gonna pay. Ah, monthly amount every month. That will be the same. I'm gonna say, Tab, and it's gonna say salary is not a payroll item yet. We don't have it set up in our item list, and I'm gonna set it up directly. As we set up the employees I was gonna say, Yeah, then I want to set up something called salaries. So I'm gonna say, Set that up, please. And it's going to say, Do you want payroll Adam to track hourly wages? Ah, annual salary commission or hours and we want not hourly. This case, we want the annual salaries. That's what we wanted to calculate it as. That's the type of item that we're working with. We're going to say next is this item for regular overtime? Ah, sick or vacation? We're going to say it's for regular pay and say next Inter name. We're just gonna call it salary, so it's gonna be nice and simple. It's what we're dealing with That's the That's the item name and that's what we're gonna call it. And then we're gonna say, Enter the account for tracking this expense. It's gonna default to payroll expenses. That sounds reasonable. We're gonna keep it at payroll expenses and finish. So there we have it there. We have the salary. Now, when we put the salary in there, we were going to say, Do we want to put the annual salary or the monthly salary? Possibly could be a question. We're gonna put the annual salary. We're going to say it's 55,000 year. 55,000 year, of course, means that on gross we would get 55,000 divided by 12 or 5 4083.33 month and then we have would have to take out from that the with holdings that we will have to deal with once we actually process. Ah, the payroll. That's gonna be great. We will also need that tax information up here. So we're on the payroll information and we're gonna go to taxes up top. We're gonna get this information from the W four. Typically, we have the federal and state. So we're going to say that this individual we're going to say is, ah, single allowances were going to say one. We're gonna pull this from the from the W four extra withholding. We're gonna have none. We're gonna have Medicare, Social Security, federal unemployment tax. We're gonna keep that, as is on the state side. Note that typically we would put the state in this case, we're gonna put we would put New York. But I don't want to get into the weeds on the state. The state's gonna change from, ah, place to place. Depending on where you are, we're gonna keep it. Since we're doing the manual payroll, we're gonna keep it with just the federal here. When we do the calculations, we're gonna actually manually calculate the federal income tax and the withholdings. The states some states will have a tax system that will be similar to the federal tax system. In some states will have some middle that will be different, a bit different. So we're gonna continue with this. I'm going to say, uh okay, and we're gonna continue. And there we have that. That's gonna be the basics of the information that we're gonna need to set up the first employee I'm gonna say, OK? And you wish to set up payroll information for other or local taxes? Sick vacation. I'm going to say at this point, I'm gonna leave it as is and just keep it at that point. So there's our first employees were going to set up another employee now and we're going to go through the same process. We can see this again. We're going to set up a new employees and this employee. Then we're gonna enter this information mainly. Most of it would be getting it from our W four. That is gonna be Erica. And we're gonna say, Roberts, son again, fictitious name. And so it's going to give it that for us. Soul security, fictitious little security and gender female. We're gonna say date of birth, and again, uptime just having through this information 12 2179 noticing, and I just type in 12 31 79. That's the quickest way to basically type that in. And then once you select tab, it'll put that information in Merrill status. We're gonna say Married Tab and then, citizen, we're going to say yes, Tab, the other information. We're gonna leave blank at this time. We're then gonna go toothy address tab, so address in contact. This is a required information. In order to process payroll for East Second ST city of New York, we're gonna say new. And there we go again with the city. Did it? Ah, it's in York. 90003 And again, I'm not gonna put the rest of this information not required, typically for processing payroll. Nice to have, however, Then we're gonna go to the payroll information and this individual we're gonna say we're gonna pay still monthly. So not to buy a weekly. But we're gonna pay monthly. That's important. And don't mess it up. And then we're going to say that we're not paying this person's salary. She is getting hourly, so we're gonna have to track the hours then. And so once I select tab, it's going to say once again you do not have the hourly set up set up yet, and we're gonna say, OK, I'm just gonna set it up from here. Set that up. Do you want to set up payroll item to track hourly wages, annual salary commissions or bonuses? We want hourly this time. Next. Regular pay overtime, sick vacation. We just want regular pay at this point. Next, we want the hourly pay. We're gonna keep it at hourly pay next. And then it's gonna give us the expense account payroll expense. That's where the expense will go as we process. Payroll sounds reasonable, will keep the default and say finished. And there we have that once again, we're gonna need Teoh set up the taxes. So we're gonna go to the taxes up, Tom, and we're gonna say married this time and we're going to say allowances will say three and no extra medical Medicare, Social Security and federal unemployment tax. We're gonna keep those again. Typically, we would have the state Teoh. We're not gonna get into the to the state at this time. Those will change from state to state. Once we process the manual payroll, we'll have enough of a complexity to get an idea of what payroll is doing from the withholding of Medicare, Social Security and federal unemployment to get a feel for what we would have to dio through that process and what the payroll checks will look like. And then we can go from there to decide if that's the process we want or if we want to purchase either QuickBooks payroll or go to 1/3 party such as A. T. P or paychecks. So we're gonna say that that will be it. I'm gonna say, OK, going to continue and then that is Dad and I say, OK, and we're gonna leave that as is. So there's our too, then are two employees. They're gonna be set up in order to, ah, record this information. Then we want a printed reports for the employee information, gonna print an employee contact list and then export that to excel as we have in the past. And that then will be under the reports. We're gonna go Teoh employees and payroll, and I'm looking for payroll summary payroll detail, payroll earnings, employees, state transactions, payroll transaction employees, contact list. Let's go with that and just give us the basic information that we have for the employees here. We're gonna go ahead and exported. Obviously, you could print this. You could then print as a pdf for saving. As a pdf, we will be exporting it to excel to a file we have been working with in prior presentations . If you haven't been following along, then you can export it, Teoh a new file or go back and take a look at that prior stuff. So we're gonna go to the expel and we're going to create new worksheet. And then we're going to export it, however, to an existing workbook. And then we're gonna find that the workbook, it's already going to the right spot because we've been doing this for a while, but going to Goa said and sit, browse, and we're gonna saith e section six. That's what we want to save it under and double click that and then export takes a little bit of time, but it should then open a pixel should export this data into a new tab. Like so. That new tab is called sheet one, and ah, notice. It's kind of in the middle of all this other stuff. We've been doing these other tabs. I'm gonna take that grab that left click on that and pull it to the right. And I'm gonna call that employee list, double clicking on it and typing an employee list. I'm gonna make a little bit larger, gonna hold down control, scroll up a bit so you can see a bit more of it. Note that you don't have the headers shown here, but there is a header. If you go back over here into the views and go to the page layout to view and say, OK, it will give you the header. So that's what the header is. If you go back over here, QuickBooks has now entered a split screen to get rid of that's you go to the View tab and you go Teoh the Windows Group and unscripted screen. I would then save this. And that's what we have S o far too. Ah, this point again noted, The payroll is a complex component of ah, of the system. And there is real questions in terms of how much support you wanna have with PayPal. Even with a fairly limited number of people you're having payroll through, you may want to pay for the QuickBooks payroll and or work with C p A and or someone who has dedicated strictly to payroll someone like paychecks, er or on ADP type of third party system. But this is how you how we're gonna get the new employees set up within most of the QuickBooks payroll type set ups. Then once we have this set up, we will run. Payroll will actually demonstrate once we enter the data how to process payroll using, Ah, these employees that we just set up actually pay them, and then we'll see how to then process the pay liabilities. Meaning we're gonna have to take that information that that money we took from them so security, Medicare, federal unemployment, and then are a portion of the soul security and Medicare that we have to pay for them as the company and pay that Teoh the Fed. 52. 6.45 Export Transaction List By Date QuickBooks Pro 2018: Lo. In this presentation, we will generate the transaction that detail report within QuickBooks Pro 2018. If you have been falling along with us and that it's great we're gonna continue on the gets great guitars problem. If not, then that's fine, too. You could see how to print the transaction detail list reports. This is gonna be a report that really gives the most detail in terms of what's going on over a certain time period. So if there's a problem, if there's something going wrong, if you look at your balance sheet income statement or trial balance and say something is not working here within this certain time frame, one place to go a really good place to go would be then to this detailed report, which will show all the activity that has happened over the date range that have been given . Given a list of the date of the transactions as well as the driving document, typically invoice bills, checks and then it will give you, you know, the name, the memo, a lot of detail. You can then drill down on those zooming into those items to see if you see something that's standing out That doesn't look right at that point in terms of grading UN assignment . If you were to actually try to grade what you're doing or review what you're doing, this is a great point report to look at for that to happen. So if we have a new employees that's doing work, and we want to kind of review the process of that work and see if the actual data has been input as we believe it should be, then the transaction list by date. Great thing to use in order to fulfill that function. In order to do that, if you If you've been following along with this problem, when you want to restore the backup to make sure we are in the current spot that we're enroll in the same spot, you can do so if you have access to the backup. If not, that's OK. We'll just print the same report and show how it is done. If you do have the backup, then you want to goto file. You want to go to open or restore and restore, the backup asked me have seen in prior presentations. We're then gonna open up here to the home tab? No to that. Of course. You do need some data in the QuickBooks file in order to run this report because we're gonna be running every port that's going to show the data over a certain time frame. So if you're looking at a new file with nothing in it, then you're not gonna have any data in order to run the report. We're currently in the home tab. Just so you know where we're at here, that's in the company and hometown. Also note that we have the open windows open. I always recommend having that done. And to do that if it's not open, when you open the program, go to view and then go to open window and that will show us the windows that are open that window on Lee being of the home tab at this time. So we're gonna run this report, Remember that this is going to include data that we're gonna have. It's gonna give us a list of all the data. We're gonna do this. We can do this a couple different ways, but we're gonna do that with the reports drop down. We're gonna scroll all the way down to accounting and taxes and then we're going to go down to the transaction list by date. Transaction list by date. Don't get that mixed up with transaction detail by account. That's different. We want to be down here with the transaction list by date, and we will generate this report. Doesn't look like there's anything on it. And that's because, of course there's a date problem. We're gonna change the dates in this report. So we're gonna change the dates first to 12. 31 to 0 and Teoh 12 31 to 0. That's going to give us the data. Remember, we entered everything in as of when we had the beginning balances as of the end of the period before the one, we will be continuing to enter new data in as we go. So this is this is the period before we and we're going to start basically entin entering data after this point. So what we've done so far is we have uploaded in this problem. We've uploaded where we haven't uploaded. We've created a new file. Forget great guitars. We have entered the beginning balances. We've entered the vendors and we entered a balance for the vendor. That was Do we entered? Ah, the customers and the balance that was Do we entered our inventory and the items within the inventory records note what we haven't done. We haven't included any new information in the current time, friend. Meaning we haven't put any invoices in. We haven't put any bills in this transaction. Detail information is really being generated just from us entering that beginning balance data as we've done so far, just from entering that those assets, those liabilities that we needed in order to start the business within our Quikbook file as of the last date before the current period that we want to start working in which in our case will be January 1st, 2021. So this is the last day we entered everything as of the last day for look at this data just to get a sense of what we've got here, note that we've got the inventory by type. And of course, this is gonna be the form will look in order to review our progress as we go throughout this whole process here so well, get used to this report and reviewing it. Make sure that it's looking like what we wanted to look like. And eso we've got the type. We've got the date. We've got the number we've got name in this case with the names What we'll get in that a second We got the memo. Ah, account cleared and split and amount Note that we can maneuver these and make them bigger or smaller, based on just going right in between with those three dots are and making the sale whiter or smaller as needed. And if we go through that, then we can think about Well, how did this stuff happen? How did these things come about based on what we have done so far, especially considering we haven't really entered any any data input that we would typically consider data inputs such as bills and invoices. And the first item is the inventory adjustment item, and it was on 12 31. Of course, as they all are, we have the memo here that being the inventory item and it went to the account opening balance equity, and we see it. So it's a split here means multiple accounts and the amount if we zoom in on that, then we can see the activity. So this is what's great about this report. If we see something funny, we can go back to the source documents. Now, the source document may not always look like what we input. For example, this one we used a multiple input screen in order to upload this information. When we go back to it, it's only showing the one basically one input screen, one item at a time. But this is gonna be the most kind of normal document that would make this inventory item. And we could see that we have the item name, the description, the quantity and then the value within this screen. So this is going to give us the detail when we double click on this information to close that back out. Those were the inventory items we set up and again we set them up in such a way that we didn't have to put a journal entry in. We just put the beginning balances in in a prior video. Take a look at that and these are gonna be the same balances. What were those transactions? QuickBooks generating this transaction detail from those beginning balances we had put in in that case from the inventory. Then we have this invoice, and again we're thinking what we never even put in an invoice and it generated an invoice. Why did that happen? Because we set up these three customers and those three customers had balances that was due to them. As of the point in time, we set this file up, and QuickBooks uses the form of an invoice to record that information. So even though we didn't generate an invoice, we hadn't yet seen an invoice. When we put those balances in the beginning balance, QuickBooks generated an invoice. If we double click on these amounts and see what happened by zooming in drilling down, as I would typically call it, we see the invoice here again. We didn't really make this invoice, but it has been generated as we put in that balance. Notes. There's no item. There's no quantity. They just posted it to opening balance or the description. Here's to opening balance. So this is the form that has been generated as we put in that beginning information. That's okay for us right now, because it's gonna make the balance sheet accounts correct. And the income statement accounts is, as of the prior year, which we're not going to be using, which will then roll into the balance sheet accounts. So I'm gonna close this out and we have an invoice, an invoice and then a bill. And again, we didn't enter a bill. Where did that come from? Well, we have this vendor EPA phone where we buy our guitars from and we owed them 15,000. We put in the beginning balance of what was owed to them. And QuickBooks generated a bill because that the driving form that is used when QuickBooks says you owe someone money, that account being related to it of accounts payable. So if we double click on that zooming in on that, then we can see the bill being generated again. The account in the expense account, uncanny arised expense. Not a good expense. Typically, we would probably want it someplace else, but we're not worried about it because we put it in there as of the prior year and we're not running reports in terms of the income statement. As of 2020 we just put the information in. As of that date so that it would roll forward correctly, closing out to the balance sheet as of the first date of the time period in which we want to enter new data like bills and invoices that being January 1st in our example 2021. I'm gonna close this back out. We then have ah deposit here. We didn't enter a deposit. Where did that come from? Well, we entered something in the checking account, and when we did that, the software uses the form of a deposit to drive. That's transaction. So all we did was open the checking account and put a beginning balance of 25,000 in the beginning. Balance and QuickBooks then generated this. So we're gonna zoom in on this and again, this is kind of the cost of not putting in journal entries and what nots that this is happening. But it all works out as long as we put the dates in there as of the last date of the prior period. And it'll all work out for the first date of the current year that we will then be working on. But note that we deposit. Here's a deposit slip and it went from accounts opening balance equity again. We don't want opening balance equity. That's a funny account. It's It's basically an admission by QuickBooks saying, We don't know where to put this, so we put it in opening balance. We had corrected for that, however, with a journal entry sets the one journal entry we had to put in in order to adjust this. But that's what was generated by QuickBooks when we entered that beginning balance. Then we've got the credit card here, and that's gonna be a credit card charge and make this a little bit larger. Can we? Never. We never put anything and call the credit card charge. But we did put a visa account in there, and we did put an opening balance in their of 1000. When we did that. QuickBooks takes the form, generates the form. That's what drives things within QuickBooks transactions. Things drives, financial transactions. And so if we double click on that 1000 to zoom in on it, we'll see the credit card purchase charge here and again. It went Teoh the memo Opening balance accounts opening balance. That's not ah really kind of account that we want to be typically using him, but but it will. We already adjusted for that and, ah, in a prior presentations that you take a look at how we dealt with that, but notes what is being generated as we set up this company. As we put these opening balances in, we then had a loan and, ah, furniture. And that means we put the loan on the books again. We didn't make a journal entry. This is more typical, however, to just make a journal entry. That's kind of what we would expect when we set up beginning balances up. But in this case, we set it up by opening the loan account and put it in a balance in opening balance. Now, because alone is not a typical transaction, it's not something that, like a bill or an invoice we do all the time, like revenue or expenses that we see commonly. The QuickBooks goes Teoh, the journal entry, which is kind of like the last resort if it's not a normal transaction, and so if we double click on this item, we see this information it tries to tries to really resist, go into debits and credits by first going to this ledger. Ah, but the ledgers air almost just is confusing when we're not really talking about a ledger that it's commonly known to us. So I'm gonna double click on the journal entry right here. And this is really what it generated. Is this journal entry? I'm gonna close this. It credited loans payable and the deputed opening balance equity. We may not know what debits and credits are, and that's the point. That's why I QuickBooks is really trying to trying to hide the fact that these air these air journal entries there trying not toe have us worry about it trying toe fill in a system that we don't have to deal with it. But just so you can see the behind the scenes, this is this is what was generated again. It put it in the opening balance equity, which is something we had adjusted for in a prior presentation. But this is how QuickBooks is dealing with us. Putting in those beginning balance is gonna close. That gonna close that we then have furniture and fixture once again being done with a journal entry Again. We didn't put a journal entry in. What we did is we went into furniture and fixture, and we entered a beginning balance what the QuickBooks do, Then if we drill down on this, we tried to take us to another register here, but I'm gonna take a look at the journal entry by double clicking, right? I'm a journal entry, and it generated this journal entry debuting furniture and fixture crediting opening balance. This is the side we pretty much saw when we enter the opening balance. This is the side that QuickBooks had to generate in order to make things work without us having to tell it where to put that credit balance. And that's the adjustment we made to opening balance. Because that's not typically an account we want to use in a prior presentation. We'll close this back out. And last one we have, Ah, the opening balance. This was the one journal entry we made, and that was to close out the opening balance to zero with a journal entry. So, in essence, this is the information that we have. Ah, if your stuff ties out to this figure, just take anti everything out to this. Then your financials are most likely exactly like the financial that we have. If there's something that is not taking and tied out to this than something maybe different and and not correct, and if there is a problem with it, then what you want to do is really change the date ranges, meaning change the ranges all the way back to maybe 2000. So you can try toe, pick up any kind of date problems and then bring it forward to at least the next year to see if we entered anything. As of the next year that we're gonna be putting stuff into. And if anything else appears and you see a different date other than 2020 then you wanted you could just double click on that. Change the date within the detail. Within that information, gonna change is back to 21 I'm sorry 20 and 20. So that's gonna be this information if if it's out of order, however, notes that that could be just the ordering that you put it in there being a little bit different and the dates still being the same. So what you really have to do if you were to check this stuff off. It's just basically take anti this that I see this here. I see this on my I see this here. I see this hon line and take anti each one of them off individually and look for any differences. Once we have this, then we are going to export it. Teoh, Excel and put it to the workbook we have been working on. If if you're not working on that workbook and you want to export it for practice, then go ahead and export it for practice and use. Ah, new workbook. We could, of course, printed at this time saving as a pdf. I like to get in the practice of saving it to an Excel file. I think that's a really useful tool to develop. And so we will do that. Going to go up to excel here. We're going to select the drop down. We're gonna create new worksheet, create new worksheet. We will then have an option pop up and it's gonna say, create new worksheet. We then want to go to an existing workbook. That workbook, the one we've been working on. If you don't have one open, then go. We can create a new workbook and it's already going to the place we wants because we've been doing this for a while. But we're gonna go to browse here and find our workbook. That's it. That's the Excel workbook. Double click on that. It should then be taken it to that toe workbook. And then we're gonna say, Export, it will then open up QuickBooks. It will export this data to QuickBooks within a new tab in QuickBooks and name that tab. Probably sheet one. And then what we're gonna dio is rename that she tab and organized those she tabs in the organization and form that we want and do any other formatting that is necessary at that time. Here is our form notice it is a bit wide, meaning that it will print on two pages wide, which can be a bit confusing. It put the sheet here in the middle of the other sheets that we have made. We're gonna go ahead and pull that to the right hand side by left clicking on it, dragging it to the end over here, gonna double click on that and we're gonna call it transaction. And I'm just gonna call list Let's call it that. And there we go. And that is going to be that and note. Of course, the header will be up top. If we were to go to the file and the print of you, we would see that the header did pull over there, gonna go back and that's gonna be it. So we'll save this and say Save that and that will be that. 53. 7.05 Record Deposit from Onwer & Loan QuickBooks Pro 2018: Hello. In this presentation we will record what is often times one of the first couple transactions that will happen within a new company. We will record these transactions into QuickBooks Pro 2018. Those being the record of a deposit from the owner and a deposit from a loan taken out to fund the start up of the business. If you've been working with us, we're going to continue on with the get great guitars problem. If you have not been working with us, that is OK. We can still see how to record the original deposit from an owner and loan within to a new business. What we've done so far is we've set up the guitars business. We have a new company file. We put in the beginning, balances the beginning accounts and the beginning balances within those accounts set up a couple vendors set up because the couple customers and we are now going to actually start recording the transactions. We're gonna record all these transactions as of the first date of 2021. So we're starting a date. That's not gonna be of the current state. That's by design. When we work problems such as these. So we've done everything in order to start things up, and now we're actually going to be entering these transactions. This is typically going to be the first type of transaction, oftentimes with a start up type of company and therefore we're gonna enter the deposits couple ways we could enter deposits. We could go to record deposits here, but often times the first deposit I like to go to the check register. So where we will then go Teoh the check register in order to enter these deposits that's gonna be located in the banking drop down and we're gonna go down to use register banking and then use register, and this is gonna look familiar. We're gonna have a drop down here. It should default to the checking account. Whatever your checking account is, if you selected the drop down, you can see you have all the accounts. We can actually open the register for just about any account if not all accounts. But typically we want to open the check register, oftentimes being the most useful. And I'm gonna open that we're going to say OK, the check register should look familiar in etiquette looks pretty much like a checkbook. And that's Ah, that's the nice thing about it And is also the reason why QuickBooks tries to make a lot of the other accounts have, ah, register. That looks similar. But when working with the registers, it's usually better or easiest to work within the check register and then record anything to any prior, any other account in the other account. So how this is gonna work then, is we're gonna have the date. We're gonna put the payee here or the customer, and then we have the payment and then we have the deposit. We do need to name another account here. So noted that that's kind of the thing that's a bit different than possibly a checkbook. We not only need that pay year customer that reference of who were pain or getting money from, but also on account that QuickBooks need to record too. So we're gonna make sure that we pick that up. We then have the memo, if needed, right here. So we're gonna go ahead and put this information in here. Now, when we go here, it's gonna try to guess what the first check number is now. Typically, if we have a new checkbook or something, we're gonna happen. It's probably gonna be, like, 101 or something like that. But we have to put the first check number in, and then it would number automatically. From that point forward, I'm gonna first select the date. We're going to say that the date of this deposit is gonna be a one. We're gonna put it in a one 10 and then 2021. So 1 10 21 we're gonna get that from our pdf files. That's just gonna be from the directions on the pdf file. When you select a tab, it will go to the next item here now, because I don't want to check number at all, and this is actually a deposit. I actually delete the check number, and I just usually put a reference as a deposit here. Then the pay either is no payee where the one's gonna put the information in So we could put owner or something like that. I'm actually gonna leave it blank at this point, and we want to make sure that we're in the deposit section. So we're on the deposit side, not to the payment side within the deposit side. We're gonna enter 65,000 and that's how much we're gonna put in as the owner. Next item. We're gonna have the account here, so this is gonna be the accounts Now, the owner is the one putting the money in, so that's gonna It's not usually wouldn't we get the money and we get a deposit later on? It's gonna be hopefully revenue from a customer. We cannot put it to an income statement account. We're not gonna put it to income or expenses. What we're gonna do is put it into some type of equity account and investment. We may set up another investment account, but typically, we just put it into the equity accounts our equity can. If we scroll up, we'll see the type of accounts on the right hand side. And the equity account we're looking for is going to be that owner equity accounts. We're gonna actually post it to the owner equity account there. And no, it doesn't record now. I'm not gonna put him well, we could put a memo, say the owner investment note that it's not going to record here until we hit, enter or return or select record down here. So if you were to leave right and how it would not have recorded someone select, enter. And it's going to say, Are you sure you want to record it to this equity account? Because that's a bit of a rare type of transact. Doesn't happen all the time. We're gonna say, OK, that's what we want to have happened And then it says it it goes and it's gonna click that once it goes down to the next line. That's when we know it has been completed. If you got the sound on, then it usually has a little sound too, as well, which will indicate that it has been completed. Next, we're gonna do a loan, so we're gonna do a similar type of transaction for a loan amount, and we're going to say that that's gonna happen on the same date. It's also gonna be not a check number, so we don't want the one. We want a deposit and we then we're gonna put the bank name here. We're going to say chases. Who were going to receive this loan from Chase bank, and we're gonna say tab, and it says we're gonna have to set something up. This name is not found. We're gonna set it up now. We're not gonna do the full set up. We're gonna do a quick set up here, so I'm gonna say I want to do a quick ad, and then it's gonna ask, Are we talking about that Bender and employees a customer or other? We're not really talking about a vendor or customer or employee, so we'll put it into other because we're taking a loan out vendor. It's kind of, you know, closest one. But that would be dealing with people that we buy stuff from, and we're taking a loan here, So not real exam. Same thing. Make sure we're going over to the deposits, not the payment side. So we are over here within the deposit side, and the loan that we will be taken out is the 50 thousands. So there's the 50,000 lone. We're gonna select tab. Then we need the account, and we may have the loan account set up already. If not, then we would have to set up a new account. I'm gonna try to type in alone. So there we have it. It's gonna say loan payable. Gonna say tab. If we had not set that up, then we can type in a loan payable. And when we select tab will say we don't have that account, you want to set it up. And I would typically set up as an other current liability accounts and and then just set up the loan payable account. Just make sure you have the right account type. Then we're going to say we, uh, take out alone is gonna be all put for the memo here. And then I'm going to say, Tab, make sure that it's not gonna enter anything until we sit enter or until we hit Tab Simon Say tab And then there we have that information. Now we can check on this and see if it does what we think it should do. What should it do? It should at least increase the checking account on our farm financial statements in some way. So let's go to our financial statement, the main financial statement that the balance sheet and go to reports and scroll down. We're gonna go Teoh the company financials were looking for the balance sheets. I'm gonna scroll over to the right scroll down to the balance sheet and there we have it. We're gonna change the dates to 12. 31 21. This time I'm going to go to the end of the current year that we're gonna be working on. And we see the checking account balance now has a 140. If we want to see the detail within that checking account balance, we can use the zoom. In future. We're gonna double click on it, see the zoom and feature, and here is going to be of that activity. Note that because the balance sheet is, as of a point in time, when we go in and see the detail in the transaction by account, which is kind of like the General Ledger account, we don't we only see one day a year, and what we really want to see is the entire year. So we're gonna select Tab and put 0101 to 1 and then see the activity that has then happened. And that activity then includes the beginning balance of 25. That's what we have in there before we started this, and then we had the 65,000 here that we just put in place and extend the memo. And that's from the owner investment. The other side of it, you can see when split. That means the other account that it is going to is the owner's equity. And then we see the 50,000 in the deposit. The other side it's going to is alone. If we want to see those than we can close this out and I'm gonna say no, don't show me that again. And then we're gonna say Scroll back down And we say the loan payable is here. So if we want to see the activity, I can double click on that and I'm gonna change the date again. 201 a. 1 to 1 and we can see there's the chase loan. The other side, the checking accounts. There's always gonna be those two accounts that are impacted when we do these transactions . It's good idea to go to the financial statements, jump back and forth and see what's happening. See what Quickbooks is doing, Even if we don't fully understand the debits and credits we should kind of see how this whole balancing thing works. That's one way to get a better understanding of how these things air tying together gonna go ahead and close that out. The last one set up the other side was going to the equity sections. That's gonna be here. It's double click on that. Gonna change the first date? No one, No. 1 21 And there we have this amount here. That's from the owner investment increasing the equity section, increasing the net value of the company increase in the amount owed to the owner of that 65 . If we wanted to drill down on this, then we can kind of see the transaction notify Double to click on these. It doesn't take me to the check register, but to a form, which is what Quickbooks is gonna is gonna use to drive the transaction. So even though we're entering this information into the check register, QuickBooks still generates in this case that transfer funds form. So I'm gonna go ahead and close this back out closes back out. So that's the effect on the balance sheet of the deposit from both a loan and the owner deposit within two QuickBooks program 2018 54. 7.10 Record Transactions In Register Investment & Furniture QuickBooks Pro 2018: Hello. In this presentation we will be recording the purchase of furniture and an investment within QuickBooks Pro 2018. If you have been working along with us, that is great. We will be continuing with the problem. If you have not been working along with us, that's OK. We're gonna be entering to transactions one to record the investments from the business into an investment. How to record that? In terms of QuickBooks, what does the transaction look like? And what are some ways to record that transaction? Then we will record the purchase of furniture and again, same questions. How are we going to record that transaction within the QuickBooks program we are working in ? They get great guitars problem here. So if you have been following along, you'll have this set up. If not, that is OK. We can just see how to record transactions such as these. If you have the backup file and want to start exactly where we are at at this time, just so we're in the exact same location. Then you can take that backup file and go to file and open and restore company. And you want to restore the backup, and that will put us in the same point. So also next point we're gonna have is toe have the open windows open. Typically, I like to have that when you open the program. That default typically is. Do have these shortcuts open. I would rather see the open windows. And in order to do that, you go to view and open windows, and that will show us what we have opened at this time. That being in this case, the home tab and the balance sheet. This is something I wasn't didn't know I had open and I'm gonna close it. So I'm gonna go there. It's that one and close that out, and that's one of the benefits of having open windows open. You can see what you are working with and toggle back and forth within them. First transaction we're gonna record is gonna be an investment in stock for $12,000. So we're gonna have a generic type of investment. We're gonna be investing in Vanguard Stock. Assuming this is a mutual fund, we're gonna put money from our checking account into the stock. Now, when we purchased the stock, we may be writing a check or we may do in an electronic transfer, most likely, and electronic transfer. What we want to do then here is to record that electronic transfer, which we would then see either at the point of the transfer or honor bank statements. Once we're trying to reconcile and record the activity, and therefore we could record it in terms of of a check and write a check here. But it may be easier, and it often is in a transaction such as this. If we're not actually printing the Czech Teoh, record this directly into the register. So that's what we're gonna practice now. And if you're recording a lot of data within the register that you need to record, that's already you already wrote the check or you already have the electronic transfer, and you need to put the data into QuickBooks often easier to use the register than the form . It'll look a lot like a check register, and that will be something that could be useful to understand to use. So in order to do that, we're going to go to the banking at top. We're going to go down Teoh use register and whatever your bank account is that's the one we want. We call those the generic name of the checking account. If you select the drop down notes, you can use a register for any account. So it's not like something that's restricted solely to cash accounts. QuickBooks tries to use the register for everything and in so doing is attempting to eliminate, or at least reduced greatly the need for debits and credits and journal entries. Now the checking account. If you're dealing with cash, either paying cash or receiving cash, you'd rather go to the checking account than the other register. Typically, in my opinion, for example, if we had an account already set up in this case for an investment, then we could go to the Investment Asset Register account and record that side of the transactions and the other side would be to the checking account. So if we're not dealing with with cash at all within the transaction, the point is we could still use registers instead of journal entries. But it gets more confusing if cash is not one of the two things involved within the transaction, so we're gonna keep it on the checking account In any case, we're gonna say, OK, here is our register. We don't have a lot going on at this point in time, but we can see that the balance is 140 at this point. We are then going to record this transaction for the Vanguard stock, meaning we're basically putting money into Vanguard for a mutual fund. We're gonna make this a generic type of investment. We're gonna put it in there as of 0104 to 1 note that we are gonna have some transactions that are gonna be a bit out of order in this comprehensive problem. So we are working in the future, working in 2021. That being the current year we are working in now, if this was a Elektronik transfer than we might put something in here, I usually put like, other or transfer or something like that. If it's a check number and we're gonna assume it is a check number here, we will start with the check numbers 1001 Now again, this might And typically, if we're putting stuff in the vanguard, it might be an electronic transfer in, in which case, we could still use this register. It's just that we wouldn't want to reference a check number here. Ah, but we're gonna We're gonna assume we wrote a check for it and so we can see what the check members will do and see that they will be automatically generated. This is the first check that we have written and therefore we're gonna assume our checkbook begins on 1001 That being the reason we have to type that in there After that point in time , the checks should be automatically numbered. The checks, even if you buy checks, will be something that will be printed outside of QuickBooks. And so even if you're printing checks through QuickBooks, you're gonna have to get the checks that already pre numbered. And that's going to be one of the internal controls. One of the checks and balances to make sure that errors aren't happening. Meaning if the check numbers are sequential and they line up to this sequence that is showing up within QuickBooks, then were more confidence that checks have not been stolen. And that is a good thing. So that's the pre number sequence. It should Duchess automatically generate the check number. After this point, we're gonna say the, uh, person is gonna be vanguard the company and say, Tab, we haven't set this up yet. We're gonna set this up now. We're not gonna do the full set up. We're just gonna do a quick set up, hear someone say quick set up and this is not gonna be a vendor. It's not gonna be a customer. It's actually gonna be other. So we're gonna take other, uh, it's not a normal customer vendor, so we'll say it's going to other. It's gonna be an investment, and we'll say OK, and we will have a payment so it will be a payment and the amount is gonna be 12,000 which we are investing Now. We're gonna invest that I'm noticed. I'm tabbing through this also, and it didn't go to the to the deposit side because if there's a payment, there will not to be a deposit and note. This is a bit different than the checkbook again, is that we have to have an account. It's not enough to say its vanguard, even though we know who vanguard is. If we're working with our own books, but we need to have an account as well as the name and the account. We're going to say this is just in short term investments. We're gonna put all the investments into short term investments. And no, we don't have that account yet, So when I select tab, it's gonna say you don't have that account yet. Do you want to set it up? We're gonna say yes. So I'm gonna say, Tab, it's gonna say, Set up that account. We're gonna say Yes, please set up the account and we have it guessing in this drop down that the set up should be to an expense that is not correct in this case, typically, oftentimes it is correct. Most of time when we're writing a check or recording check within the check register, it is so expensive. But it may be for something else. That may be for an asset such as a purchase of equipment, or it may be for an asset such as the investment in this case. So what we want to put it into is not gonna be an expense, but we're gonna put it into other current assets. So put it into other current assets here, and we're gonna keep the name. I'm not gonna put it in any subcategory. However, note that if you want to track your investments a little bit in more detail within QuickBooks and you have a lot of different types of investments and you're just basically update them each time you have the statement, then you could have just short term investments and then a subcategory for each individual investment and then go in there and track the gains and losses for each individual investment. We're gonna group all our investments in this case into 11 investment line item of that investment being the short term investments here. So I'm not gonna have a subcategory. We're gonna keep the description. We're not gonna deal with the tax line at this time in these example. Problems again. The tax line would be nice. If you're are using QuickBooks, especially with some of into its tax software, that would kind of integrate the tax preparation process. So we're gonna go ahead and say save and close. And there we have that, remember, it's not gonna actually remember that it's not gonna actually record this until we hit enter or tab again until it gets to the next line. In essence. So if you leave if you look somewhere else at this point, it's not going to have done anything until we say enter or tab. And there we have it. So there's the 65 reducing our balance here, the other side going Teoh, the investment account where it's up here. But it notice it adjusted it by date. So it bounced it up here to be in order by dates. But here's the ones here. Is there one Vanguard 12 and the investment? Now, if we want to see that on the reports which we typically dio, you want to kind of get an idea of where these things are going, what does it do to the in product? What is it? Due to the financial statements, how is it making us look as a company? Then we're going to go. This is only gonna be affecting the balance sheet. So I'm gonna go ahead and check out the reports. We're gonna go to company and financial scroll down to the balances balance sheet standard . We're gonna change the date to 12. 31 21 That's the That's the dates that we are working in for this example problem. And we know that cash went down. So if I want to see what happened within cash, we can double check on cash, and I need to change the range. I need the beginning date to be a 101 to 1, and that'll give us the whole years worth of data. If we tab through and there we have it, it's decrease in the original balanced minus 12 and that's what's impacted. They're gonna close that out. We probably knew that the other side is that is the new thing. This is where we placed it into other current assets in the assets section. It's not on the income statement. It's not affecting that income. It's just one asset going down. Another asset to going up. This is the key component that we want to make sure that we do when we record a new account like this. If we put this in the expense section, we kind of messed things up and we'd have toe adjust that at some point. So here's the 12 there. Obviously, if we double click on that, that is all that we would see at that time. Gonna go back to the checking account and we're gonna record the next transaction that we were going to work with. That being the purchase of office furniture. So we're gonna go back to checking, and again, we're going to it the same way. Note that if you were to write a check directly for office furniture, then you could go to the home tab and you could doubt write a check and that would then write the check. And it would basically do the same thing that we are doing here. You can also go to banking and go Teoh right to checks at the top. Teoh, write a check. However, if you're in a situation where the where the check was has already been written or you're doing some other type of payment that you need to later put in to QuickBooks. It's oftentimes good and useful and faster to use the check register. So that's what we're practicing here. We're gonna go back to the checking account. We will be writing checks later and it'll be it'll be great, but we're gonna go back to the checking account here and into the next transaction. We're going to say that we purchased office furniture on Ah 19 Now, I'm gonna make the date to go up, not by retyping the whole thing by just hitting the plus button and note that feature can be useful if we if we hit the plus button a few times. Go Teoh +109 Any time you can use a keystroke rather than typing in the information, you're gonna be working a bit faster and that's always going to save a little bit of time, which is always nice and note when we tab over, it's gonna have the check number. So we're hopefully that's the correct check number. If it was not a check, if it was an electronic transfer than we would delete it, we would put transfer electronic payments, some type of abbreviation other than a check number, and then we're gonna scroll over. I'm going to say we bought it from Office Depot. So say Office Depot, We don't have this set up yet, so when we say tab, it's gonna say you don't have this set up yet, and again, I'm gonna do a quick set up. We're just gonna set it up quickly rather than go to the full set up. So we're gonna go to set up vendor, customer, employee other. In essence, this is a vendor, so it's guessing correctly. Here it will typically guess as a vendor because typically, when we're using the register, we're making a payment. Usually, payments go to vendors, people we purchase from. So we're gonna say that is okay, we'll keep that. And then we're going to say the amount that we purchase with 16,000 were used a nice round numbers here and note that it's not going to go to the deposit side. We need to make sure that we're either going to the payment side or the deposit, whichever is applicable. And then QuickBooks will not have us go to the other one because you can only have one and he given transaction. Then the other side of the account is going to go to furniture and equipment. We had already set that up. We hadn't set it up, but by picking the chart of accounts by picking the type of company, QuickBooks had given us a preliminary list of accounts, one of them being. If you start typing in furniture and equipment, note that it's a fixed assets. So that's the key point. If you do not have a furniture and fixture account and you're recording it, you don't want to put it in there as an expense, which will often be the default. If you're creating a new account, you want to make sure you put it in there as an asset, not just an asset, but, ah, fixed assets, assets that depreciate that won't get in the correct ordering. It will then not put it on the income statement but on the balance sheet as it should be, and put it under the subcategory of fixed assets. Sick tab. And then we're gonna say note that it's not kind of record it until we say enter. So I'm gonna go enter and then it records it there. I can It's gonna record it by date. No to that, because we put this on 10 9 right before this transaction that we did have ah, on overdrawn until the lone happened here on the next day. So just something to know just dates that we put the problems in their did rearrange the date up to here. Then if we want to see what is going on, once again, we can go back to the balance sheet. It knows it's gonna save refresh needed. I'm gonna go back there and it automatically, then refreshed. So how can we check that? We can see if this transaction has happened. We're going to go into the checking account, double click on the checking account, using the auto zoom feature going to change the dates 20101 to 1. And there we have this transaction of the 16 right there. If we want to see that transaction, if you actually want to see the form or the driving document that QuickBooks has created, we can zoom in on that and we see that it is a check note that we put it in the check register, and QuickBooks deals a check with that when we put it in the check register. Here is the check, and the check itself means that we're decreasing cash. The other side of account then, is the furniture and fixture. So let's look at that other side. Gonna close this out. Gonna close this out back to the balance sheet looking for furniture and fixture no to the categories of the assets in the balance sheet. It's gonna be assets, and the first check is the checking account, but cash, then accounts receivable than other current assets, then the fixed assets. That's critical. That's important to have within your financials. That's why it's important to make sure you put the furniture and fixture into the category of the fixed assets that will then be depreciated and we see the 91 there. Let's see what that consists of by double clicking on it and we will change the date 20101 to 1. And there we have it. There's the 16 right there. After are beginning balance. If we double click on that, then we're gonna see that same check. There's that same check from the other side of the transaction. So I'm gonna close this back out, gonna close this back out, going to go back to the check, register and note that is how we're gonna we're gonna put this information into the check register. We're gonna do one mawr here, and that's gonna be for furniture and fixture. Another transaction purchasing the furniture and fixture and that will complete this process. We're going to say that this transaction happened on 1 11 Note that I'm just having the plus two time state plus plus brings the date up and it's gonna give us that check number, which we're going to say is right. We're going to say we're wrote it with a check and now we are recording it within QuickBooks, practicing the recording within a check register and this one we're going to say we bought from Amazon and it's gonna put Amazon and I'm gonna say Tab once again, we have not set that up. If we want to put the address and a lot more information, we do the set up that will give us more detail. But typically when we're paying the bills, the name is often what we need. That's what we would need on the check. That's what we would need on the reference. So we are often good with the quick set up which will just give us that this then also a vendor. The default is correct. In this case, we're gonna say, OK, then we're gonna put the amounts 7000 in this case is how much we are paying for the furniture at this transaction. It's gonna then go down to the account that we need. We're gonna have once again that same account, furniture and equipment. And it's gonna pick that account notice. I'm just typing in there. It then auto fills. It tries to find that if we have no idea where it would go, we first would want to hit the drop down and scroll through. Note that it's in order assets, liabilities, equity, income and expense and more specifically, the asset of cash in the asset of receivable than the current assets and the fixed assets than the other assets. Then the liabilities, including the payable followed by the credit card, followed by the other current liabilities, followed by the long term liabilities and then the equity and then the income. Then the expenses. First the cost of goods sold expense and then all other expenses. If we just If we knew what we're doing, though, then we're gonna type it in there. And if we know which account we are working with, we'll type it in there and then tab. Once we see it, that's gonna be the quickest way to select. And then we just want to say enter. Once we have selected to make sure that it then records, that's gonna be the last transaction we have. Let's just check it out one more time. We know what's gonna happen on the balance sheet. It's gonna decrease the cash Indian cash balance and now should be 10 5000 and it's gonna put an increase into the furniture and fixture and amounts we can't see here on the check. Register this register representing the cash balance, not representing the furniture and fixture balance if we go back to the balance sheet, cash is at 105 furniture and fixture is now at 98. If we zoom in on that, there it is. If we then go to the date range of a 101 to 1, we can see that second transaction there. One more thing. Just want to point out, just want to note as we see this, we could enter this. As we said a few different ways, we could have written, written a check if we were actually processing the checks. That is what we would do And we could also record this not in the cash register, but in the furniture and fixture register. And just to show you how QuickBooks does that, let's take a look at that. We're gonna go Teoh banking at the top use register, just like we did when we went into this check register. This time, however, we're looking for the furniture and fixture Ledger just to see what that would look at. Look like we're gonna go down to furniture and fixture and open that ledger. Here we have it. It looks it looks a bit different, but it's gonna be the same type of concepts. Same type of idea. If you open up this Splits column, it will show you, Ah, more accounts if there's basically more than two accounts within a transaction. But this is what happened with the beginning balance. We haven't that. We didn't do that here, but then we had our transaction here. If we were to enter the same transaction from the other register, we would say this register, meaning the assets of the office equipment would have gone up by that transaction with the 16 and increase rather than an increase in rather than a decrease in cash. We're talking about the register of equipment, having an injuries in the office equipment and the other side then would be the checking account. So here's the checking account. So it's the mere image if we go to the checking accounts of this transaction here, so note that it is possible and I would not recommend ever putting it into the register checking account for equipment like this. However, this is useful to know, especially when you see a transaction that does not involve cash. If there's if, for example, we bought equipment on account ah, then or bought equipment for a loan, we might want to go into the equipment account and say there's an increase in equipment and then go Okay, what's the other account that we're gonna put that into? And we would then put it into some type of loan accounts that maybe on easier way to think through it, even though cash is not affected and avoid having then to use journal entries using debits and credits if we don't really understand debits and credits. So I just want to point that out, and that's going to be those two transactions or three transactions 55. 7.17 Purchase Order QuickBooks Pro 2018: Hello. In this presentation, we will discuss how to create a purchase order within QuickBooks Pro 2018 as well as why to create a purchase order when you created purchase order and what the purchase order will do within the software of QuickBooks Pro 2018. If you've been following along with us in this process, we will be continuing with you. Get great guitars problem if you have not and just want to know what to do in order to create a purchase order, what it purchase order is and how it works within the QuickBooks program, that is fine, too. If you have access to the backup file as of this point in the program, then you could restore that backup file in order to be exactly where we are at at this point in time. In order to do so, we're gonna go to the file tab and restore or open or restore company were that we would be looking to restore the company, and that way we can be at the same point at the same time. If you have access to those backup files as we go, we are entering data here So as we enter data, when we get to the end of this data that we have entered, we are in hopes of being all in the same spot. And if we're not, we want to see the differences that were at and also just basically be able to start at the next point and not let the past airs, messes up in order, didn't learn the new concepts. So we're going to discuss the purchase order here now within the purchase order. If you're in the home tab as we are here in the if you're not in the home tab, we would go to company and the home tab. Note that you would also want the open windows open by going to view open windows, and that will give us the open windows that we are currently using this one being the home tab only, and the purchase order is gonna have to do typically with purchasing inventory. Therefore, it's gonna be up in the top of the home tab located in the vendors section. The vendors section off the home tab will look a lot more simplistic. If we are in a type of business. That's a service oriented business. So if you're looking at the home tab and you're saying, Hey, all I have are basically bills and then pay bills that's because most likely, we are set up as a service business. And if you go to a prior presentation, you can show you can see how to set up the company as a merchandiser, in which case you would be particularly purchasing and selling inventory. If that is the case, then QuickBooks gives you a few more options within the home tab, one of those options being the purchase order Now, when we have the purchase orders. So we know the process of the concept of purchasing inventory, it would seem straightforward, but it's a little bit different than we might think from our were normal individual purchases. For example, if we were to purchase something from, say, Amazon and we bought something a widget or something from Amazon, then typically we pay for it, either with cash or credit card or some type of deposit, and then we get the merchandise after the payment has been made. When we buy in bulk, though, it's often the case that we have more control over the purchasing items. If we purchase a lot, then we would like to have the purchase order, then received the inventory before we record it. And before we enter the bill even or make a payment, that's what's gonna happen in this case, we're gonna purchase order. The purchase order is not a payment method. It really is not even any financial transaction. It's going to be something that's going to give us information with within the system. One of the few if only icons on this page where we're gonna enter something in where it will not be reflected on the financial statements directly there being no financial transaction. Meaning what are we going to dio? We're going to request from the vendor in our case, The phone, the guitar vendor. EPA phone, I believe, is who we're gonna be purchasing from. And we're going to request a certain amount of guitars. That's all we're doing. We're requesting we're not paying for him yet. And once we receive them, then over here receive the inventory, typically with a bill. Then we're going to record the fact that they have been received. That's when we're gonna put the inventory on the books, so note that that's a little bit reversed. That's a little bit unusual for most people to comprehend, considering the fact that as we purchase things in as individuals, we typically pay before we get the stuff. In this case, we're gonna ask for the stuff, get the stuff before we even enter the bill. And then, of course, we will pay the bill in the normal process after that point. So how are we gonna enter this data? What we're going to do here is we have a purchase order that we want to do because we need mortgage tars for our gets great guitars Storm, We're gonna be purchasing from EPA phone and we're gonna be purchasing guitars. Here. We will. Then click on the purchase order within the home page within the purchase order. We will open up the purchase order window. We're gonna type in the vendor who we would like to make the purchase from. Remember that we're not actually making the purchase at this point. We're just making the purchase order and eso there's no actual transaction. If we type in the name, it'll show the name within the drop down. I'm going to select Tab. Then I'm going to select the shipping terms. I'm gonna actually skip this. At this point, we're gonna go to the template. We're gonna keep the same default template, and we can get into the styles of the templates a bit later in terms of the purchase orders , as well as in terms of the invoices. There's a lot of things you can dio within the templates, but I'm getting down to just kind of the functionality. Where now, what happens when we have a purchase order? What happens when we haven't invoice? So we're gonna have the date is gonna be one day up and remember that we are working in 2020 once, and it just kind of remembered the last date we were working with. That's one of the options we had very useful when working a problem such as this that I'm going to say tab Now, I'm going to start again with the first purchase order. Not one, but 101 And then we're gonna continue on from that point forward. The EPA phone. We may want to have the address. And what not if we if we have the head and file. That would be great. If not, I will not put it in there for the example here. Then we're gonna have to find the item. Now, remember, where are these items? They were input when we made our lists of inventory items. So if you go to a list and you go toe item list, we then have the items here in our open windows. We see the item list is where we are at right now. This list then includes inventory items, so these are gonna be our inventory items. So before we make the purchase, assuming that we have done business before and we've purchased these guitars before, we already know, then the item number, the short number for these items and the item name as well as the price. This will also give us the quantity that we have on hand at this point in time. So we already have this information we're gonna request, and we're gonna list the name, the reference number and the cost on our purchase order. We will then toggle back to the purchase order in the open item list over here. Remember, if you don't have that open item list open. Go to view, open items and we're gonna open that up and here we are. So we're gonna include This is gonna be I was gonna type in the e l p. This is gonna be the item number, and that will then generate the description here. And that's gonna be an EPA phone less pole. We're gonna get one of those items now. An optional screen within the purchase order is gonna be a having a customer's. You don't have to have a customer within here. It may be that we're purchasing this just to have in the store and then to sell at any given point in time within the store. However, it could often be that if we have something like guitar something large that we may be saying, Hey, you know, customer, what would you like? Here's what we have in terms of an EPA phone. Would you like something different? And they might want to customize it a bit, have a different color or something like that, and therefore we would be ordering specifically for a particular customer. And if that's the case, will put the customer here and in this case That's gonna be Eric music. Good name. All right, so we're gonna have that. They're now. I haven't. We don't have this individual or the store in the system yet, so when we select tab, it's going to say, Do you want to set this up? And we're going to say yes and I'm gonna say, Ah, quick set up. Now, if this was a, um, a customer of repeat customer, we may want to do the more intensive set up and make sure that we have all the customer information. But for purposes of this, we're gonna keep the quick set up in order just to link this purchase order to the later in voice that we will then have. So then we there we have that note. We have the summary balance on the right hand side. If you if you do not want to see this yet, want more of the screen? You can collapse that and then ah, un collapse that like so? So once you get note, what what's gonna happen when we record this, then is one there's gonna be no financial transaction, meaning when we go to the financial statements, nothing's going to happen. However, there will be data that will be input. We would print this out. We would send it to EPA phone, who would then send us a guitar. And when we then invoice the client or the customer for the guitar, then it would generate. It's gonna link to this automatically. It's going to say, Hey, you know what? You made a purchase order for this. And do you want to then use that to link to it and pull that information linking the purchase order to the invoice? And of course, we're going to say yes, we would like to do that. So I'm gonna go ahead and say, Save and close, go save and close and I'm gonna go to the home tab So we'll go to the home tab here. And no, we made a purchase order, and what's gonna happen later again is we're going off. Obviously, we're going to receive the purchase order, and then that's when we're gonna record the bill that's gonna get be arriving along with the guitar. And then once we receive the guitar and into the bill, then we're gonna have an invoice to the customer. So we're gonna invoice the customer. And as we invoice the customer and name that customer, it will then tell us, do you want to link it to that particular guitar that we named within the purchase order? And of course, we will want to do it at that point in time. Tying them together notes again that this purchase order is very unusual. The purchase order does not create or cause, ah, financial transaction. Meaning it's not gonna affect the reports are main financial statements. So to take a look at that, let's let's open the main to financial statements those being the balance sheet and the income statement by going to reports up top scrolling down to a company and financial. I'm gonna start with the balance sheet. We'll keep that open, and that's gonna be as of 12 31 21. That's the year that we happen to be working in here within this problem. Also gonna open the profit loss are other primary report that being reports company and financial profit and loss date range. There is gonna be no one No. 1 21 2 12 31 21. And there we have the date range there. No activity here. Obviously, on the profit and loss within our relevant range, we haven't entered any data that is either revenue or expense. And on the balance sheet notes that none of this either asset liability or equity meaning Although we ordered a guitar, it's not in the inventory yet. We haven't received it and therefore shouldn't be increasing our inventory. We don't have claimed to its yet, and we have not yet paid for it. And therefore, there's gonna be no accounts payable yet because we haven't even entered the bill yet. We haven't even got the bill. It's just a purchase order. So no activity. Nothing happened in here in terms of the financial statement for the purchase order. Next, we're gonna make one more of these. So we're gonna go back to the hometown and we're gonna make another purchase order. Therefore, we're gonna go to the purchase order tab once again for just order icon, and we're gonna have now from Gibson Gibson guitar. This is going to be a new item. We do not yet have Gibson. We've never purchased from Gibson before, and therefore we're going to set this up as we go. So we're gonna say tab and it's gonna say you want to set this up again. We would probably want to set up the full set up here, entering any contact in from the impression phone and address and everything. However, in orderto link out this information, we're just gonna do the quick ad right now so we can see what will happen here in terms of concept. So we're gonna say, quick ad, we're not gonna dio the ah drop ship to going to keep the same template the date that we are going to be using ISO 1 12 21 We now have the number that is generating automatically. We have the vendor, we have our information. We're then gonna put the item once again We've never purchased from Gibson. So if we were to take a look at our item list in the open windows over here and look for something that would be the Gibson related, we should not have one yet because we have never done business with Gibson and therefore we're gonna have to set up a new item. We could do that here within the item list by going to items and new. But we can also do it within this process while we set up the purchase order, which is nice and convenient. That then what we will do at this time back to the purchase order. We're gonna say that we're gonna get a G S B. That's gonna be the item. Name, short name. And we're gonna say it's gonna say you we don't have this. Basically, it's saying, Would you like to set it up? This item, this inventory item, this new thing you're trying to purchase from this new vendor, we're going to say yes, we would like to do that. And it's gonna guess that we want an inventory port. That is true inventory port, meaning it is a physical thing that a service and therefore will have both a cost of goods sold side and a sales side to the transaction to the data that will be needed when we make the purchase order and later win. We use this as the component to make the invoice. So I'm just gonna tap through this. I'm not gonna have a port number. The description we're gonna call it a Gibson SG. Same description over here they cost. Then how much it's gonna cost to us is gonna be the 5 98 that will have the cost accountant being cost of goods sold. That the expense account that we will use when we write down the expense. When we write the invoice when we sell the guitar, then we're gonna be sale side of it. And we're gonna say that, of course, gonna b'more seventh and we're going to stay. 777.4 700 77 40 cents. We will have tax that referring to sales tax. Now, I'm gonna go back over here. We had a a vendor, and that's gonna be Gipson. It's gonna be a preferred vendor. We're always gonna buy from for this particular item. And then we have the income account, and that's gonna be merchant merchandise inventory merchandise sales. And that could very we could customise that. But if you just chose an inventory account within the QuickBooks set up, then QuickBooks would then set up the sales of merchandise as just merchandise inventory. If you sell multiple things and want to break that sales account in to a different name or multiple sales account we caught. We could call it guitar sales or something like that that could be done, This kind of the generic name for any inventory sold. So we're gonna say OK, and we have that information. And how many of these are we going to get? We're just going to say one and we're gonna have 5 89 Do we want to Customer? Not required. But we are going to say that we have a customer looking for this particular guitar, and we're gonna buy it specifically for them. We're gonna call it music Stuff store. Very nice name, music, stuff, store. And there we have that. Now we don't have this customer yet. This is who we are eventually going to sell to, were purchasing from Gibson for this customer music stuff store. And so we're gonna say, set up again, we would probably want and a set up to have all the data, but in order to not go on forever here, we're going to just have the quick set up in order to get this going. And there we have that new account set up and we're going to say save and close once again . No transaction happening here. Nothing happened to our merchandise. We didn't get more merchandise yet. Notice we have this inventory item here, but nothing there yet until we receive the inventory along with the bill going to scroll back to the home tab. That's what we have so far. Remember, next time or shortly we will be receiving a bill and the phone are the EPA phone and the Gibson, the two guitars, the inventory that we just bought. And we will likely be making an invoice that is related to the customers that ordered those or were the reasons that we ordered those two guitars. 56. 7.20 Create an Invoice QuickBooks Pro 2018: Hello. In this presentation, we will show how to create an invoice within QuickBooks Pro 2018. Show the components of the invoice and what the impact of the invoice will be on the financial statements, the balance sheet and the income statement. If you have been following along with us, that is great. We're going to continue on the get great guitars problem. If not, that's OK because we will be going over the invoice. And if you want to learn how to create the invoice and what the impact of the invoice as well as these components of the invoices are, then that is what we will take a look at here. If you have access to the backup file up to this point in time, you can restore that by going to file and open or restore. And we, of course, would be looking for the restore process. And that way we can be exactly at the same point in time. We are entering data years at the end of this process. Hopefully, we're all in the same place in terms of the data, if not weaken. Do these restore processes as we go just to make sure that we can still move forward. Even if we made some kind of problems in the past, we will be working here with the creation of an invoice. We're currently at the home page. If you're not at the homepage, you can go to the company and then home page at the top. Also recommend having the open windows open by going to view and then open windows so we can go back and forth between the windows that we will be having open as we move forward. When we create an invoice we're looking at in the home taps a component of the customer section. So note that we have the invoice within the customer section. We look through our nice flow chart, which we have in the home stage of QuickBooks. We see the process, then is to create an invoice. Then we're going to receive a payment on that invoice and then deposit it. If you think about the process that we have seen in financial accounting most of the time, they often will skip this middle step here, meaning we typically are going Teoh create an invoice that will create a journal entry or that will increase the receivable people owing us money and it will increase revenue. And then we typically just go right to put into cash. When we think about journal injuries and financial accounting, we have an interim step here which will be to receive payments. The main goal of that interim step will be that we're gonna try to compile all the deposits that we're gonna deposit at one time into the bank together and then deposited into the bank so that the grouping of those deposits will match what is on the financial statements to what is in QuickBooks. So in any case, this will be the first step to our process when we generate thean voice. This is the driving document that will help to show us who owes us money. It will help Teoh record the revenue as we create the invoice. The invoice will be created at the point in time that a purchase is going to be made Note that the invoices not typically used if we were to receive payment at the same point in time meaning if we collected actual cash at the point of sale, we wouldn't want to The invoice we would want Teoh create a sales receipt difference being that the invoice will record at entry to accounts receivable, meaning it will show that the customer owes us money. We are using the invoice if we expect to be paid in the future. If we expect to receive a check in the mail at some point in the future for work that has been done today. If, on the other hand, we got paid today for work that got done today we will choose a create sales receipt that then will record the deposit or the cash at that point in time and the sale at that point in time we hear will be making sales with an invoice, meaning we're gonna we're gonna do the work and then we're gonna have an IOU and accounts receivable and then accept Expect to receive payment at some future time to receive a check in the mail. So let's see what the invoice looks like. We're gonna take the working click on invoice here and will create odd the invoice. Now I have a summary tab over here. I'm gonna I'm gonna compress this so that we can Seymour of the screen. And here's the components of the invoice. Now there's a lot we can do within the customization of the invoice meeting. Put in, ah, logo on the invoice in this type of thing to make the invoice mawr hours in terms of presentation. We're not gonna cover that at this point. What we're going to do at this point, it's just look at the components of the invoice and see the functionality of the invoice. What needs to be input on the invoice once we input what's gonna happen, what needs to be in place in order to be able to complete the invoice at a later time? We could look at some of the details in terms of the formatting of the invoice that look in the appearance of the invoice. So, in order to create the invoice, of course, we're gonna need a customer or job typically going to start off with a customer here. The template that's gonna be some of the formatting. So we have a default template at this time, the into its service invoice. We need the date. We need an invoice number. This is another number that will be generated by QuickBooks typically as we create the invoice, the bill, the P O. Number. If we have the purchase order and we'll talk more about the purchase order at a later point , meaning if we are tying the invoice to a purchase order, then we would be time this this amount out and we'll talk more how toe link that we've created a purchase order. In a prior presentation, it is possible to link a customer to a purchase order that document used when we actually purchased something in our case guitars from a vendor for a specific customer. And then when we create the invoice for that specific customer, we can tie those two together or pull that information from the purchase order to the invoice. Then we're gonna have the terms of payment here, followed by the item, the quantity and description. Now, when we get to the item, we're gonna see it where that's going to come from. We've taken a look at creating inventory items in the past, and that's where we're gonna draw that from. It's possible to inter items as we go. It's also possible and highly recommended to have a list of items pre set up so that when we set up the invoice, it's a nice, easy process standardised process one that we can do quickly one that we can show someone else how to dio without needing to know some of the stuff that we're gonna go through here . So first, we're gonna need the name, that person, the customer that we are selling to in this case, we're selling guitars. So we are going to sell a a, uh, stand burger solid body guitar here and therefore we're going to sell it to Anderson. Not therefore. And we're going to sell it to Anderson guitar. So this if I start typing this in the name of the customer, it's gonna appeal. Appear automatically if we already have that customer set up. If I didn't know and I want to check, we could it selectively dropped down. See our list of customers. Here's who we are selling to. I'm gonna tab through this, and I highly recommend as you go through these forms to get used to tabbing through the form. It's a lot faster in some of the tab, and then the date we're gonna have of this transaction is going to be, Um 01 12 21. And that will be january 12th 2021. We are working in the year 2021 for this entire process here. And so just keep in mind that's the current date, that of our worksheet that we are working with. And we're gonna keep it at Invoice. One of the first invoice we are creating the bill address Note. We don't have one right now because we don't have one in our system for Anderson guitars. If we were to mail the invoice, that would be a problem. Probably would be best to have address if we have one. Not required, however, for the invoice to be generated for the invoice to create the journal entry related to the invoice P o number. We don't have one. That's the purchase order at this point. And we're not tying this to a purchase order The terms we're gonna usually have, like, normal terms were going to say it's just gonna be do in net 30. So do within 30 days, then the item. So this gets down to actually what the guitar we're going to sell now if we have all these set up like we should. This should be a nice, easy process. How do we have this set up? We done it on a prior video. But what we do is we go toe lists and in the item lists. We should have all the items. So here's our inventory items over here. We're selecting from the inventory items. We are looking for that Steinberger solid body. And then here's the item number. So that will make it really easy to give someone else the authority Teoh, to create these invoices and not be able to have to type everything in there. They already have it they got. If they start typing in the g t p r, that's our item number tab. It's gonna format everything for us. We're only gonna sell one of them in terms of quantity. The description should fill out, and then we should have the rate and the amount. So we have all that is going to be put in place at the same point at the point in time that we create this note. What is not here? What is not here is our cost. And so if we go back to the item. Let's notice I'm talking before him through the open windows. And if you don't have the open windows view open Windows tab, if we go back to the item list, we could see that this solid body had a price here. If we edit it goto items and then edit item, we see that the cost is 3 28 That's not showing on the invoice, cause clearly, we don't want to give that to the customer, but it is going to be recorded. And this is what we have to understand when we create these invoices and when we when we generate them and when we record them in terms of what's gonna happen to the financial statements. So if you're selling physical things, inventory gonna go back here, going to go back to create invoices, we need to know that we're gonna have the sales price to sticker price on the guitar. But we're also gonna have that behind the scenes cost that will be recorded. If, on the other hand, where are creating an invoice for a service like bookkeeping or something like that, then we're just gonna have the sales price, and that's it. We don't have any cost of goods sold this case. We're selling inventory in this particular example, and therefore we do have a cost of goods sold will consider what that cost of goods sold is doing. When we look at the financial statements, no, we typically will have tax if we're in an area that has sales tax. That, too, is something that we set up in advance. Put in the type of tax, the amount of tax in accordance to the location, the state in the locality that we are at. We used a 5% sales tax, therefore were calculated another 20 dollars and 50 cents. And QuickBooks will then do that calculation for us. Put it into a liability sales tax payable that we will then have to pay to the state at some point in the future. This then being the total amount that is due. What will this do when we select save and close? It's going to record a journal entry, and we'll take a look at it. It's gonna debit the accounts receivable, meaning Anderson owes us money. It's going to credit the sales account. It's gonna also debit cost of goods sold, and it's going to credit the merchandise inventory. So let's if we can take a look at that, go to the financials and drill down on that. And even if we don't know, Deputy credits will kind of get an idea of what's going up. What's going down? What's the effect on net income? Let's do that. We're gonna say save an clues. And you've charged Anderson terms for this transaction. This change will will reflect, and we're gonna say, Yeah, go ahead and save that change. So next time we work with Anderson will have same terms. Then I'm gonna take a look at the reports. So I'm gonna take a look at our main two reports balance sheet income statement, otherwise called profit and loss by QuickBooks. By going to the reports up top selecting the drop down, we're gonna go to company and financial. We're looking for the profit and loss. Gonna change the dates to the dates we are currently working in those days being a 101212 12 31 to 1. Then we're also gonna open the balance sheet. So we're gonna go to the reports tab. We're gonna go down. Teoh Company of Financial were going to scroll down within their to the balance sheet standard. We're gonna change the date to the current date. We are working in ending at 12. 31. Ah, 21. Now, as we drill down on this data, we might want to have a date range Here s so that when we drill down notice if I double click on cash, it only shows to date ranges when I'm of the same date when I'm trying to When I'm trying to look at the activity. So if we want a date range here. I'm gonna close this back out. Whenever we look into one of these accounts, drill down on it or auto zoom. Then we could customise this report so we don't have to change the dates each time, so we'll go to customize report, and then I'm gonna change the date. The beginning date 20101 21. January 1st, 2021 to December 31st 2021. And okay, now we can see what is happening here. Now note We made a sale to Anderson, so we would think accounts receivable would have a transactions. We're gonna double click on accounts receivable. There we have the receivable increase in by that 430. If we double click on it, we see our envoys. So there's the invoice we've created there. I'm gonna close this out. Gonna close this out. We know that the other side to accounts receivable on the income statement is sales. So that's our profit and loss or our income statement. So I'm gonna go back over here into our open windows sales merchandise sales. If we double click on that, we see once again our Anderson guitars increasing sales. If we zoom on that, we're back to our invoice. So there's the 1/2 of our invoice increasing the a r the asset increasing the invoice on sales on the income statement side or the profit loss side. Someone close that. And then if we go back to the balance sheet, we also know that this another thing happened because we sold inventory that's being that the inventory is going down. So here's the inventory. If we double click on that, we see that this inventory is going down by the 3 28 a number we did not to see on the invoice. If we want to prove that, we can double click on it, there's the invoice. We don't see the 3 28 because, of course, it's not on the envoys. But QuickBooks knows that that's the cost going to close this. That's what is bringing down the inventory accounts by the asset accounts going down by that, gonna close this. The other side of the acid account going down is cost of goods sold. So I'm gonna go back to profit and loss, and we'll take a look at the other side in cost of goods sold. And we see that 3 28 right now, right there. And if we double click on that, there's Thean voice once again. So there's four components that are really happening here, the invoices a little bit more confusing than we might see on the initial post on when we just create one. We can create invoices all day and not really understand the effect on the financial statements. And that's great because it helps us with data import and helps us to get other people to be able to create invoices without knowing what the effect is on the financials. The effect on the income statement is revenue went up, 410. Cost of goods sold, however, also went up 3 28 So are real revenue are net income from this transaction. This being our only transaction for the time period so far in terms of the income, statement or profit and loss is net income of $82. One other report it's worth just taking a look at that is affected by this. And that would be if we know that the accounts receivable win up and we could see that that went up by the 430. We also need to know who that is owed from and we can go to reports drop down. We're gonna go to customer and receivables and we want the customer balanced detail report . Looking at this report, we can see that we already Anderson noticed money before, and now they owe us another $430.50. Here's that receivable also on the customer balance and detailed report, and once again, we can drill down on that and there's our invoice. Now we're gonna close this up. We're gonna do this one more time with one more customers. I'm gonna close this back out and we're gonna go back to the home tab and let's go back to the home tab at the bottom. And let's repeat this process with one other customer here. So we're going to say that we're gonna create an invoice, creates an invoice. This time it's gonna be four Jones guitar. We're going to sell it Gibson USA guitar. So it's gonna be for Jones. And so if we type that in, it will then pull up. If Jones is already a customer, as Jones is in this case. So there's Jones guitars were gonna select Tab, and we'll tap through this. We're gonna templates were going to say the date this time is gonna be once again January 12th 2021. Invoice number number two and it's gonna auto fill Bill. We don't have the bill to. That would be the address of Jones guitar, which we don't have at this point. And it would be nice to have but not required in order to record the journal entry. We're gonna keep it simple. Purchase order. Don't have one. At this point, we're not tying this particular envoys to a purchase order. We will do that. However, note in the future presentation terms, we're gonna have the terms. I'm gonna change the terms again to that net 30. So it's due within 30 days, is what the terms mean. And then we're gonna have the item is gonna be the Gibson USA. Now, that item number for that is G. U S. And once we have that, then we're gonna say tab and it'll auto populate everything else. Given the information that we have in our item lists, which we had prior put in in accordance to the inventory items, including the sales price as well as the cost of sale, we see the sales price here. We don't see the cost of sales, but the QuickBooks program knows it. So we're going to say that we have one. They're tapping through this. We have the sales price and then we're gonna calculate the sales tax on this. That's going to be the $19 for us that will vary from state to state, from location to location. That gives us the 399 that, then the it checked that we expect a to Z in the future. We're gonna go ahead and save and close this, and I'm actually gonna cancel this. I'm gonna. It's probably best that we turn off the print later Option. We're not gonna up the printing days at this time, but if you were to print it, you can go to the printing option here and print it and print it as a pdf. We'll take a look at the printing on how we can do that. So we're gonna go save and close. And yes, and then if we went back to our reports just to check this out a bit more quickly this time balance sheet, we're going to say that what happened in the receivable same date ranges we have here should be in accounts receivable. We see that it has increased again by now. The invoice for 3 99 Closing that out, we see that it should be in inventory assets double clicking there, decreasing inventory assets, closing that out. Other side is on the profit and loss. We see that merchandise sales should be increasing double clicking on that. There we see it here. And if we close that out Cost of goods sold being the other side. Double clicking on that. And here's the cost of good soul. Closing that out. Now, let's go ahead and go back and print that invoice just to give us an idea of of the printed invoice and what that would look like back to the hometown. I'm gonna go to create invoice. I'm gonna try to find that invoice again. Couple ways we could do it. We could go to the form and double click on it. Or we could go to the invoice and hit the back arrow. And there we see the invoice again. We're gonna go ahead now and print this invoice. Now, note that when delivering the invoice, we could email it, we could We could send by email, We get printed out, we could mail it. Either way, we want to do it. I'm gonna go ahead and print it and say, Take a look at what the actual invoice will look like. So if we print the invoice now, I'm not gonna print it to ah, printer. I'm gonna print it to a pdf file, so I'm basically saving it as a PDF file. A. Pdf is kind of like a digital printed document, so I have what's called a cute PdF printer That's gonna be one type of printer. It's a free type of printer that can be used so that if there's no light save as pdf option , we can print to the printer north. We have a few options in terms of print on into it. Credible paper forms, black paper forms, letterhead. So you have a couple different options. They're gonna go ahead and say print and this process with this type of print of the cute PdF printer, it's up free. Download would take a little while, and sometimes it requires us to a point where it's gonna go to save it. So here we have it, and I'm gonna put it on the desktop. I'm gonna put it on desktop here and see if I can find through all the stuff on the desktop where we want to put it. We're gonna put it in, get great guitars on the desktop. I'm gonna put it into Section seven, and then I'm just gonna change the name here. Teoh Jones tars invoice and then we'll put the date of the invoice, which is 1.12 point 21 Typically, you want to put points or just have nothing in between camera, we have dashes. If you're using a Windows based computer, if you're using a Mac, then you may be able to have to ashes within the dates. So I'm gonna save that and we have. That's now. I'm gonna go ahead and go open that up and see what it looks like. So here is the invoice. So we've got our name, our address. We've got the date. We got the invoice. We don't have the bill to date because we had not to fill that out. We don't have a P o number pit purchase order because we didn't have one terms. Ah, there's the terms that's due within 30 days. We got the one Gibson guitar rate amount and then we've got the total down here. And of course, the sales tax included in the total. So it gives you everything you need within just the basic format of the invoices all you need. Obviously, we could make it look a lot nicer by adding later head and our logo at the top and what not , and we could get into those types of things at a later time. At this point, we're just getting down. Teoh the basics. This is What If you wanted to just make it invoice. Get it going. Make sure that we're tracking what has happened in know what is happening within QuickBooks . That's what we're looking at here. And then we'll get into some of the features in terms of how to make the invoice look, look a bit nicer and add some some of the features in terms of logos. There's a lot of options within QuickBooks to do some of that customization process, which is which is nice. 57. 7.20 Create an Invoice QuickBooks Pro 2018: Hello. In this presentation, we will talk about the receipt of payment and how to record it within the software of QuickBooks Pro 2018. If you have been following along with us, we will be continuing here with the get great guitars. If you have not and just want to know how to record the receipt payment, that is okay as well. That's what we will cover here If you have the backup and would like to restore directly to this point in time than the way to do that is to restore the backup with the file tab and the open and restore. We are entering data as we go here. So we're gonna be relying on past data and continuing on with future data, hopefully getting to the same point at the end of this. So, in order to move forward, we do need some data to work with or to have some conceptual idea of the data that would be in place. Meaning what has happened in the past. And what are we doing now? Why are we doing it? And what are we expecting to happen in the future? As we look at that a good tool to visualize. That is, of course, the home page, which is where we are now. If you're not here, you can get here by going to the company tab and home page. I also like to have the open windows open that noticed that they're not here at this point . When you open the programs, I'm gonna go to view and open windows so we can see what we have currently open note. That shows me we have a lot of stuff open our I do and that I don't need open. I'm gonna go ahead and close these out just so we can start just with the home taps. I'm gonna clean everything out here. And I recommend doing this a lot of times when you're opening QuickBooks. Just so you're starting from one point and working, working from there. So you have the relevant information open in your tabs. Now, we just have the home tab open. We are gonna be working with receiving payment. So the concept here is that we build someone or we invoiced someone and we expect to receive payment. We can imagine receiving that payment in the mail. So we can see that Ah, flow within the customers section. So with any customer section, typically, if we are in a business where we do the work and then get payment in the future, then typically we're gonna have an invoice. Then we're going to get payment and then we're going to deposit it. So we need to have a picture or idea of those three components as we as we build the accounting system as we build what we're gonna be putting together and how this information is gonna flow through our project is going to be a store. So we buy and sell guitars. So oftentimes, if we were to sell the guitar within the store, we would create a create sales receipt and not a Nen voice in that we would hopefully get payment at the point in time that we sell the guitar and then we would just deposit that information if, on the other hand, we got paid or were sold the guitar and we expect to get paid in the future, this would be a type of set up that we would expect to see more in a lot of service type organizations. Ah, law firm or bookkeeping firm where the work is done. You send out the invoice either by email or by mail, and you expect to receive a check in the mail. For that, you have to first. In order to send out the invoice, you gotta count up the time and whatnot that was spent. In that case, we were typically have the invoice going out and then receive payment at a future date, and then we're going to record the deposits. That's what we're gonna work on here. We're going to say we have created the invoice, and now we're gonna get a payment if you want to know how to create to the invoice. We did that last time. We created a couple invoices. We're gonna create a couple more in the future. And now we're gonna take the payment that we're assuming has been received in the mail. We got a check in the mail and we're gonna record Ah, payment note. What we are not to doing were not recording deposit here, so we're gonna record payment first. There's a few reasons for this that way. Need to understand, because it's a bit different than we might learn an accounting courses where we basically skipped this middle step. What we've normally do, As we say, we go into accounts receivable. People always money for work. We did. We record sales and accounts receivable with the invoice, and then we just get the cash or the check and we debit the checking account, or cash, which in our case and quickbooks would be the checking account, increasing the amount of cash we have. And we were credit the IOU account, the accounts receivable account, reducing the amount of money owed to us. The reason QuickBooks has an added step here is that we might get multiple checks within one day. And our goal is to deposit all those checks at the end of the day or departed them regularly As we deposit them. We're gonna group them together not by individual check that we have received, but by groups of checks by deposited checks. And therefore we need to be ableto put the deposit into our system in the same format as of the checks so that it ties out to what the bank statement says when we compare our information within the bank reconciliation to the bank statement a lot easier if all the deposits are grouped in the same way as they are on both the bank statement as well as QuickBooks. So what we need to do here is have an interim step. We're going to say these are all the checks that we are holding on to, and we're gonna put him into a different account called un Deposited Funds. And then we're gonna go ahead and deposit them, then grouping all those checks together in the same format that they'll be seen on the bank reconciliation. So that's the crucial step. It's a step that's really misunderstood and gets messed up all the time. And there is a purpose to it. And there is a way that we could bypass that middle step. But it's worth doing for many businesses. So let's take a look at it. So we got to check in the mail way issued the invoice. Now we got the check in the mail. We're gonna say receive payment. The check in the mail came from Anderson. So we're going to say the Anderson is who gave us the check. We type that in. Well, then get the individual. We can also select the drop down and find our list of customers and pick the customer. And there we have it. Now, what drops down here is the information in terms of what Anderson owes us, And we could just check that off note. It's kind of a double check here. If we were to write in the amount of the check that were holding that we got him from the customer and then match it out down here. If we were just to select this item down here, we got a 5000 check. It fills it out automatically up here, and it gives you a little message in order to tell you that if you do not enter the amount received, QuickBooks automatically calculates the amount as you select each individual in the table. So I'm gonna say OK, so we have selected that, and it put the amount there that hopefully is the amount of of course, the check. So we're gonna say we get a check in the mail, will label of type of payment, the date that we got this is gonna be 01 12 21. That being january 12th 2021. We will be working this problem in the year of 2021. And the check number is optional. Field, you don't have to have it. This isn't our check numbers thes air the check numbers from the individuals giving us the check. We're gonna type in 8755 for the check number. When we record this, then what's gonna happen is we're going to say that receivable should go down from Anderson because they paid us. And where does the other side go? You might think that it should go into our checking account debit in cash or increasing cash, But it's going to go into this un deposited funds and that's what we're talking about. It's gonna go in there first. Then we're gonna group the deposits and then deposit them as a group. Some you wanted some more detail on that? Even this little icon gives you a description of that. It's gonna be deposited into UN deposit funds will take a look at it. If you want to turn off that preference and you want to deposit it directly into the bank here at this point, then you could go into preferences here and follow these instructions and turn off that preference and win been. You deposit here, it would go directly into the checking account. So I'm gonna go ahead and save and close this and we'll take a look at what happened. Remember, received. We received payment, so we would think that cash would go. I mean, cash would go up in some form, is gonna be on deposited funds and the amount owing us money would go down those two items on the balance sheet. Therefore, let's take a look on the balance sheet. We're gonna go to reports we're gonna go to company and financial. We're gonna scroll down to the balance sheet and the standard balance sheets. We're gonna change the date to 12. 31 21. I'm also gonna change the date range over on this side, so I'm gonna customize the report. So whenever we auto zoom or drill down on the information, it will then give us a range of dates as we look at the transaction report or, in essence, the General Ledger. 01 a 1 to 1. So we're gonna say OK, and then we could take a look. So we're gonna say cash. Probably not gonna be the amount that was affected, what is affected. And they put it down here, Not in the cash. They put it into other current assets. So this UN deposited funds is, in essence, cash We have on hand that we have not yet deposited. So if we double click on that, we see there's our item here from Anderson, the other side being accounts receivable. If we double click on that, we see the actual customer payment that we just filled out. So I'm gonna close that out, close that out. The other side of a dent should be in the receivable. So we'll double click on the Receivable. And we see there's the 5000 that was paid for the receivable here. So there's the other side. If we double click on it, we see that same customer payment. So close that out. Gonna close that out. One more important reports that this boil will appear on is the customer report, the accounts receivable, the subsidiary report. So we're gonna go down to reports customers and receivables, and we're going to go to a customer balance detail and then we can see again, Anderson. Here we have. The 5000 was owed 5000 then paid, and now we only Anderson on Leo's. That 430. And that is what is now remaining. If again, if we double click on this payment, we will get back to that information. Same form. We filled out same customer payment. So at this point in time, we have this account, which looks really funny on a financial statement because it's only something that you use in QuickBooks, and therefore what we need to do is get that into the checking account. If you have a bunch of amount in the in here that's not in the checking account, then there's probably an air, and that happens a lot, so there's probably something that you got to go in there and clean that out. If you reconcile the checking account, then you can be fairly confident that checking account is correct. If you have, say, 5000 in this in this account and you have no checks that you have plan on going to the bank and cashing anytime soon, then that amount is probably incorrect, and you gotta figure out how to how to fix that. We're gonna go back, Teoh the home tab, and we're gonna receive another customer payment. And see that from Jones guitar. Same concept already invoiced. Now we're gonna receive the payment. So we got the check in the mail. We're gonna say received payments. When we get that check in the mail, we have to type in from the receipt from the client or customer of Jones. I'm just gonna type that in there. It will then populate Jones guitars, and then we're gonna put the amount of the information of the payment type. I'm gonna say, this time we got paid with a credit or debit just to see the difference there. I'm not gonna enter the payment information. At this point. I'm just gonna just to show that we have a different information, this will give us. This will give us basically a reference of the payment type here, and I'm going to say done. And there we have that information and the amount of in again we could type it in here. Or we can put that information down here and just click on the related invoice. This being the 7005 it gives us that message that it will populate these payment amount for that same amount We're gonna say, Okay, that is good. So this man, this number should match this number. Note that if a payment was received for less than the invoice amount, we are applying Teoh. That's okay. You just make this number less, and then they will still be on amount to do notice. We have two amounts here. The original amount amount to do and the payment amount. We have three amounts here in the payment amount. So if we only have a partial payment, that is okay. We're going to say we paid the entire ah invoice of 75 that was on there as a 12. 31 are beginning balance for this particular problem. And we still have this invoice on January 12th that we need to take care of at a later point. Once again, what will this do? It will decrease the amount owed by Jones in the a R accounts receivable account, and that will put an amount in UN deposited funds. So we're gonna say save and close for this item. And then once again, we'll take a look at the balance sheet. It says it needs to refresh. I'm over here in the open items tab. We're gonna say, Click on that And once again, it's not going into cash. Where did it go? It went into the UN deposited funds. If we double click on it, we now see that item. They're double click on it. We see our payment, close it out, flows it out other side and the receivables here and there it is again. So there's our payment. Double click on it and we see the item. So there's Air two sides. There's a double entry accounting system in practice. Here's our balance sheet, equaling out in terms of assets still equaling liabilities and equity, which is a good sign if we take a look at the last report we looked at in terms with the customer. Report reports customers receivables, and we have the customer balanced detail, customer balanced, detailed for Jones showing once again that payment of 7500 double clicking on that may see our customer payment. And there is that We're gonna do this one more time, so I'm gonna close this out. Close this out and we're gonna go back to the home tab and now we have another customer. Paid us has been a good day for payments here. Smith Guitars is going to pay us, and therefore we already invoice toward receiving a payment for that. Envoys note that these two are related. Of course, this information that we're getting within the received payments generated from the invoice that was created So we're gonna go into receive payments, and this is gonna be from ah Smith guitar. So I'm gonna hit the drop down of this time and just pick Smith there that we dio and we're gonna tap through this. I'm gonna say payment is for that 8000. Now, I'm just gonna type on our click on it again. That's are beginning bounce that was owed from to us from Smith. Ah, the credit card is still selected. I'm gonna keep that and and noticed when we put the credit card information at this point in this format, it's really just a reference. So we're recording the payment that had been received through the credit card into our system, mainly tracking the fact that Smith doesn't know it's money anymore. That's the main thing that QuickBooks is doing here and recording the composite tracking the cash that we have then received. So that's gonna be the same information. We have this information here. Once again, it's gonna increase the UN deposited funds and decrease the receivables related to Smith's guitars were gonna save and close that we will check it one more time on the balance sheet . We see that we have a ah accounts receivable and accounts of people's going down once again . So what's countless evils going way down in this day? And we're gonna close that out and we're gonna go to the other side of it, will be in UN deposited funds. And there we have that. So now we have this big number of checks in UN deposited funds. We should be going to the bank very shortly. If we have that information there, No, we're going to deposit it into the bank. And our goal when we deposited into the bank is gonna be to group it in a format that ties out Teoh how it will be grouped on the balance sheet. Ah, when we I'm a bank statement. When we see the Bank seven because what we want to do is take anti out when we reconcile the bank statement what we have in our books to what is in the bank statement. Easiest way to do that is to group the deposits in the same format in both locations. We will do that in a future presentation. 58. 7.30 Sales Receipts Cash Sales Transaction QuickBooks Pro 20187.30 Sales Receipts Cash Sales Transac: Hello. In this presentation, we will record the creation of a sales receipt sales receipt, meaning the documentation that will be generated and prepared when we sell goods in this case the guitar and receive payment at the same point in time. This sales receipt documentation being compared and contrasted to on invoice, which is something that we would record win. We sell the good in this case, the guitar and expect to receive payment in the future, something that often is used more like a service type of business and this type of transaction, we would expect payment basically at the same point in time of delivery, often times when that is the case. The documents used that we will report in QuickBooks will be of the sales receipt. If you have been following along with us, we will be continuing on the get great guitars. If you haven't been following along and just want to see the creation of a sales receipts, that is what we will do here. If you have access to the backup at this point in time and want to be working exactly where we are at here, then you can go and file and restore that backup up here, getting us to the same point in time. We will be working with entering data, and therefore we will need the prior data, the future data, and hopefully we will end up at the same point at the end of the project if an error has been made in the past. However, note that if you restore one of the backups to that point in time, then you can work forward from there and we can all be on the same page. So what we're gonna create here is gonna be a create sales receipt now, No to that And know we have the home tab open here clearly, and the home tab is open here. Don't have the home tab open. You're going to go to company and hometown. Also, we always recommend having the open windows open here so that you can see what is open in this case, just the hometown. We're gonna be working here with the creation of the sales receipt. So we're gonna have these sales receipt document that typically is gonna be compared and contrasted to the invoice. And QuickBooks provides a nice visual here on the home page that will give us a clue and idea of what that differentiation is. And you'll note that the invoice is over here and then we're gonna have a receipt payment and then we're gonna deposited into the bank, meaning on invoice will typically happen. Often you can think of a service type business, someone doing bookkeeping or law firm that does. The work has to build. A client has to count how many hours they worked on and then record how much they have earned and then build a client for that amount. In that type of environment, that bill is going to go out. Then we're gonna receive payment into the mail. Then we're gonna take that payment to the bank and record it. Note here were saying that we got paid at the same point in time. So when we took a look at the create sales receipt that's similar to what you can think of as the register. If we're just sitting there at the register and someone brought the in our case, we sell guitars. So someone brought the guitar says, Here's the money and we're gonna record it into our register. That's more what? The sales receipt it's gonna record. It's bypassing the creation of the invoice, and we're getting the payment right at this point in time. So we're just gonna get the payment, and then we're going to record it as a deposit after it has been received. So so that the difference here clearly being that we're are receiving payment at the same point in time as opposed to an invoice where we are doing the work and expect to receive payment, you can imagine in the mail at a future point in time. So this will save us a step in that it's just going to record the payment at the point at the same point in time. If we were to get paid at the same point in time and we accidentally created an invoice, that's okay, we would just have to do two steps. We have to create the invoice and then receive the payment for that invoice to eliminate those two steps. If we get paid at the same point in time that we do the work, then we can just go directly to that create sales receipt, as we will do here, clicking on create sales receipt. So our example we're gonna have a new customer, that we're gonna get a sales receipt, it's gonna be a string music, and therefore, we're gonna put this information up top. I'm gonna go ahead and collapse this added information. I'm gonna collapse in this window. We don't need the added information and then we're gonna put the customer here. So we have a customer, we can imagine string music. Someone representing string music game into the store and just bought some some guitar. And we're gonna put the information related to that within this here. Now, we could select the drop down. We said whom? This person is a new customer. We don't have their information yet. We will take that down. In order to do that, we could go to new, but I'd like to just type it in there. I think it's easier to just type in. We're going to say, Well, what's the name? And we're gonna say string music. And then once we select a tab, it will prompt us to set up the customer. Now, obviously, in real life, if it was a customer, especially if it was a music shop, then we would probably want to the full set up get as much information as possible. In this case, we're going to the quick set up. However, that's all you need. Really? To set up them the sales receipt. And that's what we want to concentrate on. We want to concentrate on just what's happening when we set up the sales receipt. So we're gonna go to the quick and and we're gonna have the template. We're going to use the template again. We could customise these templates a lot. We're going, Teoh, use the default, which is sufficient looks. It looks nice, Teoh, to use the default, but we could put our logo on it. And if we have time later, we'll go through some of that customization options. But here, we're getting to them. Just the logistics of it. How does this thing work? So we're gonna go Teoh Cash. We're going to say we got a cash payment gonna tap through this. The date is gonna be the 16th of the 21 2021. This entire project being worked in 2021 to get from 12 to 16. I'm gonna do that by just hitting the plus toe. 13 14 15 16. That's a useful tool to have and use. So I recommend getting used to using the keyboard as much as possible, saving time tabbing through to the next item. The sales number was going to start at one. It's gonna discount upward. Might as well keep the numbering that is generated from QuickBooks. Then we have sold to All we have is the name. We would like to have the billing address again. If we were to set up the entire customer information, we would. But the name is the minimum that we need. Then we have the check number. We have cash here, so we're not going to deal with the check number again. The check number is informational, so it's not required. If we were to write to the check, we would almost have to have a check number. But if we're receiving the check, it's a good thing. To have any more information is good thing to have. It's not a require field, however. They were going to select Tab and we're gonna sell an EPA phone semi hollow body. So that's and that happens to be number W I L W I l And of course, this would hopefully be on the sticker of the guitar here. We would put that information in would say, if I select tab that costs $400 we could just collect the payment of that $400 at that point in time to make these cells a bit whiter. Now, you might be asking if we looked at this in the past. That's the same as the invoice. Where did the system get this information? We want to have this information set up before so that when we ring up the guitar, we don't have to think about Well, what's the sales price? What's the cost? How much is it? Obviously it should be on the sticker of the guitar, so we could just type it in there if we had not already entered it into the system. But it would be much better to have it already entered into the system. So the system can, uh, ring this up and we convened. Match it, Teoh the sticker that is hopefully on the guitar and that'll give us a bit of more of a check. How did we do that, remember, you have to go to the lists up top. You got to go to the, uh, item list and we set up these items. So here's the items that we set up. We're looking at the EPA phone semi hollow body. So that's gonna be this item here if we If we drill down on that, it edit. If I go to the item tab and we edit item, we can see what what we did here. Know what we see on the on the sales receipt is $400. That's the sales price. What we do not see, however, is the 320. And that's the beauty of QuickBooks will cover that. It will record not just the sales price, but the cost as we go in a perpetual system rather than a periodic inventory system. And that's gonna be great for us to to track the inventory in terms of our sales, the sales that we have made. So we're gonna go ahead and close this out. I'm gonna go back to the open windows over here. What? We can close this out, clothes that out, and we're gonna go back to the open window. We got the 400 then we've got the sales of 400. We have sales tax of 5% sales tax. We just made that number up. It's going to be different from state to state again. You would have to choose that in the lists items they item list in order to get the correct sales tax for your state's collecting that. But again, the beauty is QuickBooks will take that, calculate it and put it into a liability, which we all that all we have to do then is write a check Teoh whoever we owe that liability to in whatever time period it's required to be made at at that time. So here we have that, and we Oh, we're gonna get received the 420. Now, if you want to print this, you can go to the frontier on, and if you want it, mail it. Obviously, we can email it at with these options up top. I'm gonna go ahead and save and close this, and we can take a look at what it's going to dio save and close. And if you have something in your inventory that is not a normal word. You could add the word and I'm not even sure if that's go, but we're gonna We're gonna keep those and then we're gonna go back up to the reports and see what happened here. So we're gonna go to the reports and we're gonna enter. We're gonna open up our two main reports that being the profit and loss. But let's start with the balancing start with balance sheet down here. So here is the balance sheet. We're gonna change the date the date to 12. 31 to 1. I'm also gonna change the range so that when we drill down on it will have a range. So I'm gonna change and customize the range 2010121 12 31 to 1. And okay, now let's think through what's gonna happen here. We made a sale and we got money, so you would think right off you would think that we would get cash of ah, of the 420 that was deposited because we got cash. And if I double click on it? No, we don't see the cash for work for 20 in our major checking account. And so I'm gonna close that out. Reason being is that it's basically in our cash registers in our drawers in our hand. It's not in the bank. And so, QuickBooks, once again, it's gonna put it into this other account called un Deposited Funds. And so if we double click on that, we see that for 20 here. So after at a later point in time, we're gonna have to take all these deposits, we have go to the bank with it and deposit it. And as we do that, it'll group them all into the correct grouping the same grouping that will then be reported on the bank statement, that making it much easier for us to match our word grouping to the bank statements when we do the bank reconciliation. So that's the first thing we just we need to be mindful of that, and keep that in mind. Don't mix up that step because that's an easy step to mix up. So we have that, and then the other side of it is going to be the sales. We've got the sale side of him, so I'm gonna go to the reports. We're gonna go to company financial because the sales side of its on the income statement and or the profit and loss that's called which it is called by QuickBooks. So profit loss standard dates are gonna be a 101 to 1. We are working in the future 12 31 to 1, and we got this sale. So we have our sales merchandise, that sales. I'm going to double click on the merchandise sales and there we have that and there's our 400 there. Note. What is not there? The 20 we collected 420 but the 20 we received wasn't sales. That went Teoh who we owe. And that went Teoh Ah, liability because it went to sales tax. We owe the state that for 20. So we got for 20. I mean, over the state to 20 we got 4 20 We got revenue off 400. Where's that other 20? Should be on the balance sheet somewhere. It should be something that we owe to the state. Let's take a look at that and close this back out back to the balance sheet. We're gonna go to the balance sheet up top were looking through. The liabilities were trying to see. Is there something we owed to the state? And we have sales tax payable, sales tax payable 59 50 If we double click on that drilling down Zuman in we see there's that 20 and there's from the prior sales as well that we looked at those two invoices. I don't think we consider these in prior election, but we have the 20 there, and that means that we owe of the sales we made. This is a liability we owe to the state this 59 50 whenever we have to pay that, given the rate of sales tax that we had to then collect. Note once again that QuickBooks, once this is set up, just records this journal entry, and we don't really need to know what's going on. But it's nice to be able to have an idea of which accounts are being affected when we generate these forms. So I'm gonna close that out, and you think you would think would be done there. But there is another side to this, of course, because we gave up the guitar and the guitar is an asset and it went down, so we decreased our inventory. So we've got the inventory up top here. Inventory Asset. Let's see what happened to that account. We double click on it. Drilling down, zooming in. We see that it went down by, Ah, 3 23 20 It went down by 3 20 And of course, that's the cost. That's the cost that we saw on our lists. Not the sales price that we sold it for 400 we got 420 because of sales tax, but we sold it for 3 20 So if we double click on that, we'll get back to our sales receipt. There's our sales receipt. We still live for 400. Collected another 20. We don't see the 3 20 but QuickBooks clearly recording the 3 20 closing this right here related to the cost. That being gotten through when we set the inventory item up in the lists in the inventory lists. So I'm gonna close that out and one more item to look at and that's gonna be the cost of goods sold. Where's the other side of that transaction? The other side related to the inventory that's gonna be in the profit and loss. So in the open, windows will go. The profit and loss their cost of goods sold should contain that amount. Double clicking on the cost of goods sold zooming in on it. There's that 320. If we double click on that, here's our same sales receipt. Closing that out. Closing this out. We see. Then that cost of goods sold. Increased sales increased sales increased by 400 costs of goods sold by by, I think was 3 20 So the difference, then, is what net income is being affected by. So we're gonna do this again. We're gonna say there's another sales to a new customer. Sam. Sam the guitar man. Okay, so we're gonna record another sales receipt, So I'm gonna go back to the home tab, and once again, we're going to sales receipts. Meaning we sold a guitar. We got paid at the same point in time. And so we're gonna go to sales receipt, and we have a new customers. So once again, we don't see Sam in here. So Sam just came into our shop and bought a guitar. Okay, so we're gonna set up Sam on we're gonna say Tab, and once again we would probably want all the detail. But we're just gonna add the quick add to see what happens here in our set up. We're going to say that we got to cash and Tab. That date is gonna be 16th again. Envoy over the sales number is gonna be repeated, is gonna be the same, and we're gonna have the soul to hear check number. I'm just having through this and then we're gonna have the item. So in this, this one, we had a we had a diagnostic. So we did some. We did work on a guitar here. So now this is part of our service here rather than our inventory. And so we did it. And so once again, we could select the drop down, which has all that all the items, not just the inventory items, but also our services. So we have a diagnostic here, which we're going to put here, and there's our diagnostic, which was, Ah, 68. We could We should be putting the quantity one if we don't have the quantity, obviously it will default to one, and then we have another service provided here Our service and guitar. Full service. Okay. And that's gonna be one. And that's at, uh, 140. So these are gonna be service items rather than selling. Selling the guitar note. We may or may not have sales tax. That's gonna be applicable. Often times the sales tax is not applicable to service items, but only to inventory items, depending on the state. So if we go to this customer code, we're gonna change it from tax of taxable sales to non taxable sales item, and that should remove the amount calculated for tax. Therefore, we're remaining with just the 68 the 140 giving us the 208 In this case, when we record this, we can think through of this transaction again. What? What is gonna happen? Note that there's no inventory item here, so there's gonna be a more of a simple transaction because there's not a decrease in the inventory, and we're not dealing with the sales tax information here. We just have a service item that was sold no actual guitar in our case, no inventory. And therefore we're gonna have a nen crease or debit Teoh some type of cash account, however, not going to our main checking account, but once again going to the UN deposited funds and they were gonna have a credit to some type of revenue or increase in some type of revenue account. Let's see if that's the case, we're going to say save and close, and I'm going to say, Ah, yes, And then we're gonna go to our two reports, starting with the balance sheet, which is still open in our open items window. And we want to say it's not going to be in the checking account. Even though we got cash, the cash went into UN deposited funds. If we double click the UN deposited funds, we see that amount there the 208 Double clicking on that. We see that our sales receipt shows the 208 Given these two services that we're done, we're gonna close this out and close that out. Remember that we have to then go to the bank and then deposit that if we just spend the 208 in cash, that's not very good practice. Typically, we want to put it in the bank. The bank being a double check of our our records. So if if we typically we want to make sure that we go to the banking deposits, any cash receipts, if not again, we're gonna have to basically adjust this UN deposited accounts in some way to account for that transaction. So if there's a bunch of money in here that we do not have on on hand, that we're gonna deposit in short order than there's something wrong there and we need to kind of fix that know once again that we will understand this problem, be able to at least locate the problem when we do bank reconciliations, the checking account. We should be able to tie down pretty well when we reconcile the bank accounts very important to reconcile the bank accounts and really will help. And and that will give us an idea of whether we're doing all this stuff correctly on. So it's gonna be a big component, then the second half of this, we're going to say it should be some type of revenue that's going to be on the profit and loss or income statement. So we'll go over here to the profit and loss or income statement notice we put it into not the same sales item. We now have another sales item that we had set up in a prior presentation, and I think it was set up automatically by the system because we chose a merchandising and service company. But notice that if you set up a merchandising company, it may not set up another account for services, and you might have to set that up when you when you ah, record a service item. In order to do that, you would goto lists you would goto items and ah, one. So you gotta lists. You got a chart of accounts and then you could set up your income account down here. One for a service item, you get a service account, it's an income statement. Accounts. You could also do it with the item list. Meaning if I go to the item list over here and I was to set up an inventory item as the ones we did hear these air all service inventory items during that set up process, we're gonna have to choose the income account it goes to, and we could at that point in time, set up that service inventory account. At that point in time, back to the profit and loss. There's our item. If we double click on that. Here it is. Here. If we double click on either of these things coming from the same the same sales receipt, there it is. We're gonna practice printing this out. You could email this, you could print it. We're gonna print it as a pdf using a cute PDF printer. If you do not have a cute PdF printer or any kind of PdF printer, then you could download it. It's a free download. It's really useful not just in this program, but a lot of different programs, because some programs don't let you print. But, I mean, they don't let you saved as a PdF, but they do let you print, and therefore, if you have a PdF printer you can print as a pdf and basically save it as a Pdf could be quite useful. So we're gonna do that. We're gonna say print, and it's going to our pdf rather than another printer here, and we're going to say okay and keep the settings they're printed, and this is going to be a sales invoice. It takes a little bit of time sometimes. And sometimes when we use this cute pdf printer the we have to, like, minimize the window and then it pops up. And then we're gonna go and find where we want to put this. It's going to where we want it. It's on the desktop and get great guitars. Section seven is gonna be a pdf. I'm gonna rename it and we're gonna call it Sam. It's gonna be a ah, put the fills seats and put the Ahmar or the date of 1.16 Top 21 and save that. And that's gonna be it's for the creation and printing of sales receipts. 59. 7.35 Deposit QuickBooks Pro 2018: Hello. In this presentation, we will record the deposit of cash into the checking account. Hello. In this presentation we will show how to record the deposit into the checking account within QuickBooks Pro 2018. If you've been following along with us, that's great. We will be continuing with get to greater guitars. Problem If not, that is OK. We will be discussing how to record a deposit This item over here a bit about how we get to this item where it fits within the process and what the recording of deposit will do as well as what we want it to dio when considering the next step the bank reconciliation. If you have access to the backup file for this point, then you could restore it, going to the file tab and open on open or restore company and then restore the company. This will bring you right to the point that we are at at this point again. If you don't have it, that's OK. We'll take a look at where we are at. But we are entering data at this point and working through a problem such as this is really a good field gets a good idea of what is actually going on actually work the problem. We will be entering data and therefore we will need data to be working with as we go forward. If you made a problem in the past or you don't have the prior information than starting from a particular point in times that were at the same point, going forward is, ah, useful tool to have that being said. We are here. We're going to be recording a deposit now. We've made ah lot of transactions in the past that are requiring us to deposits and those transactions to recap them so that we know how this deposit system is working. This is really the crutch that we need to understand, especially for small businesses. Teoh to see what his QuickBooks doing. It's farther deposits. Many small businesses actually used that create invoice, and they're able to track who owes them money but possibly not using the received deposits and the end of the deposit records correctly and therefore not being able to reconcile the bank accounts and that bank accounts are huge to to reconcile. So we need to have an understanding of what's going on. We can understand this without we have totally understanding debits and credits and just have an intuitive understanding of what is happening, and that will be our goal here. So in the past, we have created an invoice. This is gonna be, of course, in the customer section of the home tab, which you confined by going to the company's home page. And then we want the open items open. By going to the view and open windows, we will be talking through some windows here. The customers process. That's where we typically have a deposit. We could have some deposits from some other areas, meaning the owner might have deposited something. We might have gotten a loan, but typically, the vast majority of our deposits are going to be through the sales process through the customer process as it's labeled within the QuickBooks home page. So this is a nice visual of the process here, which would, if we're service company, typically start with an invoice. This would be a companies such as a law firm, a bookkeeping firm where we have to do work. We count the hours that we did. We send out a bill either by email or by mail, and we've received a check. Then we would get that check in the mail. This is that interim step. Remember, that really throws people off often times because this is actually not depositing into the bank account, as it would be in a theory class just increasing or debit in cash. But putting it into this UN deposited fund account, which does have a purpose. It's not just on added step, that has no reason. There is a reason why QuickBooks is trying to force us to do this. It's trying to help us to make the bank reconciliations and the banks Reconciliations are really important. So it's not something we really want a skip. We're trying to make the bank reconciliation process easier. The other side of this would be to decrease the receivable that is owed at that point in time from the customer who bought who bought our services, that we sold services to decreasing the amount that is now owed to us. So at this point in time, then it's gonna go in that UN deposited fund and then we're gonna go over here and deposited hopefully daily or weekly. We wanted positive, hopefully daily forgetting deposits go to the bank and put in the bank. Now, when we go to the bank note we have five pending deposits here. And that means that we would assume that we have five different payments that we've received at some point or the other, that we now need to go and deposit into the bank as we do. So we're gonna deposit all of those in one lump sum. We're not gonna really list of them out. We typically put them all in one limb, son. The bank recording all five deposits at the same time. It's important to note that because when we get the bank statement at the end of the month , it will probably just report one line item, including the dollar amount for those five deposits made at that one point. And we need to be able to tie that out to our books. So that's why that's why we want to make sure that we do this process so that one we have a check to go to the bank and deposit to We want the bank statement to be in the same sequence of order in terms of groupings of deposits as our records. Therefore, when we reconcile will be able to tie those out. The other typical way we get deposits is if we sell something, like in our case, we sell guitars. If we just sold the guitars at the store, we typically get paid at the same point in time. And we would then want to go to the bank daily and make the deposit at the end of uh, the day and the same thing. What happened here, we'd be right here. And then we go and we deposit at the end of the day, this account recording the UN deposited funds rather than cash being debited or increase on the cash side on the asset side on the other side, we would have the sale happening, and now we're going to go to the bank, the bank, then the bank deposit. Once we deposit this and record this into the records is gonna take it out of UN deposited funds and put that put that amount into our main cash account, the checking account. So before we do it, let's take a look at our main form and see what we want to happen in terms of financial transactions. In terms of the financial statements in this case, the balance sheet that cash account the UN deposited funds going to reports go into company and financial scrolling down Teoh are going down to the balance sheet Standard is what we're looking for and we're gonna change the dates to 12. 31 to 1 were working in the year of 2021. We're then going to change the customized report so that we have a range. So when we drill down on this information, it will give us a transaction report. In essence, a g l that will have a range from one 01 21 to 12. 31. That's gonna be the year that we are working in. It will be in 2029 1 as we work through here. What we have at this point is this funny account down here, un deposited funds. It's an other current asset account. It's basically a cash accounts, and that represents that we have that much money that we're just kind of we have in our sewer. We don't wanna be holding on set in our story wanted deposited, and we wanted deposit it in such a way that it will be grouped as it should be on the bank Reconciliation on the bank statement at the end of the month. Now, because we did this this problem and kind of did all the invoices gonna go back to the hometown. We did all the invoices and we wanted to kind of group those together as the sales receipts and then the sales receipts. Then that means that we have a lot of deposits at the same point because we wanted to put those two things together and show them at the same time in order to show how deposits would be deposited separately. We're gonna we're gonna deposit them separately and choose to dates for the deposit. Typically, of course, if we were a store, we would be depositing daily whatever sales received we got at the end of day. We would then want to deposit them at the end of the day, grouping them together. So in order to do this, we're going to say there's a deposit of cash on 1 16 something record deposit, and we get this screen here now, we typically get a pop up note. If we had No, it's nothing to deposit this screen would would appear if we have those five items that are pending there in UN deposited funds. This green pops up and says, Hey, you got these deposits. How do you want to group these? Which of these are you going to the bank with? Typically, we would say we want a group all of those because we're going to the bank for depositing everything that we currently have. But because this is a is a book problem, we're going to select some of those deposits just to show you how the grouping works. And and so we're gonna group these together again, the idea being we're gonna group them together as they're going to be showing on the bank reconciliation, the bank statement at the end of the month. So it says we're gonna deposit this 420 and then we're going to deposit the 208 were deposit the others at a later point in time. And then if we say that, of course, adds up to the total of 6 28 when we select Okay, then it selects those two. It puts it into our deposit screen. We're gonna be depositing to the checking account. That should be the default If our accounts are set up correctly. If you select the drop down, you could see our accounts. We only have that as our principal and only cash account. We're gonna have to select the date, which typically would be the current date. But we're gonna put in the date of 01 17 21 working a problem such as this, all of the activity we will be doing will be as of the year 2021. The memo defaults as a deposit that's typically good. And of course, we have the deposits being pulled from and it shows you the receipt from and it gives us the other account that's being affected. Obviously, it's being a deposit screen. We know that we are affecting the checking account. That's what the debit will be. That's what with the increase will be. And we will also be affecting the other account. The UN deposited funds. That's what the credit or decrease in this case will be. And eso no check number, that payment method we've got that that was all being generated from these documents. When we created these dot these forms either sales receipt or invoice, these being the customers that we sold to string music and Sam the Guitar man. All right, so that's going to sum up Teoh this 6 28 That's what will be shown on our bank run on our bank reconciliation when we try to reconcile this to the bank statement. So then we're gonna go ahead and say, save and close and let's see if that does what we believe it should. We're gonna go to our main account here on our main statement, our balance sheets. It's gonna refresh automatically note. If it doesn't refresh, then you're gonna want to go to refresh up here. The reason It's refreshing automatically because we told it to in our settings. So when we go to our settings up top, you go to your preferences and make sure it's refreshing as you wanted to refresh. And then we're gonna scroll down and see if it does what we want. Of course, the checking account, we would assume, would be going up due to the deposit, so double click on that and we have the deposit now here. Of that 628 it increasing. That looks good. Here's a running balance on the side. 10 5000 plus the 6 28 bringing the balance up to one of +56 28. Then we're gonna close this item here, scroll down to the UN deposited funds. We would assume that to go down, that's where we took it out of. And we're gonna double click on that assets account, basically a cash account. And we see that the at these two amounts note that it's not grouping them together. It's it's decreasing by the form that it was received by. But so we have the string guitar and Sam. But if we double click on that, we can see the activities. It would double click on that. And here's the form. So here's the 4 20 Here's the 208 They both are together here in this one deposit, we should say, of the 628. So that's the effect on that deposit. We're gonna try this again. We're gonna do another deposit for much of the rest of the information going back to the home and looking once again at the deposit. We have three more items that need to deep be deposited as long as we see that there. That three That's basically indicating the number of items that we're going to need to deposit that are still basically telling us that we have those on hand, typically or we should on those need to be deposit. If we don't, we probably to fix something once again. Once we go in here. If we still have those items that need to be deposited, this green will pop up. If not, we're only going to see this green. And this is all that's gonna happen if that if that. If that is the case, that means we have nothing typically in the UN deposited fund account. And if you believe something should be in there, we'd have to go back to the invoices and back to the, um, sales receipts and see whether or not they're in there and whether or not they have been paid. And so here we're gonna take a look and we're gonna do the other three. So we're gonna check these off the other three, and that gives us a total of 20,500 that we're going to deposit all in a lump sum at this point. So once again will say saving close and it pulls up the information. So it's gonna be from our checking account. That should be the default. That date we're gonna keep. Actually, the same date s So we went to the bank basic twice today, and then we're gonna say deposit and it's gonna give us any information. This is where this information withdrawn from when we created either the invoice or the sales receipt, it's gonna take it out of the other account UN deposited funds. Remember that every form we make here basically has two accounts affected. At least when we generate just about any form in QuickBooks meaning this is a deposit account. It means that we're going to do something to the checking account, increasing the checking account as it's a deposit and it must do something somewhere else, which will be indicated somewhere typically, on most of the forms we we generate this decreasing the UN deposited funds. If we wanted to do something else to it, we could we could decrease some other account with the drop down. But typically that's the default. And typically that default should be correct, based on the form that was used to generate this information that in this case being the invoice and or the sales receipts. So we're gonna go ahead and we got this deposit of 20,500 we're going to save and close that. Next, we're gonna go ahead and see if it has done what we would expect it to do. So we're gonna go back to the balance sheet. So we're gonna go to the balance sheet over here, and it should refresh automatically. We have our dates as they should be. We're gonna check the cash account and see if that deposit has happened. Double clicking, zooming in. And there's that big deposit. 20,500. That's what we were looking for. Same date fleet double click on it. We see that deposit. They're the activity and notes that it shows those three deposits, but it will most likely show 20,005 on the bank statement and therefore on the bank reconciliation. Gonna close this Gonna close this. The other side of it then should be taken out of the UN deposited funds and it would be nice if you go down here and find the end of positive funds. We cannot. Why? Because now it's down to zero. So if you wanted to look at the UN deposited funds to see that transaction, to see the other side, to see it going down to 01 way is you can double click on on the cash and you could see that we have a deposit. And then the split account here will show us if we double click that it went to the UN, deposited the other fund the other ways we can we can close this out and we could try to find that activity in the other deposit funds. One place is to go to the lists chart of accounts and we're saying, Where did that UN deposited funds go and why? And we can scroll down. It was an other current assets account. Un deposited funds right there. If we double click on this activity, we'll get to the register and then we can see what happened. So here's the activity in the register and it Ah, it went down by our three deposits that were one deposit consisting of these three items the 7005 the 8000 and the five, bringing the balance down to zero. If we double click on this item right there that D p, it will then go back to that that journal entry. So when an account goes to zero, it typically then will not to be recorded on the balance sheet. It will then go away, and it's important toe note that one other way you could you could get into that location is to go to the, uh, banking and then go Teoh use register. And then, if you want to see the detail just of some account, you could select the drop down and just choose any account. The registered does not have to be the checking account, although that's the main one you would want to use to enter data within. But if I want to see the detail, not in terms of debits and credits, but in terms of increasing decrease like a register format, we can choose any account and then see the detail of what happened and say, I'm well, there's the activity. We just did and that brought it down to zero. That must be why it's no longer on the balance sheet going back to the home tab up top. We go to the home tab. So now we've recorded that deposit. Remember the process we after created an invoice, then received payment and then recorded the deposit. Or we had to create sales receipt directly to record deposit. We typically will then record the deposits daily. Note that these things tie together. So when you when you go into the invoice as we create the invoice, you could you could go in there and basically see that the envoys have been been received on. If you double click on the invoice and scroll back to some of them, it'll actually mark on the invoice. It's been paid. That means we received payment if it close that out. And that means that we've done one of these, typically or that in that case, we've turned. This we have received a payment does not necessarily mean that it's been deposited, and then we go from the receive payment and then record that as a deposited item. There 60. 7.40 Write Check for Inventory from Purchase Order QuickBooks Pro 2018: Hello. In its presentation, we will record the payment for inventory within QuickBooks Pro 2018. The scenario being that we have issued a purchase order were receiving the inventory and had Hello and its presentation. We will record the payment for inventory within QuickBooks Pro 2018. The scenario being that we had a purchase order, we purchased inventory, sent a purchase order and now are making a payment for the inventory that has been been received. If you've been working with us, we will be continuing on the problem of get great guitars. If you have not been working with us and that's okay, we are going to be working here in terms of writing. A check for inventory that has been ordered and received has been ordered with a purchase order. And now we are receiving the inventory and making payment for the inventory. At this point in time, if you have a backup file and would like to restore that backup file to this point in time for this particular problem to put us all in the same point, then you go to the file and open or restore company. It is useful to do that so that we have the data. We will be entering data as we go. We've inter dated in the past. We will continue to do so if you don't have that information. That's okay. You can kind of follow along here. But if you have that information and you even if you made an error in the past or something like that and want to be in this exact location, you can use that back up If you have that available. The scenario here being that we had a purchase order, we're first going to write a check to EPA phone. That's one of the people that we buy guitars from. So we're buying and selling guitars here, and we had a purchase order. If we click here on the purchase order, we can scroll back to the prior purchase orders. These are the purchase orders open. We had one from Gibson. We've got one to EPA phone here. This is the item that we're going to pay out now. We could do this a couple different ways if we had ah, large purchase order and we were going to receive the purchase order. Typically, this is a request. Remember when we make the purchase order And that's basically saying, Hey, we would like to purchase something unlike if we purchase something from Amazon. The purchase order typically happens before payment happens. So we're making a purchase order before we've even made a payment on it. No transaction happening at that point in time. Then in the future, we're going to receive the inventory. So we could go down this track here and say we have now received inventory. And if we select what? I'm gonna close that back out and note. Of course, we are on the home tab. And to get to the home tab, you got a company home. And if you want to see the open windows, you want to go to view open Windows list. That's what we're gonna be working on these open windows. As we move forward, the home tab gets a great little pictorial format of what we are doing through the process . So a typical purchase order inventory process would be that we make the purchase order, we're gonna receive the inventory for selected dropped down, trying to get the drop down. It's gonna say receive inventory with a bill, That will often be the case. We'll have the inventory with a bill or receive inventory without the bill. Then we can select that, and then we can have Inter bill against the inventory and then we have the pay bill, which would finally mean we're actually going to write the check. Now, this is gonna be a great process, especially if we have to count the inventory. So if he ordered a lot of guitars and we're trying to get the guitars and count them and see if they are all all there, we want to do this. So if we had coffee cups or something like that, we want to make sure that that's the case. If we want to get right to the writing of the checks and time basically the purchase order Teoh the check writing. We could go directly to the writing of the check and know what will happen. Is it still going? What's gonna happen is gonna tie out the check once we put the vendor in there to the relevance purchase order that we have out there. So what we're gonna do is we're gonna we're gonna write a check that check is gonna be to EPA phone for a guitar that we had purchased used or we ordered we had not yet purchased Hit using a purchase order. And as we do that, the system's gonna ask us, Do you want us to link this guitar? This payment that you're making for this guitar to the purchase order and we're going to say yes and that will then populate the information for us. So we're basically linking the purchase order. Teoh the payment. We only bought basically one guitar. So it's gonna be a pretty quick way to record this information for a business such as It's a small business purchasing the guitar. So we're going to say, write a check. We're just gonna write the check rather than go into the check register. In order to write this, we're gonna write it directly here, whether we are actually have a manual check or whether we are printing this within QuickBooks. We're gonna go into the right checks feature we're just gonna tap through. This is going to the checking account. That's probably our only account of that. In our case, it's our only account, but it should default to the main checking account. The check number should also default. So that should match the check numbers, whether that the in an external checkbook that we are writing or within the printed cheques of the external checks that we will be used into print these out. If we're using QuickBooks to print our checks, note that QuickBooks will not just print the check from scratch. On a blank piece of paper, you will have pre printed cheques. Main reason for that is the fact that this check number then should match the number on the pre printed cheques. And that's gonna be an internal control That's really, really valuable. So it's basically forced on any software that you have to have that that internal control there. So you're not just kind of printing printing the Czech, so that's what we're gonna have. We're gonna say tam, and we're gonna I'm gonna increase this Teoh. January 25th. I'm going to do that and notice we're always working in 2021. We're gonna do that. I'm just gonna do that with the plus button. So we're on the 17th 18 1922 12345 and there, we have that main thing. The main new thing is the EPA phone. That's who we are buying the guitar from. So we got the bill we got, and we're gonna pay for it now. So if we select the drop down, we could find it there. If we type it in there, we start typing. It will then auto populate. And then that's the one we want. So if you just find it, if it's already selected, then we can select Tab at a phone that pitiful and we get Select tab, and then this will pop up. Open purchase orders exist for this vendor. Do you want to receive against one or more of these orders? And we're going to say, of course, yes. Here. Now, if this does not pop up, then it means that you probably don't have an open purchase order. And if you thought you did, then you probably want to go back and take a look and see what happened. If we're purchasing this directly say from our vendor, such as like if we're purchasing from Amazon or something like that, then we may not have a purchase order, because in that type of situation. We would probably be making the payment before we receive the inventory. But if we're in the case where we're receiving the inventory before payment a case typical to many merchandising companies, then we're gonna have a purchase order. And then we could tie out the check and or inter go through the building process and in the check to the purchase order. So we're going to say yes. Once this pops up, we're going to say yes. And it's going to say this is the one here and this is the purchase order 10 Is there one which is outstanding for this EPA phone? Is that the one you want? We're gonna check it. We're gonna say that is the one we want and say OK, and there we have that. It then populates everything related to it. Let's go through and see what it populated. If we were purchasing this by check, without this populated items would have to know some of these distinctions. One, obviously it's gonna populate how much it costs. It already knows that because we made that through the item list. So remember that we have an item list over here. If you got a list and we go to item list, we had set up this particular up. A phone. Ah. What is this item list here was set up for the EPA phone that we purchased, and I'm not sure which one we purchased. Let's go back to home going to double click on the purchase order and scroll back. So there's the one. It's an L p E l p. EPA phone 400 bad information right there was generated from the item list that we created . And if the E. L p note it says 500 that's the price, not the cost that were buying it for If we want to know where that data came from, we have to goto items and then edit, and we see that the cost was 400. That's how much we're purchasing it for. So we already have that in the system. When we ordered it, we already said in the purchase order had this is you know what we believe the order price will be. It should match up. So we're gonna close that out. That's one of our internal controls as well that the price that we believe it should be matches up. Gonna close the purchase order. The only two items I have open now are the home and the rights checks can go back to write two checks. So there's the 400. Then it's gonna have the address of the person we're paying. Hopefully it would have the address if we if we had the address for the vendor, it's not required in order to write the check clearly. And then we're gonna have down here. Memo If we wanted to put the middle. I'm not gonna put a memo with Probably should, But I'm not gonna put a memo. And then we have the item. This is the important piece. How? This is where we really need to understand what's going on here. Whether we purchase the this item from a purchase order as we did hear tying it together or whether we're purchasing it directly with a check, possibly paying for it before we get it. If we're a small business, we do need to know that it's that the items is different than the expenses. There's these two tabs. It defaulted to the items tab when we selected the item But what's the difference between this tab and the expense tab? This often will be the defaults. The win. We'd write checks. It'll often default here, or it will default to the last place we were at, which is usually an expense tab. Normally, when we write a check, it's an expense. We pay the bills at the end of the time period. Utility bill. Wait. Possibly wages, Expanse, We pay the rent bill. Those are all taxes expenses, So typically the default will be to an expense. There's typically Mawr expenses than any other account. Typically, when we write a check, were writing it to an expense. But in this case, we're writing it to purchase an asset. That asset being inventory inventory is being driven by these lists over here in these items. And so we call these these item lists here items. So we're buying an inventory item, and that is why we have to put it over here into items. So when you see items, they could have called it. Inventory items might have been a little bit easier for us to know, but they just called it items way. Need to know that means inventory items and that will give us the detail down here also notes that everything else is recorded as an expense. You might think of some other things that you might birches that are not expenses, meaning we might have bought furniture and fixture here, which would mean that we would record the assets up here of furniture and fixture. But that's still here. That's still in the expense tab. So this this name is not as specific as it could be. What it's really saying here is this is all the items. Basically, inventory items and expenses covers everything else. Typically, those are expenses, but we could have purchased other things with with this other assets, such as property, plant equipment or supplies. So in this case, note that were hung the expenses, which will be there automatically if we tie it out to the purchase order, and it gives us that information drawing directly from the purchase order. It gives us the item, the description, the quantity directly from the purchase order that cost from the purchase order and note. We have a customer here to that customer that we had from the purchase order being Eric music. That's who we bought this guitar for. We bought it from EPA phone, thinking that it's gonna go to Eric Eric, probably already having told us that that's the particular item they want. So they game that said, That's what we want. We went then ordered it from our vendor for that particular client. And then here's the purchase order number. Once we have this information, we have the option then of either printing the Czech or not printing the check. We unchecked the printing check option, so we're not gonna print it. We could print it here, or we can print it here. Note that if you do print the checks from QuickBooks, then you will need those pre printed cheques. So you have to order the pre printed checks that would have to have your banking information on it and that pre printed number on it. And then you put those into the printer and print it out. If, on the other hand, you're just using QuickBooks to track the fact that the payment has been made and you're putting this information basically into the register to track that information and then to reconcile the bank accounts, you still need You still need this information, That's what. Where That's how we're gonna do it here Because we're not printing out the checks. So we're gonna uncheck the parental later option, and that's what we will have them here gonna hold. Go ahead and say, save and close. Now, let's go through and see what happened. Couple things weaken. We could check this out a couple different ways. We know that this purchase order has been one of the purchase orders have been received now , so we could click on the purchase order and then go back to that purchase order and say, there's the one. The payment is received, so we actually, you know, bide writing the check and connecting them are connecting the purchase order now showing that purchase order has been received. Me remember that this purchase order has no journal entry involved, But it is nice to track, obviously, the purchase order having been received or not. So then we're gonna close this out. Then the other thing that's gonna happen is going to be on the financial statements Week wrote a check. So we think that the check on the checking account should then go down the amount of check we wrote, and we should have gotten the inventory that for the inventory that has yet then been received. Let's see if that's the case going to our reports, scrolling down to company and financial both of those air assets, all assets on the balance sheet. So we'll look at the balance sheet standard changing the date to the date that this current problem will be work in 12 31 to 1. Then we're gonna change the date range so that when we drill down or zoom in, it will then have the date range basically a transaction report or basically a general ledger 0101 21 date range beginning January 1st 2021 to 12 31 21. And OK, and we're gonna double click on the cash. We would assume that the cash is gonna go down. If we do that. We see it does. There's the 400 right there that were being paid. We see the check is the thing that's happening here. The form and the date. And then they check number, the vendor's name and the split account. Where else is it? going inventory assets. That is what we would expect if we double click on that zooming in. We see that we then have our check. So that looks appropriate. Going to close that close. That we're gonna then go to the inventory account. Here's the inventory account and see if that has increased by the inventory we have purchased clicking here. We see that the check here has been entered for the EPA phone checking account. We have the 400. And so there is that item there so that should that has increased, we double click on it. There's the check exit out of at closing that out. We also note that this should affect our inventory reports. So if we were to go, Teoh reports up top and we were to go to our were inventory and take a look at evaluation. How about the inventory valuation? A detail inventory, stock by item or inventory stocked by vendor? Let's look at the inventory valuation detail and we're gonna change the dates from 0101212 12 31 to 1. And then we can see that we just purchased an EPA phone. I believe it's this. It was this 400 right here, the EPA phone, music and that item on the 25th. There's our check number, so there's the detail of the activity double clicking on it. There's our check again. So once again we can kind of find what's happening. It's useful. That should go back and forth to the full homes and see what's happening when when we do these items, when we record these items back to the home tab here next, we're gonna do the same thing. We're gonna do this for another. We received a guitar, and we're gonna make the payment for that. And so if we take a look at the purchase order, we are going to link up, checking on or clicking on purchase order going back. We see it's gonna be this item here that Gibson we're gonna say we received that and we're going to write a check for that's and we're gonna tie that together and basically the fastest way we can, which is basically just writing the check for the inventory. And then it's gonna basically check off or tie out to the purchase order. So so, once again, you could do that through the process. And my We could also do that by going to receive inventory, receive inventory with the bill and then basically put in the vendor, which was Gibson, and go through this process. It's going to say that there's an open orders here and we'd say yes and then click on that order and do this same process through this format. And then, of course I'm going to say no, don't sit. Don't do that. We're not gonna do this by that. I don't do this and say no, and that that would enter the bill. And then we would basically pay off the bill writing the check. At that point, that's a great way to do it. You can have to go through the process here. We're gonna basically bypassed that by just writing the check here, and that's gonna tied directly to the purchase order and record the inventory all at that one point. So we're gonna go ahead and do that. We're gonna say, right check and we're gonna say it's gonna be going from the checking account, and the check number should populate automatically. The check date. January 25th 2021. We will be working in 2021. We will keep that date. We're gonna type in Gibson. And again we could find that, of course, by clicking here and finding who we paid. But we're gonna type in Gibson and populating and select Tab. It's going to say once we select tab, open purchase orders exist for this vendor. Do you want to receive against one or more of these orders? Yes, we do. And so we're going to say yes. It's going to populate the purchase order. And we believe that's the ones we're gonna check on that and say, OK, once we do that, then it populates the amount based on the purchase order that we had generated. That should match how much is owed from the bill. If it doesn't, then we're gonna have to, you know, check that out and see what happened. Then we're gonna go down and we could have the memo. We're going to say we have an item once again populated for us by the fact that we tied out the purchase order should tie out to what we have then received. Note that once again, we're not on the expenses tab were receiving an item. That item basically meaning it's an inventory item. Those items being generated from the items lists here. And it should have it would have been generated and has been generated. And we had generated it in a prior presentation before we made the purchase order. And that's gonna populate then this information in accordance with the purchase order, which should tie out Teoh what we have received. And if it does, then we're going to say that that is okay and save and close this once again. If we were to go to the purchase order, then this way we can just click on the purchase order and scope back we would see that we had received in full. So that's good. That seems like a tide out. And we closed this and then we're gonna go to the reports once again, the balance sheet. We're gonna believe that we wrote a check, so the check here should have been written. So if we double click on that, the check has been written. There it is. If we double click on that, there's our check. If it closed that out close this out. Go back to the inventory inventory acid. If we double click on the inventory assets, we see this last piece here. Once again, double clicking on that asset inventory is going up by this checking this check that we wrote for the inventory as it closing this. So there are those two items. Once again, if we went to the inventory report, I won't go back there again. But we could go to the inventory report and see it's their note. Also, it's also unuseful to check the checking account with our register. A lot of people are used to seeing the register. So if we were to go to the banking and then register, the default will be our checking account. If we open that, then we should have. We should see this check then that we wrote he remember in prior presentations, we wrote some checks and and some deposits within this form within the check register. It's possible to do that, but in order to connect it up to the purchase order, typically you'd want to write, write the check or enter the bill, and then used to use the check writing from the home tab to make sure that you're tying that thing out. If you're If you're using something to write a check just to enter the data with into the check register that I check that's already been written and you just want to enter the data pretty quickly. Ah, then the check register could be a good way to to do that. If you're trying to tie the information out or print all the checks, then oftentimes using the building process or the entering checks is a useful tool to have . But in any case, we can see this information here. We can see the payments happening. If we want to see the actual check the form of the check, you click on this item and that will take you to the form that QuickBooks generates whether we do it in the register or not, whenever we write a check or decrease basically the checking account balance. So we're gonna close that out, and that's going to be it 61. 7.45 Invoice for Pre-Order Inventory P.O. QuickBooks Pro 2018: hello in this presentation and we're gonna record an invoice for a pre ordered item within QuickBooks Pro 2018. The scenario being that there has been a purchase order that has been put in place specifically for a guitar that was intended for a specific customer, that guitar has now been in place. We have the guitar, and now we are creating the invoice related to that pre ordered item that pre ordered item of inventory in this case, in our case, that inventory being a pre ordered guitar. If you've been working along with us, we will be continuing with the get great guitars problem. If not, that is OK, We will still work the scenario, that scenario being that we're gonna create an invoice as we have in the past. But this invoice being a bit different because we will issue it to a customer who has pre ordered. So we've already have an order that was put in place. We actually purchased this piece of inventory specifically for a specific customer. Hello. In this presentation, we will be issuing an invoice for a pre ordered inventory item within QuickBooks Pro 2018. The scenario being that we had a customer, the customer wanting a guitar, we sell guitars. We did not have the specific tar in the shop and therefore placed an order with our vendor specifically for vets guitar for this customer. That guitar once received now needs an invoice to be processed for that. And we're gonna link up the invoice with the purchase order with the pre ordered item of inventory as we create the invoice. If you've been working along with us, we will be continuing with the get great guitars problem. If not, that's OK. We're still going to go through the same scenario so you can see how this scenario will be set up. If you have a backup file related to this part of the problem, you can restore that by going to file and open, restore and restore that we will be entering data. So therefore, if there's an air that happened in the past or we haven't been following along in the past , then the backup files could really get you right to where we need to be to follow along with us at this point in time. Going forward at the end of this problem. Hopefully, we end up at the same place in terms of the data we are entering within the system. Also note that we have the open windows open over here that done by going to view open windows. We are currently in the home tab on Lee. Open window open. If that is not open on your system, go to company and hometown. Now we're gonna be working with creating an invoice. We've done this in the past. However, we have a bit of a twist of this time in that we're gonna create an invoice for a customer who had pre ordered meaning the customer preordered when that happened. We didn't have the inventory at the store, and therefore we're gonna order from a vendor specifically for the customer. We did that with a purchase order. Remember, the purchase order is going to our vendor ordering a guitar for us. However, within the purchase order, we're gonna list for our records that this particular purchase order is related to a piece of inventory we need for a specific customer. And therefore, when we ring up their customer on the invoice at the point in time that we're ready to give the guitar over to the customer. It will pull that information over directly. So let's see that if we go into the purchase order here, I'm gonna go back to prior purchase orders. I'm looking for Eric Music in the customer. So this one went Teoh a specific customer, but not what we're looking for. Here's Eric music right here. That's in the customer field. Not required field for the purchase order. We may have been purchasing just in order to stock the store, but in this case, we purchased directly for a customer that being Eric Music. We've actually received this guitar now from at the vendor, which is indicated here, our Avenger being EPA phone. So we got an order from air guitar. We went to EPA phone. Our vendor gave a purchase order, said we need this guitar. They shipped the guitar. We have now received. It indicated here. Now we can give it to the customer at the point in time that we give it to the customer. And that's when we need to record the sale and the inventory. That's when our job has been done. That's done with an invoice. That's what we're doing now. Gonna close this out. We're gonna go back over here to the invoice and record this invoice. So we're gonna click on the invoice and then we have the customer field where it's gonna type in. We could see the drop down, but I'm gonna type it in. There were typing in E. R. And then we see the customer we're looking for Select tab. Once we select tab, this screen should pop up. The screen says the customer or jobs you've selected has outstanding billable time and or costs. Do you want to one Select the outstanding billable time and cost to add to the invoice or to exclude outstanding billable time and cost At this time? You may add this later by clicking the add time cost button at the top of the invoice. So we're gonna say, OK, we do want to select that we're going to select the outstanding billable time when we say Okay, this screen pops up and we may say there's nothing there. What happened? Remember that there's tabs here. Or note that there's tabs up top, so there's nothing in the time tab that would be related to service items. Nothing in the expenses mileage. There is something. However, in the items tab, the inventory items remember, items basically means in this context inventory items. And there's the inventory item we're looking for. It was created from that purchase order that we were looking at. It gives us the EPA phone, the quantity, the the amount of the rate, and we can go ahead and click that in terms of the check mark and then okay, and it should populate our invoice for us. So if we tap through this, then we've got to the date we're gonna keep that date. The invoice is the third, the bill of the bill to has the name, not the address. We haven't populated the address, the P O number, the terms going to keep the terms here. Actually, we could put terms here. We're going to say net 30 on the terms due in 30 days, and then we're going to say it's the e l. P. This was generated from the, um purchase order that had then been received, the invoice now indicating that we're going to deliver the guitar. That's typically the point in time that we have the invoice. When the work is done, we've got one of the EPA phones and the rate is 500. Note that we also have the sales tax down here. 5%. That was drawn by us putting in the items for the specific state. It will change from state to state. Therefore, the amount to do 5 25 Remember what is not here? What is not here is the cost. But QuickBooks does know the cost and will record the cost. How does it know the cost? We have it in the lists so that in the lists and the item list, we're looking for an EPA phone. Les Paul. So if we go to the EPA phone list right there and then I'm gonna go ahead and edit that edit item, and we will then see that item. The cost is 400. The sales price is 500. So when we record this invoice, we're gonna close this out. Gonna close this out. We're back in the invoice. When we enter, this invoice will see the sales should go up by 500. The accounts receivable should go Abi by 525. We should have sales tax of the 25 then we should have the cost of goods sold going up by 400. And we should have the inventory Cohen town by 400. So we'll take a look at that. The key point. The difference here from this transaction than the last time we looked at the invoice, however, is this connection is this connection from the purchase order now populating At this point , we're gonna say saving close and I'm going to say you have marked this. Uh, we're not gonna email it. I've got it March for email. I'm gonna unmarked the email and then save and close and say OK, and then we're going to go to our reports and just check this out. So we've got the reports. We're gonna go to company and financial. Look first at the balance sheets, so balance sheet items I'm gonna change. Date to 12. 31 121 We're working in 2000 to 21. I'm also going to change the date range by going up to customize report and then changing this from 0101212 12 31 to 1 and then. Okay. Now, when we drill down on, anything would resume on anything. Will have a date range in our transaction report. Let's take a look at that. Within the receivable, we would expect the receivable to go up from this transaction. You're gonna double click on that. We see that receivable here has gone up by that 5 25 Double clicking on it. We see the 500 for sales, but that 25 in the sales tax meaning they owe us the customer owes us. Eric Music owes us 5 25 closing this back out. We saw that the other side of that, if we have the sale side of it, the other side of it is sales. If we have the receivable, the other side of sales. So if we go to reports that sales being on the income statement or profit or loss, we're gonna go to company and financial and then take a look at the profit and loss standard. Change the dates A 101212 12 31 to 1. And then within the merchandise sales, we should see this sale. If we double click on it, we see, there's our 500 sale that we made the other side of it to accounts receivable, double clicking on it or zooming in. In it, we see the invoice that has been created. Note that the sales amount, however, is only for 500 we had 5 25 The difference being the sales tax closing back out of here. There's the 500. Where's the 25? We will go back to the balance sheet. Look for that 25 in the liability. It should be in the sales tax payable, sales tax payable. We're gonna double click on sales tax payable. And there's the 25 right there. We owe it to the state. We need to write a check to the state. If we double click on that item, we get our same invoice. Also note that inventory should have gone down. So if we went to the asset of inventory merchandise inventory and take a look at the activity there, we should see it decreasing itself. I'm in a scroll back up. We have inventory asset. Get a double click on that item and see that we have the 400 notice that went down by 400. We had not seen that on the sales on the invoice. However, this invoice is what created this 400 due to the items that we used in it. If we double click on it, there is the 500 sales price. We don't see the 400 all. We had to go back to the list, items the inventory items and look at the detail to see where that 400 was coming from. So just remember that this other piece of it will be recorded as we go through this, the other side to that on the income statement on the profit and loss it's gonna be under that cost of goods sold here's caused a good sold double clicking on that. We see the other side of that 400 right there, double clicking on that. We get back to the invoice, so note there's a lot going on within an invoice when we record the invoice that there's a lot going on. If we're selling merchandise, we have to deal with the sales side. We've got to do with the sales tax, and we have to deal with the inventory going down and the related cost of goods sold. We're gonna do this one more time, so I'm gonna close this out and we've got another customer. Will keep the profit and loss and balance sheet open. We're gonna go back to the home tab and we've got another customer. This is gonna be music stuff store, and they're gonna were gonna invoice them for again, a purchase order that was pre ordered that we have now received. Now we're delivering the guitar, too. The client. And at that point, that's when we earn the revenue. That's when we record the invoice, which record the revenue earned. So I'm gonna go back up here, purchase order, just to check out this purchase order that's gonna help us create this. It's ah is going to be here. Music store stuff. That's We made this purchase order directly for this particular client saying, Hey, Gibson, this our vendor, we need this particular guitar. They're gonna give us the Qatar in our system. We're going to say this guitar specifically for this specific customer, thereby when we get the guitar, we can create the invoice when we're ready to deliver the guitar and we can put in the invoice This data that we're getting from the purchase order directly by linking them closing this back out. Well, then go to the invoice and do that process invoice we're gonna type in. Then the customer. We could select the drop down, but we're just gonna type in the music stuff store and then select tab and it's going to give us that same message. This customer or jobs you selected has outstanding billable time and or costs. Do you want it to select the outstanding billable time and cost to add to this invoice we're gonna select? Yes, we would and say OK, and then it's going to say These are the tabs we have now. It defaults to time as if we're invoicing time. Nothing's there. Nothing's in the expenses. Nothing's in the mileage. We're looking for the item. Remember, items in this context in most contexts is an inventory item. So we're gonna check that inventory item. That's the one we want to the Gibson SG were going to say. Okay, and then it will populate. Let's tap through this and see if it does what we think it should do. So there's our dates were gonna keep that date. Invoices gonna be automatically generated should be correct. There is Are available to We're not gonna add the address. We got the terms. I'm actually gonna add the terms here once again and put net 30 doing than 30 days. We've got the item. The G S B. Which is We want one of those. It's a Gibson SG rate 777.4. Again, if we want to know what the cost was, we'd have to goto lists and we'd have to go to item list. We want the guest, Gibson SG here, then items and then edit item. And that will give us what the cost was. Which is this 5 98 We will see that 5 98 in cost of goods sold in the reduction of inventory. As we record the invoice closing this back out, closing this back out. We then see that item there. We see the total and we see that it is taxed. Therefore, the tax at 5% of the 777.4 gives us 38 87 total amount than 816. 27 once we record that this is what's gonna happen. We're gonna This This invoice shows that we basically are delivering the guitar at that point in time. And at that point time we have earned the revenue. Therefore, accounts receivable is gonna go up. We haven't gotten cash. It receivables going to go up. We're going to credit the sales or increase the sales, but only increasing the sales for 777.4. When the receivable goes up by 8 16 27 The difference being the 38 87 in sales tax that's going to go into a payable that we owe the state. Then we've got the merchandise that's gonna have to go down, not by any number we see here, but by the number we just saw when we looked at the list and we're gonna have to have the cost of goods sold, the expense related Teoh, this selling of this asset, this inventory assets would be also affected the cost of get sold, bringing net income down. So let's do that. We're gonna say save and save and close, and once again, I have the email mark. So I'm gonna close this email and say save and close. And yes, and see if it does what we believe. It should go into the balance sheet. We believe that accounts receivable should be going up. So I'm gonna double click on the Receivable. And here's that item music stuff store double clicking on that. Here's our here's Our invoice went up by the 777 points. What went up by the 8 16 27 Closing this out. Closing this out. We think that revenue should go up. It's going to be on the profit or loss and the ink or the income statement. Same statement. We have the merchandise inventory double clicking on that. We see this Adam here 777.4. Double clicking on it. Noting that it went up by the sales price, not the sales price plus the sales tax closing this back out. That means we need the difference somewhere, going back to the balance sheet. Looking through the liabilities Well, we will see a liability of sales tax payable that should include the difference double clicking on the 1 23 37 We see that 38 87 double clicking on that item we see that. That's the sales tax. That's the difference in our sales. Part of the of the journal entry. Closing these back out. Then we have the reduction in inventory. The reduction in the inventory being an asset scrolling up to the assets section. Inventory asset here. Double clicking on that. We see that the music stuff store asset going down. There it is there. We don't see the amount anywhere on the invoice, but QuickBooks knows what it is. How? Through the list Through the item list, wind recreated the inventory item closing this back out. The other side of this is on the income statement. Under cost of goods sold or the profit and loss in our open item window double clicking on the cost of goods sold expense. We see this last piece, the 5 98 Double clicking on that. Back to our invoice. Once again, we don't see the 5 98 on the invoice, but the invoice has generated it based on this item and us setting up that item as we've done in a prior presentation Closing that back out. Ah, we see it. There. We see the net effect, then on increase in the revenue on increase in the cost of goods sold, the difference being the net effect on net income. Also note, of course, that the accounts receivable aging report will be affected. The accounts receivable by who owes us money will be affected from this Ah as well as the inventory being decreased when we look at inventory reports going down due to this transaction. 62. 7.50 Receive Payment & Make Deposit QuickBooks Pro 2018: Hello were in this presentation, we're gonna talk about the receipt of payment and then making a deposits into the bank for that payment. We talked about both of these individually in a prior presentation. Now we're gonna do them both at the same time, looking at the process of the receipt of payment and the depositing of that payment afterwards and the effect on the financial statements in QuickBooks pro 2018. If you've been working with us, we will be continuing on the gets great guitars problem here. If not, that's OK. We will be working on the receipt of payment and the deposit of payment. If you have access to the backup file up to this point in the problem, then you could restore that by going to file open or restore and restore the file. It would be good to make sure that we're on the same point whether you're going through the entire problem or whether you start at that point, because there will be data we're gonna enter here and they'll be data afterwards. And if we're on the same page, be probably a little bit easier. But if we're not working with the same set of data. Then we could still get the concepts of the receipt of payment and the recording. The deposit. Why do we need those two steps? What are those two steps? Let's see those two steps in sequence. Most gonna have the open windows open over here. So I'm gonna go to the view, tam, and select open windows so we can toggle back and forth through the open windows. The only open window at this time being the home page. If you don't have the home page open, that's going to be under company and home page. Now, we're working down here in the customer section because typically, we're going to receive payment read here from the customer. So that's what we're gonna do now. We're gonna get the payment from the customer now. That implies, of course, that in the past we must have had created a invoice. So we invoice the customer now we're going to receive payment. If we were to receive payment at the same point in time as we issued the goods in this case , the guitar. So we were selling guitars. So if we sold the guitar and got payment at the same point in time. We probably wouldn't be using the receive payment. We would just have created a sales receipt at the beginning point. So when we use this receive payment, we're basically saying there's something happen in the past and invoice and that means that we did work in the past. Most service coming. A lot of service companies will be in this format like a bookkeeper or a law service. They'll do work. Send the invoice out, receive payment later in the mail. That's what we're doing here. So now we are at the point of receiving the payment within the mail. Now note within our processor within our track. That's not where we stop we. We have another step to get to the bank. And again, if you're looking at the financial accounting in terms of just recording journal entries, probably not used to this middle step. Those middle steps, not something we typically have just in financial recording. We would typically think that if we got payment, we're gonna increase cash. We're gonna decrease the receivable, but we haven't really got into the bank, so there's a difference in the types of cash we here we have here here we have cash that is un deposited. And here we have deposited cash. Basically our checking account. Two things we want to have happen here. We want to differentiate those two. And we want to make sure that once it gets into our checking account, it does so in a way that is grouped so that our books will match the bank books so that when we reconciled matching our books to the bank books, a huge internal control that I have, I recommend everyone doing it will be easier for us to do that. I'll be easier for us to match those up. Doesn't we're gonna do here. We're gonna first put it into UN deposited funds and reduce the receivable and then deposit them, taking it out of UN deposited funds and putting it into the bank in the grouping that we want to make it easiest for us to reconcile the bank accounts. So first we're gonna click on the received payments. So you're imagining we got a payment in the mail here. We got a payment in the mail. It was from Anderson Guitars. So I'm going to say that's the customer that we have here. So here's Anderson guitars. We could just type it in there, though. I'm going to start typing Anderson guitars and then Tab and I would get used to that tabbing through. And you don't have to select a payment option here. Here. I mean, it's not required, but we're gonna select just as a reference here what the payment is gonna be. We're going to say it was a check and we got a check in the mail from the invoice. In the past, this was for and note we could type in him how it would be a check. But we we could also just check off the invoice down here. So this invoice original Mount Amounts do we're gonna say Check it off. It's going to say we're gonna enter that amount there if you check that off here and we're gonna go, yeah, and then it puts the payment up. Top shows us the balance still do. Down to zero amount due. Applied down to zero note. However, obviously if we put less than the amount of the invoice, then we would still have a amount do down here from this transaction. we're gonna have the date is gonna be, 01 28 to 1. And we got the payment type. Here's the invoice that we are referencing to. What's this going to do? Then It's gonna reduce the accounts receivable that reduce the amount that is owed by Anderson. And it's going to increase a cash account, but not our checking account yet. It's going to increase un deposited funds. So let's record this. Take a look at that. We're gonna say save and close. Let's now take a quick look at our main financial statements and see if we can see what that did. We're gonna go to reports we're gonna go to company and financial scrolling down to the balance sheet standard changing the dates Teoh annexed. I'm just gonna go straight to the customized so I can change just the date range at one time. So customers report we're gonna go 0101212 12 31 to 1. And I want a range so that when we drill down on the data will have a range within the transaction reports. I'm gonna say OK, and what that does then it only has one day on the balance sheet because it's as little point in time. However, when we drill down on the data now will have a range a general ledger type of transaction report by date that will have the date range. So if we look through this now, we're going to say that accounts receivable should be affected. So because we're gonna reduce the amount owed by Anderson, double clicking on that there's the Receivable and it has been decreased by that amount. If we double click on that, we get back to our form. So there's the customer payment closing this back out, closing this back out. We also know that we would think it would affect cash cash increasing. That's what we were typically thinking are normal journal entries. And it did kind of, but it put it into this UN deposited funds. So now we've got this UN deposited funds of 430 we need to go ahead. If we double click on that, we can see that it's the 4 30 there, double clicking on that. There is our customer payment, so I'm gonna close that out. Those of the two accounts that are affected. We do not want this UN deposited funds hanging around there after we deposit the funds. So we're gonna have to make sure that we record that second piece of the transaction that piece lowering or closing out UN deposited funds and increasing the checking account, that being something that often gets mixed, our mess missed by many people. And we ended up with his balance and UN deposited funds and end up with trouble reconcile in our bank accounts. So we want to make sure to take that that second step note. We also have the other report affected. If we go to reports up top, if we go to customers and receivables, we know that the aging report or the customer balanced detail is also going to be affected . We'll see by customer that Anderson now has paid us right there no longer own us. So we should be able to match these out within our customer payments. And it looks like where this is the case so far, bringing the balance back down to zero. If we double click on that, we get back to our customer payment. Let's close that out and close this out. We still have our open windows over here going back to the home tab. And then we're going to do this one more time. One more customer. We will then go back to the receive payment. So remember, when we select receive payment, We we are thinking that we got a payment for something that happened in the past. So we're imagining we gotta check in the mail and were saying when there's that check from that invoice we sent out in the past, we're gonna say receive payments so that we can lower the amount do to us from the person who wrote the check with company who wrote the check that in this case being Eric music going to say, Eric music. And again we could select the drop down and find them and or weaken type in here. We should never have, by the way, a customer that is not in our list. When we have a customer payment, it's never gonna have a new customer that gave us a payment because we we must have gotten a payment for something we delivered in the past. So unlike when we create an invoice or something like that we might have a new customer. We might have to create a new customer field here, but in the case of a payment, we should always it always have the payment. So we shouldn't have that that problem if you're in the receiving department where you had a payments where you see a payment for someone who doesn't exist in terms of a customer, we must have sent out an invoice to somebody, so we kind of should be able to tie that out in some way. So we're gonna say Tab and it's gonna be a check again. And there's what we want right there. That 5 25 I'm gonna click on that. Check that off. We're gonna say yes. And the date is gonna be the 28. That's what we're looking for. And the amount due? The amount applied down to zero. The amount due this is the original amount of this is the amount of payment. And so everything looks good. Everything checks out. So we're gonna go ahead and say, saving close, know thine what we think should happen here. This should reduce accounts receivable for Eric music no longer owing us money and it should increase that cash account the account of UN deposited funds. So we're gonna say save and close. See if that's the case by going to the balance sheet still open in the open windows, There's the balance sheet. We're going to say that cash didn't go up. Accounts receivable went down, though if we double click on that, we see that we have this 5 25 double clicking on that. We see that there's our customer payment. So closing that out. What's the other side of this transaction? What else is happening? The UN deposited funds is also affected. Now, at 9 55 50 double clicking on that. We see the 5 25 at the bottom, double clicking on that. We see that information once again. There is that We're gonna close this back out. Close this back out. This 9 55 50 is what now we need to move to the checking account when we deposited. We're probably gonna deposit it at one time cause we're going to go to the bank at the end of the day and make all deposits at the end of the day grouping the deposits at that point in time. In the same format, they will be grouped on the bank statement, thereby making our bank reconciliation on easier process. So we're gonna go back to the home tab and do that next step, that next step being the recording of deposits. When we look at the recording of deposits, it does indicate with a little red to that we have two outstanding deposits, meaning we have two items that we put into un deposited funds that need deposit, teen. So if we double click I or if we click on this one time, I don't need to double click on it, click on a one time and we get this pop up item happening now. If there were nothing outstanding, we would just have this window and they would not indicate that we have anything outstanding to deposit. We could weaken into a deposited directly into that window. But this window is showing S A. You've got a couple things that we have been received payment from, and that you should have like and you're and you're destined your desk drawer somewhere in your office, there somewhere near and your establishment that you need to go to the bank and deposit, and we're gonna say that is true. We're gonna check those both off. We're gonna check those off. Those of the to receive payments we've received in the mail the 4 30.5 50 the 5 25 Those are them. And we're going to say okay, and then it will auto fill this deposit screen. We are going to the checking account. It should default to our main account. Typically our checking account and we're gonna keep the same date. That's gonna because we're depositing thes As of the end of the day, we got him in the mail. We're going to the bank at the end of day. Put him into the bank. This is typically how it would be the last time we ran to the deposits. We, uh, broke the deposits out in accordance with a problem, trying to show the idea of depositing in different formats and also grouping the receive payments as best we could for the problem. This is more like we would see in practice in that we would want a new internal control of whenever we get a payment. We want to go to the bank and group those payments and deposit at the end of day. That is, of course, up piece of the internal control system. One tohave those deposits in there at a similar time as they have been received, so that the bank contract them. And we can reconcile everything in time and to just not to have the deposits in the establishment any longer than they really have to rather than have them within the bank. So this is this is the practice we would want to have. There's gonna be those two deposits were gonna have here. Here's the total amount that familiar 9 55 50 What is this transaction going to do when we save in close, It's going to deposit it into the bank. Checking account should be increasing by the amount of this deposit. The other side being un deposited funds should then go down down to zero. So we're gonna say save and close. See if that is the case by going back to the balance sheet looking at the checking account and we're gonna double click on the checking account, see what is in there. And then this last item here here is our deposit double clicking on the deposit we see There it is. So the deposit has going into the checking account of that is good. The other side of it should be in un deposited funds Note that UN deposited funds, however, has gone away. If we want to check the detail in UN deposited funds just to make sure that that is what is happening here, that's the other side of a transaction we have to go somewhere else. Other than the financial statements, the financial statements, not showing any accounts that have zero balances a couple ways, we can do that one. We could go to the banking and go to use register, and typically, when we go to the used register, we're looking for the checking account. But in this case, where we wanted, we could go to any account. So QuickBooks allows us a register with any account. And if we go to the UN deposited funds account, we can say OK, and we could see this activity. There's the activity, uh, bringing the UN deposited funds to zero. If we were to double click right on this little d e p, then we would go to that screen where the deposit happened. So that's one way we can double check the detail and say OK, at went down zero from that transaction. Other way you could take a look at it is if this is easier or makes more sense to anybody. You goto lists and you go to chart of accounts and there's our chart of accounts. So this is kind of like our trial balance here, but it's going to give us our all of our accounts, not just those that has balances within them. And then we can go back to our UN deposited funds. And I think if we just double click on it from here, it'll take us to that same register and then we can see that amount again and again. If we want to check the forms that created these, we can double click on those and there they are. So that's gonna be the process of both receiving payment and recording the payment going back to the home tab typically done in the same day. So every day we get payments, we should basically be doing that. We receive payment, deposit the payment in accordance with the grouping that we have there, and then the crucial thing we want to do at the end of each month is to reconcile. This will help with our reconciled ING process. Reconcile ing our books to the bank account, which is a huge check because the bank keeps pretty good records. And if we if we can say our records matched the bank's records, then we have a pretty good idea over cash. If we have a pretty good idea over cash cash being affected in all of these cycles vendor cycle, the payable cycle of the purchases cycle, the customer cycle or the accounts receivable or sale cycle the employees cycle or the pate wages payable cycle or payroll cycle. All of them are affected by cash. And therefore, if we're able to reconcile the bank account and say that our cash balance is good and double check it through an outside source, that's gonna be a huge check, not only for cash but for all of these cycles. So it's a big internal control, and we'll take a look at that at a later time 63. 7.55 Write Check for Expenses QuickBooks Pro 2018: Hello. In this presentation, we will write checks four expenses within the software over QuickBooks Pro 2018. If you've been working along with us, we will be continuing with the gets great. Kantar's a problem. If not, that's OK. We will also be demonstrating at the same point this. Write two checks icons. We will be writing checks for expenses using this right to check icon to write the checks. If you have access to the backup, then you could restore that backup by going to the file and restore company filed. That will take you to the specific point if you have access to get to that specific point there by not having a problem of having an air, possibly in the past. Not having the same amount of data not being on the same page will make it as easy as possible if we are all on the same page. However, if you don't have that, that's okay, too. We will be covering the rights checks and you could see what's going on with that as we do inter more data. These types of problems here we'll be entering data. It is nice to be at the same point. We would like to be at the same point both at the beginning and at the end of the problem. Basically see if for getting everything in there in the same format in the same way. Ah, we have the home tab open here. If you don't have the home tab open, you go. The company and home tab. Open that up. I'm also gonna open up the open windows which are not open. When I first opened the program, I'm going to go to view and select the open windows and therefore show what is open. The only thing at this time being the home tab. So we're gonna write some checks and we're gonna write checks in this time. Just pain. In essence, the monthly bills. We're gonna be paying normal types of bills, normal types of transactions. It can be useful. And we will see at a later time having enter the bills here first putting it into accounts payable and the related bill that related expense typically and then pay the bills all at the same time. That's one format of doing this. This format is also good in that you can put the bills in and then pick and choose which ones you want to pay their by having the ones that you don't pay. Still in the queue still being recorded as an expense at the point that you that you put the bill in there. We here, however, are going to skip that first step and we'll practice that later and just go directly to the writing checks. So we're gonna use the right check icon over here in order to write thes Now note. You could also use the check register. Just is 1/3 option that being in the banking section and then going down to register here, entering this information directly in the register, why would you use one of the other options? This option on the bills gives you a bit more flexibility to pick and choose which checks you want, and you can also have a printing option when you print all the checks at the same point in time in a couple different ways, you can print all the checks at the same point in time. Now, if you were to buy checks and print them through QuickBooks, then you're gonna have pre formatted checks and you want to be able to print those all at one time. So you have to put those checks in the printer, make sure they're facing their corrected direction and then print all checks at the same point in time. We're not gonna be actually printing the checks here. And if that were the case, if you're a small business or you're you're needed to enter the checks into the system in order to reconcile in order to have the data within the system Although the checks have been written outside of the system, then sometimes the fastest way to do that would be the check register. We here are gonna practice using this icon just the right checks. We're gonna write checks and and we're not to going to be actually printing the checks here . We're just gonna be right. We're gonna be entering the data here. The prints checks item would be the same way that then we would go to the process, of course, off printing the checks, which does mean that you would need to buy the external checks and then put them into the printer in the proper way in order to print those checks out. First check we're gonna write is for insurance policies. So we're gonna click on the write checks here, and then we're gonna go through this. We got a familiar looking check. Pretty self explanatory type looking check. The check number will populate on its own. If we were to be printing checks, that check number then should match the check number that is already on the printed check. That's one of our major internal controls over the checks. If we were to be printing these out from QuickBooks, then we're gonna put the date, which is gonna be, 01 28 to 1. We will be working this entire problem. That's January 28th 2021 2000 and 21. The pay you were gonna have safe insurance company. Now note. I'm typing that name in. This is the first time that we have paid them. This is a relatively new company. Instead of having typed in new here, I'm just gonna type in the name often being faster and then select tab and it's gonna say you want to add that and we're going to say yes now. Most of the vendors. All we typically need is basically the name in order to write to the check. But if we want to have a full set up, we would go to the full set up, injuring the date. I mean, entering their address and they're phone number And what? Not here. In order to write the check, we're gonna do a quick ad adding the information too quickly. And we're gonna select the vendor. That's who. We're gonna be pain or what? We're being pain as opposed to a customer, employee or other. And there we have that the amount is gonna be 11,000 that we're paying tab and this will populate on its own. When you we could put the memo here, I'm not gonna put a memo at this time and note that we have the expense tab versus the item tab. The expense tab will typically be the default tab. The item tab, Remember? Normally that means we're purchasing inventory. So when I'm around the items tab, we typically have some different different areas here related to typically inventory. We're gonna go back to the expense tab. What is confusing a bit on the expense tab is that the expense to have includes both expenses, and it's basically everything other than other than inventory is gonna be here on the expense staff. So in this case, for example, we bought insurance and insurance really should be in a prepaid insurance. And then we should having a Justin entry at the end of the time period that in accordance with our matching principle, for example, if we wrote this entire 11,000 off this month and then we had no insurance next month, that 11,000 wouldn't make our net income look really low this month in comparison to next month. And so what we really should do on accrual basis is putting on the books as an asset and then and then divided out over the number of months that it is covering, assuming this is covering more than one month and then divided and then expensive evenly so that our net income reflects the use of the insurance, not the fact that we pre pay for, for example, a year of insurance in the first time period. The point of that is that we're not going to be recording an expense here. We're actually going to be recording and asset account called prepaid insurance. Even though we're using this expense tab so note that this expense to have is not really properly named. It's it's basically everything other than an item tohave the items typically being inventory items. So we're gonna have prepaid expense. So we're gonna say prepaid insurance and we don't have prepaid insurance yet. That's why I'm gonna type the entire thing in here. If we were to look through here, we don't have prepaid insurance, we possibly have insurance expense. And if you were to choose that, that wouldn't be total. That would be okay. But it would probably be the fact that we would be expensing multiple months of insurance in the month of payment, and it would be more proper to set up the the pre payment. So we're gonna set the pre payment and then we're going Teoh do the adjusting entry at the end of the month here. So I'm just gonna type in the account that I want, which is gonna be prepaid insurance instead of selecting, add new and then say Tab is going to say, Do you want to set that up? We don't see that account, we're gonna say yes. Please set that up. And as we set it up, then we are not gonna have an expense. That's the default. That's what QuickBooks is always going to default to, because most of the time it will be correct that it will be expensive. But in this case, we're writing a check decrease in cash, and the other side of it is actually going to be an other current asset account. So we're gonna choose other current asset account and then say continue. And there's our accounts in the other current asset. It's a prepaid insurance account. We don't need a description. It's not gonna be a subcategory. And we're not gonna be dealing with the tax line at this point. No opening balance. We're never going to be dealing with that opening palace line again since the point in time that we started the company. So we're gonna say save and close. And there is that. So what is this journal entry going to do? What? What is this check going to Dio? We know one thing. It's a check, and that means it's going to reduce the balance in the checking account the form itself means that and that's the case with most forms. We know that this being a check means it's gonna be decreasing the checking account. The checking account here on this drop down, we only have one that being the one then that it will be affecting. Then the other side is the one that we're gonna choose down here in the expense side prepaid insurance and asset, in this case going up. So let's record this. We're gonna say save and close, and then take a look at what is happening in terms of the financial statements. Let's take a look at her main to financial statements. Those the balance sheets and the income statement gonna go to reports up top. We're gonna go to company and financial, and we're going down to the balance sheet standard. I'm gonna customize the report in order to get a date to range so that when we drill down on the information, we will have a range when we're looking at the transaction detail or the general ledger. So we are going to make the dates 0101 to 1 working in January 1st 2021 to 12. 31 21 We're gonna choose the whole year of 2021 they you that we will be working in and then we'll select. Okay, there is our information. First, the checking account. We believe that checking account should be going down by the Czech that we have now written double clicking on the checking account. Scrolling down. There's that 11,000 right there decreasing the checking account balance. If we double click on that, there is our check closing that out the other side of its note we put into prepaid insurance. So if we scroll, that's also on acid. And where my going here. We're going to stay up here. There's prepaid insurance right there. It's an asset. There's the 11. Double clicking on that. There's the activity that check in our transaction by account and with a double click on that and there is our check closing this back out. You may be asking, why is that here and not on the income statement, and part of it at least should be on the income statement, and that's what we'll do at the end of the month, will do the adjusting Journal entries to expense. Part of that prepaid insurance that has been consumed the months worse of it that has been consumed for that month. Next check we're gonna go to we're gonna go back to the home tab. We're gonna enter another check. This guy's going to be for ah supplies. So we're gonna go back. Teoh writes checks and click on right to checks. It's gonna be at our checking accounts again. But we're going to say that the number is the same again. Well, the numbers pre numbered. So QuickBooks should have that If we're writing the checks, it should match our checkbook and or the checks we're gonna have to print within QuickBooks . The date is gonna remain at the January 28th and we're gonna get this from Staples. We're gonna say another new vendor. So rather than going up here and typing, add new, we're just gonna type in Staples, the new vendor that we would like. We're going to select tab, and it's gonna say, Do you want a quick add that and we're going to say, or do you want to add that we could use the quick ad? We could use the set up the set up, then allowing us to enter the the address and the phone number and a lot of other information. That quick ad given us the name all we need, typically to write an actual check. We're gonna do the quick add at this time, the vendor is appropriate. It's always gonna guess, vendor, when we are writing a check because it's typically a vendor we're looking for, as opposed to a customer or other or employees, and therefore we're going to say OK, on the default, we're going to say we spent 500 of this check will be 4 500 staples. I'm not gonna write a memo and how the expenses. Once again it's on the expense tab, and we're buying in this case office supplies, and we're buying supplies I'm gonna imagine were buying like Computer Inc And once again, supplies is another one of those areas where we may just expense it. If 500 is a relatively small amount in compares to our revenue, meaning if capitalizing it and tracking the supplies is in material in relation to our income, we might just want to write it off. But often times book problems will. We'll put the supplies on the books and often times in real life, when the supplies is significant, we will want to track it in a similar way that we track inventory. So therefore, typically, we put the supplies first on the books as an asset, and then we would expense it over time. That being said, however, if the supplies is a small amount in comparison to the to the net income, it will just be expensed. In that case, in this case, it right here we're gonna put the supplies to the expense account. Not not doing the adjusting entry of adjusting the supplies account, writing the supplies in case directly to the expense at the point of purchase. Just be mindful. If you're working in an area where the supplies are significant or book problems, you will typically be capitalizing the supplies, putting it on as an asset of supplies, then adjusting those supplies at the end of the month. So we're gonna put supplies expense. I actually have a supplies expense office supplies. So the book is calling the office supplies is gonna be the account we will be going to hear now note that I was putting in supplies expense, and that would be the account name that I would have chose if I was to choose them on my own. The office supplies is what was already in the system, given the fact that we had a chart of accounts prepared by QuickBooks. So it's just a slight variation in the name. However it SSM useful to go through there if you have something that's gonna be an expense such as this and take a look and see if there's gonna already be an expense that has been generated similar to what you would be using through QuickBooks when we when we generated the software, when we first installed the software by choosing the type of industry, this type of industry being a manufacturing or not, a manufacturing a merchandising company. Now we do know that it's an expense and not an asset by the fact that it shows us an expense over here. So we are talking about office supplies and expense, not the Office X plies on asset, so we'll select Tam. There's the 500. What will be the effect of this check on the financial statements? One the checking account will go down by 500. The amount we paid to the expense will go up by 500 bringing net income calculated as revenue minus expenses down. Let's see if that's the case. We're gonna say, save and close. We're gonna go back to our balance sheet. Once we do, it will refresh automatically. So we are in the open windows tab opening up the balance sheet. We can take a look at the checking account here. Checking account, double clicking, scrolling down to the 500. We see our item double clicking on that 500. We see the check that has been written. The other side will be on the income statement. So we'll close out this close. Out of that, go back to reports looking for the income statement, which quickbooks calls the profit and loss. We will go to the company financial scrolling down to the profit and loss. Actually, it's the 1st 1 so we don't scroll down. We're gonna go to the 1st 1 profit and loss standard. We're gonna change the date range to the current range. We are working in no one, no one C 1 to 12 31 to 1, and we should have then office supplies, first amount. That has been input into office supplies yet That is that 500 right there. If we zoom in on that, we see the office supplies here zooming in on that. We see the actual check that have been input. If we close this back out, close this back out, we see that net income, then decreasing by the office. Supplies from gross profit down by the 500 to the to 25. 40. Next check. We're gonna go back to the home and see what we have next. We're gonna pay the utility bill to Edison, so we're gonna write another check and see what happens there. Right in. Jack, we're gonna go to tabbing over the check number will be populating on its own. Hopefully, it will match what we have on the checkbook. We have the dates is going to be the same. We're gonna write it to Ed this son. Now, once again, we don't have Edison in there yet for our power expense, our power bill. And that's because it's the first month notes that all of these are the first month. So if we were to do this when we do this next month, then all these customers were always ready to be in there as well. The accounts populate depending on the preferences that we have. So when we do this the first month of operations, of course it's a bit more detailed, a bit more challenging. We want to put more time into it to make sure that we lay the foundations for doing everything the way we want to go forward with. Because after this, much of this will just populate on its own. And it'll be a lot easier when that is the case. Just hopefully it will be set up properly. So you may want to get help, then to set the first month up to make sure that the account they're all proper and and then from there forward things become much easier. So we're gonna type in the name. It's a new vendors were gonna say, Tab, it's going to say, Do you want to set up the new vendor? We're going to say yes, we're not gonna do the full set up once again, we just need need to do the quick set up at this point. Teoh include the name in order to write out the cheque. So we're gonna go A quick ad vendor is the default, which is a correct default. So we're gonna say, OK, the amount we're gonna say 620. And we have this 620 there were. Then we have the address. No memo and expenses are going to be We're gonna call these the utility expenses, So if we type in utilities, it has one there. We had not made that account. That account was generated from QuickBooks when QuickBooks was set up. When we selected the type of industry, this type of industry being a merchandising type of industry, we have the utility set up. We know it's an expense type account here. Looks correct. Therefore, that's what we will use. 620 is the amount. So we're gonna go ahead and say it saving close after we think about what this is going to do. This is going to decrease the checking account by 620 it's going to record an expense utility's expense increasing 620 bringing down net income by that 620. So now we're gonna say saving close and see if that is indeed the case. So we will go over to the balance sheet, which is going to refresh when we select it. There's the balance sheet, cash account, checking account up top double clicking. On that. We see the decrease here of 620 it going from 1 14 5 85 50 down by 622 1 13 965 50 If we double click on that amount, we see the check that has been generated or that we just made right there. So I'm gonna close this back out. We're gonna close this back out. Then we can go to the profit and loss and see if it does what we believe it should on the profit and loss of that being on increase in the expense utility's expense. There's the 6 20 There's the 6 20 There's the check closing this back out, Xing out, X. You know, there's our two checks and now we're currently at a loss here because we had a gross profit of 7 25 minus those two expenses bringing us to a loss of 3 94 60 And so that's gonna be the second check. We are now going to write the third check. We're gonna go to the home tab Hometown back to write checks. So we're gonna be over here, right to checks and this check. We're gonna be writing the phone bill, so it's gonna be from the checking account, but we're gonna have the check number populate automatically. Date is gonna be a January 28th. That is correct. We're gonna write this 12 varieties on once again. This is the first rise on. This is the first time that we have ah, written a cheque tive horizon. So we're gonna have to enter that information here. Ah, and then add Verizon as the vendor, as we will do. And as we have done in past transactions, once we do this again, remember Verizon Will will stay self populate. It'll already baby over when we start typing it in after the first month of operation. Once we select tab, it's going to say, Do you want to set this up once again? We're gonna do a quick set up, Say yes. We would. Vendor is the correct default. So we will keep the vendor as the default. The amount is gonna be 360. Gonna tab through this. No memo. We're gonna type the account the telephone expenses. Also an account that will be generated, Typically almost any type of business that we make within QuickBooks. So if we choose an industry, just about any industry will include the expense account telephone. So you shouldn't have to generate that expense account. We can see here once again that it is an expense account. So we're gonna tam through them. Looks like what we need. What will this do? Bring down the checking account. 360 increased the expense account. 360. Bringing down net income by 360. Saving close. Let's see if that's the case. Back to the balance sheets over here. It's going to refresh automatically. If we double click on the checking account. We see that 360 here for the Verizon. We double click on that. There is our check closing this back out. Closing this back out, we're gonna go back to the profit and loss profit and loss and see the other side of this transaction. That being the telephone expense here, if we double click on that, we see the checking account double clicking on that. We see the check for the telephone expense closing this back out, closing this back out. There's the effect bringing net income down. We now at a loss of 754. 60 we go back to the home tab. That's gonna be that. And those are gonna be the checks we have written with three write checks. Note once again that there's a couple different ways you could we could go through that and we'll take a look at some of them in the future. In the past, we looked about how to enter the same data directly into the check register banking, use register, enter that data directly into the check register and to we'll see how to do that first by entering a bill and then by paying the check, paying those bills, paying those bills, of course, with a check. Ah, at a later point will take a look at that option 64. 7.60 Pay Bills QuickBooks Pro 2018: Hello. In this presentation we will be working with the A bill function within QuickBooks Pro 2018 . If you have been following along with us, we will be continuing on with the get great guitars problem. If not, that's OK. We will be working here with the pay bills. If you have the backup file for this location in the problem, you can restore that by going to the file tab open and restore note. We were are entering new data. Therefore, it's good to be on the same point. Make sure we're on the same page. We can do that by restoring a data file as close as possible to the current section we are in. But if you've been following along will be there as well. If not, you just want to see what this icon is. His pay bills. That's what we'll take. A look at two we are entering data putting in new data here, so we'd like to end up, you know, at the same point at the end of this process. Eso putting a new data set at each point can really help us within that process. So on this one, we're gonna be working on the pay bills. Now, when we see this icon here says pay bills were are going to assume that we are going to pay bills, typically with a check. So what? The process here tends to be within the home tab in the vendors tab. And if you're not in the home tab here to get to that, you're going to go to company Home company Home tab also like having the open windows open over here where you would go to the view and then open windows to see those open windows as well. Then we're gonna go over here. We're taking a look at this pay bill. And so when we think about pay, bills were thinking about paying bills with a check. So typically, the process within the vendor function that's being the payable function gives us a nice flow chart. Within the home tab is usually that we're going to inter bill and then we're going to go through the pay bills. This is a useful function, wind writing checks for a few different reasons. One is that it allows us to enter all the checks at one point in time to it allows us to into the checks or enter the bills at one point in time and then enter the bills at the point in time they are received, even if that's not the same point as payment, that typically being better format for the accrual basis method. So we want to enter the bill when we receive them, even if we're not going to typically be putting in the Czech at that point in time. It also allows us to choose which checks we wanted to pay as they become dio, even though the bills have already been entered into the system, that could be a youthful item when we're managing, which checks we wanted to write. Note. However, there are different ways that we can write the checks, depending on what type of system we're working with within QuickBooks, what type of system we have set up in order to enter our data into QuickBooks. Another system we looked at last time is to write checks, just used this right to check icon, and that will open up a check like so and we can write checks. It looks just like this within this icon in this format, and that will, of course, decrease the checking account and it will record the other county. What other? Whatever other account was selected Gonna close this back out another way that we could Inter checks would be going to the banking up top and then going down to use register and then use the check registered to enter the checks. This would be a way to enter cheques typically if we're not printing those checks from the QuickBooks system. If we are printing checks from the pro quickbooks system, this method is a pretty good way to do that because it can then allow us to list all the checks that need to printing. Allow us then to choose the amount of checks we need to print in order to put them into the printer. Because we are gonna have to use external checks if that's our process and then printed those checks. So in this case, we only have ah, are one vendor that we enter data into that we owe money on from a Nurlita transaction. That being that start of the company, we opened a new company. We put a beginning balance into a particular vendor. Now we're gonna pay off that to beginning balance. So we're gonna go to the pay bills that come here and we see that we have our one vendor EPA phone that we owe the 15 to the 15,000. That being from when we set up the beginning balances within our new company, we still have this EPA phone that we owed. We put that into the beginning balance, and now we can show that we're gonna pay that off. If there's one item or multiple items, what we're gonna do is check off that item. Teoh indicate that that's the item that we want to be paid. Also note that there's gonna be a couple IATA options we could look through here. If we say that show bills show bills, we typically show all or I would typically look at all. But if we have a lot of bills in here and we want to limit the amount of bills were looking through, we might just want to limit it to the do on or before a specific time period that given us a better idea about a quick view of what we want to look at. We could also use some other filtering options and sorting options. Again, If we had a lot of bills in there, those could be useful for us to decide which which ones were looking to pay. At this point in time, if we tapped through this, we're going to check off that this is gonna be the item. We will be pain. This is going to be the due date in accordance with what was set up in this case, the beginning balance was set up in this format. We have the vendor, we have the amount due, and then we're gonna have the amount to pay, which will be the same in this point at this time. We have some other options down here. That clear selection, of course, would clear everything that has been selected in terms of this one check that we have at this time, we have the go to bill, the sets, discount and the sets credits. We're not gonna be dealing with any of those options within this set up, we have the payment date. That's typically going to be the currents dates that were, of course, writing the checks at we, however, here are writing the checks as of a future date. That date will remain in this case, January 28th of 2021. That date being from the prior transaction we did within this problem, that's one of the defaults we chose for this particular problem. Another default. Oftentimes it's just the current date, which is which I believe is the default option we chose in this case to keep the prior date as one of the defaults. Because we're working in the future and a problem such as this, we then have the method. In this case, we're gonna have a check versus a credit card. Then, if you were to print these checks, you'd want to put keep prints checks. Here, you have to order the checks outside of QuickBooks, you'd have the preorder checks that would have outside that that would have our check numbers on it and our bank account information. We have to then put those checks into the printer in the proper format, and then once we record this, it will generate those checks and print those checks from those pre printed format. You gotta have the pre printed cheques. One reason is just another check figure on our internal controls. Having those check numbers on the pre printed cheques gives us a really good internal control. In our case, we're just gonna assign the check number. We're not going to go in, and, um, actually printed the checks, so we're gonna choose a sign check number. Now, as you do that you want you want to make sure you have the right check number. You would think the system would just kind of picked the next check in order when we say pay bills. But it makes us manually put in that check number. So we want to make sure we have the checking account selected, this being our major check checking account typically. And then once we select the pay selected bills, if we assigned ah, check number, then it's gonna ask us what that check number should be. So if I select this right now, for example, it says I'll let me a sign the check number. Here, let QuickBooks have signed the check number. Eso If we could select the default here, it will most likely go to the next to check. If I select this option, then we can manually put in the Czech number. If there's multiple checks, then it'll start from that check number and continue on with it. Those checks. So if you don't know what that check number is and you want to double check it, you got to close this. We could go to the check register and see what check number we are on just to make sure it ties out to our our checkbook. If we want, we have to close this out so that we can open the register. So I'm going to enter this data back in, which is just basically checking that box. So we're gonna close this out, and I'm going to say on we're not gonna save it at this point. We're going to re enter the data, then goto banking, then go to use register. We got the checking account, we're gonna select the checking account, and the only thing we're looking for were saying there's the last check. So that means we are on check. 1010 1010. That's gonna be the check number. We want to make sure is assigned next. So we're gonna go ahead and say, close this gonna go back in to pay bills, we can Then check this back off. Everything is as it should be. We're gonna change the to print to assign check numbers, going to the checking account as it should. So we're gonna say, pay selected bills, pay selected bills and then we're gonna sign the check number, which will be 1010 What we just saw was the next check number in our Siri's. The check date is correct. The pay is correct. So we're going to say okay when we record this, it should write a check that should appear in our check register should decrease the checking account balance. It should also decrease the amount owed to this particular fender EPA phone, so that would decrease the accounts payable. So let's do that and see if that's what happens. We're gonna say OK, and it's gonna record that we're going to say payment summary here is gonna be the payment summary. We're gonna say, done on that. And then let's go to the check. A look at this in a few different formats. One. Let's take a look at the check register and see if it recorded that within our check register, as we would assume it would. So we're gonna go to the ah banking. Go Teoh, use register and we see the check register here. That's the one we want. Checking account. We're gonna say OK, and then we see that next check has been generated. So it's in accordance with our our sequence. We see the bill payment as the icon hear it was a check that was created just like these. However, this was in response to a bill payment telling us that we're tying those things out. We're trying out the bill and the check where this one with more of a standalone check which had not been entered as a bill before, then entering the check. Then we could check the reports and see if this has been decreased on the balance sheet in terms of cash and has affected the accounts accounts payable going down. So we're gonna go up to reports up top and take away that we'll go to the company and financial. We're gonna go scrolling down Teoh the balance sheet. We will choose the custom report so that we can change the date range so that when we drill down on the dates we can then get a date range, so it's gonna be over 10117 to 12 31 1 I'm sorry, No 101 21 We're working in the future to 12. 31 to 1. This is the year we will be working in at all times. We're going to say, OK, then we're going to see if it has affected the checking account, as we would assume it, too. So we're gonna double click on the checking account and there's the 15 right there. So we're gonna double click on that and notice it goes to our check icon here. So it doesn't go to that same screen that we had when we had to pay bill screen when we paid the bill, a check was generated based on the information from that screen. So even though we used that screen, that driving form that QuickBooks is using is the check. So we'll close this back out and take a look after the other side when it closed this back out, go back to the balance sheet. So we have the balance sheet back open over here. the other side would be the liability of accounts payable. So if we scroll down to the liability, we should have paid off the liabilities. Note here that we don't have the accounts payable here. What does that mean? It means we have paid off all the liabilities. We don't have anything. Accounts payable is a zero. Now, if we want to see that within accounts payable that it goes down a couple places, we can go first. Let's try to look at the list of accounts said. We Goto lists chart of accounts up top. This will give us all accounts, whether they are open or close, whether they have zero balances or not. And then if we take a look at the other current liabilities, such as payroll payable, we've got loans payable. We're looking for accounts payable, so it's not other current liabilities. They liability of accounts payable accounts type. If we double click on that, even though it has zero, we should get a register and there's the register. So the only activity we have in the payable is this 15 that was owed, now paid, now back down to zero. If you close this out and close this out. We should also see this on the vendor detail or the accounts payable detail. Let's take a look at that. We're going to reports up top. We're gonna go to vendors and payables and we're going to see the vendor balance detail, vendor balanced detail, change the date range. While we don't really need change, it's going. It's going to show all the activity that we've gotten so far. There's what was owed due to the beginning balance we put into this particular vendor. Here's the payment that we made double clicking on that. We see that to check once again, if we close this back out, close this back out, gonna go back to the home page. So that, once again, is the pay bill I item pay built, typically being used after the bills have been entered. Pay bill is a format of generating a check. Typically a check that we will write either through the system within QuickBooks or a sign a check. In order to record the decrease in our checking accounts of weaken, enter this data within the system, hopefully reconcile, then the bank account, using that data and create the financial statements with it 65. 7.65 Set Up Customer Jobs QuickBooks Pro 2018: Hello. In this presentation, we're gonna talk about the creation of customer jobs within QuickBooks Pro 2018. If you have been following along with us, we will be continuing along with the gets great guitars. If not, that is okay. We're gonna show how to set up jobs for customers. If you have the backup file up to this point in time, you can restore that by going to file open and restore company that will get us to the same point in time. In terms of the data, we will be entering data. So it is useful if you're following along with the problem to get that data at the same point so that we're all working on the same area and we have the home tab open here. I'm gonna show where the home tab is. It's in the company and home tab. I also like to have the view open items list here, which is in a few tab open windows list. Gonna click on that? We see them that we have these windows open. That's what we have at this time. I'm actually gonna close a couple of them. Just toe have the one window of the home page. Now we're gonna work on creating a job for a customer. Jobs could be useful in many different ways. One of the main ways that we're gonna use the job is to apply particular costs to a particular job for a particular customer. So if we have a customer that we are doing multiple jobs for, it could be useful for us to track the individual jobs for a particular customer individually. And then when we create the invoice, we contract the information within the invoice. Teoh Ah, particular job. So, for example, if we were tracking time, if we had kind of a job cost system and we were tracking the time that we have and we put in and the people and our staff are putting in, then we would want to track that to a particular customer and possibly to a particular job . And then when we invoice, we can apply that job that time to that particular job and create the invoice based on it. So that's one of the major functions that creating jobs could use. They're gonna be a versatile tool. That's what we're mainly going to be using it for. So let's see how we would set up a job for a customer as first, we're gonna go to the customer center so we could go here. I'm going to go to the drop down because it's always an area we could go to no matter where we're at within the program. So we're gonna go to customers customer center, and then here is our customer center. We only have a few clients that we will be working with here in order to create jobs for we're going to create a job for Jones guitar, so that's gonna be right here. In order to create the job, he must first click on Jones guitars. We want to be on that particular customer once we are. Then we can go up to the new customer and job item here, Select. That's dropped down and we can add not a new customer, but a job. When we do so, it will add that new job below the currents customer. So we're gonna say add new job and all we're gonna do on the new job is add the job number . So we're just going to say this is a job number it's already related to, As you could see, the company name of Jones guitars. So, really, all we want here is the new number 333005 in this case is gonna be the number we are going to apply. I'm gonna keep the dates. We don't really. The dates aren't going affect anything, as long as they're before the date that we're actually going to be entering Datum into. And so then we're gonna Jones guitar. And I'm not gonna fill out any of the further information just keeping the job here as it relates to our customer Jones guitar. Then we're gonna go ahead and say, Say are okay. And as you can see, we then have the Jones guitar, and then here is gonna be the job related to Jones guitar. If we were then to create an invoice and we wanted to create an invoice for Jones guitar but specific to that particular job tracking what we're doing for that particular job the maintenance on a guitar for that particular job, we would then go to the home just for demonstration. If we went to the create invoice, then rather than typing and Jones weaken typing 3005 There's the job, and if we tap through that will then have it related to the customer of Jones. And that will be the information that we can put in related to the particular job for a particular customer. So when it closes out, we're not going to record this. I'm going to close that out and we're gonna create a custom, a couple more jobs here, at least one more job for another customer. And so we're gonna go back to the customer center. So here is the customer center within the open Windows tab and the next one we're gonna create. It's for Sam the guitar man. So I'm gonna make this a bit larger so you can see the full name there is, Sam, we need to click on the name. And once we're on the name, we're gonna go up Teoh new customer and job. And we're gonna create not a new customer, but a new ad, a job and the job. In this case, all we need is going to be the number and that number and will be for us for 002 This is gonna be related particularly to that particular customer. And that's all we really need. Here will be that data, all the other data related to the customer within the customer field. So I'm gonna say OK, and there's the job related to Sam the Guitar Man, and we can then apply any information that we're recording for that customer to a particular job and then build that particular job. So those are gonna be the two jobs were setting up now just to show how to set up the jobs will be working with invoicing later and show how weaken tienen voice out to a particular job and what that will look like, what the effect will be on that and what that can do for us in practice. 66. 7.70 Payroll Process Check QuickBooks Pro 2018: Hello. In this presentation, we will process payroll within QuickBooks Pro 2018. If you've been following along with us, that's great. We will be continuing on the get great Kentucky great two guitars A problem? If not, that's OK. We will be processing paid roll down here and we can follow along with the payroll processing process. If you have the backup file for this point that you could go to the file and restore that information, we will be working with interim data, so it would be good to be started at the same point in time. And hopefully when we're finished with the problem ending at the same point in time, we've got the company file open. We have the home tab open home tab being found at the company and then hometown. We also have the open items window open. And if you don't have that, then go to view an open window list that will give you this list on the left hand side. We are gonna be working, of course, with the employees section of the home tab, we have a nice diagram showing the process of the employee says system that first starting with the enter time this inter time field being an optional field. That is, if we're going to track time, basically have a time ticker clock, where we're gonna punch in and punch out the time. That can be useful because it could also track that time to the invoices and be recorded within the invoice. We're not gonna be using that at this point. We're gonna be processing the payroll directly, and we're gonna be processing paid role, which you would be using if you were to be tracking the time outside and just recording the hours as we are doing here, or within some other type of payroll system that basically tracks the time. If you're billing based on time, then you would be recording those hours at this point, as we will show here, win processing the payroll and or for processing payroll for those who are salary paid. Then we may not be using the enter time function over here in order to help us with the payroll processing. Remember that in order to process Pedro, we need some kind of payroll thing. Set up some type of payroll system set up QuickBooks has at least 3 to 4 of them different tiers of payroll that can be paid, and QuickBooks will provide more of the service. Obviously, the more money is paid for the service. The minimal is to basically process payroll and process the with holdings, which is a big part. We and if you go a step up, it can help you with other multiple states, and it can help. With the processing of the quarterly forms that nine forties, the 9 40 ones and the in the yearly forms, which are the nine forties and the W twos in the W threes. We're gonna be processing the payroll using the manual system, which looks pretty much the same as a lot of the other. The other tears. Except that we're gonna have to actually calculate the withholding or input the with holdings in terms of federal income tax and Social Security, Medicare both on the employee side and the employer side for Social Security and Medicare. This is actually really useful in order to understand payroll and how the payroll system works. And so it's a good practice to do, even if we plan on pain for those items, so that we can explain or have an understanding of what is being withheld, how it's being with withheld what the Net check calculation looks like. How, then is the journal entry being made, or how our accounts affected when the payroll is processed? So let's do that first thing, we're gonna go to the pay employees again. You would not have this set up unless you set up the manual system or some other system. If you just wanna work through a problem, you could set up the manual system. It's free in order to see how payroll works and practice with that, and then decide if you want to set up another system. If you have some others payroll system set up, then this icon will still be there. And if you choose, if this looks complicated or something, obviously, you then have the option to win processing payroll to think about if you want to outsource payroll to something like 80 p or paychecks or some third party rather than doing it within the QuickBooks system, whether than generating the checks within the QuickBooks system. Okay, so let's see what we have here. We're gonna say pay employees. We have set up the employees in the past. We set up the payroll system in the path of you miss those, then go back and take a look at those we are going to have. Our two employees are gonna be Adam and Erica. First thing we want to do is set up our pay period ends and our check date. Now, these may be different, but we want to make sure that we have both of these in place or our payroll will not be correct. Will have problems, so your pay period is gonna end whenever the end of the paper. It is depending on if you pay monthly if you pay pie weekly, whenever. If you pay every every two weeks or ah, semi annually, which is the middle of each month, or monthly or weekly. And so make sure that you have the end of the time period. We're going to say we were paying monthly. And so we're going to say that this is Theo. End of the month 01 31 21. We are making our our, uh information all as of the date of 2021 were in the year of 2021. The check date we're going to say is the same. And no, that doesn't necessarily have to be the case. We might have a system in which the pay period ends, and then we process the payroll checks. Ah, a little bit. After that point in time, we're gonna be taken out of the checking account. It could quite be be possible that if we have a system set up that we want to put money into a payroll account and then take it directly out, that's a fairly good internal control. If you don't have that, then we're gonna take it directly out of the checking account. That's what we're gonna be generating our paychecks from. We're gonna print, um, print paychecks on checks, stock going to say no, we're not gonna print paychecks on check stock. If we were to do that, then once we process payroll, we would have our pre printed cheques. We would go ahead and put those pre printed cheques with into the computer. And then once we process it, it would print those checks out that we could then distribute. We're going to say no, we're going to say We're gonna hand write the checks and then just process the payroll in order to get this into our system, and that's how we're going to demonstrate this. If that is the case, then we have to assign a check number. That check number is automated here. It's being picked up from the next check number in the system. We should be able to compare that Teoh the checks that we will be writing. It should be the same check number. We're then going to check off the employees that were going to be dealing with and writing checks for at this time. And then we're gonna continue with the payroll process. Here are two employees, and they've given us a great quick overview with the growth pay, the taxes and the Net pay. We can see that this is not correct, because one we don't have any information for Erica. And that and to there's no withholdings. And that's the case for a couple different reasons. One Erica information is on hourly employees, so we have to put their hours in there, and also we're using the manual payroll system, which means we're actually gonna have to go in there and enter the data manually for the with holdings and taxes, which will give us a good idea of what that actually is, rather than just blindly, you know, processing the payroll checks and not really understanding what what with holdings are or what accounts are being affected. So this will be a good process to see what is happening here. We're gonna click on first Adam and see what is there and then process what we need to in order to to make this function. So Adam is a salaried employees. So we have the rate here. There's no hours. We don't need the hours because we're hourly employees. That means we took the yearly rate and divided by 12. In essence, this is the gross pay. So if we took the 5483.33 times 12 we get the 54 about 55,000 being the annual. So that same information then is down here on the salary. This is where we're going to calculate our with holdings. So the withholdings we're gonna have to input manually these air. What's gonna be taken out that we're gonna take from the employees in order to then pay it for the employees to the government for them. So we're gonna take out 7 20 for federal income tax F I t. Why that would have been received from the information from the with holdings and the exemptions on the W four, and we'd have to actually look that up and see what should be withheld based on those exemptions. And that's probably the most complicated piece. We have to look at the tables and see what to withhold based on being a monthly boy, based on how many exemptions are have been taken in accordance with the W four and then figure out that withholding based on tables also marital status status, being in in the table as well and needing for us to look that up. So we have that. And then we have Social Security and Medicare that we need to withhold. So this is coming out of the paycheck to 58 for Social Security, and the Social Security is usually about 4583.33 times 0.62 Ah, and so it's gonna be a 0.6 point 2% so that could, very from from time to time, they might change the sole security rate. But it's usually going to be more of a flat rate, so it's a fairly easy rate to calculate. And then we're gonna have the Medicare, which is 66 we're gonna be reducing from, and that again is usually fairly constant. So I believe it's for a three point. That's the growth times 3.0.145 or 1.45% and that will give us the 66. So this is just an example problem. Don't take those percentages Azaz at as as if they're always applying, make sure Teoh double check that. And look at those, however those. The point is that the Social Security and Medicare being flat rates, typically are easy for us to calculate the federal income tax being at progressive rate and relying then on tables exemption marital status is a bit more difficult for us to figure out. That's usually one that's being difficult. Then we have some other stuff we're not going to deal with now. This is just an example problem showing the federal depending on the state we are in, we're gonna have state income tax that's gonna vary from state to state. And we could have some other types of things that would have to be withheld. It might have union dues. We might have garnishment and stuff like that, which we would have to include in the withholding process. So this would be the minimum federal type of with holdings that we would have to be dealing with and give us an example. Therefore, our net pay is this gross pay minus the F i t federal income tax minus of Social Security minus the Medicare. But we're not done yet because we also have toe have our side of the Social Security and Medicare. So we're going to say our side is gonna match the Social Security in this case, being this to 58 and we're gonna match the Medicare, uh, which is gonna be the 66 he's gonna go in its positive. So this is what we are paying as the company the owner, based on the salary to the employees, this is the same to amounts, But this is the amounts that the employees these two on the amounts of the employees there paying for Social Security and Medicare out of their paycheck. So these air really not our payroll taxes these air, the employees payroll taxes, these air, the company payroll taxes that are paid based on the employee's. We would typically have a federal income tax. It would be mandatory to, but it's it's kind of dependent on the state unemployment tax. And so I'm not going to deal with the unemployment tax either, in this example problem. And if you, if you have this set up in the payroll system within QuickBooks and and their pain for it than these taxes, the federal income taxes would be calculated for you. But this will give us an idea. So we're going to say saving next. And then we're gonna have our second employee here. Erica, we're gonna do the same information. But now Eric has an hourly employees. So we have to put the rate in Europe in 20 on our were saying and we're going to say that there were 40 hours worked and therefore the calculation that 20 times 40 is gonna be that 800 that were gonna pay here, and then we're gonna calculate the with holdings once again federal income tax withholdings , we're going to say is negative 110 that then getting the information, the exemptions, that marital status from the W four Looking up on the table toe, find that information. The Social Security we're going to say is 49 which oh, go back in Eric 49. And that should be calculated as the 800 times 8000.62 typically and and so don't don't Obviously, it's It probably should be rounded up to 50 but we're gonna keep that there. And then we've got the medical Medicare 11 and, ah, keep it in return. And that's going to be usually 800 times point. 0145 So there's the 11 Probably should be 12 but we're gonna keep the example at the 11 and then we're gonna have our portion, which would be the so security of 49 11. So the same type of idea, the federal income tax typically being the most complicated again. If you're going to calculate thes, make sure toe seek a professional. Make sure you're getting the current up to date dates based on the current update information, and you would need to include the state and local taxes and the federal unemployment. That's just gonna be an example of getting idea of what this is gonna be recorded and how it will then affect the financial statements. So this will be the net check. Then that's what's gonna be actually written for the Net. Check These amounts are gonna be withheld. They're gonna be payables on the books that we're then gonna have to pay for the employees to, uh, the Fed in this case. And these two are gonna be items that we did not withhold from the employees, but that we owe our payroll taxes that were gonna pay, Uh, as it will be a liability as well. So security, Medicare that will have to pay Teoh the Fed. Now we're going to select save and close. We've entered that data. So now we have the data is there? So here's the growth pay. Here's the taxes. Here's the net pay. And then we've got in the employer taxes our portion of the Social Security and Medicare. Here's the gross pay for Erica. The taxes and in the net pay this taxes, including all the taxes that are employee taxes, federal income tax, their portion of Social Security and Medicare, and an hour portion of Social Security and Medicare that we have to pay on the company's side. Now, we're gonna go ahead and create the paychecks so we will create to the paychecks. We're not gonna print the paychecks because they're already we're not gonna print them in this example. Note, however, that even if we were to write the paychecks by hand, we would need to provide in some format the pay stubs to employees. So you'd want to still print the pay stubs and provide those to the employees those air typically going to be mandatory to do. But I'm gonna close this out and see what we have. So there are a couple errors where we can check and see what has happened in terms of the payroll. First we can go to the register. That's probably the most common area to see if those checks were actually processed. Do they show up on the payroll register? We're going to do that. We're gonna go to banking used register, and I'm gonna keep it on the checking account and say OK, and then we see that these two checks are here for Adam and Erica. If we double click on the paycheck, then we will see the items within the paycheck, and we could see the detail. If you want to see more detail, we can click the paycheck detail, and we could see more of the detail here in terms of what has input. If we want to see what is going on in. The financial statements will take a look at that payroll. Whether you do it within QuickBooks or you do it outside of QuickBooks is one of the more complex journal entries that you'll have to put in place if you do the journal entry within QuickBooks. If you run this process, QuickBooks does the journal entry. But then we need to really kind of understand what the journal entry is doing in order to make sure that we're paying the payroll properly. If you have the payroll system done outside by an outside like ADP or paychecks, then you gotta make sure somehow to get that information into the system with a journal entry or some format to get it into our books, even though it's been processed outside and that might be a fairly complex journal entry to do, too. So no matter what you do, whether you do it in house within QuickBooks, whether use a manual system, whether use QuickBooks paid system or 1/3 party system, we have to have some idea of what the effect is on the financial statements in order to make sure one it's being recorded. And two, we understand how it's recorded and three, making sure that we are in accordance with regulations to make the payments to the people that were withheld from the Fed, the state in any other type of garnishment or whatnot. We've got to pay for that with holdings. So we're gonna go to reports we're gonna go Teoh Company of Financial and let's take a look at the balance sheet. We're gonna change the dates 20101 21 and let's go into the customized field as well and change the range so that if we drill down on anything, we will see more than just the one date. So I'm gonna go from a one on 1 21 to 12 31 21 and that will change this the 12. 31 21. So now we have that range and we can take a look at what's gonna happen within the papal now, when when we process pit role. You would think that the transaction would pretty be pretty easy if it wasn't for with holdings, meaning we would just credit the check. And we would debit payroll expense that with holdings, complicates the picture. Because then, ah, the paycheck is gonna be net of with holdings and that with holdings, then we'll go into a liability. So first we can check the checking account, as we did in the register and weaken. Double click on that zooming in, drilling down on that, we see our two paychecks. We double click on those. We see the paycheck once again, if you want to see the detail, we can click on that. See the detail closing that back out, closing that back out. We see those two there. If we go to the other side of it, we would assume that there would be an expense called wages expense or something like that . So we're gonna go to reports we're gonna go to company and financial. Look at our income statement or profit and loss statement for QuickBooks. And we're going to change the date 20101 to 1 to 12. 31 to 1. And look for our payroll expense. There is our payroll expense. If we double click on the payroll expense, we see it broken out in a lot of different items here. So no, what? What they have here is we're gonna have the check amount, and then they broke out, basically the types of with holdings being the Social Security and the Medicare. And let me correct that. These two are not the with holdings of soul security in the Medicare. But those are the employer portions of Social Security and Medicare. So what we have here are the total gross pay for the two employees. And then, instead of breaking out our portion of the payroll taxes into a separate account called payroll taxes, we kept that they kept that in QuickBooks default is to keep that in the payroll expenses. So we're combining the payroll expense in terms of the employees growth pay and our portion of payroll taxes, often times at the end of when we create the financial statements. We may want to break out the payroll taxes to another expense. The payroll taxes, in this case being the 2 58 to 66. The 49 the 11 the Social Security and the Medicare for the employer side. If we were to double click on these, we can go to the check. There is the check item. If we want to see more detail, we can click here. Note that we're showing in the register this amount, the earnings because that's what was in the payroll. Wait, that's what they earned in terms of an expense, even though they got a net check of this amount. So when we look at the expense side, we're recording the entire expense, not net of the withholding. Meaning we recorded it Gross on the expense side. If you want to see more detail, of course, we could go to the paycheck detail and there is that closing this back out. If we choose one of these other items, this is gonna be for the withholding. Our portion. We double click on that and we get back to this paycheck. This emphasizing not the amount of payment here the net check or the growth check, but the amount of taxes lumped into this line here if we go to the paycheck detail, what we're looking at is these items here. So security, I believe, is the one we clicked on. These two items being reported separately of those being not part of the employee wages but part of our employer payroll taxes. So I'm gonna close that back out. We're gonna close that back out. And so those are gonna be these items on the income statement or profit and loss. The next item to take a look at is gonna be back on the balance sheet. And we should have a liability that we owe now. For those with holdings we took out as well as for the payroll. Taxes that are are were responsibility force all security and Medicare. It's other other current liabilities. Here's the item here. If we double click on that, we see the break out of the information once again for our employees showing the detail of this information. And no, we have the doubling up here. So this is the federal income tax for Adam. This is the Social Security employees portion. This is the Social Security employer portion. This is the Medicare employees portion. Medicare Employer portion. Here's Erica's federal income tax withheld Erica's Social Security Employees portion. Ah, so security employer abortion, Medicare employees portion Medicare employer portion So you can see how complicated this this can start to get Once we get mawr employees set up, we could set this all up if it was done basically externally, with basically one journal entries showing this transaction debuting the the expense or increasing the expense, increasing the liability and decreasing the ah, the ink, the cash. But if we want to show the detail per employee, then of course it's going to get a bit more complex to show that detail. If it was done by 1/3 party, then they could. They can show all that detail and within their system and provide that details Well, so this is gonna be some of the information we double click on this. We get back to this check if we double click on the detail there, we get back to that same detail so that, in essence, is gonna be the information. So if we were the lump, basically the payroll recording into one journal entry. We would be decreasing the checking account for the Nets. Check that we wrote. We would be debuting the expense or increasing the payroll expense for the growth pay that is due to the employees. And we would debit it for either the payroll expense or payroll taxes for the payroll taxes , the employer portion of the payroll taxes. And then we were credit or increased the liability here for the amount that we withheld and are now paid or need to be paid to the organizations in this case, the Fed for both the employee portion that we took from the employees in order to then pay the Fed with it for them and our employer portion that were responsible for ads employers, our portion of Social Security and Medicare that would also have to be paid. Note that that's that could be done with one lump journal entry. But when we look at the detail, we after, we need to track that per employee as well in order to track that data. So at the end of the time period, we can process per individual what their W two was what was withheld for them. And ah, and and that whole process, what was the Net check that was paid to them as well? That's gonna be the basis of the payroll at some future time. We will, of course, have to pay this amount on to the Fed, and that would be writing a check to the Fed and reducing this liability. 67. 7.75 Job Sales Receipt QuickBooks Pro 2018: hello. In this presentation, we will be creating a sales receipt applied to a particular job for a particular customer within QuickBooks Pro 2018. If you have been working along with us, that's great. We're gonna be continuing with the get great guitars problem. If you have not, that's OK. We will be creating a sales receipt, that sales receipt, then being applied to a particular job that we have created for a particular customer and see what the impact is of entering that data. If you have ah, the backup file to this point, you can restore that, going to file open and restore. If not, that's OK. But if you're working through, the problem would be helpful to be all at the same point in time, we will be working with customers and jobs that we have set up in the past. So if you're following along and you want to have those exact customers and jobs in the data that we need, then there you can put that information in, if not too, then you can go back and build the information and or just see what we what we have in terms of creating a sales receipt for a job. I also note that we have the home tab open, which is gonna be under company and home page, and we have the open windows here, which is under view and open window list that will give you this list of open windows. What we will be doing here is creating a sales receipt, as we have in the past. But rather than just applying it to a particular customer, we are going to apply this to a particular job. And in order to see that, let's take a look at the jobs we have set up. If you haven't set up jobs or you want to set up the jobs that we looked and take a look at a prior radio in terms of how the jobs are set up, we'll take a look at the jobs that have been set up here by going to the customer center through this link. Or you can select the drop down, which I recommend getting used to, because you can get to the center any time from the drop down Customer center here is our customer center. We set up to jobs Job 3005 and 400 to those being related to the customer of Jones guitar and same The Guitar Man, respectively. We set those up just by clicking on the customer and then go into new customer job and adding a job and then just basically typing the number there. The usefulness of this is that we may have multiple jobs for a particular customer and want to track those jobs separately in terms of applying time and more of a job cost system per job rever than simply by customer. And so this job then will track particular job. For example, we may have sold a guitar to Jones guitar, and then we may have some other jobs that were doing maintenance on the guitar in some way and therefore want to track that in a separate job and track. That time we could have multiple jobs for a particular client and want to make sure that we're building those multiple jobs on their own and tracking them separately. That's when a job cost system and the jobs within it the creation of jobs can be useful. What we will do right now is create a sales receipt and we're gonna create a sales receipt for these individuals. These companies Jones guitar and stand the guitar man. However, we are going to create it for the particular job related to them on track that information by job. So we're gonna go back to the home tab within the open windows and we're gonna create a sales receipt. 1st 4 Sam that guitar man. So we're gonna click on create sales receipt, note that this is similar to an invoice. But rather than debuting accounts receivable or increasing the receivable what is owed to us, we're going to say that we received payment at this point in time and put the increase into UN deposited funds. We're gonna make it to Sam the guitar Man. However, we're gonna type in, not the name but the number of the job. For 002 we can see that it will populate up here the full name, as we just typed in the number, name and then number. And it will also populate down here, giving us the name and then subcategory of the number. If we tap through this, we're gonna have the template, and we're going to say that payment or can say cash. If we tap through, we're going to say that date is 1 31 We're going to keep the sales number the same that should be generated from the sales receipt number that should be generated from QuickBooks . And we're gonna tap through this to the item, and we're going to say it's gonna be a service item. We could select the drop down to select the service item or weaken. Select the service, Adam by starting to type it. This is an inventory item, not This is a sales item, not inventory, not something we're physically selling but service on the guitar. In this case saying that QuickBooks is applying sales tax, I'm gonna say OK, and then this is actually an item because it service typically probably does not have sales tax in most states. And therefore I'm gonna take that off by selecting down here customer code. If you select this, it's out of the screen right now. But the drop town is going to say tax or non taxable, and we want to make sure that it's nontaxable and that currently is not adding the tax here . So it's currently nontaxable because it is a service item, it's populating for itself here. So we already have this item set up for the service item being ah, 100. So we're gonna keep that in place. We're just going to say quantity one. And there is that information for Sam the guitar Man. When we record this, then it's going Teoh, increase the UN deposited funds and it's going to credit the service revenue. So let's go ahead and record this and see if that is indeed the case. So we're gonna open up our two main reports here our balance sheet and profit and loss or income statement. By going to reports, we're gonna go to company and financial. We're gonna scroll down to the balance sheet, and we're gonna change the date range by first going to customize reports the date range being no. One, No 1 to 1 January 1st 2021 to 12 31 to 1 December 31st 21. And there we have that. So the sales receipt then has increased this UN deposited funds, so it didn't put it into the checking account. We increased UN deposited funds. If we zoom in on that We see that 100 here zooming in on that. We see the 100 there. We're gonna close back out of this. I'm gonna close this back out. We're gonna close this back out the other side. Then if we go to reports, we go Teoh Company and financial will be the profit and loss we wanna look at changing the date ranges from 0101212 12 31 to 1. We see our information here now. We had service revenue, so if we double click on the service, we see the item here. There's the 100 double clicking on that. We see our sales receipt there. So there is the journal entry that has been created when it closed this back out. We're gonna do this process one more time, and we're going to go back then to the home page. Let's go to the home page. We will create another sales receipt and we're gonna create it for 3005 And that, once again, is gonna be a job this time related to Jones guitars. So Jones guitars. 30052 subcategory. It'll type it in this format Jones guitar and then the job 3005 up top. Tabbing through that, we're going to say we got cash. The date will remain the same. The sales number or the sales receipt number will be generated and we're gonna tap through to the items. We are once again going to choose the item of a service item. The partial service We have tapped through that. And this time we're going to say that we have the quantity to of those. And no, this is an area where if we're tracking by service out, if we're doing a job costs, it's basically just applying our time out. We want to be tracking our time and then applying it out to the particular jobs. And we might have different people. Within are our organization that we have different, different a billable rates to different items, then two and then be counting the time they spent on those particular processes. That, in essence, is what we're recording here in terms of a job cost system and applying those costs Teoh a particular job for a particular customer. So we have that information here. We're now at a cost of 210 the sales tax. We should not have any this again being a service item. So we're gonna turn off the sales tax. I'm gonna take the tax here. We have none. I'm gonna say none and say OK, and that has been turned off. So now we're not charging sales tax for the service Adam or value tax, and that will be that. So we're gonna go ahead and record. This will check one more time. What happens on the financial statements? It should be increasing UN deposited funds. It should be increasing the sales. So I'm going to say save and close and yes, and then we're gonna go to the balance sheet and it should refresh automatically. We see UN deposited funds here, 300 would double click on that. There is our 100 from the last 1 200 from this sales receipts double clicking on that. We see the sales receipt closing this back out, closing this back out, we can go to the profit and loss in the open windows and within the profit and loss, we're gonna take a look at the service items double clicking on that We see that 200 there . There's the service item and there's that information here. All right, I'm gonna close this back out and close this back out. Notes that if you were tracking jobs and John the job cost system, you can also have various reports in terms of job cost system. So if you selected the reports up top and you scroll down to the jobs and time mileage tracking, you could have the job profitability summary that job, profitability, detail and look at information if you're applying more costs out to the job, this could be very useful if we're not doing just a service company, meaning applying hours out to the job but using the job cost system to track costs per job and making bids on jobs in a job cost system. In that format, these reports can be used to look and track by particular job, not just the revenue per job, but also expenses applied to each individual job as well 68. 7.80 Review Reports & Export to Excel: Hello. In this presentation, we will talk about how to export reports to excel, including a profit and loss of balance sheet and transaction reports by date. If you've been following along with us, that's great. We will be continuing on the get to great guitars problem. If not, that's OK. We will demonstrate how to export reports to excel. If you have this backup file, you can restore it by going to file and restore the company. That will bring you to the point that we are at now and we'll be able to see the same data on the transaction report. If your phone went through the data set, you should have the same information on the transaction reports as we process them. The one in particular we want to take a look at is the transaction reports by date. That's gonna be a really good comparison to see what we have done through this process and whether or not we've had any problems with the process. If everything ties out within the these reports, So I'm gonna open up the open windows on this side so we can toggle through the reports that we will be creating In order to do that, we're gonna go to the view at the top, drop down and open window a list. And there are our windows that we want to have open. I'm gonna go ahead and just keep the home tab open at this time is all you need tohave open and will generate these reports as we go. So we have the balance sheet here, and I'm gonna open up the company home tab. So this is gonna be our starting point. Typically are starting point on Lee having the home page open. We're gonna start out by taking a look at the balance sheet, then moved to the profits and loss, then the transaction report. So let's go to the reports up top. We're gonna go down to company and financial scrolling down to the balance sheet. We're gonna change the date range. I'm gonna go over to this side to change the range to the current period. We are working on a 1117 or 101 to 1 January 1st 2021 to 12. 31 to 1 December 31st 2000 to 21. We're going to say OK, now, I typically like to look at the balance sheet first when we're analyzing this data because the balance sheet is the double entry accounting system is the accounting equation. It is assets, equal liabilities plus equity. And so that's the first place I like to say. Is there something wrong on the balance sheet? Weaken? Take anti our data here to any data. If you're working along with this problem and see if there's any problems, any differences between what I'm showing here to what we have in the problem, that's gonna be our first indication that there's a problem and then really weaken drill down on it here in the auto zoom function. And or we can go to the transaction report, as we will do shortly. And those are two locations that we can really drill down and see what the issue is if there's any problems now, of course, the checking account is a common place where we could be off because there's so many transactions within the checking account. So again, if there's numbers different, if you're going through this problem and you see a different number than this 94 4 36 you could drill down on that. And here's the data, so you can take anti off this data here and see if it matches. If it doesn't match. Often, it's the case that there's a date problem. So you want it? Might want to go down and extend the date and bring the date back into the past and see if there's any added data that is included in your data set. This problem we have worked on this is the only period we have worked out. And therefore, if there's anything outside this date range, probably a date problem, and you probably want to bring it within this date, ranging that might solve the problem. So the best way to check this town stuff is just a tick and tied it all out and also look at the split account to see which other account is involved in this. Then we're gonna close this back up. We could do the same for every other transactions of here's accounts receivable inventory, prepaid insurance, short term investment, UN deposited funds, total current assets also helpful when you're checking data like this to maybe start from the total start at the total current assets down here. If that balance is good, If it's in balance to what you see here, then you maybe you pretty good. You might want to go in and double check your data. But that's a good indication that your information is correct. If you're out of balance, of course, then you might want to go to the sub categories, including the total current assets, then ah, and the total long term or property, plant and equipment, and check those sub totals and then drill down. Up. There is something wrong on those sub totals. Then go back into the data. And that might be the most efficient way to go through the data and see what has been incorrect or what needs to be picked up. So here is gonna be the liability side. We've got the liability. Same idea. You might want to goto total liabilities and equity and then take a look at the totals and total total liabilities than total current liabilities. See if those tie out. And if they don't then go back into the data, including the visa card in this case, the payroll liabilities, the sales tax, the loan and the Owner Equity. I'm not going to drill down on any of these mawr, but we will see more detail if you have some problems here. When we go to the transaction out report by date. That's really the best way to do a comparison when two people are entering data and you're trying to compare whether or not data has been entered properly on one account to another, what we're gonna do now as export this and practice the export process that will be located up here in the Excel sheet. So we're gonna go Teoh, create a new worksheet. This is the first time we have exported the Excel. So we're gonna create a new workbook and then after that, we're going to just keep on posting to the existing workbook. So we're gonna say export and it should open up a new Excel sheet and it should export this data to one tab of that New Excel sheet that will then be opened. Here we go. Here's the New Excel sheets that has been generated. We see the new tab down here. I'm gonna double click on that tab and rename it. We're gonna call it a balance sheet and we could increase the size of this sheet like so in note that the header is not here, but there is a header. If we go to the page layout section over here, you, Wilton, and go ahead. It's gonna unfreeze panes, so we'll have to deal with that. But we're gonna say Look at that. And if we scroll up top, we should have a header. But I'm gonna unfreeze the pains so we can see that To do that, we're gonna go to the View, Tam. And in the Windows group, there's a paint split pains, We're gonna unspool it. That and that allows us to see the header so the head or does exports in the header function, which you cannot see in the normal view, going back to the normal view of Excel. So there's gonna be our data to excel. I'm going to save this workbook so that when we print the next two reports, we can export it to the same Excel workbook, and it will create two more worksheets within the workbook. In order to do that, we're gonna go to the file town we're gonna say, save as I'm gonna brows. Look for where we want to save this as now we have the location. I'm gonna save it as section seven in this location. That's gonna be the name of the workbooks I'm going to say save. And we're gonna say Follow feature. That's okay. I'm gonna say yes. And there we have that. Now I'm gonna close this back out, and we're gonna go to the next report. That being the profit and loss, so close that out, we're gonna go to the profit and loss. So I'm gonna go to reports up top and scroll on down. We're looking for a company and financial, and we're looking for the profit and loss standard changing the date ranges from 0101212 12 31 to 1. There is our data. Now. It's a just measure and check to see if that were on the same page and entering data. If you've been following along with the problem, best place to start is the net income. And see if we have the same net loss in this case for this time period. And if that is the case, then that's a good indication that we're on the same page in terms of the data. If not, then go through each item line item, starting with merchandising sales services cost a good sold and then the expenses and see what is not tying out there. I'm not gonna drill down and look at the G L for each data set. If you had two data sets you were comparing, of course. Then the best way to check that would be to say whom. If this number is different than what we have, let's do an auto zoom on each of those and check the transaction detail. Check basically the General Ledger and see if we have the same detail making up this bottom line number and then, if not, then you want to go through and probably check and see if it's a date problem and put the date in the past. Put the date in the future and see if you have a date issue and then I'm gonna close this back out for us. We're gonna we're gonna print this out. Remember that if there is a problem, we're gonna check the transaction report by date, and I dont show us all the activity. So that's really where in these types of things, we can go back through it and see where the where the detail is and take anti off from that report. So we're gonna export this report this time to the same sheet, the same excel workbook that we had set up in the prior. So we're gonna go to excel, we're gonna go to create new work sheet. That's gonna be a new worksheet within the workbook. But the workbook we're gonna make is in an existing workbook this time an existing workbook And then when we browse, it's probably gonna take us. Well, didn't this time it took me to another location. So the first time you go to the existing workbook, you're gonna have to find that workbook minds in Section seven. Once we find the workbook, we're just gonna double click on the workbook or click at one time and select open which other you choose to do, and then we're going to go ahead and export. And once that happens, it should open up that pre existing workbook and then add the new tab with this information being exported to that new tab. So here we have it Note that it put the new tab before the prior tap. I'm gonna want it afterwards, so I'm just gonna drag it. I'm gonna click on it and drag it over. And I also want to get rid of the split screen I've feature that they always put on there when it exports. And so we're gonna go Teoh the view, and I'm gonna goto windows, and I'm gonna unspool it. That so that features now unspool it. Then we can check and make sure they headers on there. So if we go to the page layout, which is going to be this little icon down there, we could see that the header still remains. And so, going back to the normal view, we're gonna now rename it and I'm gonna double click on the name and just call it P and L for profit and loss. And that will be that. So we're gonna close this back out, and we're gonna do this one more time for the last report that we need to create. And that is gonna be the transaction report by date, so we'll save that. Say that. So we're gonna go back to reports up top, and we're looking for the transaction report by date, which is under the accounting and taxes accounting in taxes, and we want the transaction reports transaction list by date, we'll change the date range from 0101212 12 31 to 1. The current range we are looking at, and this will give us a detail of everything that we did during this time period. So it's going to give us the type of item that we did, whether it be a check, a transfer on invoice, a payment, the date that it happens, the number of the name, Whether that be vendor, customer, employee and we have the memos, we have the account, and then we have the split meaning what other accounts is affected, and then we have the amounts. This is really the report that you really want a tick anti out. If there's a problem, you want to check each of these numbers and see if there's anything missing, meaning If it's on this worksheet and not the one you're working with, then we'll probably add it or see if there's a data problem. Change the dates and see if that has been entered outside the date range. And if there's something on your worksheet that's not here, then the question is, should it be there? Do you need to delete that? If they're duplicate and do we need to delete those? So I'm just going to go through this one by one just real quick here. So just so you can see these, there's a 65 while Stupid one by one Negative 12 1000 Negative. 16,000 Negative. 115,000 Negative. 7404 130 50 cents. 399 520,420 208 628 20,500 Negative. 400 Negative 5 98 5 25 816 and 27 cents, 430 50 cents. Scrolling down. 525 in 955 and 50 cents Negative. 11,000 negative. 500 Negative. 620 Negative 360 negative. 15,000 negative. 3539 and 33 cents negative. 631 102 100. There's any problems with those and drill down on those and see what the item is and see if you can locate the problem for those items. If anything is out of order, then that's okay. It might just be a date thing, but if it's within this range, So, for example, of this date you have this transaction of this 20,500 but it's dated on a different date, such as the 25th or something like that. It got group to somewhere else. Then as long as it's in this date range, it probably won't be throwing off your reports, including your balance sheet in your income statement. But you might want to go back in there and change the dates anyways. If, however, the date ranges outside of the date range, we process here, then it will have an effect on. You want to make sure to pull it back in, and that might be something that will solve the problem. That's probably one of the most common problems is a date problem. That's why QuickBooks does have ah, feature that tells you when you're outside the date range, but we turn that off and this problem because we were working in 2021. So you can set ranges to help you with that problem When we work A problem like this, however, we are more susceptible to a date problem. So now that we have that, we're gonna export this to the same location, we have the prior ones. So we're gonna go toe excel and creates new worksheet. And we're gonna put that However, in an existing workbook, it's already going to the correct location, probably at this point, because we just did this. But we do want to double check that, and it's not so we want to go toe, get great guitars, we want to go to section seven, and this will be the item. We want double clicking on that, exporting to that particular reports. And then it should open up the existing excel file. It should create a new tab putting this data on the new tab. And, um, here it is. Okay, So here's the new tab sheet. It's in the middle of the prior to that we have made. I'm gonna put my cursor on the tab, drag it over to the right. Gonna double click on it, rename it. I'm going to call it transaction before that's going. That's good enough. And there's that. We're gonna go to the View tab up Top Windows Group and hit the split so removed the split . Then we can just double check that the headers there by going to the page layout view at the bottom. This little icon There's the header. Note that if you print this, of course, it's not printing very well. If you print it, print on two pages. We need to fix that if we are to printed. So I'm gonna go back to this normal view. To do that, you could go to the file and go to the print options and try to figure out whom. How can I? How can I make this better? Well, one, I don't want the columns on two lines so we could try to change the layout from, ah, portrait Teoh landscape, and that'll fix part of it. It's still on two lines, however, so the next thing we could do is try toe, go out of here and see if there's anything that we can remove or shorten meaning? Do I need all these lines? Could I delete some of these lines? Possibly. I don't need the split lines in between. So if I wanted to clean this up and try to make a little smaller, I might want to delete these. Mike, highlight these and delete these lines. I'm just deleting the columns that have no data and you might want to do this. Anyways, if you were to create a table with this data, you would need to get rid of the lines that have nothing involved. So you do want to clean some of this up, and so we'll just delete all these and see if that is enough to bring it to one page wide. And then if we go back to the file and we go to the print, we can see that it is on one page. Now, if it were not and that wasn't enough, and that's all we could do were like, we can't do anything else. Your last resort is to scale it to fit on one page, generally fit all columns on one page. Meaning I don't really mind if if the if these if it goes to pages long, but we do typically mind if it goes to pages wide and we have to put two pages together, for example, to see the account column and how it lines up to this check. So two pages. So that would typically be this. Adam here, fit fit all columns to one all columns on one page, meaning it could be two pages. But I don't want the columns to be split, so that's gonna be just some options. There were going to save this and we're gonna close this, and that will be that. 69. 8.05 Loan Payments, Interest, Principle QuickBooks Pro 2018: Hello. In this presentation, we're gonna talk about how to make a loan payments within QuickBooks Pro 2018. If you've been working along with us, that's great. We'll be working along with the get great guitars problem. If not, that is OK. We'll show how to make a loan payment and crude, including the recording of interest and expenses while making that loan payment. If you have the backup file up to this point, you can restore that by going to the file and restore that backup. I'll are working through this problem, and getting to this point will be helpful is that we're on the same page and working with the same data. But if that's not the case again, that's okay. We can follow through this and get some relevant information from the process of recording a loan payment. What we're gonna do is write a check for a loan payment. That tricky thing about that, however, is that when we write a check for alone that we have taken out, there's typically going to be at least part of it allocated to principal and part of it allocated to interest. When that's the case, we're gonna have to split the two accounts that that payment is going, Teoh, and we'll discuss about how to do that split and why we're going to do that split. And then what's it gonna look like on the financial statements? So, in order to do that, let's first look at what we have so far. So we're gonna go to reports on the drop down. We're gonna go to company and financial and look at the balance sheet in terms of the loan that we have at this time gonna change the date to. I'm gonna customize the date and make it for the year of 0101 to 1 January 1st 2021 will make that go through 12. 31 to 1. And OK, so we're gonna be working in the future. And we have this balance here in terms of the loan scrolling down to the liabilities of this balance here in terms of the loan. Now, this is a loan that we took out and we're making payments on it. There could be a variety of different ways that the payment could be set up, that it's in accordance with the loans not typically doesn't have to be, in other words, just like a mortgage payment in that we're paying principal and interest back on a monthly basis. That's one format of alone. We might just be paying only interest back and in pain, the principal back at a later time Or many different combinations of that. However, let's take a look at the typical situation in which it'll be similar to a mortgage where we have principal and interest payments being made on a monthly basis. And think about what? When we make those payments, we can't adjust, decrease cash and decrease the loan, because when we do that, what's gonna happen is we're not taking in account the interest and we can't just make the payment recorded all the interest, because when that happens, we're not taking into account the decrease in the principle. We're gonna have to you somehow split that out between the two. That is what we are working on here. In order to do that, we first need to know what that split is, and to have that we need an amortization schedule when we get the loan way may not have an amortization schedule when we get the loan, we might just have the terms and we might have to build that amortization schedule. So first, let's look at an amortization schedule, actually make one and see what we're talking about. And then we'll take that information and record that here, using the split and see what happens here is our data in Excel. So we have the data within its cell. We have the 7 2000 lone. We're going to stay. It's for five years and we're gonna pay monthly. So five times 12 means we're gonna make 60 payments. And we're going to say the rate is 5% on a typical loan. That's that's gonna be the type of information we have. We may or may not even know the paint. We probably know the payments to, but we're going to calculate the payments here, and then we may not know what we don't know. It is the split between interest in principle per payment, because that will vary. That will change as we go. So first, let's do this calculation for the payment within excel weaken, see how to calculate the payment and then we'll have to calculate for each of those payments. Those 60 payments the individual split using an amortization schedule and show how that would be broken out. So let's let's do that too. Now, this is something that if you don't have this, you get it from your your accountant or CPA can help you with this. We'll also take a quick look at some other ways. You may do this and then look to adjust it at the end of the year with possibly you're adjusting department or your C p A. In order to account for the interest portion of any loan of the world's the short term and long term portions of them. So if we have the payments is gonna be the calculation. One way we can do it here is we can go to the formulas and we go to this functions tab, and if we type in payments, then that usually brings it up. It's this PMT is what we're looking for. That's the payment calculator. So if we know the loan amount and we know that the, uh how many months and the rate way then have everything we need, accept the missing variable of the payment for this calculation and Excel will do that for us. So we can say OK, and we get this nice little function entering box. It will help us do this. We'll take the rate it's gonna be that 6%. However, we're gonna break this out by the number of payments which are being paid monthly. So we really want the monthly rate. So we're gonna take that and divided by 12. That's the trickiest piece of this calculation. Remember, whenever we think of a rate it means per year, so we're gonna divide that out, and that will give us the rate per month. In this case, this is going to be the number of payments, number, periods, number payments. And we're going to say that that's gonna be this 60. It's gonna be five years, times 12 months, which is 60 payments. And then we're going to say the present value is what we have right now, the 72,000 and enter, and it gives us our amount. I want to see it as a positive number rather than a negative number. It puts a negative because it is a payment. In order to flip the sign All we need to do is go in front of the P in the formula and put a negative. And that, in essence, will take the whole thing and make it negative or take the whole thing in multiply times negative one making it negative. Now, there's another way you could do that just to show you the help. So we'll do that if you say equals P m the payments tab or click on that. Then we got this nice little thing down here that shows you what we're working on. So it's actually a quicker way to do it. You can take the rate divided by 12 comma, and then it wants the number of payments, which is that 60 comma. And then it wants the present value. Which is that 72. These are not required fields. So we're gonna close that up, and that will be it. So now that we have that information, that's great. I'm gonna make it a negative, Teoh. I'm gonna make it a positive by putting a negative in front of the P like so that's gonna be our payment amount. Now, that's what we're gonna write the check for now, we probably already knew that that's gonna be in our loan terms. We probably know this information, but we don't know how to split that payment between interest and principal. So let's think about that now. Let's break this amortization table out. I'm going to say the payment amount is going to be this for payment. Number one will calculate the interest as equal to the principal amount times the 5% divided by 12. That's how much interest we're gonna. We should be pain for the first installment, one month from the date of the loan. If that's the interest amount, the principle, then is the payment minus the interest. So the principle is gonna be the payment minus the interest. Some just taking the B seven minus c seven will give us the principle, then our new principal amount. It's going to be equal Teoh the 72,000 minus this decrease in principle. So after our first payment, we still owe 70,009. 41 we had the payment of 3 1059 but broken out between interest of 300 principle of 1000 and 59 payment to If we do that same calculation. We're going to say the payment is constant. That's what we said was gonna be constant. But the interest now is now calculated on this new lower principal amount. Because we're basically paying rent on the lower principle times. This 5% I'm gonna say F fours. When I copy that down, it'll keep that cell tab, and then we're gonna say, Principle, do you think that looks awfully high? And that's because we didn't divide it. I did not divided by 12. And so there's the new prints. The new interest is a bit lower. There's our payments minus the new principal. There's the principal reduction, and we're gonna take the prior principal minus that deduction, and that gives us our new principles. And now we're, of course, the principles going down, but not by the amount of the payment. That's how much cash went down. 296 of it was interesting. And therefore the principal was 1063. If we do this again one more time three the payments the same. The interest now is the new principal times the 5% F four. To make it permanent. That just means the dollar scientist mates. I want that an absolute reference. So if you don't know that, don't worry about that. Now we can look that up in the next cell course, but you need that there when we copy it down, divided by 12 and then the principal deduction is gonna be equal to the payment, minus the interest. The new principal therefore, is the prior balance minus the principal deduction point being that the interest is going down with each payment as the principle that that interest is calculated on goes down and the principal portion then being applied out. Part of the payment is going up. Now, I'm gonna copy this down all the way down to 60 payments, and we should get to a principle balance of zero after 60 payments. So let's do that. We're gonna copy this down somewhere, like around here. There we go. And so there's the zero. So we made 60 payments. It goes to zero at that point in time. That last payment, we still made the same amount, but the interest portion was only $6. All of it was principal because we only had that much that was being calculated interest on bringing the balance down to zero. So this is an amortization table. This is what we need in order for us to say, OK, we're on this first payment and we need to make that payment. We're going to say it's 43 1059. So we're in essence gonna just write a check for 3 1069 However, we need to split the other accounts between interest in principle. That's what we'll do now. So we're gonna go back to QuickBooks over here. We're gonna make our first payment. So I'm going to do that. There's a couple different ways we're gonna do this. I'm gonna do this in the check register and then we'll actually write a check. Several gun of banking. I'm gonna go to use register. We want to be on the checking account and say, OK, here is our check register. Gonna make this payment as of 0201 to 1 the first day of the next month. And I'm gonna say that that's the check. Should the check number should be okay, We're gonna say that remains the same. The payment is gonna go to chase. We're going to say Chase and the payments going to be the for the full amount. 1359 A full amount on our amortization table. Now, we only have one other account. And this is the problem. When entering this data, we need to account for to go to one for interest. One for principle. The way to do that as you select the split here within the check register. And now you can add up multiple accounts. As long as this line these totals head up, Do this total here won't let you post it. If that's not the case, you can't really mess that up. So we're going to say that there's gonna be an interest expense portion. Noticed interest expense does pop up from our chart of accounts. We had not made that it was there and generated from when we created this chart of accounts as a merchandising business, it is an expense. That's what we want. So we're gonna say that's what we want. That amount, however, is wrong. It's gonna be 300 from our amortization table, and then we're going to say that the other amount is going to go to the loan payable. And so there's loan payable. It's a long term liability, and QuickBooks figures it out for us. We could have gotten that from the table, but QuickBooks figures it out for us. Now, let's just pretend we got it wrong here, and I put 1000 on accident. And if we if we try then to record this QuickBooks going to say the transaction is out of balance, we're not gonna let you do that because it's wrong and we're gonna get all right, it's wrong. And then we're gonna figure this out. The 2nd 1 we're gonna say that that came from our table of 1059 and that then should match this amount as it does. I believe so. If there's no pennies involved here, so we're gonna say record and there we have that. So this amount has been recorded. If we take a look at what happens then in terms of the financial statements, we can start with the balance sheets going to the balance sheet here, and we know that the cash went down, double clicking on cash. We see that cash should decrease by the full amount of the payment. Double clicking on that. We see the check here, closing this out, closing this out. We then go to the income statement or profit and loss we get to the other two accounts, reports, company and financial profit and loss. We're gonna change the date 0101212 12 31 to 1. And we're gonna look for those two other amounts. One being the interest expense. There's the 300 in interest expense. There's the 300 there. So there's our check closing this out, closing this out. That, of course, decreases net income. And I misspoke before I'm looking at the balance sheet is the other counts. Let's go back to the biology and we're gonna scroll back down, and we now want the alone. Here's the loan amount 70,009. 41. Double clicking on that. We see that check right here and no, we started with a loan of 22. And then we updated our loan terms by the 50 to get to that 72. So we're assuming that the new loan was negotiated at the 72. If we double click on this, there is our data. And if we close out of this, then we could check this by saying that amount should match the amount on our loan table here. So that's that's how we want to take a look at that. Now, note that if you were to do financial statements, you still have an issue that that here is in long term liabilities and we would have to after each payment. Really, if in alone like this is, figure out the current portion. So if you are actually to make financial statements, you'd have to be specific and say that they're still of these amount of payments that are current or the principal payment principle portion that is current 12 months out and take that number. Let's sum it up this way. Ah, and that number, then, is what would have to be the current portion versus the long term portion of the loan. So beware of that. But just note that the total loan balance is going to be this if we split out between those two payments, so we're gonna do this again, and we'll do one more payment as of the end of the month for the second payment and we'll do that a bit different. Way back to QuickBooks. We're gonna go back, Teoh the home page. And this time we're just gonna write the check. So we're gonna go to write, to check, to write to this second check and this one we're gonna write as of the end. So it's the second payment that we made it happen to make him in the same month, one on the beginning of the month, one of the end of the month. So we're going to say it's the checking account. That check number should be accurate. We're gonna keep that we're going to save. The date, however, is over two or 28 21 And so that's gonna be that date. It's gonna go to chase again and know that we already have Chase set up as an other not a vendor, not a customer, but other. The person we took the loan out from the amount is going to be the same. 1359 same amount. And however, we're going to break that amount out between interest and principal a slightly different format. So once we have that break out, we can't just copy. The last check is the point. We have to go back to the amortization schedule because that breakout changes the interest now only being to 96 and, uh, cancel account interest, expense, interest expense tab on Lee being to 96 and the principal for the loan, then the difference. This should be to 96 the principal of the loan differences 1063 So note they're slightly different was 300 before, and it was 1059 Now we have the interest expense to 96 1063 We're gonna save and close this Note that when you look at the check, we already have those breakouts down here so we don't have to use this flick column, and you've got to remember that we're always on that were on the expenses, typically, unless we're dealing with inventory when we write a check. So we're gonna say save and close, and let's see if that did what we would expect it to. I'm going to say no to the advertisement to get checks, which is a nice thing to consider, but we're not gonna do that at this time. We're gonna go to the balance sheet and scrolling back up. We could see that cash is here for double quick on cash. We can see that cash has decreased by that same amount. Second payment, Same amount. Double clicking on it. There is our check closing this back out. Closing this back out. Profit loss scrolling down to the interest expense. There it is. We see that second check for slightly different amounts. There's our check for Close this out. Close this out back to the balance sheet. And we checked the loan balance. We say, Here's our long term note. Loan payable. Double clicking on that amounts. We see our check again. Decreasing that by a different amount. Double clicking. There it is. Closing back out. This is, of course, in accordance with the amortization table closing back out balance 69 89 17 8 If we go back over here, we can see that we're just made our second payment right there. Balance. 69 8 78 Again, if we wanted. If we were to show this to someone else, we would have to then adjust after each time because note that the amount that's do the principal portion dio within 12 months changes after each time period. So we'd have to say that the current portion is 123456789 10 11 12 out and break that portion out as current and the rest of this 69 8 78 as long term in order to to show that we have to make that a Justin entry at the end of the month. If we were Teoh, report these properly in terms of current liabilities versus long term liabilities. Also note you might be saying, Well, why aren't we adding this up? 123456789 10 11 12 And if we were to do that, it would remain constant, given the fact that we're paying the same amount each month each month. But the reason we don't do that is because this interest expense has not been encourage it . So as of this point in time, we have not yet incurred this interest expense because time hasn't passed. Just like if we were renting and off rented an office building, we're not going to charge the rent that we know we're gonna pay in the future. We don't over that rent yet because we haven't yet used the office building. So these payments include assumptions that we're gonna be using or borrowing the money. And we haven't so we can't recorded on the balance sheet As of this date, we can't. We can't include the interest portion that is on the balance sheet as of this date because we have not yet incurred the expense by time passing with which we are using the purchasing power of the money gonna pull this back out. So that's gonna be the interest calculations. We could set that up. Just note that if you're working with a c p a firm or bookkeeping firm and you're making payments and you're saying I don't know that immunization schedule and that maybe that's too complicated and I don't want to make an amortization schedule, Then you could get an agreement with your, uh, accounting for, especially if you have a lot of loans and you might come up to an agreement say, hey, you know what? I'm just gonna post the payments to these particular loans, and there you'll see him all there when you double click on the loans. You'll see all the payments that I've made to this loan and as of the and I'm gonna break out, each alone individually could be useful, helpful to, ah, process like this and tell your accounting firm that they need to make an adjustment. Or we would appreciate them to make an adjustment at the end of each month in accordance with the portion of this loan that needs to be reported as interest before the financial statements are used to make decisions on and the current and long term portion needs to be broken out. So that's another way a system could be set up Teoh to run this efficiently. Just just say, Hey, I'm doing the checks. I write the checks, I'm gonna write the checks to the loan and then I expect my, you know, accountant or Teoh bookkeeper monthly to go in there and make that adjusting entry on a periodic basis is 70. 8.10 Deposit Investment & Interest QuickBooks Pro 2018: hello. In this presentation, we will record a short term investments deposits in QuickBooks Pro 2018. In other words, we have an investment that has become due and therefore were transferring that out of the investment asset account and into the checking account. If you have been working along with us, we will be continuing along with the gets great guitars, if not to. That is OK, we will be recording this transaction trance, foreign and asset that have become do in terms of a short term investment from the assets to the checking account. We currently have the home Take home page open, which you can find at company and home page. If you have the backup file, you can restore that backup file to this point at the file and restore the backup file. It's good to have the same point in time. The backup fire will provide that, or, if you've been working through the problem, to be at a similar point in time so that we can start here and move forward. However, if you don't have access to that or if you're looking at a different file, that's okay. We can go through this set up and get the most out of this set up. Note that we do have the open windows not open over here. We're going to select open windows by selecting the view page, An open window list. Now we have the open window list on Lee being the homepage at this time. Our goal here, the objective is to convert a short term investment that has become do. And now we are receiving the deposit from that. So we're going to scroll over and take a look at where that short term investment is, and then record the expiration of that short term investment, decreasing the assets and putting it on the books in cash as the cash has been received for it in the checking account. To do that, we will take a look at the balance sheet. So we're gonna go to reports up top. We're gonna scroll down. We're gonna go do company and financial. They're going to scroll down to the balance sheet. We're gonna change the date range up top. So when we drill down on the data, it will have a range. So we're gonna customize and the date range is going to be a 101 to 1 we are working in in 2021 starting with January 1st 2021 to 12. 31 to 1. There's our date range. We're going to say OK, looking at our balance sheet, we see the short term investment right here at the 12,000. What we're going to say is that short term investment has become do and we've received that 12,000 plus interest of another 250 12,000 plus the 250 then is what we are going to need to record in terms of a bank deposit. And we're gonna have Teoh into our checking account, and we're gonna have to reduce this amount to zero. It haven't been expired at this point, and we're going to do something with the difference that will be interest revenue, some form of interest, income, interest, revenue. A couple of ways we could do this. We could go to the short term investment register and record that transaction there. We could go to the journal entries. We could record this as a journal entry by going to the company up top and make journal entry. If we were to do it that way, we were debit a checking account. We would for the amount that was deposited, 12,000 to 50. Credit the short term investment and then credit the 2 50 Teoh the interest revenue. However it might be the easiest thing to do would be to go into the check register and record this as a deposit directly into the check register and use the check registered to split those accounts and thereby not really needing to know debits and credits as we record this. So let's take a look at that option. We're gonna go to the banking drop down, We're going to the EU's register and we're gonna keep the check register as the register we will be using and say, OK, the date of this transaction is gonna be 0206 to 1. So to ah, February 6 2021 that the check is not going to be correct. We do not want to check their What we want is a deposit. I'm going to show that, but just type in D E p. Just to eliminate the check number. So when we write another check within this field, The correct check member will pop up and we don't have a check. Now, with this is just gonna be an implication that this is going to be a deposit enter directly into the check register. Next, we're going to say Chase is the investment that we had in That's gonna be our bank. We also have We're gonna say that this investment was with Chase, like a CD or short term investment. We're gonna say Tab tab and we want to make sure that we are in the deposit screen, not the check screen were increasing. This is the deposit side, not payment side. And we're gonna enter the 12 2 50 there and tab. Now we need an account. Now, we only have one account here again. We need to accounts In order to record this one, we need to record the decrease of the 12,000 investment originally, and we need to record the 2 50 of interest revenue. So in order to do that, we're gonna select the split item here that will give us our accounts. That we can select. One is going to be the short term investment that needs to go down to zero, but only for the 12,000. The difference, then meet needs to be going to some type of interest revenue. So we don't have interest income. It looks like from the accounts that were set up. Originally, when we set up these accounts through QuickBooks, QuickBooks generated this chart of accounts using the manufacture or not the manufacturer the merchandising set up. We could put it into uncanny arised, but it might be more specific for us to put it into an account called interest expense. So we're gonna say interest, interest revenue or interest income, I should say income. When a type in interest income, it's gonna be a new account. So when we select tab, it's going to say we don't have this set up tab. Interest income is not in the account list. We're gonna go ahead and set that up, then setting up the new account, and now it's gonna default to expense when we enter something into the check register, and that's not what we want. We want it to be income. So we're gonna say drop down and we're gonna look for income account, and we want an other current income to be more specific. It's not normal. Our normal income operations. We don't typically get most of our income from interest and therefore we're gonna put it into the other income selection. Everything else will remain the same, and we're gonna say save and close there we have the items. So the 12,000 to 50 that's gonna be the increased the checking account that to other accounts affected, decreasing the short term investment, decreasing the interest income. Let's go ahead and record that and then take a look at the impact on the financial statements going back over here to the balance sheet. We're gonna select the balance sheet and see if it does what we would think it to dio. We should have a increase in the checking account for the amount, So I'm gonna double click on the checking account, and we have an increase in the checking account. For it is, it's not quite at the bottom because we entered that last one a little bit out of order in the date range. So we have the 26 here. It's the 12,000 to 50 that we increased in the checking account If we double click on that , it goes to a deposit screen. Note that we entered it directly into the check register. But when QuickBooks looks at a deposit, this is the driving form, so it's going to go to the deposit screen there. We can close that out just to verify that it is the same transaction. We can look at the checking check register in the open windows items, and we can see that we do have that amount here as well. If we were to double click on this little D E P, we would get to that same driving form that deposit form. So there is that back to the balance sheet. So there's the balance sheet side. Let's take a look at the profit and loss side by going to reports up top drop down. We're gonna go to company and financial going to take a look at the profit and loss. Changing the date range to the dates we are working in 0101172 not 170101 21 January 1st 2021 to 12 31 21 December 31st 2021 looking for the other side of this transaction in terms of the interest. So we should have another income notice not in the income section, because it's gonna be other income. It's not part of our normal operations. In the point of that is to say, if we were to present this or read this, financial statements were saying This is the net income of our normal operations and or loss in this case, and this is the stuff that doesn't normally happen. We don't Typically, our business is not the business of investing. Our business is the business of buying and selling guitars. But we had this other income related to it. When we look at our normal operations, you want to take a look at this number when you wanna lick it all the normal operations, plus the other things that have happened that are outside the norm, then that's gonna include the interest income. If we double click on that, we see the interest income here. And if we double click on that, we of course see that to deposit slip once again closing this out, closing this out last piece of it. If we go back to the balance sheet, you would think would be on the balance sheet showing a zero for that investment account. However, it's not here. Why isn't it here? Because it is zero and therefore not showing on the balance sheet. If you want to take a look at it, make sure that that account was impact in that it is indeed zero. And it was affected by that journal entry. We can go to the lists and go to chart of accounts. And then if we go find that accounts gonna be an other current asset or some type of assets that we have the short term asset, other current type assets, it is at zero. If we double click on it, we'll see the check register. Here's the register and we see that 12,000 bringing it down. If we look at that deposit, double clicking on the deposit will then get back to that deposit sheet. So that's the That's the recording of investments that has become Do we've received the deposit often times we see this on our bank statement when we have this deposit, in this case for 12,000 to 50 and we then need to decide. Well, how are we going to record that? Because one of our investments then must have become do. And we're gonna have to record that increase in our checking account and the decrease in the investment account, as well as the related interest or type of of earnings that happen. Probably interest or dividends. 71. 8.15 Purchase Order New Item & Customer QuickBooks Pro 2018: Hello. In this presentation we will create a purchase order with a new item adding a new item, a new inventory item while creating the purchase order within QuickBooks Pro 2018. If you've been following along with us, we're gonna continue with you. Get great guitars. Problem If not and that is OK, we will be creating a purchase order. And as we create the purchase order, we will be adding a new item and a new customer in that process. If you have the backup up to this point, you can restore the backup file and re storm. Also, have the open windows open over here. So if you want to have the open windows, which I suggest having we go to view and open Windows list, we currently only have the home tab open in order to open the home dab, go to company and home tab. That's where we are currently located within this software. If you're working with us, it's important. Have the data up to date up to this point. But if not, you could still take a look at what is happening here in terms of purchasing a new purchase order in order to order new inventory, That inventory being new inventory. So what we're gonna do here, the scenario is, is we're gonna create a purchase order. Remember, What I purchase order is is a request that were basically sending Teoh, our vendor, the people that we purchase from in our case, we're purchasing guitars. And so we're requesting a guitar from our particular vendor. As we set up the purchase order, we're going to create a new vendor, and we're gonna create a new item for a new guitar that we are going to create. Remember that the purchase order is, ah bit different than most other items on the entire home page because the purchase order does not have an actual journal entry behind it. Meaning when we create the purchase order, no accounts are going up or down. We're not debited or credited anything or QuickBooks is not deputy or crediting anything. That's just a request. We haven't got the inventory and we have not paid for the inventory. In other words, it's different than when we have our personal purchases from something like Amazon, where we typically pay with a credit card or some other form of payment at the point of purchase, and then we received the inventory. If we're purchasing ah, lot from vendors, oftentimes the the purchase order then will not have the payment included and will not have the inventory, of course, received at the point of purchase. So it's a bit different there. And then once we receive the inventory, then will record the bill that has received. So at the point of the purchase order, just a request. No payment has happened. No transaction. Let's see the purchase order. We're gonna click on the purchase order and we're gonna have a new vendor. So if we select a drop down, we're saying, here's the vendors. We're going to select a new vendor. In essence, what happens? We had a customer come in and say, you know, I'd like this new guitar. It's gonna be a fender guitar. I don't see those in the store here. We're going to say that's okay. We can order from, uh, sender and order that guitar for you. So we're going to set up a purchase order for this new venture, So we're gonna type in Fender is the new vendor, and we're going to say tab. Now I'm gonna type it in there rather than selecting. Add new just typing in the new vendor. And then we're gonna select Tab, and it's going to say we don't have that vendor set up. Would you like to set them up? We're going to say yes. And we're gonna go with the quick ad instead of the set him up the full process so we can go through this problem a bit faster. So quick, ad Not including the address and all the other phone number and contact information. But being enough to create the purchase order. So we're gonna say, Quick ad, we're going to say drop ship. We're gonna keep that blank. We're going to say it's the template. That's what we want to their The date that we will then have will be the ninth. So I'm going to say I'm on the sixth right now of the current year. This is the year that we will be working this problem and I'm gonna just select the plus button to move it up to the nines. That's a little bit faster. If you get used to doing that, then we're going to go to the purchase order number. We got the vendor, and we've got our information. Now we're gonna have to put in the new purchase order information a new item. Remember that the item is the actual inventory item. If we select the items, we will not have the inventory. Adam here because it's gonna be knew it would be somewhere in the inventory parts list. So we're gonna create a new one, and it's gonna be called a Squire. We're going to abbreviate It s Q for the item name and we're going to select Tab and it's gonna ask us, Do we want to set that up? And of course, we're going to say yes, we dio. So we'll set up this new item. This is a piece of inventory that we're setting up. We have the drop down here, so we're gonna say it's going to be an inventory part that is correct. So the default is correct. We're gonna have the the item name here. This is gonna be the short name, so just are quick. Name the sq and we're gonna give it the subtitle Manufacturer part number. We don't have won the full description description, Squire it's gonna be the full description. Do that one more time. That's gonna be the full description tabbing through the rest here, it will populate over here automatically. That's what we want. Then we, of course, need the cost and the sales field. So we're going to say this is the cost of what we buy them for. 1 68 we're gonna tech tab down. We got the cost of goods sold. That's gonna be the income statement account that is affected when we sell this item and then the other side. Of course, the sales price. That's what we purchase them for work. I mean, that's what we tell them for That's gonna be to 44. We do have sales tax on this account, so we have to record the sales tax for this. The preferred vendor then is going to be ah, fender. So fender is gonna be our preferred vendor, and then we have the income tax account is gonna be merchandise ah, sales. So when we make the sale, it's going to increase merchandise sales by the 244 and that will increase sales by 2 44 increased the cost of goods sold expense by 1 68 The difference being the effect on net income. So that's gonna be that we're gonna say, OK, it's gonna ask if we want to add that to our list. We're gonna say yes. And so there it is. We have our new item description, Quantity. We're going to say that we're purchasing one of these and we purchased it for a specific customer. Not remember. You don't have to have a customer field here for buying in bulk. We may not have any customers. We might be buying it for the store. But we can have a customer if we're purchasing this purchase order for a particular customer. And then when we create the invoice at the point in time that we're completing the process delivering the guitar to the customer, we can pull this information from the purchase order automatically to the invoice, save us some time. With that process, we're going to say it's a new music stuff is going to be the name of the store that we will be setting up. Ah, and again, it's a new customer. So we're just gonna type that in its not gonna be in the drop down. And once we say tab, we're gonna set up this new customer. Now again, I'm gonna use the quick ad just so we can move forward with this. That's all we need for the purchase order. However, if it were a new customer, we would probably want the address and make sure that we have everything in our database program within QuickBooks. But we're gonna say quick, adhere in order. Teoh, just have enough information for the purchase order. Then I'm going to say save and new. We're gonna record this with a save and new, and we're gonna record one other purchase order. And that's just gonna be our normal store purchase order for the information for the for the stocking, the store for the guitars within the store. Meaning we're not gonna have a customer related to it. So for that, we're gonna purchase an EPA phone, and that's gonna be our vendor. We're gonna tab through this. We're gonna keep the date, keep the purchase order number vendor our information of the same. We're purchasing an e l p. So weaken, type that in and the, uh the amount shoot or the specific inventory item should populate as we time as it has. And that will be the description. We're gonna buy three of these at 400 and that's going to give us the 1200 note here. This is in contrast to what we have just done the vendor that we typically use our one of our normal vendors, the item already in place, giving us the description already in place. We're gonna buy three of them for the store as opposed to for a particular customer, and therefore not need Teoh record anything in the customer field. Then we have the total here. That's what we expect to pay. Remember that neither of these are actually being paid. Neither of these have actually been received. This is informational data within QuickBooks data not being present, not being recorded on the financial statements in terms of the balance sheet and the profit and loss. So we're gonna say save and close, and those will be our purchases for this time 72. 8.20 Receive Inventory with Bill QuickBooks Pro 2018: Hello. In this presentation, we will record that receipt of inventory with a bill within QuickBooks Pro 2018. If you've been following along, that's great. We will be continuing with get great guitars problem. If not, that's OK, too. We're gonna be receiving inventory with a bill choosing of this icon here, looking at what that will do, what will that record and then take a look at the financial statements and see how they our affected. If you have the backup file up to this point, you can restore that at the file tab and restore the backup. We will be working with new data here. So if you're working along with the problem, it's good to have the new data as as up to date as possible. If we're on the same page, then we'll be entering the data at the proper time and especially the purchase order that was entered last time. So if you're if you're following along with the data, you will need to have had the purchase order entered the last time. No, we also have the open windows open here, and of that is found at the view tab and open window. And of course, we have the company homepage found ATS company and Homepage. That being the only open window we have at this time working through the home page. Now what we're gonna do is create a receipt of inventory with the bill. So what has happened prior to this is that we have made a purchase order to the vendor. Now we're going to receive that in the mail. Note that this is a bit different than ordering something individually from something like Amazon in that when we make the order, we haven't made a payment and we haven't received an inventory, and we're not gonna make the payment. Unlike if we have, we're at Amazon, where we would probably make the payment at the point in time that we purchased the inventory here. We're just basically requesting inventory with the purchase order. Once it is shipped, it will be shipped. Then with the bill, which we will then input. And then that's what we'll do now. And then we'll make the payment on the bill that we have received. So we got the purchase order. We're gonna check that purchase order against what was actually received. Take a look at the bill. Then if everything looks like it's in order, we will pay the bill. So in order to enter this information, we're going to say receive inventory and we're going to say receive with a bill. Then we're gonna choose the vendor that we're receiving this from. And in this case, we're going to choose offender. Now, you could select the drop down and that'll have your vendors here if you start typing in the name were saying Fender is the vendor. There is the vendor fender, and we're gonna say Tab and the pop up should pop up if we're in the same data set. That saying you haven't purchase order for Fender? Would you like us to populate this bill? With that information from the purchase order, we're going to say yes. Then we need to select the purchase order that one being this 1003 Once we select OK, it should then populate the bill. So there we have this and eso we've got fender the bill, and we have the information down here being populated from the purchase order. Gonna go back up to the top and we're gonna tap through this information. So I'm gonna tab go to the date range. That's gonna be the 14th. So we're gonna add the 14. So I'm just going to use the plus button in order to increase the date day by day 9 10 11 12 13 and 14. Tab, we're not gonna include the reference number or any reference number. The amount should be pulled from the purchase order that 1 68 being pulled from the purchase order. We're going to keep the bill due date at Avid to 24. The terms We're gonna keep the terms and leave the terms, No memo. And then we have the information in terms of the item. Remember, this is an inventory item, and because we pulled it over directly from the purchase order, it moved to this items tab rather than being a bill that would be recorded on the expense tap notice. If we go to the expense taps such as this, nothing is in the expense tab. When we go back to the items toe, that's the inventory items to remember. The items mean basically, in essence, inventory items, expenses, typically or any other accounts that we will be creating the bill. Four. We then have the item number pulled from the purchase order. And the description. If we make this a little bit larger, we could see the description. Quantity is one cost is 1 68 the amount 1 60 out eight. And we purchased this for a particular customer, that being new music. And we're going to say that this is billable. And that means that once we create the invoice, then we can populate the invoice from the same information meeting. We ordered this guitar specifically with a purchase order to fender for this company. New music stuff. We have now received it with the bill, and now we're gonna probably invoice at a future time fairly soon. This customer at the point that we deliver the guitar to them and then we can link this together, populating that invoice with this same information. So we're going to say now the other thing we want to look at is the journal a tree that will be recorded from this transaction. Note. We are entering a bill here. Whenever we have a bill, that means that we're gonna have an increase in accounts payable. We're gonna Oh, fender. The amount of the bill. The other side of it was an item here meeting inventory item. So the inventory should go up by this amount as well. So we're gonna save in close, and we'll take a look at that before we do. However, we might want to take a quick look at the purchase order for a look at the purchase order. I want to go back to the purchase order for Fender now. It says received in full. So here's the purchase order that was generated that was connected. It has now been connected and helped us to populate the bill and way See that it has now been received. When we go back to the purchase order, closing this back up, we're gonna close this. We're gonna go to the reports. We're gonna go to reports and company and financial. Take a look at the balance sheet. I'm gonna change the date range. Gonna do that by the customized, But we can have a beginning and in so that when we drill down on the information, we will have a start and end that date being no. One. No 1 to 1 January 1st 2021 to 12. 31 to 1, and we're going to say Okay, there. Now what we have done is we entered the bill for inventory, so we should have inventory increasing. Here's the inventory assets account. If we double click on that item and scroll down, we're good. We see the new music stuff. So this looks like the one we double click on that. And there is our bill for new music stuff. Closing this back out, closing this back out. The other item that we have is a payable. We haven't yet paid for it. Here's the payable. We double click on the payable. There's the payable right there. Double clicking on that. There's our bill closing this back out, closing this back out. We also want to see that payable information by vendor so we could go also to reports we could go to vendors and payables. And in this case, we could have an AP aging. Let's look at the vendor balanced detail and that will give us some information by vendor. Here's the bill that we currently Oh, there, this is the open vendor. The open amount that we owe in terms of vendors in terms of accounts payable, double clicking. On that, There's the bill closing this back out notes that the total here 1 68 in terms of the vendor balance detail closing. That is the same, of course, as on the balance sheet going back to the home tab Over here. We are gonna enter a never to receive inventory for a prior purchase order. If we click the purchase order to see the purchase order first and go back, here's the other purchase order that we have not yet received the bill for. That's what we're gonna enter now saying that we received this EPA phone and these three EPA phones and the bills related to them. So we'll close that out and we're gonna go Teoh receive inventory, um, with the bill. And now the vendor is going to be up a phone and would choose that before I'm just gonna type it in there and it's gonna pick up a phone. We're going to say tab and okay, this, of course saying, Do you want to tie this to the purchase order? Of course we do. Tied to the purchase order. There's the purchase order. We're gonna click on that purchase order and say, OK, that's the one we want, and it will then populate for us. We're going to keep the date at the 2 14 21 referenced under number. We're not gonna have won the 1200 populated from the purchase order. That's what we want, Bill. Do we're gonna keep, as is terms keeping, as is items, remember is in the items tab. Not in the expenses. Tam. This item being pulled this information being pulled directly from the purchase order, we have the description. We have the quantity three this time. The cost 400 times. The three gives us the amount of the bill 1200. Note that there is no customer here. Meaning when we had the purchase order. We have not received a custom order for these. What we're doing is just populating our stock within our store. Then we have the number here. What's going on? What's this going to do to our financial statements? What's quickbooks going to do when we record this? We know that by the fact that it's a bill, it means that the accounts payable is gonna increase, we're gonna owe more money, accounts payable increases. The other side of it is, of course, the fact that we are receiving inventory and therefore the inventory will increase by this amount as well. Let's close this out and take a look at that save and close. We're gonna go to the balance sheet and scrolling back up. We're going to go Teoh the inventory item first. Here's inventory. Double clicking on inventory. We see this EPA phone double clicking on that information. We see our bill closing that back out. We see the other account here on the split column being accounts payable. That's the other accounts Effective. Let's go take a look at it. Closing this scrolling down to accounts payable. There it is. Double click on accounts payable. There's our 1200 double click on that. Here it is. Here note. We also want to see this closing this out, closing this out. We also want to see this in terms of who do we owe for that? We go back to reports we're going to go to the vendors, so we're going to go toe vendors and payables and we're looking for the vendor balance of detail. And now we can see that there's that 1200 ode to EPA phone. Here's the 1 68 02 fender total being that 3 1068 that then tying out to the balance sheets . If we go back to bounce sheet on the home on the open windows here, back to the balance sheet, we see that that will be the same amount for the accounts payable. 73. 8.25 Sales Receipt & Deposit QuickBooks Pro 2018: Lo. In this presentation, we will be recording a sales receipt and deposit from a new customer within QuickBooks Pro 2018. If you've been following along with us, we will be continuing with the get great guitars. If not, that's OK. We can follow along with the entering of the sales receipts and the deposit will be covering what the sales receipt is how to enter the sales receipt and what the journal entry will look like, as well as the recording of the deposit, how it relates to the sales receipt. What will happen to the financial statements when that is done? If you have the backup up until this point, then you can restore that. Go into the file and restore. We're gonna have the open windows open. So we're gonna go to view open windows here and then have the open windows open. I'm actually gonna close everything except for the home tab. So I'm gonna close everything up. We have the home tab on Lee open window. If you don't have the home tab open, it's in the customers or I'm sorry in the company and home tab. We're gonna be working here in the customer's section. What we have is the receipt of a sales of receipts, which means that a customer is in the shop or selling guitars. Purchased the guitar from the shop. We're gonna get paid at the point in time of the sale, as opposed to when we have an invoice in which we build the clients and we expect payment in the future. So an invoice and our case if we were to be selling guitars, may beam or, in the case of we shipped to the guitars that Qatar went out and we expect to receive payment in the mail as opposed Teoh. If we're having a create sales receipt, we can imagine someone in the shop purchasing the guitar, and therefore we're gonna create the sales receipt. At that point, the journal entry, recorded when we have their create invoice or the accounts affected, would be that the receivable would go up. People would OS money, the revenue would go up. We would record the sale. We would also have it were selling stuff as we are here selling merchandise, another half to that one being the inventory going down for what we sold in this case guitar or guitar equipment. And then we're gonna have the cost cost of goods sold on the income statement when we have these sales receipt Onley difference, then, is, of course, that we're gonna be receiving payment in some form at that point and therefore not increasing the receivable, the amount people always but some form of payment typically cash. So let's see what that looks like. We're gonna create the sales receipt, and then we're gonna record the deposit related to that sales receipt and any other deposits that we have at that point. Looks like there's two of them, so we're gonna create sales receipt, and we're gonna have a new customer. So if we select the drop down, we got Garcia guitar, and it's not here at this point. So we're gonna have to add that fastest way to add the customer would be just a type in customer name. And then we're going to select a tab, and it's gonna ask us to add the customer wants Look, Tab and it's going to say, Do you want to add the customer? We don't have the customer in our list. We're going to say yes, we're gonna add it with the quick add feature rather than the set up. Meaning we're not gonna put the address in the phone number of the contact information, which we would probably want to do if it was a customer that we wanted to get repeat business from. But for purposes of the sales receipt, we just need the name here. And that's what we're gonna be working with at this time. We're gonna keep the template we are using. We're going to say that it was a check that we received. That's the form of payment. The day the dates gonna be 02 12 to 1. We will be working this problem within the future. So we're going to say February 12th 2021 the sales number will populate on its own. Sold to Garcia guitar. We don't have an address because we didn't populate the address within the customer field. So we're gonna keep that, as is the check number. We're going to write 8541 now that's not to the check number for a check that we are writing. That's the check number of the check that we are receiving, and it's good to have the reference there is not required, but it's good to have. Then we're gonna say the item that we sold the guitar that we sold was an E L P. If we select the drop down, we see it's gonna be this item there. If we type it in E LP, it should pull up. So there it is. And if we say tab, the description will appear Tax quantity, we're gonna have one of those. The rates is gonna be 500. Therefore, the amount 500 we do have sales tax that at 5% and that 5% is unexamined number is gonna change from state to state. It's gonna be an item that we have to set up to calculate the sales tax and make sure that that's set up within the preferences to calculate the sales tax if needed. And that will be our total amount. What will this do when we record it? We see the 500 will increase the amount that we received in this case that check a check that has not yet been deposited. Therefore, increasing UN deposited funds rather than the checking account and the credit of that 500 is going to go to sales. There is gonna be a second half of that. However, because we are selling inventory that's gonna be cost of goods sold and the related account decrease in inventory. Note. Do that. The UN deposited fund is gonna be for 5 25 The sales amount will be for 500 of the difference of 25 is what's going to be recorded in what is due in terms of a liability to the state for sales tax. Let's take a look at the cost. Where can we find that just to know where that could be found? Note that it's not on the sales receipt because we don't want to show it to the customers in order to see it. We can go to the lists up top and go to item lists. And if we find this item this e LP right there, we then open that up. I'm gonna go to items at the bottom and we're going Teoh edit item, and that will give us what the cost was. So it cost it's 400. That 400 not on the sales receipts on Lee, the sales price of 500 is. But we know that this computer will record that for us. After we recorded, we can take a look and see what happened and see what happened in terms of the cost of goods sold and the decrease in inventory related to that 400 amount. Closing this back out, closing this back out, we're back to our sales receipt. We're gonna say save and close, and then we'll go and see what happens in terms of our financial statements, save and close. And it's going to say you have change the transaction. I'm going to say yes, we want to record that and we're gonna go to our balance sheet first. So it's go to the reports up top, scrolling down to company and financial and then scrolling down to the balance sheet standard. We're gonna change the date range Top left customized the reports, and it's gonna be from 0101212 12 31 to 1. So january 1st, 2021 to December 31st 2000 to 21. Okay, there is our items. We know that we received the check, but it didn't go into the checking account, yet it went into UN deposited funds. So we're gonna double click on UN deposited funds and take a look at that. Here it is there. There's the 5 25 If we double click on that, there is the sales receipt that we have just generated. So that's for the full 5 25 including the sales tax. That's what we got the check. Four. If we close that out, clothes that out, let's go to the income statement side and see what the sales receipt with for what they revenue was for. If we go to the reports, company and financial profit and loss and then change the dates from 010117 to 12 31 to one , I should say not 17 to 1. So january 1st 2021 to 12 31 2021. That being the year that we're working this problem in in the merchandise sales, we should have an increased their from this transaction from this sales receipt, double clicking or zooming in on that, we see the 500 there for the Garcia guitars, so it's only the 500. If we double click on that, we're only taking the 500 not the added 25. Although we received 5 25 that difference of 25 is going to be what is owed to the state. So we're gonna close this back out and we close this back out. Take a look at that. That's gonna be on the balance sheet side going to the balance sheet, and then we're gonna go to liabilities where we have the sales tax payable, double clicking on sales tax payable. We see that 25 that we owe double clicking on that 25. We see the amount that are same sales receipt and that 25 the sales tax calculated on that sales receipt. More than gonna close this back out, close this back out. Now, let's take a look at the inventory item. So if we scroll back up to the top, we have the other current assets. We have the inventory item. If we double click on the inventory, we see the Garcia guitar. Here. There's the 400. If we double click on that, we see the sales receipts and we don't see the 400 here. Why? Because that's going to be part of the cost that we're not gonna put here. But it is recorded by QuickBooks on a perpetual inventory basis. Closing this back out. Now, note that we do have some other items here that were entered in a date after this. So our dates are varied a bit. We're going a little bit back and forth, and this problem is going to be an example problem. So we'll have to deal with that a little bit. We're gonna close this back out, and then we'll go to the profit and loss and look at the other side of that piece, the inventory decreasing and the cost of goods sold, then the cost of the goods that we are selling the expense related to the revenue that we are earning. Double clicking on that. We see Garcia guitars here. There's that 400 again, there's the other side of that. So this simple sales receipt actually has a lot going on. If you can understand what's going on with the sales receipt in terms of the financial statements, it's worth going back and forth and making sure you understand those relationships gonna close this back out. Close this back out. We're gonna go back to the home, and now we're gonna make the deposit. Now we have three deposits that we need to make. Remember that when we recorded the create sales receipt, it put the amount of the checks in UN deposited funds. Now we want a group, those all into the same deposit that we will be making after the bank and deposit them at the same time. That's what we'll do now we're gonna say click the deposit. Now, since we have three deposits that we need to deposit, this window will pop up. If we had no deposits that were that were in UN deposited funds that we need to deposit, then this window would not pop up and we would only see the window behind. So in this case, we wanted deposit these three checks, so I'm gonna check all three of them out. And when we make the deposit, we're gonna group them all together and deposit them into the bank at the same time. That then will group on the bank statement at an amount of 8 25 will be the same grouping. We will see on our books. Therefore, making it easier for us to reconcile the bank account at the end of the month. So we're gonna say Okay, there it is. There's the 8 25 were in the checking account. That's the only checking account we have. If you have multiple checking accounts you want, make sure you're in the correct one. We are going to make the deposit abs of 0 to 12. 21 and the deposits gonna be the deposit that will be it. Once we record this, it's gonna increase the checking account with a debit or increase the checking account. And it's going to decrease the UN deposited funds down to zero. So let's record that and check it out and see if that's what actually happens. So we're gonna say saving close, and then we're gonna go back to the balance sheet and see what is going on with of the balance sheet. We know that the checking account here been should be going up double clicking on the checking accounts, scrolling to the bottom. We see this deposit here. There's the 8 25 their double clicking on that we see the deposit of 8 25 There's that amount. We're gonna close this back out then and close this back out. We don't to see note the UN deposited funds. It went away. Why? Because it went down to zero. That's what we wanted toe happen. But if we want to verify and look at the activity in the under positive funds, one way to do that would be to go to lists at the time, go to the chart of accounts and then look for that UN deposited funds and we'll look at the activity within it. So it's recorded as an other current assets. Who should be at the top? We just double click on that line item within the lists. We'll see the activity. There it is. There's the deposit. There's the decrease in the and there's the deposit, which decreased. The UN deposited funds to zero, and if we double quick on that, we should then see the sales receipt for clothes that back out that deposits actually right above it. Here's the deposit. There's the deposit, so they're both on the same date, and it looks like a deposit was put above the sales receipt but they're both there, the both on the same date. The sales receipt is an increase to the UN deposit funds, and then the deposit is decreasing it back to zero. The way it was input here we were at zero than the deposit that record first, making it go negative in terms of the UN deposited register. And then we had the sales receipt, bringing it back to zero. 74. 8.30 Advanced Payment From Customer QuickBooks Pro 2018: Hello. In its presentation, we will record an advanced payment from customer within QuickBooks Pro 2018. We will continue working with the get great guitars problem. If you've been working along with us and you have the backup, you can restore that backup by going to file and restore. If not, that's okay. We will be recording an advanced payment. Meaning we're going to receive payment from a customer for work, or is goods that have not yet been delivered Could be thought of as a deposit. We're getting the money before the work has been done. In this case, the work being the delivery of ah guitar. If you have the home page open, that's what we're gonna be starting out with. If not, we go. The company and the home page also gonna have the open windows open. We can get there by going to the view tab and open window list. We currently only have the home page open. The scenario here is gonna be that we sell guitars and we are going to receive an advanced payment from a customer. We can think of it as a deposit. So if we had the order the guitar custom for a customer. We may require an advance payments on it, and therefore we're gonna actually get the payment. Received the payment here before we create the invoice. And what are we going to do when that happens? Clearly, we're gonna We're gonna debit some kind of cash count in this case, un deposited funds. But we can't credit revenue. In this case, we haven't yet sold the guitar. We want to connect these two things, but normally we can see the process going from create invoice to receiving payment. And in this case, we're gonna receive the payment, get the deposit before we create the invoice. So once we create the invoice, then after the point that we receive payment will be able to tie those credit amounts out. We'll also take a look at what happens in terms of the financial statements which accounts will be affected and what's gonna happen to the aging encounter? How is that receivable or going to be put in place in terms of a negative receivable in this case or something that we typically Oh, in terms of a liability when we record this in terms of normal accounting Jilly accounting principles, we would say debits the orc increase the deposit, that cash and then we would credit, not revenue, but un deposited funds. We're actually gonna work it a little bit differently because of the format of QuickBooks and because it helps us with some of the reports and we'll talk a bit about that. So we're gonna say receive payments and we're gonna have our guitar. Our customer is going to be Anderson, so we could select the drop down. Or we could just type in Anderson and start to type in that. And we're going to say the payment is going to be for 250. That we are receiving the date is gonna be, 0 to 16 to one. We are working in the future. We will keep it as a check. We're going to save the check number on optional field that we're getting a check from the customer. This is not a check that we are writing 5 to 43 and that's gonna be it for the customer payment. Note that when we record this, we're gonna have the 250 but it's not gonna be deposited into our checking account, it's going to go into the UN deposited funds. Normally, the credit would be decreasing the accounts receivable for on invoice that we have outstanding here. Now, we're still gonna be dealing with accounts receivable because that's basically what the customer payment function does. But since we don't have anything to apply it to, because we have not yet created the invoice because we have not yet delivered the guitar, what's gonna happen is it's gonna create a negative receivable. So when we go in and take a look at the receivable for this customer, Anderson will actually have a negative receivable. That's not exactly proper in terms of accrual accounting, because we should have a liability, not a negative asset, not a negative receivable. However, it does work well for us to connect this deposit, this pre payment to the future thing that's gonna happen when we actually make the invoice at the point in time that we deliver the goods in this case, the guitar. So we're gonna say save and close and see what that looks like. It says a credit for the overpayment will remain with the customer. We're gonna say OK, and we're gonna apply that credit to the customer when we create the envoys. So then we're gonna go to the reports and see what happened. We're gonna go to company and financial scrolling down to the balance sheet. We're gonna change the date range so that we can see the drill down on the date range and we're going to say it's a one. A 1 to 1 to 12. 31 to 1. There's the date range. Okay, so we have the date range there. Now we know the received payment did not go into the checking account. It went into the UN deposited funds. So if we double click on the UN deposited funds and scroll down, we see that we have the Anderson guitars, the 250. If we double click on that, there is our customer payment. If we close that back out, closing this back out, the other side of it is going to be in receivable. Even though nothing was due at the time. If we double click on the receivable and we scroll down, we see the 250. Now that looks normal. Until we see the fact that there's no related invoice to this payment, as they're typically would be. For example, we see this for 30 and then this 4 30 going out and we see the 3 99 and I don't see the 3 99 going out. We see the 5 25 and we see the 5 25 That's gonna be the normal process for the receivable. In this case, we've got something a payment but no invoice, which typically would be input before the payment. So let's take a look at what that looks like on the accounts receivable. Detail and note here, however, that this amount should then be reported as a liability, which will make more sense when we look at the detail. So we're gonna go to the reports, we're going to scroll down to customer receivables, and we want to go to the customer balance detail. And if we look at Anderson, we see that we have this 250 again. It's a negative number, and that means it's a negative receivable that shouldn't be because of receivable means people owe us money and negative receivable from this customer means we owe them money, which means that it's a liability, not asset. So this is not something that would be under general accepted accounting principles, meaning If we look at our total balance sheet number, which added up Teoh 9 65 it should be higher by 250 we should have a liability of 250. However, this system works really well for us to be able Teoh track everything by customer and then apply the invoice out to this amount in the future as we will dio. So, in essence, we're going to do this in practice so that we can make that connection so we can have software of QuickBooks. Make that connection. However, when we do the adjusting entries at the end of the day when we're trying to make our financial statements in accordance with Gap, then for for financial reporting, then we're basically gonna do in adjusting interest to take these negative amounts out and create a liability for them. 75. 8.35 Apply Credit to Invoice QuickBooks Pro 2018: hello. In this presentation, we will apply a credit to an invoice using QuickBooks Pro 2018. If you've been working along with us, that's great. We will continue with the get great guitars problem. If not, that's OK. We will be creating an invoice and applying a credit to it for a payment that has been received in the past. If you have a backup file for this point in time, you can go to the file and open or restore. That will bring us to the same point so we can work through the same point forward. If not, you can look at the prior presentations and see the data and work to this point. We also have the open windows open and order to get that you want to go to the View tab and open Windows list we currently have. The homepage are only open window in order to open the home page. If it's not open as of now, you want to go to a company and home page. The scenario here is that we're gonna create an invoice for deposit that had been received in advance, meaning we sell guitars. We have a particular customer that wanted us to reserve a guitar, and therefore they paid us a deposit in advance. So rather than going through the normal flow that we see here within the homepage meaning make an invoice and then receive payments, we have this particular customer give us a payment, and now we're creating the invoice. That, of course, happened because we got the payment before we we deliver the guitar as a form of deposit for us toe hold the guitar. That's gonna be common in certain types of industries. Now that we are at the point that we want to deliver the could guitar male, the guitar and bill the client with that with an invoice, we need to a be able to apply that credit here in order to to see what is happening. We can go to the reports up top, and we're gonna go to the customer and receivables and scroll down to the customer balanced detail so we could see this particular customer see where this credit is and then apply it to the invoice. So we're gonna say customer balance detail. We're gonna be working with Anderson guitars. This is the deposit we see this payment here. It's a negative receivable, the way it has been entered within QuickBooks in a prior presentation, and that is so that we can apply it out. So this isn't exactly proper. It should be a liability. But it does help us to see what is happening within the same set of customer lists. Whereas if we put it into the liability, we have a problem tying it out here. So this works really well within QuickBooks. It does require an adjusting entry if we have some of these outstanding deposits. So we're gonna go back to the home tab, and we're gonna apply this out. So we're gonna do this by selecting create invoice. This customer's name was Anderson, so we could select the drop down. Or we could just start typing in name Anderson and tabbing through this, we're gonna keep the template as it the date we're going to say is 10 18 to 1. We will be working in the future. As always, the invoice number will populate automatically. We're gonna keep the rest of the information the same here. The terms net 30. We're gonna keep that. As is the item that's gonna be purchased is the e l P. And that's the EPA phone. Les Paul. Once we type that in, it will populate. We're gonna have one of those Tab tam we're gonna have the 500 is the rate, and the 500 is the amount we see that we have. The sales tax is being applied at the 25 bringing the total up to 5 25 Now, what we want to do is have the payments be applied here. That's what we're looking for. That payment that we just saw we want to have applied out here. In order to do that, we want to go to the main in terms of the tabs, and we want to scroll all the way over here to apply credits. So we're looking to apply credits selecting that says the changes in this transaction must be recorded before continuing. We're gonna say OK, and then here's the credit that we want to apply. So we're applying this credit The 252. This and voice looks good. Therefore, we're gonna scroll down and and of course, we have the check mark. But to apply that out and we're gonna go down and say Done. And there we have it. So now we have this 250 applied out. So the total invoice $500. 25 sales tax brings us to 5 25 within. Have a credit that we had received in advance from the customer of 250 bringing the balance due to 275. That is still owed on this. If we were to think about this journal entry and we'll go take a look at it, we know that the invoice were created. Men voice. So we're gonna have an accounts receivable. Accounts receivable is gonna go up by the 2 75 total because we're applying out the 2 50 that's already in accounts receivable under this particular client. So it's gonna be to 75. Is the net increase that we're gonna increase the receivable by four, particularly Anderson. The credit is going to go Teoh the sales. The sales was made for $500 so that should increase by the $500. We then have a A payable in terms of the sales tax which is going to increase by $25. And then, of course, we've got the cost of goods sold side of this, which we cannot see here. If you want to know what that is, we've got to go Teoh the list. Or one way we can do this is go to the lists and then go to chart of accounts. And we're looking for this inventory item, not chart of accounts. Let me do that one more time lists and item lists and we're looking for this particular item and it's an, um yeop So there it is, and it's if we double click on it, it's the 400 the 500. So we're selling it for 500. It costs us 400. That's gonna be recorded when we record the invoice. Meaning we're going to decrease the inventory by 400. We're gonna increase the cost of goods sold by 400 Xing out of this, we're gonna x back out of this and close this out. We are back to the invoice. So let's record this and see if it does what we would expect it to do. So we're gonna save and record and then go to our reports So we're gonna go to the balance sheet first, we're gonna go to reports company and financial scrolling down to the balance sheet standard. I'm gonna change the date range up top and the customized reports. We're gonna have the range so that when we drill down on it will be able to see the detail of 0101212 12 31 to 1. Then we're going to say OK, and take a look at what is involved within this transaction. One, we've got the Receivable. So that receivable is here. If we double click on the receivable, we're gonna scroll down and we see that 5 25 So that 5 25 is there and it's netting out this item right above it. The 250 remember that 250 was the payment from Andersen received in advance. If we double click on the 5 25 we see the invoice and the receivables for the full amount being the 500 plus 2 25 And then it's been decreased from the advance payment that we had received in advance. Gonna close this back out notes that this 250 was there before we recorded the this invoice that's 250 was there prior. Now we're recording the 5 25 The net of the two, then, is what is still owed by Anderson. If we close this out, we go to the profit and loss aside. We're gonna go to reports up Tom company and financial scrolling to the profit and loss of standard. And we're gonna change the date range from 01 Do that one more time. 01 a 1 to 1 to 12. 31 to 1. There's a range, and we're going to say that the sales went up, double clicking on these sales. We see there's the 500 now. No, it's only 500 not the 5 25 If we double click on that. That's because this is the sales price, not including the taxes. So let's see that taxes that Let's see where that 25 is going. If we close this back out, we go back to the balance sheet. We can then look at the taxes. It's gonna be a liability. Liability accounts down here. We're looking for the sales tax payable, and there's the 1 73 70 37 Double clicking on that. We see that 25 here. That's the sales tax. And that's the sales tax that has been applied there. Now we need to look at the inventory side. The cost of goods sold side. So we're closing this out, closing this back out If we look at the inventory, Um, that went down. We sold a piece of inventory. Here is the inventory assets. We double click on that. We're going to see that we have that 400 going down. If we double click on the 400 here's our invoice. We don't see the 400 on it, because when we deliver the invoice, the 400 will not be there. But QuickBooks is reporting this on a perpetual system, recording the invoice to our system as we generate the driving document. Thean voice recording the sale at that point in time and the related cost of goods sold. So we're gonna close this back out, close this back out, one other location to to see where these are in the main financial statements to bounce sheet in the income statement or profit and loss going back to the profit and loss scrolling down. We see the cost of goods sold. Here is the cost of goods sold double clicking on that item we see the 400 again. There's the 400. The other side of that. Now one of the report we want to look at I'm gonna close this back out. Close this back out. Is that customer balanced detail again? So if we scroll back to that customer bounty tilt in the open items if you closed it, it's in the reports. It's in the customers and receivables. And then we were looking for the customer balanced detail. If we scroll down through this, then we can see that this nets out here. So here's the 250. There's the 5 25 Everything else has has been closed out. So there's the 5000. There's the $5000 of 4 30 50 There's 24 30 50. Then we have this deposit that was received in advance now being applied to this invoice, meaning we have a remaining balance. The difference for that last guitar, that last invoice that with purchased for 275 76. 8.40 Record Sale on Account QuickBooks Pro 2018: Hello. In its presentation, we will record sale on account within QuickBooks Pro 2018. If you've been working along with us, that's great. We will be continuing with the get great guitars problem. If not, that's OK. We're going to be creating invoices for the month Invoices from customers for guitars purchased within this month. Merchandising inventory. Um, we currently have open windows open in order to open open windows. We want to go to the view tab and have the open windows list that's gonna give you this open item, the only open item at this time being the home tab if you want to, or the home screen. If you want to open the home screen, which we recommend doing at this point, go to the company and home page. If you have the backup file up to this point, you can restore it by going to the file and open to restore. It would be useful to be at the same point in time as we enter this data, so we have the same customers, same data. However, if we don't have access to that or you don't want every haven't going through the prior examples. That's okay. We can see what would what we're gonna do in terms of the creation of an invoice. So we're gonna do the normal creation of an invoice here. We're gonna create an invoice, and that will go through the normal process of receiving a payment on that invoice and then recording a deposit story than being that we have someone that's ordering a guitar from us . We're gonna create the envoys. We're gonna build the customer at that time, she about the guitar, expect to receive a payment in the future, at which point we will record the receive payment and then make the deposit. So we're gonna go to create invoice First envoys we're gonna create is for music music store stuff. So we're going to select the drop down. That's our customer. And we see it here. But I want gonna like to type it in first and see that it populates for us. We're gonna type in music store stuff when we select tab. It will then populate the information having through to the date. That day. It's gonna be 02 18 21 so that we will be working with in the future, it's gonna be the invoice at number eight. Let's go back to the dates are the day it's gonna be one day up. So we're going to say it's the 19. So I selected the up era one time 02 1921. Invoice is the eighth. We have the rest of the interment information. We will remain the same. We're gonna go down to the item. We could select the item, drop down this being the inventory item and we could see all all of our items in this drop down in our inventory items we would be selling. We're gonna type in the E in L, which is the EPA phone standard Pro. We're gonna sell one of those tab tab. It's gonna be for the $600 this information being generated from the item list from the inventory list. And we have the sales tax of the $30 on that. Therefore, the amount due to us as we ship this out is the 630. If we think about what's gonna happen when we record this transaction, it's gonna increase the accounts receivable. That's what an invoice does. It means accounts receivable will be increased for music store stuff. It means that we're going to credit the other side. Now. The increase is going to be for the 630. We're gonna increase also the revenue. Not for 6 30 But for the 600 that difference of 30 is going to increase the accounts that accounts payable. But the sales tax payable what is owed for the sales tax we are collecting from the customer that will then need to be paid out. And then there's another side to this, that being the inventory must be going down in a perpetual inventory system and the related cost of get sold, which we don't see the number four on the invoice. If we know if we want to know that number, we need to go to the list. Or one way we could do this is Goto lists in item list, and we can look for that PLP inventory item E N l p. And it's gonna be this item here. It was the 600 sales price. We double click on that. It will give us the cost 480. That's gonna be the other side It's not on the invoice river meant, remember, But we do want to recognize that it is there so that when we record this when we think about our sales, what's the effect on net income? We can make that calculation closing this back out, closing this back out, we're back to our invoice. We're going to save and close this and then take a look at it and then record one other invoice doing the same process. So we're saving close. It's always useful. Any time you're reported anything to, then go to the reports and see if we understand what Quickbooks is doing. If we can understand what QuickBooks is reporting, that gives us an understanding of what is going on and that that really helps Thio Thio go through the process of the bookkeeping. So we're gonna go to the reports up top. We're gonna go to company and financial, and first look at the balance sheet standard. We're gonna change the dates. We're gonna go to the data range so that when we drill down on the dates, it will then be changed. It's gonna be 0101 to 1. We are working in the future to 12. 31 to 1, and we're going to select. Okay, so there is our items. We're gonna go to the receivable so they're receivable is going to increase double clicking on the receivable. We see that we have that 630 for music store stuff. Double clicking on that item. We see the invoice. So we're gonna close that back out. Note that that item is for the receivable of the full amount, including the sales tax of 630. Closing this back out. Closing this back out were then going to the other side of this, which will be on the profit and loss by going to the hometown company and financial profit and loss changing the date range from 0101212 12 31 to 1. There's gonna be our item. We have merchandise sales, double clicking on merchandise sales. We have our 600. If we double click on the 600 we see that invoice once again for the 600 amount, not including the added 34. The sales tax. Where's that add? 30 gonna go. That's what we will look at this time. So if it closed this back out and close this back out, we're gonna go back to the balance sheet. And we're looking for that other 30 that's going to be down in a payable. It's what we owe for sales tax payable. Teoh State. If we double click on that or any local whatever this whoever was the collection of the sales tax, we owe it to some government entity and it's gonna be the $30. We're gonna double click on that 30 and there's the sales tax. Now, remember, the sales tax will differ from state to state place to place. But if there is a sales tax, we're gonna record it, and we will then need to record it as a payable universally and then pay it to whoever is regulating the sales tax. Then we're gonna go ahead and close that. Then we have the other side of this happening that's going to be the cost of goods sold and the inventory going down. So if we scroll back up, we're going to say, Here is the inventory asset. Double clicking on that we scroll down there is the 480 if we double click on the 4 80 again, it's not seen here. We don't see it anywhere on this particular invoice, but we saw it on the list of item list that that's the 4 80 the cost that is being recorded as this generated as this invoice is recorded even though it cannot yet be seen. So we're gonna go ahead and close that out. One other item closing this out is going to be on the profit and loss or the income statement that being the cost of goods sold, here's the cost of goods sold double clicking. On that we scroll to the end. There's the 480 in double clicking on that, there's our invoice once again. So if we close this back out, we're gonna do this one more time and we'll see this process one more time Back to the home tab. We're gonna create a another invoice. So it's gonna be creating another invoice customer will be Smith guitars. If we select the drop down weaken, select the customer in that format or weaken, start typing in and that will populate and select Tab Tab. This is gonna be on the 20th. So we're gonna just going to select any plus era one time to move up to the 20th. The invoice should populate automatically. We're gonna keep the rest of the information and then we're going to say that it's going to be are wild DK 80. So if I select the drop down, we could see the information here to look for it. But if we know the information, we could start typing it in, and there it is. So we're gonna say tab and that happens to be an EPA phone. Semi hotly Hollywood. Very nice sounding. Guitars were gonna say, That's gonna be one of those and it's gonna be for 400. And then, of course, we have the sales tax again at 25% of that 400 meaning we've got the 420. If we think about the transaction, once we record this receivables gonna increase by the 420 the sales is going to increase only by the 400. The difference of 20 will increase what we owe then, Teoh whoever collecting the sales tax, it's gonna be a payable a liability. Then we're also gonna have inventory decreased by an amount that's not on here and the related cost of goods sold increased by the amount not on here and therefore the 400 minus that cost of goods sold will be the net effect on net income. If we want to know what that amount is, we got to go toe lists we've got to go to or there's one way we can do it. Item lists and we're looking for that Wild here. That's the 400 that we're selling it for. If we double click on him, then we could see the cost is 320. That's the cost of goods sold. We should see once we record this closing this back out, closing this back out, we see the invoice. We're gonna say save and clothes and then go to our reports, starting with balance sheet on the balance sheet. We see the accounts receivable. Accounts receivable should be going up by the this invoice. If we double click on it, there's the 4 20 double clicking on that that we see the invoice. There's the full for 20 the full amount that's being increased, including the sales tax. We're gonna close this back out. Look at the other side on the profit and loss that being the revenue sign, profit and loss merchandise sales. There it is double clicking on that. We see the 400 double clicking on that. There's are same invoice the 400 not including the sales tax. Let's see where that sales taxes at closing this back out going Teoh the balance sheet once again looking for the liability section, looking for the sales tax payable. We see the three of to 23. 37. Double clicking on that. There's the 20. Double clicking on that. There's the invoice. Once again, the 20 go into the sales tax, closing this back out. We're gonna close this back out. Then we're gonna look for the other side. So we're gonna scroll at back up to assets. Were looking for the inventory asset, double clicking on the inventory assets. We see the item 3 20 If we double click on it, we see our same invoice, but not the 3 20 that 3 20 Not being here, although it does being generated by this invoice. So remember, we are seeing that perpetual inventory system being recorded. Although the 3 20 is not being on this invoice, it is recorded through the recording of this invoice driven by the item. When we set up the item closing that back out one more side of his closing this back out back on the profit and loss, we're gonna go back to the cost of goods sold, double click on that item. There's the 3 20 again, double clicking on that. There's our invoice closing this back out, closing this back out note, too, that if we want to see the customers that owe us this money and track by a customer, we can go to reports customers and receivables and scroll down to the customer balanced detail. And we know that we had the let's see music store stuff, Otis Money. I believe that was Thesixties 130 the one we just created was for Smith guitars for the 420 . So if we look at that 420 double clicking on that, we see that same invoice what it's owed to us, including the sales tax in the receivable under the Receivable by customer, in essence, customer balanced detail. And of course, that is what is owed to us by Smith at this time 77. 8.45 Advance Customer Payment QuickBooks Pro 2018: Hello. In its presentation, we will record an advance customer payment within QuickBooks Pro 2018. If you've been working along with us, we will be continuing with the get great guitars problem. If you have the backup, you could restore that backup at this point with a file and restore the backup. If not, that is OK. We will be recording an advanced payment, a payment that has been received before the invoice or the goods have been shipped, that being a guitar in this case in orderto work this problem. We currently have a home page open to open the home page, go to company and home page. We also have the open items list open that's under view and open window list. Onley Window Open is the home page at this time. Our scenario is here that we have a customer that would like a particular guitar. They've requested to hold that guitar for them. In order to do that, we have requested a deposit on that guitar. So we're gonna hold on to the peach piece of merchandise and therefore give the peaches Merson and give that piece of merchandise in the future. So we're not going to create an invoice because we now have not yet sold it. But we have received money, so we have to record the fact that we have received money. So this is a circumstance in which it's a little bit backwards when we look at our flow chart. Meaning typically, we have an invoice, and then we collect the money, we get the check in the mail. In this case, we got the money before we create the invoice. So what we're gonna do is we're gonna create that invoice, and I'm we're gonna create the receipt payments, depositing or recording the fact that we have that 300 in this case, we're getting $300 for the guitar that we will sell in the future. Then once we sell the guitar, we're gonna create the invoice, and we have to be able to apply that credit to what has been sold at that point in time. So this is to record a deposit from a customer before the work has been done. In accordance to the revenue recognition principle, we can't credit, we can't record the revenue. Therefore, we cannot create the invoice yet because we have not yet earned the deposit we are receiving. Instead, we're gonna record this, receive deposit or receive payments, and we'll see what the transaction is. And look at the financial statements and what's being recorded and how we would then deal with that in the future. So we're gonna go to receive payments. We have received a payment for a customer in order to hold on to a particular guitar. That customer is if we select the drop down, we could find the customer. It's gonna be a string music, very bottom. I'm gonna start typing it in, and that will give us the items were going to say, Tab, we're gonna receive 300 that day. It's gonna be the 21st. So I'm just gonna hit the up arrow or the up plus button to get to the 21st. It's gonna be cash. We're gonna say cash here and then we're not gonna have a reference number, and that will be it. So once we have this customer payment, we're gonna record this note that it's not being applied to any particular invoice. If there were an invoice that string guitar had out in place, we would have to make sure that we do not apply to that invoice if it's a deposit on another, uh, guitar, an advanced payment that we have. The fact that it's not being recorded to another invoice means that when we create an invoice for this customer, it will then be available to apply that credit this pre payment to the invoice that it's created, what's gonna be the transaction when we record this? The fact that it's a customer payment means that it's going to be increasing the payments. You would think cash, but typically QuickBooks is gonna put it into that UN deposited funds accounts until we put it into the bank until we go to the bank and and record the deposit side so it will be increasing UN deposited funds. The other side of that, you would think, would be decreasing a particular persons receivable, typically when we have a customer payment. But we don't have any invoice here. What it's gonna create, then is a negative, a negative receivable for string music that is odd. That's not normal accrual accounting, but it works well within QuickBooks, meaning normal crew accounting would say we would need a liability. We would need to credit the liability and say that we owe something in the future that something in this case being the delivery of the guitar. If we don't, if we don't give that, we should be given the 300 back. So we owe something in the future. In this case, we're gonna have a negative asset. Why? Because that makes it easy for us to track the asset in accordance to the customer and when we then create the invoice to tie those things out. So let's take a look at what that will look like. We're going to say save and close, and it's going to say we're gonna create a credit. Were going to say that is what we want. Okay? And look at the reports that we have. We're going to save reports. Drop down. We're gonna go to company and financial. Let's go down to the balance sheet and see what we have in the balance sheet. Were to change the dates. So we're gonna go to customize reports, and the dates will be from 0101 to 1. We will be working in the future to 12. 31 to 1 we are working at in the future by changing the date ranges here. Although there's only one date here. Once we drill down on the data, we won't have to change the data when we look at basically the General Ledger or the transaction reports. So we're gonna go to the accounts receivable first. Here is the receivable. If we double click on that amount, we see that 300 here the split, the other accounts going to UN deposited. Here's the 300 in the receivable Decrease in the Receivable. It's in the receivable, although it's not being applied to any particular invoice. As typically, the payments will be, as we can see with some of the payments up top where we have the 5 25 here. The payments being related to this invoice the 430 here being related to this for 30 50. Here here, we've got the 300 payment not related to any 300 invoice, but decrease in the receivable. If we close this back out and we then go to the UN deposited funds, that's gonna be the cash out on deposited funds. Double clicking on that that should be the other side of the transaction scrolling down. We see that 300 there double clicking on that. We see our customer payment closing this back out, closing this back out. We'll take a look at one more place where this will be the customer report, the report's by customer going to reports up top, going to customer and receivables scrolling, scrolling down Teoh customer balanced detail and going all the way to the bottom. Where we have these string music, we see this 300 it's a it's a negative receivable again. That shouldn't be the case. We shouldn't have a negative receivable. However, The negative receivable helps us when we tie out the invoice to the particular customer so we don't have to be jumping from the liability accounts to the receivable account will keep it on the receivable accounts then QuickBooks has a nice, easy way to tie out the deposit to the later in voice that we will then create. If, however, we were reporting this in terms of financial statements, we would need to take this adverse evil meaning increase the receivable by that 300 record a liability for the fact that we have this pre payment and therefore oh, something in the future, So be it. Be aware of that when you go through this process is process works really good within QuickBooks to tie everything together. But it's not exactly Jill accepted accounting principles. If we were to report under generally accepted accounting principles under normal accrual accounting, we would have Teoh increase the receivable by this, not have a negative receivable, increase it by 300 and record the related liability for something that we owe in the future . 78. 8.50 Bills Track & Pay QuickBooks Pro 2018: Hello. In its presentation, we will track and a bills within QuickBooks Pro 2018. If you've been working along with us, we will be continuing with the get great guitars Example. If not, that is okay. We're gonna be processing and paying bills within this process, selecting those bills that will be paid and looking at what will happen and what the process is from the entrance to the pain of bills. We currently have the open windows open in order to open the open windows go to view open windows. We also have the home tab open, which you confined at company and home page. That being the only thing we have open at this time, If you have access to the backup file, you can restore that by going to file and open restore company, that taking us all to the same place at the same point. If you don't have access to that or if you have been working through the problem, that's okay. We can get the idea of the pain bill item within this presentation. So when we look at the inter bills and paying bills clearly the idea from the flow chart will be that we're gonna inter bills. We're gonna have bills that will be entered, typically through the Inter Bills window here. Then later, of course, paying those bills. We may also have received bills from the receive inventory with a bill item here it closed that back out the drop down here, receive inventory with a bill, so that will be the normal flow. The advantage of recording it in this way meaning recording the bill before just writing the check rather than just writing the check when we have the bills, are that we can then enter the bill at the point in time that we receive them recording the bill on an accrual basis, even though we are not paying them. And then we can pick and choose which of those bills we want to record. So when we record the bill, what that does is going to record an accounts payable, meaning we owe money. It's gonna track it by vendor for us, and it will record the related either expense or assets that we have purchased with that bill that is generated. That means that we have that information ready for us. It's part of our financials that's been recorded and hopefully the proper time at the point in time that we enter the bill, even though we have not yet paid for it. If we wait, on the other hand, until we are going Teoh pay that that bill then QuickBooks doesn't isn't able to really track that information for us, and we're not easily able to find out which bills we want to pay and track which bills we want to pay. And once we put it into the system, we're really only tracking it at the point in time that the check goes in when we really should be tracking it at the point in time that we received the bill, which would be closer to an accrual basis, meaning if we have a bill today for something that happened last month and we want to put that building now that recording the expense at the time it was incurred even though it has not yet been paid, also allowing us to track who we owe within the same system rather than just having a pile of bills that we're going to try to track, we can have them all laid out within QuickBooks. Once we enter all the bills, then we can pay the bills. Now when we pay the bills, it's helpful because when we select his pay bills option, it will generate paychecks. If we generate those paychecks within QuickBooks, or we can write the checks by hand and just used the Inter Bill and pay Bills icon in order to track the payment of the bills as well, it's helpful when we print these things out to have all the bills paid at one time. If we are writing checks within QuickBooks weaken, take all those checks, put them into the printer. At the point in time that we pay the bills and print them all at one time, that is a useful future. If we select the pay bills here, we're gonna go through the bills. We only have the two of them. If we go through the process, we're going to say we're not gonna filter. If we wanted to filter. If we wanted Teoh Filter. If we had a lot of bills here, we can filter through this and use different filter options in order to choose the ones we want. Sorts by due dates another sorting option, which could be useful in order for us to track which ones we want. Teoh, Uh, pay first. Then we have the do on or before another option that can help us to limit the amount of bills that are in there and try to figure out which ones we want to pay first. In this case, we're gonna pay this item first. So we will choose Fender here. That's the only bill we're gonna pay. We're gonna keep this outstanding. It will be their next time. Once we go through this again, if we go through the rest of this item, we're going to go through these arms. We're gonna keep these acts as is. We have the payment date, which is gonna be to 21. That's gonna be the date of the Czech. Obviously, if it was real life, we would be issuing the check. That would be the current to date. If we were entering this data just to process it and writing the check outside, then we wanted the date of the check, and then we're gonna say it's going to be a check. Now if we're going to print the checks then we would go to this item. We would printed the checks. Then we would have to put the checks into our printer. If we're printing multiple checks, would print multiple checks at that point in time, which can save a lot of time. If we're printing a lot of checks, we want to make sure that we have checks in there properly and meaning that they're facing the right way and what not given the dimensions of the printer and the what we need to do for a particular printer in order to then print them, Altin, we could print them all out at one time. The reason we have to not just print them on a piece of paper is that we want to have those external check numbers there. That's one gonna be one big verification. One big check internal control for the cash. We here are not going to be printing them. We're gonna assign the check number just recording the check numbers as though we were going toe print the checks or write the checks outside of the system and then record that data into the system. So we're gonna pay selected bills. Well, then, need to assign the check number. Someone say 10. 15. That's gonna be the next check. What we do. If we don't know that, we're gonna take a look at our check register and see what the next check is in sequence. And if we pick the first check, that's the next check within. See quits in this case, 10. 15 and we were to print of multiple checks. Then QuickBooks would've signed the next check for the following amount. 10 15 10 16 and so on. If we let QuickBooks assigned the checks, it should pick the next check that is due within the sequence and then assign them as appropriate in order in that format. So we're gonna go ahead and say, Ah, okay. And we're gonna record those checks. I'm gonna close this item out, and then if we go to the reports and see what is going on, we can go to reports weaken, Go to company and financial, and we're looking for the balance sheet balance sheet. I'm gonna change the date ranges in the customized reports so that when we drill down, we could see through the transaction detail. We're gonna go from 0101212 12 31 to 1 and say, OK, then, if we look at our checking account, we're going to select the balance within the checking account. Scrolling to the bottom. We see the check written here that, in this case, the 168 was the check that we just wrote to 168 and his check number 10 15. So it's actually a data before that check that was written prior to this in our problem, we're gonna double click on that and it generates a check. Now note. It's it's generating a check. And we have not yet seen this with this isn't the same screen we saw. We just checked off that we wanted to pay that item. But QuickBooks, of course, will drive that with the check the forms of what drives the QuickBooks operations. And when we pay the bills, we pay them with with a check, whether we actually make a check and print the check or not. So when we go back into it, we'll see the same activity within the check went defender and we got the amount, and then we've got the date and the vendor down here, and, ah, the amount once again. So I'm gonna close this back out. Gonna close this back out. The other side of that typically will be an accounts payable us paying off what was due to Fender, our vendor in this case. So if we double click on the account stable, we're going to scroll back down. Here's that amount again. Was the check is the other side of it double clicking on that? We see that same check here. If we close this out, we may want to check that also in one other report. And that's gonna be the accounts payable at least one other report. So we're going to the reports. We're gonna go to the payable or the vendor reports, and we're gonna scroll down to the vendor balance of detail within the vendor balanced detail. We see that under fender are render we have 1 68 paid in relation to the bill that was owed . We should see that being matched out and be able to track that as we pay our bills. When we process the bill through the accounts payable. So if we double click on that. We see that bill once again. One other case where we might want to know where that bill is. And check to that has been processed is within the register. That could be a useful way to look at it. Ah, familiar way looking very similar to a register we may be using with our checkbook or have used or be used to using with a checkbook. So for that, we're gonna go to banking use register. We're gonna choose our checking account and say OK, and we should see that same item here. So here's the fender. Here's the amount, the accounts, cables, the other account that was affected. It was a bill payment. If we double click on that item, we'll then see that check again. So you got a double click right on the bill payment in order to get here. And that's one of the way that could be useful. In order to see this information is off often useful for me to go back to this check register because this is a nice, familiar way to look at the data and a quick time frame the other way, of course, the nice way to look at is on the balance sheet and go to double clicking the checking account. But some people aren't as familiar with this type of layout as we, maybe with a check register layout, same information and, for the most part, But sometimes it's nice to see within the register format right here and so you can take a look at it within the register format and see that the check number has been processed and everything looks as it should in this in this item. 79. 8.55 Customer Payment on Account & Deposit QuickBooks Pro 2018: hello. In its presentation, we will record the receipt of customer payments on account and the deposit of that customer payment. If you've been working along with it, we will be continuing with the get great guitars problem. If not, that is OK. We will be recording the receipt of payment from an invoice prior received and then recording those deposits will actually have a few different receipts of payments that we will have and show how to deposit those in a group and discuss what the pros and cons of this system is. If you have the backup file, you can restore that by going to the file tab and restoring the backup file. That should take you to this point in time. So we're all on the same page and we can see the same invoices. If you don't have that, you can work through the problem. If you don't have that and just want to look at the receive payments, that is okay as well. We currently have the whole home tab open, which you can find at the company and then home time. We also want the open lists open Windows open, which is at the view and open window list and therefore we can see, and then we can see the open windows on the side Here. Note that I have a few open windows I do not want open at this time. I'm gonna close the checking account, going to close the transaction reports and gonna close the balance sheet. That's the benefit of having the open windows. We can actually see what types of windows are open. We are going to be working with the receive pot deposit. So what we are doing is we're selling guitars here and we can imagine the system of we have an order for a guitar. We ship the guitar and therefore we earn the guitar or that revenue when we did so and we create the invoice at that time, and now we're going to receive a payment from a customer. We're imagining that payment to be in the mail perhaps, and we're going to record the receipt of payment and then the deposits of that receipt. Remember that this middle icon here is a bit unusual in that when we you when we learn normal financial accounting, we don't typically have this middle journal entry we just have an invoice. Meaning we made a sale on account. We increased the amount people go to us in accounts receivable and we increase the sales as well as dealing with the cost of goods sold in the inventory going down. But we're focusing on the accounts receivable here, and then we get payment at some point and typically in terms of normal journal entries, we often just put that right into the checking account. We say cash went up debit, that checking account and credit revenue or credits the receivable representing the fact that the customer no longer owes us money. But here we have this middle step, and that's gonna be the received payment. What that will dio is put the check or the cash or whatever type of payment we have received not into the checking account, but into an account called UN Deposited Fund. It's a form of cash account, but it's an UN deposit fund account. They put in other current assets, but it's pretty much a cash account. And then we're gonna take that money and put it in the under positive funds until we make the deposit. And when we make the deposit then the goal is for us to make the deposits daily, hopefully as an internal control and to deposit them in such a way that they will be grouped together so that it will be easiest for us when we make the bank reconciliation. Because the bank reconciliation, what will be on our books in terms of the amount of deposits will tie out to what is on the big statement in terms of the amount of deposit. And that'll make the bank reconciliation of very crucial internal control much easier to dio. So let's do this. We're gonna say receive payments. First payment is gonna be received from music store stuff. So we're gonna go into music store stuff. We could select the drop down or just type in music store stuff and tap through the items here. We have to Invoice is currently out. Now we're going to say that we receive payment on Lee on one of this invoice number four and the payment was for $816.27. Therefore, if we just check off that one, we're gonna apply it out to that one is telling us that we will be putting this dollar amount in the payment amount and that is what we want. So we're gonna say, OK, we're gonna say it is a check. The date that we have received, we will be working in the future and 0 to 26 to one is the date that we will be using check number is going to be 4562 That's gonna be the check number from the check that we have received, not our check numbers. So it's an informational form does not need to be refilled out in order to process the customer payment. But more information is useful, so we will put that information there and then we see that we have the original. We've got the amount of do and the payment. Therefore, there's no more amount due on this particular invoice. We have received the full payment. However, we have not received payment on this amount here. When we record this, then the customer payment form will be. It means that we're gonna increase UN deposited funds unless we change the settings in order to deposit directly into some other account, like the checking account. But unless that is the case that default will be and we will keep the default that it will be increasing the UN deposited funds, other side going to the accounts receivable, reducing the amount owed to us in this case by music store stuff. So we're gonna record this and then take a look at that, using the forms and see what is happening here. So we will save and close. Then we're going to go to the reports up top. We look at our most common most familiar reports that being first, the balance sheet changing the balance sheet that dates, we're gonna go up top to customize reports. And we want to have the dates to be in the future of 0101212 12 31 to 1. Looking at the year that we will be working in and then say OK, and there is our report, UN deposited funds. It didn't go into the checking account. It went into un deposited funds. That's down here. That's the new account. That's the confusing account. That's the account that often people have problems with. And we check on that. If we double click on that, we scroll down. We see that we do have the music store stuff that 816. 27 right there. If we double click on that, we see that we have our customer payments. And that is the data that we have. Just input. We're gonna close this back. We're gonna close this back out other side of this. What happened? Well, people do not always that money anymore, particularly music store stuff. Doesn't know is that money that particular customer and that is the receivable account. Then must be going down if we double click on that. Zooming in on that scrolling down to the payment from music store stuff other side in the split section in the split column going to UN deposited funds. We see that same 816. 27. Double clicking on that. We see the customer payment once again. If we close this out, close this out. One other area we might want to note where this is happening would be up to reports scrolling down to customers and receivables. And we want to look at the customer balanced detail. If we look at the customer balance detail for music store stuff. We see that invoice for 816 27. We see that payment for 816 27. We see the payment for our the invoice for 630 no payment for the invoice 630 therefore that still remaining, as do from music store stuff notes that the total of this adds up to this report. This customer balanced detail adds up to 1400 to 42. That then should be the same amount on the balance sheet. If it's not, you probably have a date thing going out. It's probably that the two reports are run as of different dates. For some reason, let's go back over and do this one more time and see this process once again with another customer. We're gonna go to the open tabs If you don't have the open tabs open, you go to the view at top and open windows. We're going to scroll to the home tab and then we're gonna receive another payments. Been a good day for us at the get great guitars. We've got two payments here in the mail, so that is good the next one was from Anderson. So if we select the drop down, there's our customer list. We're gonna type it in there. Anderson guitars tabbing through this. Ah, we see that we have one in village invoice from Anderson. That's the one we got. That's the check. Amount was four or 525. So we're gonna go ahead and check that off. We're gonna say that's okay. That's the one we want. And in in this case, are the check was not for her 525. The check was for 275. The amount due and this one was the item in which we had a ah deposit in advance. So we received a deposit in advance of creating the invoice. Then we created the invoice, tying it to the deposit. And now we're collecting in the mail. The final portion of the payment after delivery of the guitar of the 2 75 still do. So here's the original invoice amount amount to do. This is the amount that we received in the mail in with a check for the final completion of this guitar payment, and that will bring the balance down to zero. We're gonna have the same date here. Check Number is gonna be five. What happened there? Check number is going to be 5321 And once again, that's not our check number. That's the check number on the check we are receiving from the customer. Informational information not required, but useful. Once we record this, then we will once again see that the customer payments will increase. Not cash, but the UN deposited fund, not the checking account, but that un deposited fund accounts. And the other side will then be going to accounts receivable, reducing the amount of counts receivable due to the fact that we received payment and therefore we don't are people don't know us as much money. In particular, Anderson does not always as much money, if any money. I believe Anderson will. It was no money after this day, man. So we're gonna say save and close course. We're gonna remedy that shortly by selling Anderson more guitars, Uh, soon or more guitar parts, possibly guitar services. Then we're gonna go back to the balance sheet up top and see if that is what happens. We're going to scroll down to first undiplomatic Did funds and double click on the end deposited funds scrolling down. We see that 275 Double clicking Zooming in on the 275 We see the customer payment once again the input form closing this back out. Closing this back out Scrolling up to the receivable. Here is the receivable account double clicking on the receivable. Other side We see that payment here the other side in the split on deposited funds reducing the receivable Double clicking on that We once again see the customer payment amount closing this back out, closing this back out looking at the one other report that being the customer balanced detail for Anderson guitars which should be at the top in alphabetical order in this case and we see that the 2 75 has indeed been paid there. So if we look at the pattern here we got the 5000 was invoice. So that was our beginning, balance and invoiced before we started the company and then we got payment for that. Then we had the 430 invoice. Here's the invoice over here. And then here's the payment. Here's where it says it's a payment. And then we had this kind of funny thing where we got paid before the invoice. That invoice being 5 25 And then we matched the invoice to the deposit we got before the payment. And then we got the rest of it here on that zeroed it back out now, resulting in Anderson. Um, not only in any more money and ah, time for us to go see if Anderson needs anything new. The Anderson looks like a good customer for us. So we're gonna go back to the home tab over here, and then we're gonna record the deposit. So we've got some couple checks in the mail. We're going to run the bank with those. Deposit them at the end of the day, as is a good internal control, as we do so, we will group those deposits together, and they will be recorded in our system as well as on the bank statement. Once we receive the bank statements at the end of the month in the same format in a group format. So if we select the record deposits we see we have four deposits currently open. If we had no deposits open. This little window not would not show up. We would just have this deposit window. These four checks basically mean that these air all in UN deposited funds and we need to take them out of on deposited funds and deposit them into the bank. So we're gonna check all of them off. We got all these were going to say we got a really, really got to go to the bag and deposit this stuff here. So we're gonna say check them all off. Okay, there they are. Total deposit 6 1041 27 is what we have in UN deposited funds. At this time, the dates gonna be to 26. And once we record this, the fact that it is a deposit into the checking account will increase the checking account balance by that 6 1041 27 decrease the UN deposited funds by the 1000 fix 6 41 And let's record that and see that that is the case. Hopefully, it will be saved and close. We're gonna go back to the balance sheet here. That's not the balance sheet. We're gonna go back to the balance sheet in the open windows. And if we select the checking account, then looking at the checking account, double clicking on the checking account, scrolling down, we see that we have a deposit here of the 164127 If we zoom in on that, we then see our deposit. And that has been recorded as we believe that it would be closing this back out. Closing that back out. Scrolling down to the other side of this transaction would be the UN deposited funds. But it's not there. It's not there anymore. What happened to the end? Deposited Funds account. It's now zero and therefore no longer on the balance sheet, so we could check it. If you want to go back and check it, I want to see the detail. I'd like to go the in deposit funds he has been recorded, their double click on it and see that it's going to that same deposit. We could do that in one format by going to lists up top chart of accounts, and the UN deposited funds isn't other current assets, so it's gonna be up nor near the top. Looks like it's right thereon deposited. It's got zero in it. We can see here, but if we want a double click on it, it will give us a register similar to a check register type format. And we'll see that if we scroll down. We are at zero down here in terms of the total balance in the UN deposited funds. It's breaking out those deposits, however, in different amounts here. So it didn't give us the one lump sum. We're not seeing the one lump transaction. We're seeing the four checks that were deposited. If we If we look at those in terms of this check, for example, this is an increase or ah deposit. This is a decrease. So let's look at this last 1 to 75. There's our our deposit here. So here's the to 75 being one of the components of that total of 6 1041 So if we close that out, that's one way we can go in and verify. This information is there so we can close this back out notes if we go back to the balance sheet that when we recorded this, both when we recorded that receipt of payment. Let's go back to the home tab both when we record the receipt of payment and the deposit. Neither of these effect net income. Although we got cash, although we got checks. And although we deposited those checks, we had not increased revenue or net income, nothing on the income statement or the profit and loss statement because we already had done so when we recorded the invoice. When we recorded the invoice, we increased, or QuickBooks increased as we, you know, made that form increased revenue by the amount of revenue generated and increased the other side accounts receivable. All we're doing over here then is not really doing the work of delivering the guitar and earning the revenue, but just receiving payment of what has been due to us for the revenue that had been earned in the past. 80. 8.60 Pay Sales Tax QuickBooks Pro 2018: Hello. In this presentation, we will record the payment of sales tax within QuickBooks Pro 2000 and 18. If you've been working along with us, we will be continuing with the get great guitars problem. If not, that is OK. We will be recording the sales tax that we have been collecting throughout the time when we have been selling inventory to the state using the manage sales tax icon here. If you have the back up to this point, you can file and restore that backup, taking us to the current point in time so that we're paying hopefully the same amount of sales tax and we can follow along with that we currently have the open windows open in order to have open windows open, you go to the view tab and open window list, and that will give you the open window list in which we only have the home tab open in order to open the home tab. If the home tab is not currently open company and home tab. So in this presentation, we're gonna take a look at managing the sales tax in essence, pain, the sales tax. So let's quick discussion what has sales tax. How are we getting sales tax? Where's in governed from and how do we pay it? Remember that sales tax is a bit of a tricky I item in that it will differ from state to state and place to place country to country. And it has generated could be a value added tax. But it's basically going to be the tax on sales. So when we create in essence, a invoice or create a sales receipt depended on the location within the states, it would be depending on which state we're in. As Teoh, the stables tax will have different sales tax amounts that will be recorded and then need to be paid to the state or local governments. Whoever is collecting those sales tax. In order to set that up, we set the sales tax properties up within the set up process, and you can go to the edit and Preferences to set that up and go Teoh, then the lists. And if we go to chart of so I temple list the item lists, then we could see that our sales tax items will be here. Our sales tax items being this 5% within this item than if we edit this item. We will. We will have the information regarding the sales tax, the sales tax gonna be the 5% and the description and then who were paying it to. In this case, we're just saying New York state sales tax. This is not, ah, an actual problem. This is just gonna be an example of where the sales tax is going to do not take this as, ah, actual rate. It's just a example rate of a nice, easy 5% that we will then pay to some states organization and note that that will change depending on where I'm gonna close that out, obviously. And that will change depending on where you are at. So you have to know where your sales tax, what it will be and then set it up. Whatever that is in terms of the sales tax that will be drawn out and the rate and then just the vendor, all that really is is the vendor who were gonna pay it, too. Once that is set up, QuickBooks really does a lot of it for you then. So if we close this back out when we create an invoice if we just take a look at one of these invoices that have been created and scroll back to an invoice that has been created. We have an invoice here, and we have an item we sold, which is a guitar. It was, Ah, $400 guitar, and we took 5% of that. The sales tax rates to get $20. That $20 then, is what we are collecting on top of the 400 then collecting 420 20 of it. However, not ours. 20 of it's something that we owe in the future 20 of it, then being recorded as a liability rather than part of the revenue accounts. So if we close this back out, that's where the sales tax is being generated. And we see that also, if we could go to the create sales receipt, this would just be similar to an invoice. Except we received payment at that point in time and same item where we have the item being purchased. A guitar in this case cost 500 25% flat sales tax rate, and that brings it up to 5 25 So that's where it's being collected in terms of the money being collected were getting the revenue plus the sales tax when it's recorded. Note that if we look at the financials and go to reports, go to company and financial scroll down to the balance sheet. And if we change the date range and a customized report to No one, No. 1 to 1 12 31 to 1. And OK, we see this information here, and we scroll down to the sales tax payable. We have the sales tax amount there. If we double click on that, we see the amounts that are being generated 2019 20 around the same cause. We're selling guitars. If we click on any of these noticed there, either invoices in terms of the item or sales receipts. If we click on either of those who were going to get that related invoice or sales receipts closing that out, note that most of time the VAT sales tax is going to be on physical goods. So if we have services, we may not have to have sales tax depend on the location on services. It's usually a tangible goods like inventory free close this out. Now, of course, we need to pay that now. The payment depends state to state as well. It might be that you pay it every month. It might get me that you paid every quarter. You have to basically set that process up in terms of whatever the regulations, our, our But where you're gonna collect it throughout the time period, whether it be a month or 1/4 or even a year, and then you're gonna pay it when we pay it. Obviously, what the journal entry will be is that we're going to write a check, and we're going to decrease cash. And we are going to decrease the payable here instead of just writing a check. However, we can use QuickBooks. Nice little feature up here. It's in the home tab. We're in the home tab and we're in the vendor section and we will be managing the sales tax . So that is what we will use in order to pay the sales tax. Do at this time. If we look at the sales tax screen that we then see, we could see that run some reports that might make it useful for us to see this information . One is the sales tax liability. If we select that, we might be just paying the sales tax for 0101 to 1 the first month. 01 31 21 And just be paying the sales tax related Teoh that first month here. And it will generate the total sales, the non taxable sales and then the tax rate and give us the tax collected just in this case in January, often times of pain on a monthly basis. So we're so in February we would pay off January and and so on. So if we close that out looking at the remaining items, we could take a look at the view sales tax items. If we select that, we're gonna get a quick view of just the items. Meaning Same thing is if we went the lists and we went to the item lists and we're looking for just that sales tax item, however, we only have the one do the one state. If we were in multiple states, we would have multiple sales tax items, possibly and next item. It says open sales tax code lists. If we take a look at that. We've got the sales taxable sales nontaxable. What that is is when we look at the invoice, we can either choose that'll be taxable over nontaxable, and that will apply the sales tax or not. If we then go to the adjust sales tax. Do. If for whatever reason, the sales tax that we have is not correct. We need to make the adjustment. We can increase or decrease by that amount here, thereby making that check for the correct amount that we need to make the check for. At that point, the sales tax preferences item here is a quick shortcut. Rather than go into the edit and preferences, we can just go straight to the sales tax preferences and that will go to that preferences item under the sales tax tab, and we can adjust the preferences here as needed. So we've got to Do you charge sales tax? Yes, so that's where we have to turn on the sales tax. If you don't have that on, then you would go to edit and preferences, and you could find this tab and turn it on. If you can't get to this point in time and then ad sales tax item. That's gonna be our sales tax. Taxable items tax or non taxable. None identified taxable items with a T as invoices are. Do when do you oh, sale tax win? There do. And then when do you pay sales tax? We're gonna do it monthly rather than quarterly or annually. Typically many places. If you have the more sales tax, you have that the short of the time period. So if you don't make a lot of sales, possibly you'd have it quarterly. If you make a lot of sales, you're probably gonna pay it monthly if you don't make. I'm really a lot of sales, and you could probably do it possibly annually. So it depends from ST ST and location, location. And if we go to the my preference is nothing on the my Preferences tab. So we're going to say okay in terms of four of the sales preferences, Finally, we will select pay sales tax, so we're gonna pay the sales tax that we're gonna have the check date is gonna be 0 to 28 21 It's not gonna be the current date. Of course, we are working a problem in the future. So it says show tail sales tax do through 9 31 7 Now, of course, that's not the date we are working. I'm gonna put that Teoh 01 31 to 1. So the January the first month we were working and we're gonna pay it at the end of February, then we're gonna go ahead and select that. So we're selecting that item to be paid, and we're gonna keep everything else the same. We're not gonna clear selections were not gonna adjust it. And the Indian Bank balance is given here as well. Check numbers should be correct. So we're gonna say, OK, note that we also were not going to print the check. We're just gonna have to check number. If you were to print the check, then we would have to have the check that we were then put into the printer in the format and it within print check for us. So we're gonna say OK, and there is that item. If we close this out and take a look at the forms, let's see what is going on. We're gonna close this out. We're gonna go back to our balance sheet and we're going to scroll down. Sales tax is here. If we double click on the sales tax, we then see that we have this payment of 1 23 37 Double clicking on that 1 23 37 We see our check being generated from that process. If we close this back out and close this back out, the other side of it is of course, in the checking accounts up top in the asset section, there's the checking account. Double clicking on the checking accounts, scrolling to the bottom. We see that same item, the 1 23 37 double clicking there. There is our check. Once again, if we close this back out, close this back out. One other place, It's nice to check this death is when we're dealing with stuff with dealing with the bank account is the check register? Often people like the check registers comforting to see a check registers familiar to say that Jack register. So if I go the use check register, we're checking accounts and we're gonna say OK, and there is our check register where we wrote this check right there. If we double click on it. It gives us another little little tag here. Tax payment? Because we use that special sales tax rather than just writing a normal check where we just have that we had a special check tax payment item, and if we double click right on that, then we will see that check. And it has been pulled up when we did that process and process through that. So that will be the sales tax going back to the hometown. Remember, what we're doing here is paying that sales tax based on the sales that we have generated I made from the invoices generated and the sales receipts generated, and QuickBooks then tracking the amount that is do for us, compiling it and given us a nice little option to pay it at one time. Once that is set up, not then, this process is pretty pretty easy to run through. Studying it up does take a little time. You got to make sure you have the preference on the set it up. You got to make sure you have the right item in their the right state requirements in terms of the amount of sales tax and the right item listed as to whether sales taxes do or not in accordance with the item that you're selling, typically inventory items being the ones that are subject to sales tax. Clearly, if you have multiple states and that multiple countries, then the sales tax becomes more complicated, and you got to make sure those items air set up correctly. Once set up, however, then QuickBooks really drives the process in terms of tracking what is owed and what can be paid and when it should be paid. 81. 8.65 Pay Payroll Taxes QuickBooks Pro 2018: Hello. In this presentation, we will pay payroll taxes, including F I T. Federal Income Tax and Fike A Social Security and Medicare within QuickBooks Pro 2018. If you have been working along with us, we will be continuing with the get great guitars problem. If not, that is OK. We will be paying the payroll taxes and you can go through the process of that pain payroll taxes process with the pay the liabilities function within QuickBooks at this time. If you have the back of file and would like to restore to this point in time, you can go to the file tab, restore QuickBooks, and that will take you to this data set so that we have the same information. Hopefully the same amount of payroll liabilities to be pain as we work through the example . If not, they would just look at this for an example of that. We currently have the open Windows open years. So in order to have that open, if you do not at this time, you want to go to view and open Windows list. We also have the only open window that's the home tab. And so we're gonna go to and make sure you have that open. Why go into company and home? Tam. That's where we are. We will be, of course, down here in the employees section, working with the payroll. Our goal now not to process the payroll but to pay the payroll taxes in order to do this will give a quick recap of what we have so far in terms of what is payroll? How does it process water, payroll taxes? How are we going to pay them? Who are they going to be paid? Teoh. So within payroll, there's a lot of options within payroll. QuickBooks itself has at least three tiers of payroll options and has another option, which is basically the free manual version of payroll option. Those three tiers typically will differ in terms of the types of reports and the number of processing in terms of forms that will be processed, including the state forms and the federal forms. At the year end and quarter, how much they will be populated from the state forms often being the more difficult forms because they're going to differ from state to state for talking US federal forms, usually pretty easier if they're still not the easiest thing process. But they're easier than some other forms because, of course, they will be standardised throughout the entire area so you can build big Standardized. The state forms typically could cost more. If you use the manual process, then you'll have to actually calculate the with holdings as you enter the payroll within the payroll processing system here. So that's gonna be the concept. The other option, of course we have is Teoh. Use 1/3 party, such as like ADP or paychecks, to process the payroll for us outside of the QuickBooks system. And then we have to link that into the QuickBooks system in some way with a journal entry of some kind so that we were recording the proper expenses related to payroll in our system . No matter what tier of the payroll system we have set up your employees system within the home tab should look something like this will have an inter time. We'll have a pay employees, and we will have the pay liabilities. The pay employees is what we've looked at in a prior time period. That's what we do when we process the paycheck when we're actually printing the paychecks or entering the data for a paper that has entered, including ours, that the employees have worked generating the paychecks. That's those paychecks being calculated as their gross pay, minus what was taken from them, not for our purposes, but to then be paid for them, in part to whatever the state and the local, that including for the U. S. The federal income tax and vehicle, which is Social Security and Medicare. Now, of course, we're gonna pay those. So in order to look at the payroll process, we have this nice little icon, and we could just click this icon and pay the payroll that is due. But in order for us to get a better understanding of this, let's take a look at the forms and what we have. It's so far when we generate this pay employees, we will be withholding some from our employees for F I, T F and ah Fi, Castle Security and Medicare and we'll have to pay are a portion of Social Security and Medicare, and whatever other payroll taxes that are we we are responsible for two as well. So it's including federal on Fouda Federal unemployment tax. So anyways, we're gonna go to reports up top. We're gonna go to company and financial, and then we'll go down to the balance sheet. We will then change the date ranges in the customer report section, clicking the customer report section and changing the date range from 0101 to 1. We will be working this in the future to 12. 31 to 1. We're gonna look at the entire year that we will be working in. And OK, although there's only one date up here that will allow us to drill down on the date ranges and see the detail within the date ranges, what we're looking for is the liability accounts us owing the state and and for the taxes in terms of payroll taxes. Here they are here. So we have the payroll taxes of 5 1098 If we double click on the payroll taxes, we then have the items here in terms of the payroll taxes they're generated from the paychecks that we have been generating and you'll note there broken out by type of payroll tax. So we have in this payroll taxes we've got the 7 47 20 which looks like federal income tax that we withheld from Adams here, the employees and then we've got the 2 58 which looks like Social Security we withheld, and then another 2 58 which looks like the social carried that we have to pay our portion as the employer. And then we have the 66 which looks like the Adams again, the amount that we withheld for Medicare and then another 66 which looks like the amount that we have to then pay in terms of the employer for Medicare. No, where there's a simplified problem, we're only dealing with federal income tax. We're not dealing with food side here, and we're not dealing with any state income taxes. And so that's what we will be paying when we pay this process. We got the two employees same process for the other employees. Federal income tax. We've got the ah, the Medicare for the employees that Medicare for the employer outside this Social Security for the employee sold security for the employer, Medicare for the employees, Medicare for the employer, for our second employee. If we were to double click on any of those, we can see more detail within here. And if we want to see more detail within this check, this is really the Nets. Check these air the net taxes that were taken out of the check. If we want to see the detail over that amount, we can go to the paycheck here and we see this item. This is that this is the earnings. This is not sure, Of course, on the payroll tax ledger transaction detail. We were looking at what was was the 7 20 federal income tax F I t. Social Security we took from the employees in order to pay the government the Medicare we took from the employees in order to pay the government, thereby giving the employees this amount even though they earned that amount. These three amounts, those that we are including as a liability, they're not ours. We didn't take them for ourselves, cells. We're gonna have to put them in a liability and pay them to the federal government, as is our obligation. Then we have our portion Social Security and Medicare, our employer taxes paid and calculated based on employee earnings similar to a matching type of situation, so we're gonna close that out. We're gonna close this out. We're gonna close this out. In essence, we are going to be paying this amount. That is, do now when we set up the payroll that when it When do we have to pay that? It could be. It could differ. Depending on our circumstances. We might have to pay it the month after the payroll has been processed. We might have to pay it weekly are after the payroll dates. If we process the payroll bi weekly, we might have to pay it by the next week. It just depends on on usually the size of the payroll that we have in terms of what the government agency we're dealing with will permit in terms of when you have to pay these particular payroll taxes. Once those air set up in the system, then it's pretty easy to use the payroll process to to pay the payroll. In order to set those in the system, we have to make sure that payroll is turned on first, and in order to do that, you have to pick one of the payroll processes were using the manual system here we showed how to set up the manual payroll process in a prior presentation. If you go toe lists up top and then we go down to the payroll item list, we'll see some items related directly to the payroll. So we have our hourly pay, our salary pay, advanced earnings, federal unemployment, federal withholding, Medicare, Medicare employee, Social Security, Social Kerry employees and Medicare employees aid. And we, of course, will have to populate those percentages. Now, if you're in that, if you're in the US and we're doing that Medicare sold security, this will basically be ah, populated for us. Where it gets tricky is when we get Teoh, the state taxes and those things that will differ from state to state will have to make sure that we have the right percentages in these items. So then we'll go to the hometown, and instead of just writing a check and saying we were going to write a check, we have a liability. It's already tracking the reliability instead of just writing a check, then we want to go through the pay liabilities in the Latin. What this will do is it will help QuickBooks to tie everything together. It'll help QuickBooks to generate reports that are all within the prey Will payroll process . And it will help us to just Teoh track the process and let QuickBooks doom or of these calculations for us. So what we're going to do instead of just writing the check estate, pay my abilities and then we're going to select the date ranges that were gonna pay the liabilities for in our example, we're going to say we're gonna pay it for the time period of 0101212 12 31 to 1. We're working in the future for the first month, so more imagine it's in February and where you are paying off the month of January in the year of 2000 and 21. So we're gonna say OK, and then we have these items. So if we go through this first to print checks, we're not gonna print checks in this example. If we were to print the checks, then of course we would leave that on. We would have our printed cheques that are pre set up, and then we would have to put those into the printer and print them if we tab through these items. So I'm gonna unchecked the print checks we tap through these items gonna be printed from our checking accounts. If we have another account of payroll accounts, then we we want to make sure that we have the proper account in terms of the cash being removed from the proper accounts. Review liability check to enter expense penalties were gonna keep that as the default, and the date for us is going to be 0 to 28. 21 February 20th. That's when we're gonna write the check. But remember, the dates that were running the payroll are January 1st through show payroll liabilities. January 1st through 0101 on sorrow 1 31 to 1. So those are gonna be the liabilities. Were pains were paying the liabilities as of the end of January? We are paying them in the end of February. This again is something that you're gonna make sure you want to set up and have the proper Pedro time periods set up in accordance with whatever regulations we are dealing with. But the point being that we're gonna write this date, of course, the date that the check that we're gonna right. And we're gonna have these dates being the range in which we're going to be dealing with the payroll. So everything that happened in January is the range we're dealing with here. Then we could check all that apply. So we're gonna say payroll. Adam has no liabilities, so okay. Oh, actually, we don't need I'm not gonna have the federal unemployment, so I'm not gonna check that one. So they're saying that no vendor has been set up. We don't have any liability for it. And so we're not gonna be using that, Pero item has no agency. So if that's the case, we're gonna have to set up the agency that we're going to be paying the federal with holdings to. So we will set up the vendor. And when you say yes, we're gonna say inter name for the federal withholding tax payroll item. We will keep it at the federal with holdings. This is gonna be a federal withholding payroll item is an active know. So we're going to say next. Inter name of agency which liability is paid if we look at the agency's these air basically just the vendors that we have here Now these are going to be federal, so I'm gonna say Internal Revenue Service, Internal Revenue Service, and then we will say next. It's saying we haven't set this up. Do we want to set it up? We're gonna go. Yes, we're going to set this up. I'm going to set it up as the quick set up went rather than they set up the long set up, which is where we would put the address and everything else related to it. We're gonna set the quick set up and next and select the items that will increase wages for calculated federal income tax withholding. We're gonna keep this as the default on both of those the salary and hourly being the only to payroll items we currently have set up and finish that process. So there we have that I'm gonna check off the Medicare, do the same thing that we're going to set up and say, yes, that is gonna be Medicare, and we're gonna keep those Two were going to say next and then it's gonna also go to the Internal Revenue Service. So it's picking that for us now. these accounts are correct. Liability account liability account. Correct. We're going to say next payroll expense. Correct. Next. And we have the rate 0.45 That's it. So we're going to say next for both the salary and ah, the two items we have set up? That is it. And finished. So we're gonna check off that item. Once we have the items set up, we're gonna go ahead and create the checks here. Now note that So we have everything checked off. We're gonna go ahead and create the checks. If you want to double check this note, we could run the nice little payroll liabilities report here. This is a report that could be found in the reports. And if we went Teoh employees in peril as well. But if we take a look at that report real quick, we can see our our liability report. As of 0101 21. General first vets wouldn't want to January 31st 2021. And here is our data, so that could be useful to run that. So here we have that That's gonna be what we have. So we're going to say create, so we will create this and it has then generated the checks that need to be generated. We're gonna go ahead and close this and then if we take a look at what has happened, we can go to the balance sheet at this time and scroll up to the top, looking in the checking account to double clicking the checking account, scrolling down. We see the checks that we have written. We wrote that the three checks here put him in at separate checks. So there's the 8 30 Ah, there that the federal check has been generated. So when we go through this process, it will create an actual check. And we can also go Teoh close this out. If we go to the payroll liability than if we scroll down, we have the A role liability that is now zero. So if we if it zero, then we're gonna We could check this by going to the lists up top and go into the chart of accounts. And then we're looking at the liabilities. We want the payroll liability. There it is. It's at zero. If we want the detail weaken, double click on that item and see the detail for Want to look at the individual checks. We can check on a Nen vivid jewel check and see some of the detail for that. So if we close this back out back to the hometown Ah, that's gonna be the process for paying the liability once again. Once it's set up, it's not too bad of a process. It does take a little bit of setting up. We did have to set up some vendors at this point, even still, that had not yet been set up for the payroll process. But once those have been set up, next time it would be much easier for us to pay that payroll liability and fairly easy for QuickBooks. Then, to track that information, I always got to make sure that we have it all set up properly within the set up process. When we put the payroll items together. Remember that when we did pay off this liability note, what happened is we paid off the liability, decreasing a liability and decreasing the checking account. No effect on net income at this point in time. At the point in time we pay off the liabilities, the income statement was affected for both payroll taxes and the wages when we generated the paychecks that the time when we debited the our increased the expense for payroll tax expense and payroll and as well as payroll expenses itself decreasing the net income at that point here, which is paying off for something that has happened already in the past, some something we have consumed labor that we has been consumed in the past and we now know it. So we're paying off a liability with the cash here. 82. 8.70 Enter Bills & Pay Bills QuickBooks Pro 2018: hello. In this presentation, we will record the entering of bills and then the payment of the bills within QuickBooks Pro 2018. If you have been working along with us, we will be continuing with the get great guitars problem. If not, that's OK. You can follow along with us entering bills here and then seeing the pay bills icon and noting what is happening when one we enter the bills. And two, we pay the bills as well as some pros and cons and using this function as opposed to just to writing a check. If you have the backup file up to this point, you can restore that by going to the file type and restoring the backup file, that giving you the information up to this point in time so that we're are on the same page . If you've been working through this problem, hopefully we're on the same page as well. If not, then we can follow along with what we have. We currently have the home tab open to open the home tab. If it's not open, you want to go to the company dropped down and home. Tam, If you also we also have the open lists open over here so we can see the open windows to add that open. You want to go to view open window list so we can toggle back and forth through the open windows on Lee open window. At this time? Here is the home tab. In this case, we're going to be entering the bills. Is there gonna be the basic your end bills were paying? The utilities were paying the phone bill, and then we're going to pay the bills. Now, this is gonna be the normal process when we enter just the bill. That's not going to be the bill for receiving inventory, which might go through a process where we would first have to purchase order and then have the bill related to the receipt of the merchandise. In this case, we are going to be entering the bills for items that will typically be expenses. And then we're gonna pay those bills over here. Now they're pros and cons of doing this process as opposed to just writing a check, or that when we have the inter bills, we can enter multiple bills at one time, and then really, we can choose which bills we want to pay at the end of the month, rather than writing waiting until we actually want to pay the bill to write to the check. If we do that, then at the point of time that we enter the bill. That's when QuickBooks will record the related expense typically related Teoh the bill that we are entering or an asset, if for and if we're making a bill for an asset that we are purchasing, and that's what we really want to happen in terms of the accrual basis, we want to record the expense at the point in time we incurred the activity that we are using up. Typically, that's at the point in time we received the bill being closer to when we actually consumed the goods and services like the phone bill or the utilities bill, as opposed to the point in time when we pay it, which may be the following month, we'd rather have we want to, under an accrual basis to be recording the expense at the same point in time that we consumed it in order to generate revenue as opposed to the point in time that we paid it. So it's gonna be one benefit that we have to the entrant bills. It's also pretty useful for us to be able to enter all the bills and then pay them all at one time. And then if we're processing these in terms of checks, we can print all the checks at one time, which is nice. If we're not printing the checks, then note that we could enter the actual payments of checks here. We can use the right to checks here, or we can enter these directly into the check register, which sometimes is faster if we're just entering the checks. And in that case, we would go to banking use register, check, register. That's gonna be our main checking account here and okay. And we could we could enter the checks here with the check number, and the amount will go back here and see what is being generated within the check register . Just note that if you're not actually writing the checks, sometimes using the check register is faster. If you just want to enter the data in order to generate the financial statements and get what you need in terms of reporting processes. We're gonna go back here in the open windows to the home tab and start entering the bills. So we're gonna enter the first bill here entering the bills at this as of the end of month of February, in the month that we are currently working in and ah, that is going to be first is gonna be for Verizon. Now note if we select the drop down, we have all the vendors here. If we start printing Verizon, it should then populate. And there's Verizon. There is the vendor. Selecting Tab now populates the information relevant to this vendor, meaning the information that we had in there basically last time. So we have, Ah, Verizon and we have the account. Now we could also set up Thesis TEM, so it pulled in the last amount due within the settings. Sometimes that's useful. Sometimes it's not depending on, you know, if it's the same amount that's going to be too all the time, in order to change the settings you would go to edit on, go to preferences at the bottom and look through the set into new and you can change those settings. But it's really nice that it populates, at least in this case, the account that was used last time and therefore not requiring us to do that again. The date is gonna be to 28. 21. We are working in the future. We don't have any reference number. The amounts gonna be 365 and the bill date, we're gonna We're going to say the due date will keep the due date is defaulting at the 3 10 We're gonna keep that, not going to change the terms. Not gonna put a memo em all. That would be nice if we were to put memo and will not going to, though. And then we're gonna have the account already being selected. The default. If it were not, we would select the accounts. We'd have to add it. Typically, the telephone expense will be included, even if we just created the QuickBooks file and used whatever the default said in an hour case, we use the defaults list of accounts related to a merchandising company, but typically, any default list of accounts will have a telephone expense, so we should not have to create it. And then we have the amount here. Note that we are in the expenses side here, not the items aside. If we were on the items tab, we're typically looking at inventory items that we are purchasing. Everything else typically is in the expense side, even if it's not an expense. Even if we're purchasing, say, an asset like supplies or like equipment, we will be putting it over into the expensive side. Note that the bill is much similar to a check. It looks really a lot like a check. Most that data fields will be the same. The difference between the bill, of course, is that once we record this bill, it will not be reducing cash as a check would, but will be recording this to accounts payable. That's what a bill means. It's going into accounts cable and increasing the amount due in this case to the specific vendor of Verizon, the other side, then increasing the expense of the telephone expense that, of course, decreasing the net income for the time period it has entered. As of that February 28th 2021. Let's record that and take a look at them save and close. We're going to go to our major forms. We're gonna go to reports company and financial and scrolling down to the balance sheet. Looking first. Well, let's change the date ranges. We're gonna go to the date ranges, customized reports, and the dates are gonna be 0101212 12 31 to 1. So january 1st, 2021 to December 31st 2021. This is when we will be putting the data in for this problem hitting. Okay, We then have our information, and we're looking at the payable. So down here in the payable, double clicking on the payable, scrolling down. We have this varieties in the name the split. The other account is to de telephone double clicking on that. We then see our bill clicking out of this are closing this bill closing this window. We also note, and it could be useful to track this by vendor report. Going to reports up top scrolling down to the vendors and payables and going to the vendor balance detail. We then see here the Verizon Bill for the 365. Double clicking on that. We see the bill for the 3 65 closing this back out, we can then go toothy income statements or the profit and loss as it's called and QuickBooks and go to reports scrolling down the company and financial to the profit and loss standard the dates. Then we're going to change 20101212 12 31 to 1 January 1st, 2021 to December 31st 2021 scrolling down to the expenses area. We see the telephone expense. There's the telephone expense double clicking on the telephone expense. We see our bill here, 3 65 Double clicking on that. We see the telephone expense here closing this back out, closing this back out. Our net income at this time is a loss of 6005. 32 within this second month of business. Next we will go back to the home tab back to the home tab, and we're gonna look at the next bill that we will be entering. So we're gonna inter Bill, and this case is going to be for the cable bill. So we're gonna go to Spectrum and let's selectively drop down and we don't have spectrum there yet. So this is gonna be for our cable bill, our Internet bill. And we're going to select Spectrum to enter the new vendor, and we're gonna type that in. And then when we select tab, it's going to say you don't have this vendor set up. Would you like to set it up? And we're gonna say yes, rather than doing the long set up in putting the date and the phone number and what not? We're gonna do what we need to do just to process the bill. In this case, that is the quick ad. We'll set that up. The pay date is February 28th. Once again, we're not gonna have the reference number. The amount will be 180 will leave the bill due date as the default date, and then we need to be expensed down here. If we look through the expenses, we can see the list of expenses that's being generated primarily from QuickBooks. When we created a merchandising company, if we don't see an expense that we want to put this into, such as office expense for the for the basically the Internet bill or telephone expense. If it was grouped with the telephone expense, then possibly we want to have another line item, which we might want to call Internet expense that will allow us to track this separately. Now it's up to the bookkeeper as to how Maney expense accounts we want tohave. We want a group that into utilities if we want to put that into the telephone expense, it's all wrote, depends on whether it's relevant relevant to our decision making process. If we would like to look at this expense in a separate line item, then we can have a separate line item. If we have too many separate light items than when we look at our income statements, that's a little daunting because we have all these line items with dollar amount that maybe insignificant to decision making. However, if we group everything into two large of pools of groups of expenses, then we're not really getting enough information to make the best decisions when looking at our income statement. So it's really up to the person put in the income statement together as to how many line items they want to have. We're going to select tablets, gonna ask us to set this up, so I'm gonna select Tab. Say we haven't set this up. Would you like to set this up? And we're going to say I set this up and there it is. It's gonna defaulted to the expense. That's what we want. So we will continue with that and continue. And so, once again, the expense, same screen, same information. We're not gonna put any added description. We're not gonna put the attack line. In this case. We're not tracking the tax line here, and we're going to say, save and close. And what will this do then? It's going, Teoh, increase the amount that we owe in terms of the accounts payable. Account for spectrum in specific and increase the Internet expense account. Decreasing net income. Let's say save and close here is that process. Then we're going to go to our balance sheet. And if we take a look at the accounts payable double clicking on that scrolling down, we see the last check that we have Or Napa. Check the bill that we have put for a spectrum double clicking. There's the bill closing this back out, closing this back out, going Teoh the vendor balance detail. We now ceased spectrum here, double clicking on that. There's our bill closing this closing this go into the profit and loss in the open windows , double checking to see that we have the Internet expense or new line item has appeared with the one Etienne it zooming in on that by the double click, we see our 1 80 double clicking that we see once again our bill here. So that's gonna be the effect on the financials. Let's do this one more time that with the electric bill from Edison, we're gonna go back to the home tab, We're going to go to inter Bills and we're going to say Edison, So we already have once again Edison there. So if we just start typing in it should auto populate. There it is. There's our vendor. We're gonna slick Tab. That date is correct. We're right in the mall. As of that date or putting the building. As of that date, the amount is going to be in this case, $648. The bill will be the default. No terms, no memo. Utilities pulled up automatically from the last time we have done that, that's great. That's what we want. That's typically going to be correct, as it does. Do that. Default utilities. Another item that no matter what type of business we choose within QuickBooks and QuickBooks, then generates a chart of accounts for us will typically include some type of utilities expense. So that's not one that we will usually have to add if we select one of QuickBooks pre prepared chart of accounts. Once we enter this, what's gonna happen? Accounts payable is going to go up from the bill. Specifically, the vendor of Edison will go up. We will owe money to Edison, and the other side of it will be an increase in the utility's expense for Edison, and that will decrease net income. Let's check that out. We're gonna say, save and close. We'll go back to the balance sheet and we're looking after the accounts payable once again , double clicking on accounts payable, scrolling down last item. Edison double clicking on utilities. There's the bill closing this back out, closing this back out. We can then go to the vendor balance detail, which apparently I closed and will now reopen by going to reports going to vendor and payable and vendor balance detail. We then see the Edison here. There's the bill 3 65 Double clicking on that. We see the item of 3 65 in the bill one more time, and we will do this again one more time in the profit and loss the income statement type account from QuickBooks. We then go down to the utilities. That's where we put the utilities bill for Edison double clicking on that line on him. We see the 6 48 double clicking on that once again, our bill. What we're gonna do now is we're gonna pay all these. I'm closing this out, closing this out, going back to the home tab just to show the payment process all at one time. So I'm going to select the pay bills, and we're gonna pay all those at this point in time. Now, depending on the terms, we might just want to pay some of them at at some points and not all of them. If we were to pay all of them, we could just have written the check. But this bill icon runs it through accounts payable it gives us another kind of line item, another audit check within their and it also allows us to pay all the checks at one time. So we're gonna go to the pay bills here, and we're going to select those that need to be paid. So I'm going to just select the ones that we have just created. Now note the options here that we have. We have do before a certain time period that could limit the amount of options we have. And that could be useful if we are managing a lot of payables. And if we're working in the AP department, we very likely might have. Ah, lot of tables were trying to manage into trying to decide how best to manager cash flow, and this due date period could help with that. We can also have different filtering options that could help us as well sort by. So rather than sorting by date, we might want to sort by amount and try to see and look through this report in terms of the amount and do our or any other type of issue or any type of column or light on them that we would want to sort from. And so this is this field may not be blank. I'm gonna say all All right, So And if we see that drop down, that's gonna be the drop down. Of course of these that we could been sort by these header amounts here. So then we're gonna once again, I've un selected those in some way. So I'm going to re select those and then down here, we're going to keep all this constant. We're going to say the date is gonna be up the check as of 2 28 That's when we write the check. It's gonna be coming out of the checking account, and we're not going to print the checks. But if we were to print the checks, we would have to have pre printed cheques that we would then put into the printer in accordance with the proper format in terms of which way they go in the printer. Make sure you have that straight, and then you can print the checks, and once we do this, it'll print the checks for us. What we're gonna do is a sign the check number here just entering the data tracking the data within QuickBooks so that it will then populate the information into our financial statements. So I'm gonna say, pay selected bills and it says I'm gonna go ahead and click. Let QuickBooks assigned the check numbers, and it should then assigned the check numbers in the next sequence that are due within the check numbers and total sign those out for the three checks. And we're going to say, Oh, and of course, that should match our physical checks that we right. So if we're writing the checks in an outside checkbook, we wouldn't want to then match up these checks to the actual Jenks that air being put into , ah, into the checkbook to here and say OK, that then populates I'm gonna close this. What should that have done when we pay the bills? Then, of course, cash is going down by those checks that we have written, and the accounts payable was going down represented the fact that we do not owe those particular defenders anymore. And the vendor detail will go down for the particular vendors being in this case Edison Spectrum and Verizon. Let's see if that is the case going to the balance sheet first taking a look. First of all at the checking account, the one that's most obvious cause we wrote checks. If we double click on that item, scroll down to the bottom with See the three checks we have written Edison Spectrum, Verizon. You check numbers being a sign 10 2010 2110 22 does look like it is in sequence with prior checks we have been writing. If we double click on any of them, we see the check being created. This screen we haven't seen before when we generated the checks because we used the pay Bill icon. But when we the check were the thing we actually made, of course, was the check when we paid the bills. This is the driving form. We would have the same for Spectrum and Verizon here. We also may want to look at that in the checking account register, which we have open over here as well because we might be used to the register. I know I am. So here's our register. And instead of just having the plane check here, we have the pay bill item, even though it is a check. If we double click on it. We see that check and close that out. That little item will just tell us that it did go through. Accounts payable did go through the pay bill item. Then we're gonna go back to the balance sheets going to scroll down to the liability of accounts payable this then should be the other side of this transaction. Double clicking, zooming in on that item we see Edison Spectrum Verizon, other side checking account cheques being created. Let's then look this time at spectrum double clicking on spectrum. We see the Bill Ford or the check for spectrum here, reducing the accounts payable, closing this closing that we should also see this in the vendor balance detail clicking the vendor balanced detail. If we see Edison, here's the check that was paid for Edison bringing the balance down to zero. If we scroll down to Spectrum, here's the check paid bringing us down to zero. Verizon check paid, bringing us down to zero there as well. Note that there's no effect on the profit and loss at the point in time that the check is paid because we recorded the expense prior when entering the bill 83. 8.75 Enter Service Item & Invoices QuickBooks Pro 2018: Hello. In this presentation, we will enter service items that we will then use to create invoices four services done by the company within QuickBooks Pro 2018. If you've been following along with us, we will be continuing with the get great guitarist problem. If not, that is OK. We will be creating in essence service items which are kind of like inventory items. Those will be used in order to generate invoices which we will generate invoices. Four services done by some of the people that work within the company will have different billable rates for them and create the invoices based on the service items that we will now generate. If you have the backup file, you can restore the backup files to this point by going to file and restore the company. To this point, we currently have the open windows tab open to view that you want to go to the file. Open windows on Lee Open window at this time is the hometown in order to open the home tab . If it's not open already, go to the company and home tab at the top. Here is the scenario we want to make an invoice for in this case, we do sell guitars and we have guitar lessons. We're going to invoice for the guitar lessons that have been done for the month. In order to invoice for the guitar lessons done for the month, we will need to set up items for them here. And so we're gonna create items that will then be used within the invoice. When we do something like counting the hours, often times we're going to count the hours for the month have a billable rate per in this case person teaching the lesson and then multiply times the number of hours. That's how we're going to generate the invoices. So to start this process, we're going to set up the service items once they're set up for the one times all we have to set them up for Then we can generate the invoice and they'll set up the invoice as needed. After that first set up process of the item lists, let's look at that process. We're gonna go lists up top. We're gonna go to item list. Here is our item list. So far, we have these services. At this point, we have these inventory items. At this point, we're going to add service items that will then be used on our invoice that we will generate for the month. We're gonna add three of these. I'm gonna do them one at a time, or we will do them one at a time. We're gonna go down to the drop up window at the bottom of the items drop up window. We want to have a new so we're gonna add a new and the default is at the service item, and we will keep that default rather than go into an inventory item and someone a tap through this, we're going to say the item, name and number we're gonna have. We're gonna have Jodie guitar lessons and we have no sub accounts. This gonna be it's gonna be the same thing out down here. Jodi Tar lessons. The rate is gonna be 100 and 90 and our in this case tax code, we have known no tax code. In this case, it's not something that's subject to sales tax. In other words, if we select the drop down, we're gonna have the income account, not merchandise, but service service revenue. If we want to have a different account for it. Specifically, Ford this type of service, then, of course, weaken type in guitar lessons or something like that to have a different account for it. And we have to set up that account as a revenue account. We're gonna keep it under the generic service revenue at this time at any point in the future, if we want to break that out, we could then start tracking that in its own account. I'm going to say save or okay. And we're gonna ignore him and ignore this. And then we're gonna add a new item again. We're gonna have another individual, Angela, guitar lessons. I'm gonna say items at the bottom were going to say new item. Once again, it's gonna be another service item, and we're going to say it is Angela guitar lessons. Well, then tap through this. I'm just gonna copy this. I'm gonna copy this. We're going to copy it. I suggest copying this and pacing it into the description. The rate here is gonna be 150 tax were going to say no tax here. So we're not charging sales tax for the service item as it's not needed most of the time. And the accounts, then if we select the drop down once again, we're looking for the service and it's gonna be, of course, an income of some type. We're going to set it up as the generic service as was picked here when we created the the company, using both service and merchandise as our company file that was set up within QuickBooks Pro. Then we're gonna say, OK, that's our second individual doing the service lessons that we're gonna build at the separate rate next one, we're gonna do one more time here. We've got the items at the bottoms. We're gonna go to edit or new. I should say new item new item it once again will be a service item. We're going to say that the item name is gonna be Rebekkah guitar lessons. I'm gonna copy that this time. Copy that. As we go and we're gonna put that in the description. Same thing we're gonna tab over to the rate $100 Rebecca, and we're gonna have new tax so nontaxable information there. It's not subject to sales tax. In other words, then we're gonna select the drop down on the account side. We wanted these service, so we're going to select the service revenue that is once again, even in income account type. Make sure it's an income account type and then we're going to say OK, and I'm gonna go ahead and ask now that we have our items. Here are new service items for the month for the guitar lessons by our three individuals performing them at the three different rates for them, we can now set an invoice up for those hours that were charged over the month. This is gonna be a type of area if we go back to the home tab that we could track down here with the time clock inter sheet. So this time clock could punch in and out the time and then track that time to the create invoice. And that could be a useful tool if their employees it could be used for two things. That's why it's down here in the employee section. We can use it to both generate the invoice by having a billable rate times the time that we have here, and we could also use it to calculate payroll if it was also applicable in that format. In this case, I'm not going to do that. Oftentimes we may use an outside system as well, just to track the time. We might just do it in Excel. We might have another software that tracks the time and and have our rates set up. So what rates in this case, in this system, our rates are set up on the item list now, and all we have to do is track our time in some format, then weaken build. Whenever we decided to set up our billing progress, it might be monthly. It might be. Every couple weeks, it might be weekly. It might be daily that we have to go through there and gather up our hours and then create and send out those invoices. We're gonna do this one at the end of the month. So at this point, we're gonna create an invoice. We're gonna create these invoices for the hours that we have had guitar lessons for throughout the month. And we're gonna say inter the 1st 1 We're looking through the time sheets for Jodi. So Jodi has counted her times. She's got three clients that will be dealing with that. We're gonna build four. First one we're going to say is a new customer. And that's gonna be Star Lee. This is a new customer. So we're just gonna type that in and say, Tab, we're going to not set up the full customer, although in practice, that might be good to do that, to set up the the address in the contact information. But we're gonna put in this invoice information using the quick ad just giving us the name to complete of the invoice we're gonna invoice as of the end of the month to 28 to 21. We are working in the future. At this time. We're going to say that the invoice should generate the number automatically, and we're gonna keep that there, and we're going to save the terms. Then, in other words, there's no purchase order applied here. We're going to say that terms are gonna be Net 30 and the item then is gonna be the new item. We set up the service item, which we could select through the drop down. Or we could type in the service item with choose Judy guitar lessons and it should pop up there. And we've got the service item. That's the one we want. And then within the quantity, Now it's gonna be a 190 an hour. So and we're gonna put in the quantity of hours, which is five in this case. So that's how we're gonna calculate this out pretty simply, pretty easily. Note down here we have this sales tax not to being calculated because it is a service. That's gonna be our first invoice. What will happen when we record that it's going Teoh debit accounts receivable. It's going to credit the revenue account. I'm not gonna go and check that until we do at least three of them, and then we'll go and check it and then do the next three for our three people performing the lessons here. That's gonna be our first invoice. This time I'm going to say save and new and create another one. So say the new we're gonna, uh you've changed it. We're gonna say yes. And I'm gonna say, add next one is gonna be another new customer. So if we select a drop down Diana Martinez not here, I'm gonna add it, Diana. Mark Keane is music lessons. Was the customer we had musical music lessons with Jodi's? So we're gonna say, Tam, we're gonna once again used a quick ad rather than the set up. No address that we're gonna put in or the or the phone number and whatnot. Quick ad. There's the item. There's the date. There's the invoice generated automatically, and nothing in the Pio that terms we're gonna have once again being the Net 13. The item we're gonna have Jodie guitar lessons that should pop up automatically once we type that in there, or we can select the drop down. But once we type it in, should be there automatically. And then tab and the information we have set up will pull over once again. This one is going to be another five hours set for Ah, Diana. Once again, this will debit accounts receivable specifically for the customer of Diana. Credit the sales revenue, no cost of goods sold, no sales tax, were not selling inventory. Once again, save and new. And we're gonna say yes. Next item a new customer. So if we hit the drop down, not there, we're gonna type in Lynn Jackson and Tab, we're gonna add the quick ad for the new customer. Tabbing over to 28. Invoice is correct. Tab Tab, We're gonna say the terms is net are net 30. And once again, Jodi Tab, quantity here. 10. And there's gonna be our invoice. Fear generating this invoice. No sales tax as well in the journal entry debuting accounts receivable crediting sales. If we save and close this, then we can check this out. We're gonna first goto our balance sheet. So we're gonna go to reports company financial scrolling down to the balance sheet. We're going to change the date range in the customized report item so that when we drill down on the information, we can see the data 0101 to 1. We are working in the future to 12. 31 to 1. So january 1st, 2021 to December 31st 2021. And okay, there is our information double clicking on the accounts receivable. We should then see our three items star Deanna and Lynn Invoiced as, um right there. Done and done closing out of that closing out of that. The other side of this will be in the income statement. So reports, company and financial profit and loss. Selecting that data range changing 20101212 12 31 to 1. And we have the service revenue now for the guitar lessons. If we double click on that there we have it. And we have stored Diana and Lynn. If we double click on any of those Ah, we see the invoice related to them. One more item closing that out. Clothing this out. We should probably check out. And that is the reports, the company and receivables and customer balance detail. And now we can see our customers. For Lynn, there's our invoice. And for Star, there's our invoice. And we had another one, didn't we? Diana? There's the invoice. So those are the three. We're gonna do this once again for Angela, who has three clients as well. And we'll put in the invoices. They're going back to the home tab. We will select the invoice and of this time we got another new client is going to be Jenny Jones. We're gonna type in, drop down, not there, so we'll just type it in uh, Jenny Jones. Tam, We're gonna quick Adam's gonna select return to do that tabbing through this same day because we're recording all of these invoices. As of the end of the month here, terms are gonna be net 30 Net 30 once we set the net 31 time, it should copy the format Every time we see Jenny Jones in the future, when we invoice Jenny Jones in the future, this is gonna be for Angela's guitar lessons. Once we select tab, we have a different rate to that rate we set up of 150. We're gonna put in the hours related to the customer client of Jenny Jones. And so this is these Remember Angela's hours assigned to the customer Jenny Jones of seven . Ours the 1 50 times the seven is the 1050 no sales tax journal entry debuting accounts receivable, crediting the service revenue. We're gonna say, save and new for Angela's next client saving the template. So it'll have the terms next time. Diana Miller once again, not there. So we're gonna add by typing in Diana Miller and then tab quick and tabbing through invoice numbers the same terms will be net 30. We're gonna have the item. That's gonna be Angela. So we could select Angela here, But we're gonna type in Angela's guitar lessons. 150 an hour. And we had six hours here for Diana and therefore the invoices 900. What's gonna be recorded here? Debit accounts receivable. Credit the service revenue save and new One more time. Saving the template and the format for this client, Diana Miller. Next one, Jill Gonzalez dropped down. Not they're gonna add it by typing Gio Gonzalez Tab, We're gonna quick at it once again, tabbing through this dates, correct invoice number populates automatically addresses good. No purchase order. Terms will be net 30. And the item is what we set up, which is Angela this time. Nine hours tab. And there we have the bill there. We are now going to say save and close and yes, And if we go through our our financials in the balance sheet balance sheet under the accounts receivable double clicking, scrolling down, we now see these Jenny Jones, Diana Miller and Jill these air, the three set up double clicking on them. We see that they are for the item of Angela closing that out. We can see the other side on the profit and loss in the open windows in the service item. Double clicking on that. We see Jenny Jones, Dina Miller and Jill Gonzalez as well, once again closing this out. If we then go to the customer balance of detail, we'll see the A R broken out by who owes us money. We see Diana. We see Diana Miller. Here we see Eric Music. Jenny Jones, Jill Gonzalez, Lynn Jackson. We set up fairly recently, Star. And there we go. So it should all add up. Note that we have the 8000 to 49. It does allow Adam, which adds up to what is on the balance. It if we go back to the balance sheet, that should be and will be of the same amount in accounts receivable. If it's not, you probably have a date problem and just changed to make sure the dates are tying out. All right, we're gonna do this one more time. I'm gonna go back to the home tab. We're gonna select the create invoices or one more set of 31 more time for the guitar lesson giver, Rebecca, who has three more invoices for three more clients. 1st 1 Noah not in the drop down. So if we set them up no, Uh, Davis going to say, Tab, we're gonna do a quick ad. We're gonna tap through this state's correct and voices populated as it should know, purchase order terms. They're gonna be net 30. We're gonna have the item this time being Rebecca's guitar lessons tab $100 for Rebecca's guitar lessons. We have eight hours billed to Noah. We're gonna put the eight hours there tabbing through no sales tax. Once we record this, we are going to increase the accounts receivable and increased revenue. And let's say save I knew we will save the template and add this next item is gonna be Grace Matthew. So if we select adopt, drop down, not there. Typing in grace Matthew tabbing through tab quick ad dates good and voice populates on its own. Terms are gonna be in 30 and we're once again working with the item of Rebecca. We could select with the drop down or type in Rebecca guitar lessons, which we just set up at the rate of $100 we're building of this customer. Grace, Matthew. Six hours multiply. Matt out. $600. No sales tax journal entry will be debit accounts receivable and credit service revenue. Say that new one more time saying yes to the template. And we have. This time Pan Smith dropped down. No customer named Pam Smith, we Then we'll add it by typing Pam Smith. Selecting tab. Selecting inter for the quick ad tab. Dates. Correct. Tab invoice looks good. That should populate. Build to populates automatically. No. P o. Number. Terms are gonna be the Net 30 tab. Item is gonna be Rebecca, so I'm just gonna type in Rebecca. Guitar lessons will populate on its own. It is a service item, Tam. We've got the rate at 100 the hours of eight, giving us 800 at this invoice. No sales tax here. Therefore, journal entry of being debit in or increasing they accounts receivable and the other side being sales revenue. Let's save in close and check that out first. So it's safe. And yes, we're gonna first go to the balance sheet, going to the balance sheet, scrolling up two accounts receivable. We see the 4 10,049 If we double click on that scroll to the bottom, we see Noah, Grace, Pam, the three new we set up double clicking on either one of them. We see the invoice related to them with Rebecca as the item and the $100 rate being used to generate the invoice. Closing this and closing this, we can then go to the profit and loss the other side. We can look at these service revenue or income double clicking on that scrolling to the bottom. We see once again the 800 that 600 the 800 double clicking on any one of those we will then see on invoice just generated with the $100 rate and the Rebecca item that has been set up closing this closing this, going back to the customer balanced detail. We then see ah Lin. We see Noah, Pam Davis. We see Smith guitars. We see Smith and we see Star Star Lee. So we've got everything set up here and these are the customers that we want to check for their balances. We see the ending balance thin at 10,004. 49 which will be as long as we have the correct dates, the amounts on the balance sheet under accounts receivable as well as it is here. So that is the recording of and voices after having entered the service items for those and voices in essence put it in a billable rate, tracking the hours that we worked with clients over a time period, in this case being a month, then using that billable rate to make the invoices and acorns with the a number of hours per person that we worked with. 84. 8.77 Purchase Equipment with Debt QuickBooks Pro 2018: Hello. In this presentation, we will record the purchase of music equipment with debt. In other words, we're gonna purchase 5000 worth of music equipment and finance that equipment within QuickBooks pro over 2018. If you've been continue along with us, we will be working with the gets great guitars problem. If not, that is OK. We will demonstrate the purchase of equipment through financing. We currently have the home tab open. If you don't have the home tab open, it can be found under company and home page. We also have the open list open over here. Open windows that can be found at the view tab and the open window list. If you have the back up to this point, you can restore that backup by go into the file tab and restoring the backup that will get assault of the same point so we can put in the same information as we go forward. Currently, we are going to be entering equipment. We purchased equipment. We financed it a couple of ways. We can do that. We cannot do that the traditional way, however, and that is that we would just basically write a check for the equipment or possibly Inter a bill and then write a check at a later point in time because the financing is gonna be a bit longer term. So if we were, for example, to create a bill for it, it would go through accounts payable and we would create a liability. However, it wouldn't be in notes payable, and we wouldn't be recording interest on it. We can't write a check or simply put it into the check register, as we normally do. Most of our journal entries we've looked at are driven by some of these forms or we write a check for it, and that makes the journal entry for us. We can't do that at this time because there's no cash involved in this transaction at all. So we're gonna have to fall back on some other method. One method is obviously we could make a journal entry for it. So this is one of those types of transactions where we might have to look at debits and credits. If we understand debits and credits, then we can just make a journal entry and put it in the general journal. The way to do that would be to go to the company town and make journal entry. And if we were to do that, we bought equipment on account. We were just debit the equipment accounts and credit the loan loan payable, increasing the amount of equipment and increasing the loan. If we don't want to work with debits and credits, however, QuickBooks does give us other options that we can use as well, and that would be the registers. So if we go into the banking option and that's what we'll work with now, so we'll do the same thing. It will be a journal entry. Everything we do in QuickBooks most things is a journal entry or QuickBooks makes a journal entry through what we dio. But this is gonna be a way that we can. We can do it by same increases and decreases rather than debits and credits. So if we go toe banking and say use register, we were usually used to check register, but we can actually see a registered for any any type of account we want to look at. If we're going to be purchasing equipment, we could go toe a four debt. We can go to any of these two accounts, we could go to the equipment account or we can go to the loan payable account. Either of those two accounts will work. If we go to equipment, we're gonna say that we're gonna increase equipment and the other account will be loans payable. If we go toe loans payable, we're going to say we're gonna increase loans payable and the other account will be equipment. Let's see what that looks like. I'm gonna go to the equipment account. That makes more sense to me. So I'm gonna say furniture and fixture that needs to go up because we bought more of it. So I'm gonna click on that, and we're going to see a registered when we select Okay for that equipment account, Probably not too much activity in your equipment account activity cause you're not buying and selling equipment every day. If you were, it wouldn't be equipment. It would be inventory, and therefore, there's probably not so much action going on here, But note all we have are increases and decreases. So I don't need to know that I need to debit the equipment account to make it go up. This way we can just put this information in in terms of increases and decreases. So we're gonna put the date I'm gonna say, 0 to 20 0 To 28. 21 the end of the month that we're working on in the year 2000 to 21 we're going to say that we're purchasing from Office Depot and we already have this. Then you're here, so we're just gonna type that in? There's the vendor. We are gonna increase the equipment. So it's not in terms of debits and credits in terms of increasing and decreasing us being in the furniture account, we're gonna increase the furniture account by 5000 and then we just need to add whatever other accounts is affected that other account happens to be. In this case, it's financing it. We're gonna put that into an account called loan payable. We already have a loan payable set up here. So if we screw up, it's gonna be in other current liability if we start typing it in loan payable. There it is. If you were to set up a loan payable, you would want to set it up as either long term or current liability, depending on the terms were going to say here, it's gonna be a long term liability and that's how we're going to set this up. So if you hadn't set it up, you want to type in loan payable tab and then set up the account as a long term liability for that? So we're gonna tab through this. It's also possible notes that we're gonna record all of our loans into this lone table account. And if you have multiple loans, you might actually want to list out the loans separately on the trial balance and have the loan number so you can track them separately with their own line items. And then when you make the financial statements you want, might want to group them together. All in one line item called loans payable in this case is is our This is our only are we have few loans. So we're gonna put them all into our one group of loans payable and note that it does not record unless we hit. Enter Teoh, be on the next line. So we should say Enter now it's on the next line. What's this going to do. It will obviously increase the front office furniture or account the accounts we are in by the 5000 and it will increase the loan payable by 5000. Let's see if that's the case. We're going to go to our reports and check that out. Reports drop down. We'll start off with the balance sheet. We're gonna go to company and financial scrolling down to the balance sheets. Standard format. Gonna change dates by going up to the top and customized report. And we will then tap to the dates and go 20101212 12 31 to 1. So january 1st, 2021 to December 31st 2021. And okay, there is our report. We didn't pay cash for this. What did we buy? We bought furniture and equipment that's gonna be here, so we'll double click on that item and we see the furniture and fixture there. There's the 5000 double clicking on that. We get back to our register where we have input this information, closing this back out, closing this back out, we're going to go to the other side, which is not gonna be in accounts payable, but loans payable because we financed this item and we do have other loans out, apparently. So we're gonna double click on the loans payable and grouped within the loans payable. We have the 50,000 and we now have this 5000 here within the loans paper. We're gonna double click on that, and there is our amount again. So the loan is on the books. Note that when we think about this in terms of financial statements, we do have to consider whether or not how much of this loan is gonna be short term. How much of it is gonna be a long term? And when we create the financial statements, we'll have to see how much of the principal will be paid in the current portion. Ah, and how much of it will be paid in the long term portion to adjust for this loan payable 85. 8.80 Enter Payroll QuickBooks Pro 2018: Hello. In this presentation, we will inter paid role for the payroll period within QuickBooks Pro 2018. If you've been working along with us, we will be continuing with the get great guitar problem. If not, that is OK, we will be processing payroll within the QuickBooks pro system. If you have the backup file up to this point, you can go to file and restore the backup file, taking us to the data set we have now allowing us to enter information to the current employees. If not, then you can watch long and to see the payroll process that we will be going through. We currently have the open windows open. If you don't have that open, you can go to the View tab open window list. We also have the home tab open here, the only open window in the open window list that can be found at the company and home page . We're gonna go through payroll quick recap of what payroll is, how it works in QuickBooks. There's a lot of options on payroll, so remember that QuickBooks itself has at least three. What three payroll options? Those payroll options all providing a different level of service, often times that increasing level, having to do with how much of the reports they're going to fill out in terms of quarterly reports and your end reports, as well as added reports within the QuickBooks feature in terms of reports that can be related to payroll. And then, of course, the states. So the more complicated we have in terms of what state we are in and how many states we have or for in different countries. Then, of course, the payroll will be come more complicated, given the fact that those areas, they're gonna have different requirements. If we're in a state, for example, that only has federal taxes, well, that makes it a bit easier in terms of the reporting off the payroll taxes or has less state regulation in terms of payroll taxes. We here are gonna be working with the manual system, so that's gonna be the the easiest system You could set up the manual set up If you want to look up and the prior presentation when we set that up, and just to get a practice problem, it will provide you the information, and it's almost better to practice with because what will happen is instead of the system creating and calculating the federal income taxes with holdings F i t. So security Medicare will have to put those numbers in, and it'll look the same, but by us putting it in there, it will help us to see what is happening in payroll. Your other option on payroll is to outsource it to something like 80 p or paychecks. And if you do that, you still need to know what the journal entries, because you have to put it into the system, at least in a journalist reform, so that it's on the financial statements. And this system will help us to understand what that gentle entry is and how you might read a report from ADP or paychecks how you might integrate your systems with theirs in some way . So once you set a payroll within QuickBooks, you'll have this icons before you set this up. You may not have this arrow here once you set it up and you can set up the free version just to practice it and then upgraded to a paid version as you would like. Then you will see these items. Now we're gonna pay the employees every pay period in our case every month. But it could be bi weekly, semi weekly or it could be every week, and then we're gonna pay liabilities at a later time. So in this case is the end of February. We're gonna process the payroll. We got the two employees that were going to be paying for and we're gonna say pay employees . If we go through the process here, there's two dates we have. We got the pay employees for the period end. That should, after the first payroll period, populate automatically because it's going to its It knows that you're paying in my case monthly, so it's gonna populate the end of the month. The paycheck dates should be the date that we write to the checks. But obviously we're working a problem in a different date than the current to date. And therefore I'm gonna put the date at the same date 02 28 to 1. So we're going to say the pay period ended and we're writing the check at the same date. That doesn't necessarily have to be the case. We're gonna take it out of our checking account. If you have another payroll account, then clearly you would be putting it into the payroll account and taking it out of the payroll account. Ah, printed cheques. No, we're not gonna print the checks. We are going to have the pre you just into the checks, as if we were printed them in another format, just importing the data so that will be there for the financials. If you were to print the checks, then you would have the checks that would be already pre set up, that you would have to put into the printer in the right format and then make sure that check numbers line up as they should. If they're the pre printed and everything's been going along in the same format, that's an internal control to the paychecks, then you can. Then you can print those out As you run the payroll. We're gonna select our two employees here. We've got Adam and Erica and say's Continue. We will continue with this and then what we need to do is go through here. We got the growth pay, but no taxes, no deduction and no employer taxes. That's because we're using the manual system, and we gotta calculate those manually. And therefore, we're gonna go through here and take a look at that and will be helpful to do this to, because it will give us an idea of what's going on rather than just processing the system and hope. QuickBooks, you know, magically does everything correctly. We can have some idea of what QuickBooks is doing here. So we've got the salaries. We've got the 5 4083 That's gonna be the gross pay. That's what this employee has earned, Adam. And we're gonna take out then the payroll taxes that need to be taken from the paycheck, these air, the petrol taxes of the employee, not employer, not ours. The employee, Adam, And we're gonna take his employee taxes out. So we're gonna have I'm gonna put down here the three taxes air going to be that we're gonna withhold are gonna be the federal income tax. This is gonna be derived from the W four. In terms of marital status, it will be in terms of how many exemptions that are reported. And then we'll have to look that up on a table based on that and the fact that we're paying monthly. That's the table you're going to take a look at if you're paying month levers with bi weekly. So, in any case, is a bit more complicated. One for us to figure out. We got a look at a table of figure that out based on the correct table and based on marital status and then based on how many exemptions and we're going to get that now the sole security. Medicare is usually a bit easier because it's basically a flat tax, which means we're just gonna take the gross salary and multiply it times some rate, which I believe right now. And this problem is 0.6 point 062 So if we multiply the 4000 let's just do it real quick. If we the 4583.33 times 0.62 or 6.2% remove the decimal place over two places 20.62 we'll get the to 84 16. So that's what we should have here. I'm gonna put the negative to 84.16 and then on the Medicare. If we were to calculate that out. That one should be fairly easy to calculate to because it is a straight method. Typically, it's gonna be Ah, 4583.33 That's our growth pain times 1.45 or 0.145 If that. If we move the decimal two places over for a percent point 145 or 1450.145 that will give us the 66 46. I'm gonna round up. So we're gonna say negative 66.40 46. Now, this is just an example Problems. So those percentages air just just to show you a new idea of how the percentages would be calculated. If you want to calculate these percentages, I would talk to a professional to calculate the percentages. Make sure you have the current percentages. The point here is that the federal income tax is usually a bit more complicated cause we have to get used tables in order to figure that number out. The Social Security and Medicare is a little bit easier typically because it's more of a flat rate and therefore usually that's going to be easier to calculate. The federal income tax if we mess up on the federal income tax or the estimates. Never gonna be perfect, of course, because it's just a estimate on a very complicated tax system that as a progressive rate system. So I went at the end of the year. That's what happens is you get a refund or you owe money based on your with holdings, of course, and we're hoping that where the tables are set up so that generally, if everything is set up on and no one within the table, the table would result in a slight refund at the end of the year if this was the only income Teoh that employees. But of course, in real life there's a lot of other factors. So in any case, this one's a bit more complicated to calculate. This one's usually a bit easier. These two have to be fairly exact, however, because we don't usually get a refund or owe money at the end. Based on the sole security Medicare, it needs to be exactly the correct amount. All right, so we're going to say, then we have our side of it, so that means that we have to check here we pulled out federal income tax, Social Security and Medicare. That's all we're gonna do for this example. Problem. There are other employer taxes, food, for example and the state taxes that would have to be taken out depending on where we are at these, however, will be fairly standardised. And those will be there in any area and give us a good idea of what is happening here. Then we have the employer side on the federal taxes we have to pay in match. In essence, the soul security, which is to 84.16 We're gonna pay on our side, the employer taxes. And then we have the Medicare with we're gonna match 66 point fourth six. And I'm not gonna do the federal unemployment at this time. It's usually a much smaller out rate, but we're not gonna deal with federal unemployment because it's in some ways dependent on state unemployment on what I can do with the state stuff. So we're gonna stop there, so know we have This is the salary. This is the net check. This is what we pay on that. Now we're into that for one other employees. So if we select tab. This employee is an hourly employees. So we're just gonna enter the number of the rate in this case, which we have 20. What? We're paying this employee, and we're saying 40 hours is what we have. Therefore, we've got the 800 here. We'll do the same calculation. The federal with holdings. We would have to look at the table based on medals, tasks and exemptions. And we're going to just say that that's gonna be 110. And then the soul Security and Medicare will calculate that out this time using this rate for example, 800 gross pay times 6.2% or times 0.62 times 0.6 to 6.2%. That will give us 49.6. So I'm gonna put that here 49 60 cents, and then Medicare will calculate that out. Same gross pay times point times 1.45 or 0.145 point 145 That's 1.45% or point. 0145 And I don't give us the 11.6, so we're gonna say negative 11.6 again, I don't mean to toe have this completely, exactly mean to give an example of how these these calculations would be calculated depending on whatever rate is currently there. And make sure to check checking on that and get the correct rates. So then we're gonna have to match it on our side. So you got the Social Security that we're gonna have to match on the employer side 49.6, and then the Medicare, which is gonna be 11.6. We're not gonna be dealing with the federal income tax. And then I'm just gonna say, save and close populated now for our two individuals. That net check then to them 3005 12 74 71 6 28 80 Now, if we were trying to think about what's what's gonna happen when we record this thing, we're gonna make these two checks. The two checks will actually be written for this amount and visit him out. It will also create the check stubs, having all the detail on it, meaning it will tell him what the girls pay was and what was taken out in terms of taxes and the grouping of Why Medicare, Soul Security and Federal Income Tax. In terms of the journal entry, we know cash will go down not by the gross pay, not by this amount, but by this amount. And we can think of the journal entry as what's gonna happen in total or by paycheck. If if we think about what happened by total, we can kind of think about it as what we would the minimum we would have to input into our system if 1/3 party was to do the payroll. And then we had to enter that data so that our financial statements included that data. In other words, we see that the net the cash would go down by the 1 4041 51 But the payroll expense was actually 3 5083 That gross pay for for these individuals, so the payroll expense would be this increasing the expense. The check, however, would only be this, and then we would have to record the difference, which is the taxes that we took. That's federal income tax. So security and Medicare that would go to payroll tax liability, a payable account which we would then need to pay out at a later time with another check that we would write for two in this case, the I. R. S for the amount owed. And then we would also have the employer portion of taxes here. We had to pay this soul security and Medicare on top of what we took from the employees out of their paycheck. And that would be increasing the payroll taxes, which QuickBooks just puts in the payroll expenses. Well, and it would be increasing a payable as well, which QuickBooks is just gonna put in this to the same payable that is owed Teoh the Ire S . So let's create this and we'll take a look at it. We could record this net like that. When we look at the detail in our system, we'll see that it will be broken out not only by just that one journal entry, but by the accounts by that by the number of employees, and we'll see the break out and see how that works. So we're gonna say, create paychecks. There. We have that. We're not gonna print the checks or the check stubs. I'm just gonna close this out. First, we might want to check the check register to make sure that those have been created. So we could go to the banking weaken, go to use register and checking accounts. And there's our two checks. We could see that they are paychecks rather than just normal checks or pay bills. If we double click on it, we had to double click right on. That little item works of paycheck, by the way, Then we can see our net day. Our activity, it's all lumped together. However, if we want to see the detail, we go to pay check detail and that will give us our break out of the input screen. Closing this back out. Closing this back out we can then take a look at our reports going to the reports going. Teoh, come. We're going to company and financial scrolling down to the balance sheet, changing the dates up. Top customized report dates gonna be a 101212 12 31 to 1 and we're gonna say OK, so here we have our information. Now we think that checking account went down so we'll double check on the checking account scrolling down we see are two paychecks here. If we double click on either of those, there's our information from one. See more detail, paycheck detail. We could see the information there. If we close out of this close out of that, there's and close out of this. We are back to our balance sheet in the most simplified format. You would think the other side of that will be on the income statement as an expense or the profit and loss, as it's called in QuickBooks, that will go to reports, company and financial profit and loss standard changing the dates from 0101212 12 31 to 1 January 1st 2021 to December 31st 2021. We see the account payroll expenses. That's gonna be the other side of this transaction. If we double click on the payroll expenses, we scroll down and we look at our two items now it's broken out into a lot more detail. This is gonna be a little confusing when we look at the activity because we see more than just one line item for the entire payroll that was recorded it's broken out. One by these. Looks like these are the two checks we just rope and we have the checks that were wrote. This is gonna be for the for the entire amount, including gross pay, including the amount that was taken out for payroll taxes from them. So this is gross, not net. And then we included also in here. They're not breaking out. QuickBooks is not breaking out payroll taxes to another account. These being the employer, er, portion the employer portion of Social Security and the employer portion of Medicare. This being the growth pay for a second employee, the employer portion for so security, the employer portion for Medicare. So you can see if we have a lot of employees. This this detail can be a bit confusing. When we think of it as an aggregate. Then we would enter just basically, is one line item, which means that we would just just have one line item for the entire payroll and so you can think about it on aggregate, the entire payroll, you know, posting it with one journal entry trips, combining all of it together, or looking at the detail which were seen here in the transaction report breaking out this information by employees. We can look Atmore detail here. If we double click on any of these, we see the check and we see the check amount. This is the gross pay, not the amounts that the check was written for, Not the net amount of check. If we want to see the detail, then we see that The difference then, of course, is the employee portion of Social Security and Medicare and their federal income taxes. So when we record payroll expense, we recorded at growth even though we took out their taxes here because we and then need to pay these the government, in this case, the iris for their taxes. And then we record our side Social Security and Medicare. So what we see in the detail is the gross pay for 583 33 and then our portion, Social Security and Medicare not to breaking out their portion of Social Security Medicare , because that's just part of the employees payroll expense. So if we close that back out and close this back out, that's what we see here. We see the gross pay, our soul security and our Medicare for See the second payroll check. Same thing we see the gross pay. Ah, here, not the net pay detail. We're seeing the Gross pay 800 not pulling out there. So security, Medicare and then separating our portion of Social Security, Medicare, the employer portion. And that's what we see. So we see the 800 then this 49 60 in this 11 60 in the detail. Let's close this back out close this back out there is the 800. There's our employer portion of the 49 60 employer portion of the 11 60 closing that back out. The other side of this will be back on the balance sheet. If we go into the balance sheet, we see that we have a payroll liability scrolling down to the liabilities. Payroll liability here. If we double click on that, we can see the detail. And again, it's breaking out all the detail here. If we look at this last Jack, we've got the 11 10 looks like the F I T federal income tax and then the Social Security for the employees. They have sold security for the employer, the Medicare for the employees, the Medicare for the employer. So when we're thinking about the total taxes we owe in terms of payroll tax expense, it's breaking out byline Adam and by paycheck within the transaction detail. So once again, this is one employee, and we're saying, saying there's 110 that we owe to the federal government in this case for federal income taxes that we took out of their paycheck. We all 49 60 for the Social Security that we took out of a paycheck, that we got to write a check to the government for well 49 60 for the self security that we oh, based on their wages for the employer side. And then we have on 11 60 for Medicare that we took out of the employees pay check that we owe to the government. And we have the 11 60 that we owe based on the employee's wages. The employer portion. If we double click on any of these were going to go to the pate, check here again. We don't see the paycheck amount the net pay or the gross pay. We see this activity being broken out here. The taxes what is owed in terms of taxes. So if we look at the detail, what we see and the accounts payable is the 110 what we over federal income taxes that we took out of the employees pay Check the 49 60 that we took out of the employee paycheck for Social Security. The 11 60 that we took out the employee paycheck for Medicare and then our portion of the 49 60 that we owe and our portion of the 11 60 for Medicare that we owe. So if we closes back out, closes back out. Once again, there's the federal income tax. There's the employee portion of Social Security, the employer portion of Social Security, the employee portion of Medicare, the employer portion of Medicare broken out by in this case, one paycheck. Same information would be up here for the second paycheck, and if we had more than two employees, you can see that this would be a detailed transaction by account report 86. 8.90 Rental Income, New Account, New Item QuickBooks Pro 2018: Hello. In this presentation, we will record a rental income within QuickBooks Pro 2018. In so doing, we will set up a new account, four rental income. If you've been working along with us, we will continue with the get great guitars problem. If not, that is okay. We would follow along. We can still follow along. We will be creating a create sales receipts for rental income that has been received at this time. In so doing or in the process of doing this, we will set up a new rental income account and a new item account for the rental income. If you have the backup file up until this time, you want to hit the drop down and go to restore the backup and that'll take you to the this point in time. If not, that's OK. You can follow along. If you do that. Be great because we'll have the same data. If you've been following along with the problem, you should have the same data as well. We have the open windows tab open in order to open the open windows. Tabs go to the view tab and open windows. We also have the company Home Page Open, which is at the company and home page. That's where we are at at this time. We're gonna set up rental income. So first I'm gonna take a look at our income statement and see what we have so far and then figure out what's the best process for us to record the receipt of income for rental income for renting and our case music equipment for this time period for this month. First, let's take a look at the income statement or the profit and loss, as it's called within QuickBooks. By going to reports, company and financial, we're gonna look at the profit and loss standard changing the date range from 0101212 12 31 to 1. Here is our income statement. We have two types of income. We have merchandising sales. That's when we sell the actual merchandise, mainly guitars. We have the service items. That's gonna be our service. Items are maintenance items and currently lessons in terms of guitar lessons. Now we have rental income in terms of music equipment, renting out music equipment. We could put that into the same service area. It's not merchandising income. Or we could set up another account called something like rental income. If it's gonna be port of our business often, then we want to put it up top in terms of rental income up in this line item. If it was something that we're only gonna do from time to time, then we would have it down here in terms of rental income that we just so happen from time to time, we're gonna be in the business, hopefully of renting some of our equipment out. So we're gonna include that up top in the rental income as another incomes account. Now, when we add the income account, we could do that by go into lists, and we're not gonna do it this way. But just to show we're gonna goto lists and chart of accounts. This is our chart of accounts. We could add the new account by going to accounts at the bottom and add new. That's one way we can set this up, and when we set it up, we were then set it up as a revenue type account or an income type account here, and we could do that, but we could also set it up as we go through the process of recording our transaction. So that's the way we're going to do it. So I'm gonna close this out back to our income state. When we set this up, we're also gonna have to set up the sales receipt and use an item in order to set up the sales receipt. Meaning we have a new revenue item and that's gonna have to be set up within. Or it could be set up within the items lists. And that would be here, that item being rental rental income of some kind. If we were to go to the lists, then we could go to the item lists, and that would give us usually this. There are service items here. So here's our service items. We're gonna have to add a new service items, something like the rental income on the service item in this section. Again, we're going to do that as we go as we put in the data. So when it closes back out, we're gonna go back to the home tab, and we're gonna enter a create sales receipt four rental income for rent in music equipment . We're gonna go through our data here first. We got the customer and it came from a music store. Stuff is who we rented to so music store stuff. I'm gonna type that in current customers. So it's gonna pull up automatically tabbing through this. We're gonna keep that template. We're going to say that we got paid already with a check, so we'll keep the check. We're gonna put it in there. As of the end of the month to 28 sales number will be the six again. The sold to should populate on its own check 647 to not our check number. That's the check that we received from music store stuff. Then we're gonna need a new item. So we're gonna have to put in an item here. This is either the service items here or inventory items that we are selling. In this case, we have a new service, Adam, that we are selling. So we're gonna type in. I'm gonna call it on inventory count. We're gonna call it rents on music, equipment, rent, music, equipment. We're gonna say tab, and it's going to say QuickBooks did not find this equipment in your list. So do you want to set it up? Yes, we do. We want to set that up and we're gonna have it be called a service item. We're not selling the equipment this time. We're just renting it out. So we're going to say it's a service item. We're gonna say the item number is here. Subscription description is gonna be the same. It's gonna be rent music equipment. Now the rate is going very depending on the music equipment we have. We could try to piece it out in terms of how much music equipment or what music equipment we are going to rent. I'm gonna put it in there. At the current price, we're gonna charge 4500. That's something that we is gonna it's gonna populate at 4500. It could very depending on the contract that we set up for different music equipment rentals. We in practice, we might want Teoh piece out the music equipment and have each piece of music equipment the rented at a different set or have packaged bundles saying, if you if you rent this package deal for a weekend, then this is how much it costs for that package of rental package. So we're gonna put it in there by 4500 Were going to say that that's where renting this music equipment for a weekend or something like that. It's gonna have taxes. We're gonna have nontaxable. It's gonna be a nontaxable item. The account that it's going to go to once again, an income statement accounts usually and we could put it into services. But we're gonna make a new one, and we're gonna call it the same rents music equipment. So we've set up a new item and a new revenue account as doing this. So we're going to set up a new account as doing this. Once we select tab, it's going to say, set up. We do want to set it up. So this is gonna be the account we're gonna we're gonna set up as the default account when we enter the inventory item of rental equipment. When we rent music equipment, we're gonna keep the name, their description, eyes going to be the same note that it defaults, of course, as an income account already because we're entering it in as on them on the sales receipt, which would be makes sense to be an income account. We're not gonna populate any of the rest of the items here and save and close and there will be our items. So if we so know what we have done here, we set up a new service item called Rent Music Equipment. That's gonna be the driving thing that's gonna cost out when we make an invoice or a sales receipt, as we have done here. And we've created a new account called Rents Music Equipment on Income Statement count, which will appear on the income statement as a separate service line item. So we're gonna say, OK, there is that If we make this a bit larger, there's there. There's our item. There's our description, the same in this case, no tax quantity. We're just going to say is one. So we have the 4500 no sales tax. That means 4500 total. Nothing in terms of, uh, inventory is being sold and therefore the journal entry as we create this will just be an increase Teoh the revenue and an increase to the UN deposited funds because we have not yet taken the funds to the bank. I'm gonna go ahead and uncheck the print later item here. We're not gonna print this item and then we'll just say save and close. Take a look at the income statement and the balance sheet and see if it has done what we believe it should do. So we're gonna say save and close. If we then go, I'm gonna first go to the balance sheet. Going to reports, scrolling down company and financial scrolling down to the balance sheet Standard changing the date range up. Top customized reform date range is gonna be from 0101 to 1 January 1st 2021 to 12. 31 to 1 December 31st 2021. Okay, there we have our information now. Didn't go into cash even though we got a check. It's going into under positive funds right there. There's are under positive funds, double clicking on that item scrolling down. There it is. There's the 4500 double clicking on that. We then see our sales receipt. If we close this backup, close this backup goto our profit and loss, which is going to refresh automatically since last time we had it open in the open items window. We now see a new income statement. Accounts we had merchandise income are so healthy before we had service before. Now we have rent music equipment. Note that within the income section, as we add a new account, it's gonna be in alphabetical order. So it's not. It's It's in order first by type of account income before cost to get sold. It's in order, second, by the order of the accounts, because we didn't assign any account numbers to to specify the order in any other way than that. So note that within the account type it'll be ordered by alphabetical order by default, unless we have some other ordering systems, such as account numbers. And there's going to be our rents, music equipment, income account. If we double click on that, there is our rental. If we double click on that, there is our sales receipt closing this back out, closing this back out. That is what we have so far in terms of recording the rental income and adding the new account for rental income as well as the new item 87. 8.95 Comparative Balance Sheet & Income Statement QuickBooks Pro 2018: Hello. In this presentation we will create comparative financial statements within QuickBooks Pro 2018 including comparative balance sheet, comparative income statement, and will also create a transaction report by date. And take a look at them in context to what we have done so far. If you've been working along with us, we will be continuing on the get great guitar problem. If not, that is okay. We're gonna produce a comparative balance sheet, income statement and transaction reports by date, and then look at them in context with what we have done so far. Meaning we're gonna compare one month to another month and then take a look at the transactions in accords with the transaction report and how we might use that report. Teoh test ourselves to see if we're entering the data that has been entered correctly. Currently, if you have the backup file, you could go to file and restore the backup file to bring you to this point. And we also have the open windows list open that is at the view and open windows list. We also have the home tab, the only open tab being the home tab, which you can find at company and home company and home page in order to open that up. That is where we are starting here. We've been entering data into this problem. So if you're working on a 5.5 of the data within the problem, whether it be this data or some other data, we will practice the format of just making a financial statement in terms of a balance sheet and an income statement that is comparison between one period and another period. So well, first, generate those reports. We'll take a quick look at what we have so far, what we put in place. And then we'll look at the transaction report. And that's a really good report for us to try toe see what is happening. And if there's any problems with what's going on, the transaction reports of Great Port Report to look at. So that's what we will dio here. We've been entering data for January and February of 2021 the year we're working with, and so now we're going to run these reports and take a look at them so and first we're gonna start off with the balance sheet so we're gonna go to reports up top. We're gonna go to company and financial scrolling down to the balance sheet, and we're gonna change the date range. Now, this time I'm gonna go back up to the rain. So if we drill down on it, we have to do we could see information, and I'm also gonna make this comparison so we'll do this in a two step process. I'm gonna first go to this item. Well, first, let's do this. I'm gonna I'm gonna close this back out first. Let's just change this date and we're gonna make it as of a point in time. And that will be 02 28 to 1 for our problems. So we've been entering data for January and February. The balance sheet is typically seen as just one date frame, which is the end of the time period. So here is our balance sheet. We are in balance assets equaling liabilities plus equity on the balance sheet. And that's is our information. Now what we would like to dio rather than printing this out, it's have a comparison. We would like to see where we stand as of this point versus the prior month. In order to do that, we're going to go to the customized report item here. When looking at the information displayed here, we see first the dates. Now note we have a two in A from an A to date now, Whereas when we looked at the financial statement, we only had the one date here. That's because the balance sheets only presented as of one date. But if we wanted to zoom into it or if we wanted to do some of these other options, we need a date range. What we want to see here is we want to see the prior month. I want to see a comparison once the last month, this month, and then the difference. What we're gonna do to do that is go down here and go to the previous period, and that should give us the previous period. And then I'd like to see the change, Which would be that the change in terms of dollars and then the change in terms of percentage. Now, if I do this with just this range, it may not give me the full rent. What I would like to say is this month. So instead of the 28 I'm going to say the month of February 1st, Teoh February 28 the whole month and then we would like to see an equivalent timeframe prior to that which should be the month of January. Note. We're not choosing the prior year we're choosing, which is in the prior month in order to run this. If we say OK, then let's see what we have here. We've got the month of February. The month ended in January and then we see the change in terms of dollars. If we were to calculate this, of course, we would think that we would have to make this is smaller. Here, we're going to have the 99 to 10.56 minus 94 436.17 and that will give us the change of 4007. 74. 39. In order to get the percent change, we're gonna take that change column and divide by the prior month. The 94 in this case in January 94 4 36.17 That will give us if we move the decimal place over two places and round to the one decimal 5.1, That 5.1. So there is this information. That's how this is gonna be calculated. It's really useful to see the change. Of course, when we know our own business and we can see the dollar amount to change, it's also useful toe have this change in terms of percentages because then you can look at that percentage change, and that will be something that can be compared to other line items as well as to other companies. More readily, other companies that may make more or less money, we can compare these percentage changes, and that often is a useful format. What we're gonna do now is we're just gonna take this information and export it. This will be our evidence. We're gonna export this information to excel. So I'm going to go to Excel. We're gonna create a new worksheet, and we're gonna put that into a new workbook. This is the first workbook we have made. We're gonna export that Excel will then generate Excel Open Excel, export this data, create a new worksheet with it, and put this data to that new worksheet here. It is a couple things to adjust. I always adjust. It has to split screen all the time when we have it, that's this split screen. I'm gonna take that out by going to the home tab view and in the Windows group, I'm gonna unspool it the screen. So we'll start off with that. Note that if you go to the view tab over here, you do see the header here, the balance sheet, and I'm just gonna then change the name. I'm gonna double click on it, and I'm just going to call it the balance sheet. I'll just call it balance sheet and we'll keep it there. Since we're not gonna have another balance sheet and a comparative, we might want to have to change the names on that. But we'll just keep the tab like that. Then let's save this. We're gonna save our other reports to the same work book so well say, save save as I'm gonna browse to find where we want to put this going to scroll up, I'm going to go Teoh desktop and scroll down to d get creates guitars. We're gonna call it. This is in section eight. We have our amortization table. We're gonna put section eight reports section AIDS reports and save it there. I'm going to say yes. And there we have that. And then I'm gonna close this and reopen it when we create our next report. So that's the first report we want. Then I'm gonna We're gonna look at the income statement, do a similar type of report for an income statement so or profit loss, as it's called in QuickBooks. So we're gonna go to reports we're going to go to company and financial. Take a look at the profit and loss of standard and we could change the dates here now. And we want the dates to be the second month 0201 to one that you're wearing February 1st 2021 202 28 to 1 February 28th 2021. This would be the standard profit loss of standard income statement that we have been working through on this problem. We would like to have a comparison of February to the prior month of January and then have a difference calculation as similar to what we had on the balance sheet to do that. We're gonna go to the customized report section once again. We currently have the dates here, so we have the month of February already input. We're going to go down to the previous period section. We're going to select that item. And once he that'll give us the previous time period, which will be January. And so we don't want the previous year we want the previous month. We're going to change and make sure we see the difference in terms of dollars. And we'd also like to see the difference in terms of the percentage change. Then we're gonna say OK, and that will give us our information. Here's February notice. It always starts with the later ah, month first and then the prior month. And then we have the change and then the percentage change. So if we were to calculate this, of course it would be the 2000. Well, then subtract minus the 2467 So, Teoh well ST minus 2467.4. That will give us the change of 4 67 40 We're gonna take that number and divide by the prior year, which is the 2467.4 divided by 2467.4. And that will give us if we move the desk full over 18.9%. That 18.9. So on the income statement this change is actually in some ways makes more sense than on the bounce, because the income statement is measuring performance. So when we're looking at the merchandising sales, how how many sales did we make or how much revenue did we make in January fert versus February Or compared Teoh? There was an 18.9% decrease in performance at that point. However, in total income percentages, then we we we went from January of 9 2075 to 15 800 which is an increase of 431%. So that's gonna be That's a good sign for in terms of February. And so if we scroll down here, we could see those percentage changes. Those percentage increases and decreases this being a new company, new operations, it's gonna have ah bigger change between the two months because the first month is to set up the company the second month, you get more into the operations of the company as the company standardizes. Then you would expect these changes to be somewhat constant, hopefully at the revenue having a steady increase to them. That would be somewhat steady over time. That would be something that we would hope to see next. We're gonna take a look over next. We're gonna print this, we're gonna export it to to that same workbook that we set up. So we're gonna exported to excel. So we're gonna go to Export. We're gonna create a new work sheet, but it will go to the same workbook, and then we're gonna take that to the workbook we just set up. So it's gonna be in an existing workbook and we're going to browse. That might not be going to the same spot. It is not. So I'm gonna select the drop down, get great guitars. Section eight, we want the Section eight Report's gonna just double click on That and export it should then open excel, create a new tab, export this information to that new tab and give us that that information in that format. Here we have it. I'm gonna make the same changes. I'm going to go to the tabs over in the view, Tam going to go to the windows section, turn off the split screen we can then check the header and safe. It's better by going to the page layouts. There's the header going back to the normal view. I noticed that put us in front of the prior one we made. I'm just gonna pull it to this to the outer side. So it's in order. I'm gonna double click on it. Profit. I was gonna call it P and l Profit and loss and save it there. We're going to save the changes up top. Save the changes. Close this item, and we're gonna do this. We're gonna add one more tab for the one more report that the transaction report by date Transaction report by date, we're gonna go back up to the top reports scrolling down to accounting and taxes, and we're gonna scroll down to the transaction list by date. Transaction list by date. Going to change the date range just to February. So we're gonna go 0201 21 0 to 28. 21. And this will list all the transactions that happened So this is great for grating. It's great, Teoh, take a look at somebody's work. If if you had somebody that was working in the bookkeeping department yourself asking them to enter the data for the month and you want to see what happened for that month, this is a great report to do that. It's going to give you all the information that has been done over a certain month. If you're grating or something and you're comparing your work t some other work that has been happening then on you want to see the differences, then this is the report to have. So if you went through the profit and loss and you've been following along here and you're February numbers do not match what is on the screen here, and your balance sheet, for whatever reason, does not match. Then we can find the reason by one, you can drill down on this and take a look at each individual line item. But also, if we take a look at the entire transaction list for that time period, that's the way we can do it here. So this is really what you would want to use to check someone's work and check your own work as we go through. A problem such as this and what you have to do is just go through each line of these and take anti the thing out. No, what we have here, we've got the type. We've got the check the deposit, that sales deposits, the bills, the payments that invoices. We've got the dates. We've got the numbers. These numbers may not you know, all of the references. You might have some different references if the references a little difference not gonna change the numbers. We've got the names. We got the memos. We've got the split accounts, which could be very useful because that's the other side of the transaction. So, for example, this went to the Teoh a deposit and the checking account. This is going Teoh bill and its accounts payable, and the other side is inventory acids. Now, this one, we have a split meaning it went to more pop, possibly more than two accounts. So that's why we have a split there. We can't see. It would have to drill down on that and see more detail on it so we can see the one account , but not the other account. And we have, Ah, the amount. And so this is all gonna be useful information. Weaken, Go through this and check line by line. So if you print this reporting you've been following along, you should have this line by line and you want to check him off both ways. Meaning you want to go from this report to your report and check every line off on my report. You want to go through these just line by line and check moth. Now, if the date is a little bit off, you may want to double click on it and change the date. Refresh the report and it might be easier to see in that format. However, if everything is within the same month and we started at the same point, then if the dates are a little bit different and the ordering is a little bit different, it shouldn't throw off the in number. So if you could still check him off, so you want to go through mine and check them off on the screen? So you're going through mine and checking off my report to your report first and seeing that you're checking everything off on my report and looking for any changes that are on my report that are not on your report. And you just want to note those. You'd have to write those down, of course. Or if you printed this screen somewhere, then you can take anti them out and highlight the ones that you find. Check them off and circle, or highlight the ones in another color that you don't find. Then what you want to do is go the other way. You want to check your report to this report and anything that you haven't ticked off. You want to see if there's anything on your side that's not on this side meeting. You might enter something twice or something like that and just do the same thing again. Go through this line by line, checking off on your side that you see everything from your report to this report, and you would just go line by line and see any discrepancies with those two that aren't just the date discrepancies, which you could fix as you go by drilling down on him, zooming in and changing the dates. Then once you go through this. And you see this The items that are on this report that aren't on yours and the items on yours that aren't on this you could then change the dates and see if it's a date problem meaning, like if I bring this all the way back to something like 2000 because we've only entered two months of data in this particular problem. So it's not like I'm gonna have any data prior to that. And if I go all the way out to you know, 2030 something ridiculous because again we only have two months of data you could go through here again and see if anything has been added. That's outside our range of January and February. Meaning Are there any things that happened in January that should have been on this report that are on my report in February and see if it's just the timing difference that that's there, and then if it is changed a date, is there anything outside of our date range, meaning there shouldn't be anything entered outside of February? Oftentimes, the problems the date problem if it's not a date problem and you don't see anything within the date problem. Then, if it's on your report and not this report, maybe it shouldn't be there. Maybe should double click on it and see if it's something that has been duplicated or why. It's why that is the case, why it's on your report, not this report. David on this report and not your report. Then we can consider adding it at this time. If we want to try to take anti everything out, go in there at it and then try to take anti this stuff out. So that's what the way this reports really useful. And, of course, if anything, you want toe check. You can double click on it and you can change anything like the date and whatnot that needs to be changed. QuickBooks is very versatile. I'm gonna close this out and changing information, which is a detriment and benefit, depending on what you're doing. But it's good practice in terms of a benefit, to be able to understand how the financial statements work, to be able to change things afterwards and try to figure out and match what you've been working on. So that's gonna be that I'm gonna change the date ranges back and then we'll print this report out. They're gonna say, 02 0121202 28 to 1. So there's our report. We're gonna go ahead and export this one more time. So we're gonna export to a new worksheet in the workbook that we're going to say an existing worksheet. Let's browse for that to work sheet, going to select the drop down. I'm gonna go to get great. I want the section eight and we will go to section eight to report once we export it should then once again open up the Excel sheets. That should export this data to a new tab within that excel sheets that we have been working on. We will then adjust that tab name and adjust the location. So here's the TAM. It's in the middle again. I'm gonna just click on that tab and drag it to the right. So it's an order as we have been putting this in place and we're gonna put it a transaction report and I'm gonna go. Same items up here will go top view and windows turn off the split and where can check to see that the report in the page layout of you has the header up top and then go back to the page a normal page note that if we were to print this, we would have to fix the printing, But we'll keep it as is now back to normal. All right. And there we have that. It's been the report is saved there. So I'm gonna go ahead and save the changes, okay? And close this out, and those are the reports that we will be running. 88. 9.10 Bank Reconciliation First Bank Reconciliation QuickBooks Pro 2018: blue. In this presentation, we will create a bank reconciliation within QuickBooks Pro 2018. As we do this, we will be working with the first bank reconciliation for a new company, which can cause problems when we have that first bank reconciliation. So we'll discuss some of those problems and how those problems can be fixed. If you've been falling along with us, we will be continuing on with the get great guitars problem. If not, that's OK. We will be doing a bank reconciliation, the first bank reconciliation for that company and looking at problems related to finishing the first bank reconciliation. If you have the backup file up to this time, you could say file and restore the backup file that given us the data so that we can reconcile that data. If you've been working through the problem, we should have similar data, but that the backup will get you right to that point to make sure we're on the same page. We have the open windows open to open the open windows to go to the view tab, and we want to select open windows list, and the only open window is the home tab to open the home tab at here Company home page. That is where we are at what we're gonna do this time. What we have done so far for this project is we have entered a new company where merchandising company. We put all the beginning balances in their prior to the 1st January. That we are going to start operations, which were things is January 2021 and then we enter data for January and February. We have not yet reconciled either January or February, we're going to say Now we've got the bank statements and we're gonna go ahead and use those bank statements in order to reconcile the bank accounts. There's gonna be one of the most important things that we have to do in terms of the double entry accounting system to make sure we're doing things correctly. I cannot emphasize this enough if you can. If you can reconcile the bank accounts, then you have some pretty good assurance that you have the information into the system. It may not be in the system totally correct and doesn't mean there's not errors, but one. The system is given the check of having the double entry accounting system, meaning debits will equal the credits or assets will equal liabilities plus equity just by using QuickBooks. And then, if we can reconcile on top of that, that means that an outside party that means that the bank is actually checking and verifying every transaction that we have that goes through cash and cash is going to be involved in any of these cycles, whether it be the vendor cycle, customer cycle or employees cycle. The timing difference will be different because we are on an accrual basis. But by us. Reconcile in the bank account were really given a check not only over our checking account , not only over just our cash account, but also giving some verification over every cycle in the process. And therefore, the reconciliation is not just the check to see if the bank made in air and make sure that the bank didn't make an error. It is a huge check against theft happening and problems of that nature. But it's also a huge check, just in terms of everything, every system we have. So it's our second biggest control. If you're using QuickBooks and you're putting all the data within it and you're able to reconcile. You can have some pretty good assurance that at least the data is in there and we have some pretty We have some pretty good numbers that we can work with. So in order to do that, if, by the way, if you don't have the pink reconcile, have reconciled, then Ah, lot of times I wouldn't have a whole lot of faith. And in that all the data has been input to the system or that it's all been input correctly . It may be it may not me. Most likely there are problems and there are errors. Uh, we will still have some information that's relevant in using the double entry accounting system to input that data. But this this check is is pretty crucial. Teoh really have trust in the financial. So let's take a look at what we have so far. We're gonna go to reports we're going to go to company and financial, and we're gonna scroll down to the balance sheet, and we're gonna put the date here is gonna be no. 1 31 to 1. That's the end of the first month that we have operations in Now we're gonna compare this number in the bank statement. Teoh. Well, this is our books to the bank statement. So what we're gonna have, of course, is a bank statement by the end of the year. And you would think that if everything was done well that the number would equal on the bank statement this 4 94,036 17 and everything would be great. And we would have a verification from the bank that that number is indeed the correct number as of January 31st however, it's never gonna be the case where that members the same unless we have very few transactions because there's always gonna be some timing differences. So if we think about our personal checking account, if we wrote to the rent check today and then we went to the A team and checked our deposit and it didn't include that 500 or fact that were, you know, $1000 rent check or whatever, then we're pretty confident that that about that's in the bank is wrong by the fact that they haven't yet received that that outstanding check. And that's going to be the case where We're always gonna have a difference in terms of outstanding checks and possibly outstanding deposits. Meaning checks take a while that clear. And therefore, when we write a check when we send a check, then someone else has to receive it. They have to put it in the bank, and then the bank has to somehow talk to our bank or get to our bank to talk to it in order for our bank than to process the check being withdrawn from the from the account. So what we're really gonna do is we're trying to find narrow down the differences to just being those differences in outstanding checks. And if we can do that, then we can say that everything else is correct in that we have a double check by third party bank, checking off every other check that we have written. So our goal here is to reconcile the difference between this checking account and whatever it says on the bank statement. And by doing that, we're not really looking for those differences just to find the differences were trying to find the differences in order to then say that everything else that has been input, thus far is correct, and that's what we're looking to do. So let's take a look at the bank statement. Here is an example of a bank statement. So we're gonna have the bank statement for January 31st 2021. Typically, we're gonna have a recap on the bank statement. This is we're going to say this is from the bank. Obviously, this is an imaginary statement, but this is a bank statement were saying from our bank, and it started off with 25,000. That's the beginning balance that will have in the bank statement. And that's really what we started off with. We enter that amount into the checking into our checking account as a beginning balance. But that's one of the issues. Often times people have win reconcile ing the first bank account. So we'll talk about that beginning balance. Then we have the additions and the withdrawals and subtractions giving us our Indian balance. Therefore, this is our Indian balance. For the bank statement, we had 94 4 36 17 on our books, and that's gonna be the reconciliation as of the end of the month. What is the difference between those two and we're gonna find and try to narrow down that difference to just timing differences. Then we have the deposits by date, and then we have the checks by date and also by check number, so we can check these off in a couple different ways. We got the check number and the amount and the date, and then we have some other things that aren't checks that are going to decrease our deposit here. We just have withdrawals and bank charges, bank charges. We could have other other items down here like non sufficient funds and other types of items that would be down in terms of other types of transactions That would decrease our bank account from the bank statements side. So our goal is to reconcile these two amounts. Let's go back to QuickBooks. Remember that this 94 4 36 that's what we need to reconcile to the bank statements. 1094 15. In order to do that, we're going to go to the banking up top and we're going Teoh, reconcile the bank accounts. So we're gonna go reconcile. This will be our reconciliation screen were going to reconcile as of date of January 31st 2021. That's the first month that we have actually started in putting data. We then have this 25,000 as the beginning balance. That's the beginning balance we set in our checking account as we set up the checking account. This is one of those points that if we had not set up this 25,000 we could try to go back in now and set up the beginning balance. That balance being the balance from our prior bank, save it, meaning it should be the Indy balance on the 12 31 2020 bank statement. And that, then, is where we're going to start from this point. So we need to have that beginning bounce in there, either in this form here, or note that we need to include it in the the check register at some time, typically before the date that we're starting to input data into so that doesn't affect our income. Statement on the current date or any of the balances on the current data just gives us the bank balance as it needs to be in accordance with bank statement and then we can check it off when we go through the checking off process. So it needs to be in one of those formats, either here in the beginning, balance or input into the check register so that we can check it off. Ah, as we go through the process, that's the one of them. One of the tricky parts of doing the first bank reconciliation once it has been completed. Once you've done the first bank reconciliation that beginning balance should always be the same as long as we've completed the process correctly, because we will end off with the ending balance of the prior bank statements which will always equal the beginning bounce that we have some maturity and you'll be very confident with that once you start doing the bank statements a few times, but the 1st 1 oftentimes we don't have a lot of confidence with it. When were first, you know, learning the first bank reconciliation. And and, of course, the 1st 1 is the most difficult. Technically as well. What we're gonna do now is put the ending bounce from the bank statement and remember, that was 109415 We're just taking that number directly from the bank statement as the ending balance. That bank statement being what we received from the bank, giving us that Indian balance, this other information, we have a service charge. Oftentimes we might have service charges. We saw that we had bank service charges of 15. We could input that here and record that. But I recommend not doing that cause it kind of muddies the waters. When we're trying to figure out the reconciliation, it's easier in some ways to just put that in place in the register or some other format, so that when we reconcile, we can check it off. So that's what I'm going to do. That's what I recommend doing. We could have interest as well, meaning we might have earned interest on the checking account, and we could input this year. But again, that might make the reconciliation a little bit more complicated to understand. Therefore, I recommend just putting in the interest as a journal entry or into the register so that we can see it in this process, and that will make more sense once we do this. So I'm gonna say continue now and this is what the bank reconciliation screen looks like. So we have on this side the checks and payments. So this is everything. Decreasing our books in terms of cash and we have the date. We have the check number. We have the pe e, the amount and the check number and the amount are really the most relevant. And then, of course, the date. However, the date are not always gonna follow through the bank statement because of those timing differences, whereas the check numbers and the amounts should tie out exactly on the deposit side, we have the date and really the only other relevant amount item is the amount. And so that's how we're gonna have to check off the deposit now. Typically, there are less deposits, so they're gonna be easier to dio, even though we don't have that added set of data being the check numbers for them at the bottom. Here we have our reconciliation. The difference right there that needs to be down to zero once that is at zero, then we should be reconciled and everything is good, meaning the difference between our books and the bank has been has been reconciled. So What this is saying is that is that this 25,000 is what has currently been clear. That's are beginning balance. And if we are able to check everything else off in terms of everything that's on the bank statement to what's on our books, then this balance should go down to zero, and we should have found the difference and that will that will bring us in balance. So we're looking for the cleared balance to equal the ending balance of the 109 for 15. As we do this, I'm gonna try to put this side by side as much as possible, but not make the screen too small as much as possible. So here's our book balance. Here's the bank reconciliation. Here's QuickBooks. Here's the bank statement that we're looking at her part of the bank statement and what we need to do now. It's just all we do is go through this and tick and tie out to just check off the bank statement to the book. So we're just gonna find each amount on the books and tie them out to the bank's name it and check them off anything that hasn't been checked off will then be the differences. What's gonna happen in practices were just going to say anything that's on the bank statement. Typically, if it's on the bank statement and not on the books, usually that's something we need to adjust on the books. Usually that's something we need to fix on our side. For example, we have down here the service charges and the bank When the with holdings. Those are not going to be on our books yet. We haven't input them yet. Those are things we're gonna have to fix. So we're gonna actually go into the check, register and fix those, as as we see those when we see those differences. If, on the other hand, it's something that's on our books, that's not on the check register. Not on the bank statement, I should say. Then it's most likely something that is outstanding. And that means that it should be okay, because it's gonna clear in the next month in February, and we'll see if that is the case when we do February's bank statements. So those are just the timing differences. Those will actually be the reconcile ing items that were looking for so if we go through this on this side, we see the checks. So this is gonna be the first thing we're gonna check off. Here's our check numbers on the bank statement. We have the date. We have the check number and the amount. Here we have the date, the check number and the amount. All we're gonna do is take anti these often and have tried to do this side by side is best weekend. So here's just one. I'm If I had a highlighter, I'll just highlight this whole thing. I'm gonna say we have found that and there it is there, and then check it off on this said, next one, we see the 16 I would highlight that and check it off on this sad next one. We see the 7000 note. The dates are not the same because they cleared later. Always gonna be later on the bank statement, but the amounts of the same and the check number is the same. So all we're gonna do is just say we found that one. Check it off. Next one, there's the 400. There's the 400. We found that one. We're gonna clear that off. There's the 5 98 There's the 5 98 We found that one. We're gonna go ahead and check that off, and then I don't see this. 11. I see the 6 20 That's the next one. We have number 10 There are eight. So we're gonna check off the 6 20 and skip those other two. Found that and then we see the 15 that's gonna be down here. Check number 1010 So we find that and there there are the withdrawals. Now we don't see the 80 or the 15 over here. That means we're probably gonna have to fix it. And we see these other checks that were written in January. This check number 100610071009 Those are in our books, but not over here. But we're not overly concerned with those because it looks like those were written at the end of the month and therefore we're going to have Teoh check them off, probably next month. So if we were concerned about those especially like this check here, we might want to make sure that that has cleared, we can call the bank. It's a hate that clear in February. If it had been, it's just the time indifference. And we're okay with it will pick it up on the February Banks reconciliation as we'll see. Let's take a look at the deposit side. Now here is the deposit side in QuickBooks. And here's our bank statement. So we're just gonna go to the same thing. So we got the 50,000 here. We see that. So we're gonna highlight that and check that off. Here we see the dates different again, the date I's gonna be different than the date here. But, um, the amount is the same. And so we're gonna have to basically go through that. It should be easier for us to take anti these out, even though we don't have the extra reference of the Czech number because there's fewer deposits and we group them properly. Hopefully so they'll be in the same grouping in the bank statement as we go through this. That's part of the benefits of grouping that deposits together and going through that UN deposited fund process in the when we enter the deposits. So here's this number There's the 65 there's the 6 28 There's the 6 28 there's the 20,500. There's the 20,000 to 500. So we thought we've have found all that. And if we look at our reconciling item, then we see that we're off by 95. That 95 is the difference from our bank statement that we haven't yet found a home for because they haven't been input in our system yet. So all we need to do is find a home for these. We need to input this item into our system, and we should be okay after that point. Note that we do have this deposit on January 28 that didn't clear here. It's not on the Ah bank statement and that might be concerning. We might want to call the bank. It's a hated that clear As of the end, it's been three days. Did it clear in February? If it had, that's okay then it's just the timing difference. We're just going to reconcile it, note that it is a time indifference and move forward. Now what we will do is take this 80 that is on the bank statement and entered into our books in QuickBooks. There's a few ways to do this. I'm gonna do it. That what I believe is the easiest way. And that is by the register. So we're gonna select banking. We're gonna go down to use register, and it automatically opened the checking account because we have a bake reconciliation open . I'm gonna enter it as of the end of the of the month 01 31 to 1 being the date. It's not gonna have a check number. I'm I usually put something else like other in there, Some other reference number and I don't know who the page. It looks like a withdrawal that we had. So we might have gone to the A team of bank. It pulled out money and ah, not reference where it was going, Dio. And so we're gonna put 80 is the amount that's gonna have to be decreased now, we don't know where it might have been a draw that we took money out of the business checking account for personal use. Or it might have been a business expense that we put We pulled money out. We're gonna assume here that it is a business expense that we we used the money for. This is one of the things that we have to go through when we when we see these differences on the bank statement from our books and enter them into our books, we know that the cash account needs to go down, but we also have to have some other account for our reconciliation process. Typically, it would be some kind of expense if if there's if there was a decrease on the books, it might be draws, however. So if you took the money out, if we took the money out for personal use, we should select draws or the capital account. So it's not decreasing our net income because it's not really part of of the business operations. And if it's so in that case, we would use the capital account. So if it was a draw and you were looking for a draw, we do have an owner's draws. You can put it in there. If you don't, you could put it into the equity account. You don't want to put it into an expense because that distorts your your income statement. It puts personal expenses, expenditures on the income statement, which we typically do not want to have their we're gonna We're gonna assume that it was for the business, but we don't know exactly what it was for. So I'm gonna make an account. Our favorite account ah, is a miscellaneous expense. And this is where we're gonna put expense items that we don't know where to category go rise or they're too small for us to categorize them into another grouping or category. So we're gonna say tam and we're gonna set that up. It's gonna be a set up. It's gonna assume that we wanted as an expense account it is correct we wanted as an expense account. So we're gonna keep that everything else will remain the same, and we will save and close now, in order for it to record, we have to select enter. So we're gonna enter, and there is that item. If we then go back to the bank reconciliation in our open windows, it should appear there. There is the $80 right here. Just gonna check that off Now we're even closer. We're only $15 off on our reconciliation. That 15 is of course, this bank service charge. So that's gonna be the next item we're gonna input into our check register. Going back to the check register in our open windows were gonna select 1 31 again. Once again, I'm gonna select other. And we could put the bank name, but I'm gonna leave it blank here for the payee, and we're just gonna put the amount of 15 and then I'm looking for a bank service charge. And this We do have a bank service charge here that was set up, so just type that in there. We have it there from the set up when we created the QuickBooks file using their chart of accounts that chart of accounts being for a merchandising company. So QuickBooks will set that up. If not, then you can go through the same process bank, service, charge or service charge of some kind and then add that account. Make sure it's added as an expense type. And once again, we want to make sure that we select entered so that it does record. Otherwise, when you go to the bank reconciliation, you will not see it, and then we're gonna go to the bank reconciliation, open windows and then we should see that 15. There it is, the 15 and that will put us back in balance. That's going to be it for be checking these things off. We're gonna finalizes. But before we do do do want to point out that this is a bit more simplified than some cases , Maybe if we had not just started the bank accounts right before we had the first month of operation, meaning if we didn't just start writing checks in January, the first month of operations, we may and most likely Dio have checks that were written in December of last month that are clearing this month because they had not yet cleared. In other words, we're gonna have outstanding checks and possibly outstanding deposits as of the prior month . So in the in this example, we started off with a beginning balance, which we could get from the bank statement, and we would get from the bank statement of last year of 25,000. That's fine. We can enter that beginning balance. We put that in the beginning balance window. If we had not had it in the beginning, balance window we could just put it in as a deposit before the month that we are starting and then just check it off on this side and will still be reconcile ing, However, if we have some outstanding items that we wrote checks for last month that are not included in the first check that we wrote in this first month of operations. In other words, if this check right here of 1001 is not the only check that cleared or not, the first check that cleared in January. But there were checks that we wrote in December, which had not yet cleared the December bank statement but were outstanding. Then we'd have to enter those here because those outstanding items would have to be checked off here. In order to do that, all you have to do is go to the checking account and then enter those outstanding items here. Just make sure that the date is before that, the current date of operations. It's in December in this case and that way it will record it as of December, and any expenses related to that will then clear off in December won't affect your income statement in the current month that we are working in. And you could just enter that data if you want it even to enter it as a lump sum data for all the outstanding items in order to reconcile for that first month, you can do that. Although putting the detail and of each check that is outstanding would be the preferred method that this first reconciliation is the most difficult because of that problem, these problems of having these outstanding items and putting that beginning balance in place, especially if you are working with a checking account that had not been started. I mean, it had been in place in other words, before we started using it Teoh to reconcile our books within QuickBooks. So you want to enter those checks once you would enter those checks as of December of 2020 in this case, then you would go back to the bank reconciliation, and you can check those off and those will be. The difference is that you will need in order to remain in balance. If that doesn't quite make sense to you, wait till we get to the next month. And that might help out with that process because we'll have that same issue here in that These checks were written in January, but they're not gonna clear until February. So when we do the February bank reconciliation, we will see that these items will clear in February. We will have to check them off in February, even though they're in our system in the books in January. So we're gonna go ahead and finish this. We're gonna reconcile this item. Note that if this is not zero, it's going to give you an air sign and say this is not records held, and it's gonna ask you if you want to force it to reconcile I highly, highly, highly recommend not forcing it to reconcile most of the time. Maybe you have to on this first bank reconciliation, but by forcing it to reconcile, it's gonna make it do a journal entry. And when it does that, it really defeats the purpose of the bank reconciliation. Because again, you have no assurance that everything is checked off, that everything is input because you don't know exactly what that difference it is. And it could be a combination if this is off by $5 even. It's not just that your cash is off by $5. It could be that you have a deposit of, say, this, 12,000 that's off. And then a bunch of checks that are not in there. And it could be a significant difference that that a combination of things that are a problem throwing your balance off by only $5 if, on the other hand, so any balance that that you have that is not completely reconcile really declines the, uh, the level of assurance that the bank reconciliation gives. So you really want to look at it? And if you if you have the beginning balance that's the same and you're able to check everything off, it really should be not too difficult to check everything off and bring this into a reconcile ing point. And if you have to go in and adjust things I'd rather not. You'd rather not adjusted here. You'd rather not force it to make a journal entry. You'd rather go in here and do whatever you gotta deal like record that, for example, are $80 to the miscellaneous expense that we don't know exactly where it went. We'd rather go in there and recognize it and put it to miscellaneous rather than just allow QuickBooks to force the journal entry for us. So keep that in mind, we're going to reconcile, and it's gonna say, Ah, QuickBooks is giving us some information about the services. So I'm gonna say OK here. Now, when we have this screen, typically you can print this. You really want to print these in some way? Probably just as a pdf file. But you wanna have them printed in some format? Because once you reconcile multiple, you can't. You can't really go back to these reports as easily oftentimes as you can with other reports. So that means that you want to have the hard copy of the reports so that if there are problems and there could be problems later on, if we'd say delete checks or something like that, then you want to have this detail. So you want to have at least the detail. So you have the detail, and I usually say both the summary and the details, so we'll take a look at both. So let's display them. So I'm gonna say display and say, okay, and then we're going, Teoh, print these or export these if they allow us to export them to excel. So here we have the bank reconciliation. Uh, this is the summary report. And what we're saying here is we've got the beginning. Balance is the 25,000. Then we had these checks here. There's nine of them that have cleared and the deposits four have cleared. So that gives us the total clear transactions to 84 4 15 giving us the 1094 15. This is the cleared balance, meaning these items have all passed. They've all cleared the bank and have been checked off in our system. That, then, is the bank balance this year. That's the bank balance. What we're looking for is the difference between are the bank balance now and what we currently have. If we go back to our our balance sheet in the open windows item, we see that our checking account is now at 94 3 41 17 We adjusted it slightly for the $80 withdrawal that we just input into the checking account and the bank service charges of 15 . If we go back to the bank reconciliation summary. We see the 94 3 41 70 year team here. That's the register balance. The difference between this 1094 15 and this 94 3 41 17 are the outstanding checks. There's five of them at the 16 29 and the deposits of one of them outstanding of 9 55 So this is exactly what the differences in terms of these five checks that one deposit have not yet cleared. That is our book balance. That's the bank balance. This is really the reconciliation pope portion of this report right here. That's what we need to dio. And then we have the new transactions. This is saying that there's 12 checks and payments that are new and deposits and checks that are new. This giving us the ending balance, our latest balance. In other words, if we go back to our balance sheet over here and we go to our latest point in time changing the date for us, we can change it even to the end of the year. 12 31 to 1. Then we're saying our latest balances 99 1 15 56 So that's gonna be where we are at at the latest point in time. So if we go back to our bank reconciliation, that's the latest point time. So as of January 31st this is really what we're looking for. If we double click on this, we can't. We don't have the drill down features here, so note that you don't have the drill down features to get these five checks or this one item. So that means that you do have to have the balance detail. And so I highly, highly recommend printing out the balance detailed report as well. So we're gonna go ahead and export this by go into, ah, reports up, Tom, we're gonna create a new worksheet, and then we're going to place this into a new workbook within Excel. We're gonna export this item, and once we do this, it should generate an excel sheet and export this to a new tab within the Excel sheet. And it has done so. So here's the Excel sheet that has been generated. Now I'm going to adjust this a bit. We're just going to go to the View tab. We're gonna go to the windows and the split and there we have that. I'm gonna double click on the name and I'm gonna call it think wreck summary. And there we have that. And then And then if you know that the header once again, if we go to the page layout, we see that it does have a header. If we were to print this out back to the normal view, then I'm going to save this. We're gonna goto file save as browse, going to go to desktop where we got this information somewhere. Hopefully get great guitars gonna add a new section New section nine and I'm gonna put that person ports. And that will be that. Yes, and closed out. So then I'm gonna close this one. Well, let's keep it up. I'm gonna go to the bank reconciliation detail in the open windows. Now, Now, this gives us the same information, but it looks a bit more messy, but this is really the report you want if you only save one of them because it gives you that detail. And you really would like to have that detail if you have to go back and look at it. So it's gonna give you the beginning balance, and that's gonna give you the clear transactions. Here's everything that cleared, and this is not as important of the information because the fact that it cleared means it's on the bank statement, which, if we have the bank statement, we have that. So this is the stuff that we checked off. It cleared the bank statement. Then we have that cleared balance, which is the 1094 15. That's the amount that is on the bank statement as of January 31st and that equals What has cleared are you know, the clear balances that we checked off here on our books. Then we have the detail that's really important. The difference between this number and our book number, the 94 3 41 17 on our balance sheet versus what's on the bank statement is the difference of these outstanding checks. Ah, the 106 the 107 And so on. These being the amounts that 16 29 33 is the difference. Then we have an outstanding deposits, which is 955 50. That is exactly what the difference is to get here. So we know exactly what that difference is. Therefore, everything else is correct. And we know these air Correct for sure, because they cleared the bank and we checked them off. And then if we go down here, these are gonna be the new transactions again, not as it relevant. Not as important because but they're gonna bring us to the current balance, the latest balance that we are at. So I'm gonna go ahead and export this, too. We're gonna go to excel, and we're gonna create a new worksheet, and we're gonna put that into the existing workbook that we have just created. And I'm gonna browse and make sure that we have it there. So it's section eight report. That's where we Actually, it's not where I wanted to want us. Drop down. Go here Section nine. And that's the one we want double clicking and export him. It should then open, excel and put that export that information into a new tab within excel, as it has done here, or is in the process of doing. And then I'm just gonna pull that screen over and adjust it so just that a bit. So here we have this and I'm going to go to the view. Tam. We're going Teoh Windows Group, Take the split screen out. I'm gonna pull this to the right hand side. So it's an order of when we printed it. Double click being Rick detail. That's gonna be the bank wrecked detail and it will have the head Ron, if you when you print it by going to the page layout this little icon here, you could see that the header is there. Now, if you were to print this, you would want to format it a bit a bit nicer for go back to the page layout you have. Let's go back the page layout this information here Now, obviously, if you're going to give this to somebody, then the summaries nicer to give to somebody because it gives you a natural summary. But you really want the detail. If you really want, you know, toe, have this information. If you're gonna print this out, you want to go to the file tab, you want to go to print and then we can try to get this on. I'm one of them one page wide and then if it's a few pages long that's okay. So in order to do that, you probably want to adjust this to landscape first, and I don't make it closer. Let's see if that does it, and that actually pulls it all into one page. So that's good. If we go back to the file print and scroll down, we see that it's it's two pages long, but everything's on one page wide, and that's typically not not bad. So that's pretty good. So that's gonna be that for the bank reconciliations for January. Next time we'll do the bank reconciliations for February. 89. 9.15 Bank Reconciliation Second Bank Reconciliation QuickBooks Pro 2018: hello. In this presentation, we will create a bank reconciliation within QuickBooks Pro 2018. This will be the second bake reconciliation of a company that has been newly created. So in a prior presentation we created the first bank reconciliation of the company, it having its own problems when it's the first bank reconciliation, it's good to see to bank reconciliations. The first and the second demonstrated because then we can see having tied together how the outstanding items of one will be cleared in the second bank reconciliations and what the outstanding items will then be in the second bank reconciliation. It's also useful to note that the second bank reconciliation should be easier in that we don't have some of those problems we had in the prior bank reconciliation in the first bank reconciliation that we create wind starting a new company. If you've been following along with us, we will be continuing with the get great guitars problem. If not, that is okay as well. We will per be performing a bank reconciliations that can follow along with that process. The second bank reconciliation off too, so we can see what the outside outstanding items are and see how those have cleared from the prior month. This time we currently, if you have the backup file and want to restore this data to this point time and work through this, then we can go to the file tab. We can go to restore and restore that process. If you don't, that's OK to note that we have the open windows tab open that's going to be in the views and open windows lists would like to have that open and the other item we have open or the only open item is the home tab that's located in the company Drop down and then in the home tab. This is where we are currently at. What we're going to do now is enter a bank reconciliation to discuss that. Let's first look at the balance sheet and the cash count on the balance sheet. We're gonna go to reports up top. We're gonna go to company and financial and scroll down to the balance sheet. We're going to create the bank reconciliation for the month ended. 12 are not 12 02 February 28th 2021 21 February 28th 21 We're gonna be working this problem in the future. So that's the date of the bank reconciliation. You can see the bank balance here. 99,115 56. Now, if we thought we did everything perfectly and implementing the data, you would think that the bank reconciliation would have that same number. But as we discussed in the prior presentation, the number will differ because of outstanding checks and outstanding deposits. Even if we did a perfect job, I won't go into the whole goals of the bank reconciliation again. But note they're very important. There are second best internal control. They are number two in on Lee to the double entry accounting system, which we are using through using the software and whether we're a big company or a small company, we should reconcile the bank accounts as one of the internal controls that we are doing. So we have this amount. What we're gonna do is compare that to the bank statement as of the end of the month, So I'm gonna take a let's take a look at the bank statement. Here is the bank statement. So we have the bank statement as of February 28th and we see the summary up top beginning balance. That's gonna be the same ending balance of the last month, of course. And then we've got the additions. We've got this attractions, and we have our ending balance. This ending balance 99 to 96.9 slightly different than what we had on our bank statement. And that difference is what we're looking to reconcile. If we do reconcile that, then we can have some assurance pretty good assurance that we've entered all this data correctly within the system, which is which is a good check. So note within the bank statement, we're gonna have deposits by date and amount that dates will be different in our system, depending on when we entered the dates. Because it's gonna take a little bit of time for the bank to process those, although they should be pretty close. And then the checks are gonna have the date check number and the amount now the dates on the checks could be quite a bit off because it takes some time for the checks to get to the other person and for them to deposit in the bank and for their bank to talk to our bank. So the dates are not as relevant here as the check number and the amount for us really to verify these amounts from the checks, we then have the withdrawals and the bank service charges at the bottom is gonna be other types of things other than checks reducing our bank balance, other types of things, often times which we do not have on our our side of the books. Now we'll go back to QuickBooks and we'll look at our side of the books back in the QuickBooks. We're going to scroll up, and we're gonna go to the banking tab and we're gonna go, Teoh, reconcile reconcile for the bank reconciliation. And we got the information we're gonna set here. We're gonna have the checking account. It should automatically pop up for February 28. If we had entered the bank reconciliation for the prior month, which we had in the prior presentation. We have the beginning balance, the 1094 15. That will be the beginning balance on the bank statement, which will also equal, of course, the Indian balance of the prior bank statement. In other words, the Indian balance in the bank statement in our case for January and the beginning balance in the bank statement for February. We're then gonna enter the Indian balance here. This is the ending balance that have been entered. We put this in place for the end of February on the bank statements. We have some additional items down here, including the service charge and the and the earned interest. We could put these in place if they were on the bank statement and not on our books. However, I recommend not putting them in this way because it can confuse us when we're checking everything off and just looking for those differences and then putting them and manually into the check register because that will be something that's very visible for us to do. So I'm gonna say continue here. We're gonna continue on here. We have our information on the left side. We have the date, we have the check and we have the amount that's gonna be similar to what we have on our bank statement. However, the date will differ here because the date in our books is gonna be when we wrote the check , which would will be before it cleared the bank statement, which will be the amount on the bank statement of the date on the bank statement. The Czechs will tie out and the amounts will try out on the deposit side. We've got the date which once again will be slightly different. But it should be much closer on the deposit side because when we make a deposit it shouldn't take around three days for that that clear So it should be pretty close and we have the amounts we then down here have our reconciliation item. This is very useful because it will show us when we have completed the bank reconciliation successful a member, meaning when this difference here is at zero, we have completed the bank reconciliation successfully and we can go ahead and select reconcile for it to complete the process. This cleared balances 1094 15. That's the amount that has been cleared before we check anything off and it will equal to the prior bank balance or the prior cleared balance. The prior bank statement balance. We should say that we had cleared at the time of the last bank reconciliation. As we check off items here, we're going to contribute to this cleared balance. And once we're done with this process, the cleared balance should equal the ending balance. Meaning everything that we have checked off through the process should tie out exactly to what we've seen in the bank statement. And that's why we checked it off. And therefore it should match the ending bank balance. And that is when this amount will be 20 Anything that is not checked off that is still within the month off. February. Those will be our outstanding items. So that's how we're gonna work through this. We're gonna put our items in terms of our bank statement over here and our rec side by side and go through these and just check these off. That's how we we work. These problems note that what we're going to say is, if it's on the bank statement and it's not on our books, it's probably the case that we need to adjust our books, meaning the bank's name. It's probably right, and we need to fix our books, and that would be for the example of these items down here. We have. We have a withdrawal of 100 service charges. Those are examples of items that the bank may have that we have not yet recorded. And if that is, the case will have to record them. If, on the other hand, it's an item on our books, that's not on the bank statement. The hope is that it's just announce standing check. In that case, In other words, it's a check that was written towards the end of the month, most likely, and therefore it hasn't yet cleared the bank because it hasn't had time to do so. And it will just be an outstanding item on the bank reconciliation. So what we're gonna do then, is we're gonna go through this items and just check everything off. Ah, from the bank statement and the bank reconciliation. So first we'll start with the checks up here. So we're at the checks here. Here is the bank statement. Here's the bank reconciliation. We see the 1 11,000 here. Check number 1006 Date to five. Same amount, same check. Never date. Different note. The date is in January, meaning we wrote it in January. So you think it would have clear that we would have had to deal with this in January when we did the bank Reconciliation. However, of this item is one of those items that were outstanding, meaning it was part of those outstanding items. The difference between the bank balance and the book balance in our reconciliation for January now clearing in February. So we're gonna go ahead and check this off. We're gonna say that cleared in February and will highlight it on this on this side, saying it has indeed cleared. And then we have the 500 at the 107 again February on the bank statement. But January on the bank reconciliation number, the same amount, the same will check that off and will highlight this amount. Then we have 3 63 60 again February bank statement, January on our books. We're gonna check that off on the bank reconciliation and highlight this as being cleared. We have the 3539 and the amount or check number 10111011 Checking that off. Crossing that off or highlighting it. 6 30 10 12 6 30 10 12 Checking that off highlighting this amount. And then we have the 13. 59 10 13 13 59 10 13. Just checking in ticking time and these off as we go. And of course, now we're past the point of the outstanding items from the last month into the current month for items. Then we have the 1 68 50 and 10 15 10 15 1 68 Checking that off. Highlighting this. We then have the 13 59 10 14 13 59 10 14. Checking that off. Highlighting this 1 23 37 10 16 1 23 37 10 16 Checking off. Highlighting this 8 30 10 17 8 30 10 17 Checking off. Highlighting 6 48 10 twenties and 6 48 10 twenties down here. So we had to skip a couple. That's okay. We're going to check that off and then we're gonna say 351 to 10. 23 351 to 10. 23 Can we had to skip a couple. So that's all we have in terms of checks on the bank statement to write off, even though we have a couple more that are on the bank reconciliation. Those then are outstanding. The ones we now checked off are the ones that will be cleared and everything that has a check. Then if we add everything, if it has a check, it'll add up. Teoh the cleared balance on the bank statement, and that's how we're going to reconcile these items. Next, we'll work with the deposits. There should be fewer of them. So we've only got We've only got a couple deposits to be dealing with here, and there's going to be three on the bank statement here, there. Let me see if I can pull this over just a bit so we could see the date. So we have our 955.5 on 23 Of course, here it is, but this one was cleared or written or deposited in January, not clearing until February. And then we have the 12 to 50 on 9 to 9. There's 2 12 to 50 on 26 dates, slightly different. However, it's the same transaction 8 25 to 15 8 25 to 12. There is that item and so that is everything. For if we look on the bank statement. We have now checked everything off. Everything in green has been checked off except for these two amounts down here. That withdrawal and the service charge that adding upto 1 20 Looking at the bank reconciliation, we see that 1 20 difference down here. That's the difference we need to account for now. Now the difference is due to something on the bank statement, not on our books and therefore something we need to fix. So the easiest way to do that is just to go in the check register and inter any balance that we need to enter. The tricky thing is, of course, that we know that cash needs to go down. May not be that obvious, but we know that cash needs to go down, but we don't always know the other side of it. What's the other side of the transaction? We're gonna have to record that to something as we will see. So let's go back and see those two items that are outstanding and then record those in the check register. The two items are withdrawal of $100 banks service charges withdrawal were going to say that we went to the A team basically and drew some money out or we drew money out of the bank and there, and we were saying that that could go to a couple different places. We're gonna have to ask that as the question. Is it a draw that we spent and drove out for personal use? Or is it a draw that we took out for business use? Then we have the bank service charges which are often just charged to us by the bank, the bank taking money out for various charges. And we don't know about it until we get the bank statement, at which time we'll have to enter that into our books. If we go back over to the, uh to quickbooks, we're going to go to the check register. So I'm gonna open the check register, go into banking use register, and we're gonna enter this data as of the end of the month. 02 28 to 1. I'm gonna make sure you don't have a check number, because where this isn't a check and I'm gonna put the withdraw. And first, I'm not gonna put a p e. I don't know who the pay is because we drew money out. It's gonna be $100 we're gonna say this time last time we put it and assumed it was a business expense, putting it into miscellaneous expense. This time I'm gonna assume it's a draw for personal use. I'm gonna assume we went to the A team pulled money out for personal use. It's not business related and therefore should not be on the income statement. And to do that, we don't want it on an income statement or an income or expense account. Where we want it is where we want it is in the equity account somewhere. So if we set up the accounts through, QuickBooks will typically have an equity account of some type, depending on if we're a sole proprietor, a corporation or a partnership, we will have different equity account. So here we have the owner's equity as a sole proprietor, and we could put it directly there, or they also made a draws account. So the draws account will track draws throughout the month for us as well. Tell us how many how much money we took out but not affect the income statement. So If you have the draws account, that's the one to select. If we're pulling out money for personal use, it should not be on the income statement. And we can have that. They're note that it's not gonna record anything until we select Enter someone it select. Enter there we have that. If we go back to the bank reconciliation in the open items window, we can then see that 100 right there. Checking that off brings us down to being on Lee out of balance by $20 that the service charges of the bank that charged US service charges. So I'm gonna go back to the checking account, will enter the service charges. Now, what's going to say other? I'm not gonna put the payee. I'm just gonna put the $20. And now we need another account again to record it, too. If you set up within QuickBooks that usually do set up a bank service charge account so it will be in the expenses will be a bank service charge. Typically, if you start typing in bank service charge. There it is. If it's not there, then you could think about creating one. If it's insignificant to you. You might want to just put it into some other account, like miscellaneous. I like track in the bank service charges, even if they're small. So I will put on account called bank service Georges and enter. Then we go back to the bank reconciliation. There are the bank service charges and checking that off. There we have it and we're back in balance down here, so we're back in balance. If you want to see what happens, let's take a look at what happens on our balance sheet and our income statement for those items. If we go to the balance sheet, we have changed the checking account now. So our checking account balance is now 98 995 If we double click on that, we have our two items here that we just entered into the register to change that balance. So when we are reconcile ing, we are now reconcile in to this 98 9 95 the only difference being the outstanding check items. If we close this, we're going to go now to the profit and loss by going to reports scrolling down company and financial profit and loss date range. I'm gonna make it the whole year 0101 to 1, Teoh 12 31 to 1. And I'm going to scroll down to the, uh, expenses note. Last time when we made a draw, we put that $80 into an $80 miscellaneous expense. This time, we did not put it into the miscellaneous expense. We put it into draws that $80 reduced net income. And if we took it in the draws, then it's assumed to be personal use going back to the balance sheet rather than being in miscellaneous expense. It should then be in the equity section under draws. So here's the $100 we took out there. This will accumulate until the end of the year, and then it'll close out to the equity section. So that's a good distinction toe have when you're doing these bank reconciliations or when you're working anywhere. And you have this, um, money in terms of where do you put it? Is it a personal or business expense? If it's personal, you want to put it into the draws? Okay. Back to the bank. Reconciliation. Thank reconciliation. Here we are now in balance we have these items that will be outstanding. These are gonna be the outstanding items of these unchecked items. Those are the differences between the bank balance in the book balance, both outstanding checks, and we have one outstanding deposit. If we have questions about those checks and deposits, we can call the bank. It's a hates fed. It's march now. Has this deposit in particular clear? That's one of the most concerned about as that cleared in March. And if it has been great, then I'm just gonna keep it as un deposited and still be happy that it has cleared and we have been reconciled. If you have not reconciled here, if that is not zero and you select reconcile, you could force the reconciliation you could QuickBooks will make it reconcile. But it will force QuickBooks to do a journal entry, and it really deteriorates. The deteriorates, the value of the bank reconciliation. Even if this is off a little bit, if it's if it could be off by multiple things, I mean meaning if this was off by $20 it might not just be 1 $20 item that was missed. It might be 10 items that add up to 20 them being both deposits and checks. So we might be missing a lot of information. Therefore, if we're even off by a little bit, if we're off if we're on exactly, however, we're pretty good assurance. We have pretty good assurance that everything on that bank statement has indeed been put into the books properly. And that's that's a really good check for us, not only for the checking account, not only for cash, but for all the other areas within the accounting cash being something that really is a port of every accounting cycle in every process within the accounting department. So we're gonna go ahead and reconcile this now, so we're going to reconcile what it's gonna give us the option to print. We really do want to print this as it gives us the option because we cannot always go back and print prior bank reconciliations and bakery cancellations could change in that people could go in there and delete checks within QuickBooks and that would mess everything up and it would be very good for us to have the bank reconciliation that we could go back and say what happened in this check that was here before it got deleted. The only way to do that is to have the, uh, the detailed format here. However, it's nice to have both, so that we can present the summary to those who need the summary in a way that doesn't overwhelm in them and have the detail for the detail that we should have. So let's go ahead and display those and then we'll export those. Here's the summary report. So the summary report starts with the beginning balance. That's what the balance was before. And then we've got the cleared transactions. It's going to be the checks and the deposits, and that will give us the total cleared transactions and that. And if we add those up, then we're gonna get the cleared balance the 99 to 96 09 that matching the cleared balance or the ending balance on the bank statement. So, in essence, this is the bank statement. Balance this 99 to 96.9 This is really where the reconciliation kind of starts. That's where the bank balances. Then we have the difference between the bank and the book, and that's gonna be the outstanding checks. There's five of them. We don't know which five here, which is why we want the detail. But we know that there's five checks and they add up to 9 1041 80 And we know that there's one deposit that is outstanding adding up to 6 1041 23 27 meaning there's only a difference of $300.53 that emphasizing our point here that the fact that we're only off by $300 may make us feel that we're pretty close when in actuality, we're off by five checks and a deposit. So the fact that we may be off by not too much, it doesn't mean that we have entered everything accurately. The closer we are, in other words, to being in balance doesn't necessarily mean that the closer we are doing a good job and entering all the data, because it could be a combination of deposits and checks that are making it pretty close, and we want to have all those input to have the detail. In any case, if we add this up, then that's the difference to get our book balance of 98 9 95 56 If we look at our balance sheets back to the open Windows balance sheets scrolling up 98 995 56 is our balance here. So that's what we want to have. I'm gonna go back to the to the reconciliation summary. Now we're gonna go and and there's no new transactions because there is no new transactions here. If we had any data past this point, then it would give the new transactions at the bottom. We don't have any new transactions at this point because this is a far as we've gone in terms of entering data through February. So this is the end of the bank reconciliation for us. We're gonna export this to excel. We already have an Excel report that we generated. We are going to export this to that same workbook in a new worksheet. So in order to do that, we're gonna go to excel, create new work sheet, so it's gonna be a new worksheet within an existing workbook. Let's hit the browse button. It should be going where we want, but it looks just make sure section eight looks gig in a double click on that, and export QuickBooks will then export that to our existing excel file. Open that file and create a new tab. Put on that new tab. The data that has been exported from this report, as we see here, I'm just gonna update that bit. Now. My typical updates are Howard. Typical updates. I'm just I'm making a little bit larger by increasing this item, and I usually go to the view tab up top, go to the windows, unspool it the split thing down here in split that and then go to the layout time. It's a page layout this little icon and see that the header is there just to check. The header is present. Go back to the normal view and then just save this. Okay? Close that. Now we're gonna go to the balance detail and will export this after. Look at it very quickly. The balance detail, Remember, this is the one you really wanna have, cause it's going to actually list out the checks that we want to actually see, which are the difference if we had a problem. So we've got the beginning balance that these are the cleared balances these air important , but not as important. These are the items we confined on the bank statement fairly readily, the ones we cannot find on the bank statement because they have been uncleared or the difference. So here is the cleared balance that 99 to 96 09 That being the bank statement, balance the These are the five checks now listed out. This is the detail we we would like to have so that we can see those outstanding checks. And we can if we want to verify them, call the bank and ask if he's cleared in March and then we have the outstanding deposit. Once again, this is probably the one we're most concerned with because we deposited it it on the 26th and we would think it would clear possibly by the 28th. So we might want to call about patent. Make sure it has if it has great just the time indifference will keep it here and note that we're off by that amount and that it has cleared in March. And then we have our engine balance 98 9 95 56 That Then once again, if we go to the balance sheet matching the 98 995 56 back to the detail, we're gonna go ahead and export this as we did with this summary going to excel, create new worksheet, and we're gonna put this in an existing workbook. It should already be going to where we want it to go. We're gonna double click on section nine and export. It will then create a new tab and export to that tab. And then we're just gonna pull that over. See, it's taking a little bit longer because it is a longer report here. But now we have this. We're gonna pull that here and we see the more detail within the Excel. I'm gonna pull this to the right. So we're gonna pull this over to the right. Good. I rename it by double clicking on it. I'm gonna say, Thank right. February detail, something like that. And then we'll go to the top. We're gonna go Teoh view windows, unspool it the pains, and we might want to then adjust the settings for printing in case we want to do print this by going to the file tab going to print and then adjusting from, Ah, the view from portrait to Landscape and see if that does what we want. Now it's two pages, but I can see all the balance on Aled the columns on one page, so that should be enough for us. If we still can't see the columns on one page, we can go through and delete and adjust the column size. And if that still doesn't do it, we can fit all columns to one page using this format here. I wouldn't do this still, unless it's a rat last resort, because it does adjust the columns and it can do so in a kind of a funny way. But that is the last resort effort to do that, and we're gonna go ahead and save this and close that, and that's gonna be 90. 10.10 Short term loan Adjusting Entry QuickBooks Pro 2018: hello away. In this presentation, we're gonna talk about an adjusting entry for the loans payable breaking out the loans payable from one account to two accounts that the short term portion of the loan payable and the long term portion of the loan payable. If you've been working along with us, we will be continuing with the get great guitars problem. If not, that's OK. We will make an adjusting entry to look at our loans payable accounts, breaking out that short term portion versus the long term portion when making financial statements. If you have the backup file, you can restore that backup file by going to the file tab and restore to this point, we currently have the open windows list open and open. In order to open that, we go to view at the top and the open Windows list item. The only open window we have right now is the home dab. In order to open the home tab, go to the company tab and the home tab. What we're gonna do now are some adjusting entries, and in order to do so, we will first look at the financial statements and do some adjustments to those financial statement statements in accordance to accepted accounting principles. So we're gonna go up to the reporting up time. We're gonna go to company and financial and scroll down to the balance sheet standard. We're gonna change the date. I'm gonna do that by going to the date range and work on the date that we are currently working on, which is 0101 to 1 212 January 1st, 2021 to February 28 21. So this is going to be for that two month time period that we are running this report for will reflect, okay. And what we're focusing in on here will be the loans payable accounts. So when we actually present these financial statements to outside users, we typically would need to break out and the current and long term portion of the loan that we have outstanding. So here's our loan. Right now there's our loan payable accounts. It's often useful for us to use one account, too. Two recorded Teoh because that amount will change as we go on, make more payments. So it's good to make a system in terms of how we just gonna make payments to it. And then when we reported or when we want to make a decision making on the financial statements, it's useful to have the current portion broken out of this loan amount so that we know how much of it is gonna be do relatively soon so that we could make decisions based on that. If we presented also outside the company, we would need to break this number out. If we double click on this number and look at the detail of it. We see that we started with the 22. We took out 50,000 another loan, and then we took out another 5000 down here. These two were going to say, are the same loan that we we took out to get to that 72,000. So we have a one lone at $72,000 in other words, and then we took out this other loan. When we purchase furniture and fixture, this is the one we're gonna focus on here. When we put this loan on the books, we put it just into the loans PayPal accounts that we have. But now we want to break out the current portion, and we're basically going to say that this loan is just a, ah, alone that's gonna be due within six months and therefore all current. So this is gonna be a current loan. Let's take a look at the amortization table just to get an idea of that and how ah, to loans how these different loans could be put together. And then we'll just re categorize this loan to the current portion of alone. These will be our amortization schedules. So this loan, we often just have the terms. But just to give an idea of the loan, we're gonna say it's a $5000 loan we took out for the equipment. It's going to be paid in six months, and the rate is 6%. We're going to say that this loan, we're just gonna pay at the end, So we're gonna pay back both alone and all of the interest at the end of the loan. Note that loans could be set up in many different ways on in terms of how they're going, how the interest will be paid, how the principle we will be paid next time we'll take a look at a loan that set up more like a traditional loan in terms of a mortgage where we pay back some of the interest and the principal on that 72,000 where we will have to break out a short term and long term portion. But this one, we're gonna put it all in the short term. But we do want to make some distinction about what is interest and do we have to include interest, and in order to do that, let's look at the amortization table. Many times they don't give us an amortization table when we get alone. But weaken, derive it or we can ask our accountant tip. Put one together for us just to see what the kind of interest payments we are looking at. So if we have a $5000 loan, it's going to be doing six months in the interest rate of 6% and we're just gonna pay it all back interest and principal at the end of the loan. Then how much are we gonna have to pay back? We could do this type of calculation within Excel. There's a there's a fair value calculation or future value calculation, I should say, and there's a couple ways you could find it. One is you can go to the icon here and type in future value calculation, and it's this future value right here. If you go through that section, you can say OK and go through the the little boxes that they have here. The rape is gonna be 6% but that's per year, and we're gonna divided by 12 for a per month. Rates because we're paying every month. That's the trickiest part of this calculation are pretty much the trickiest part. The number, the number of payments is going to be six, even though there's only gonna be one payment. And when with this type of loan again, that's a little bit little bit tricky to to see. We're gonna make the payments, however. Zero. So the point of this is saying, Hey, there's Instead of having annuity where we have constant payments, we're gonna use a similar evaluation field. We're gonna use the same kind of function, but we're going to say that there's six payments of zero just to tell the computer there six periods that we need to compound the interest over and then we're going to use this field that we wouldn't really need Ford Annuity. But we do need when we do this present value of one calculation because of the way we did this number of payments and the payments being zero and that present value being the 5000. So if we go through, if we enter this data, we could see that we're gonna have to pay back 5152. If I want to make that a positive number, then I can go to this form like a double click on it. And I just want to flip the sign in front of the formula instead of negative. And that basically says, Hate, multiply this times negative one, and that'll flip the signs of the payment will be positive. So that's what we're actually gonna pay at the end of the time period. So then our question is, of course, how much of it should be short term versus long term on the balance sheets. Now, given the fact that we're gonna pay 1 5052 at the end of the time period just to see this, a cruel one other kind of way. If we put this into our amortization table, which will do in the long term as well, we're going to say the payments again are zero. The interest per month is gonna be 5000. The principle times, the 6% divided by 12. That's the interest rate per month. When that's gonna be the interest per month and then the reduction in the principle is actually going to go up. It's gonna be an increase in the principle because the payment is not greater than the interest. So there's gonna be an increase in the principal. And in essence, we are owing this. Ah, 5000 is increasing by the amount of interest. And if we do that, if we continue to do that, we're basically saying there's no payment for each of these periods were saying the interest now is gonna change. It's going to be this new principal after the first month times 6% and then we're gonna divide that by 12. That would be per year. We're gonna divided by 12 for 12 months. Another 25 we're gonna say the principal reduction then, of course, is 25 this, Um, And that this minus that is going toe increase it to 5050. And if we continue this process down for the six payments, the interest will change you up. One idea what did ideo I'm gonna take This number needs to be an absolute value. So we're going to say in B three gonna make that absolute value. So when I copy it down, it'll take that sell every time. And if we do this and copy that down Ah, we should get to this number here. So this number matches. So that's just an idea of the amortization schedule will have to do that. And it will make more sensitively more necessary when we do the long term portion, or the short term and long term portion of the long term debt, which has both a long term and short term portion what we want to see here. What we want to note here, though, is that the interest rate that loan is for 5000. We know we're gonna have to pay within the year 1 5052 However, we're just going to be dealing with the 5000 now because this 1 52 has not yet been earned . And therefore, even though we know we're gonna pay it within the short term time period within a year, we're not gonna include it until it's actually been earned. So if we go back to QuickBooks, then I'm gonna close this back out. All we really need to do is move this portion up. 5000 of this loans long, long term loan payable into the current liabilities. Which means I need another account up here for the current loan payment, and it needs to be in other current liability type account. And we need to move 5000 to it a couple ways. We can do this one. The most traditional way is to make a journal entry. And we would go Teoh Ah company and make journal entry. And we can we can make a journal entry in that format and we would debit or we were debits the loan payable, decreasing it and credit the current loan payable, increasing it. But if we want to try to do the adjusting entries without without knowing debits and credits, we could try to do this with registers. So we will do it with registered, we won't try, but we'll go to the loan payable register and say that this needs to go down by 5000 and then we'll put the other side to a new account will make, which is called other current payable. So we're gonna do this without debits and credits, even though they're adjusting entries, if we can what we will be able to. So we're gonna go to banking, we're gonna use registers, and we're gonna go down to the liability accounts. And we want this loan payable and say, OK, so we're gonna have a register kind of like a check register. It looks like a check register, but it's really the register of the loan payable account. There's our balance in it. We want to decrease it. So as of the end of the month as of 02 28 to 1, we want to decrease this by 5000 and then we're gonna move that to the other account on new account we're gonna create, and it's gonna be called. Um, call it a loan alone. Payable current portion was called loan payable current. What happened? Unpayable current. All right. And so we're gonna say Tab, and it's gonna ask us if we want to add a new account and we dio we will set that up then and it's not gonna be an expense. So make sure we change that drop down, that we'll change this drop down to other current liabilities. We want to make sure is a current liability and selecting that item, everything else should remain the same. So we're gonna say save and close, and we want wanna put here that it's adjusting entry. So maybe a deejay for adjusting entry, and it's gonna be Teoh Great out current portion of loan, something like that. Make sure to select a tab or intern. Make sure we're on the next line, and then when we go to the balance sheet, it should adjust. So if we go to the balance sheets looking in the current portion, then we see that 5000 there has been brought up to the current portion double clicking on it. We see the 5000 here we see our memo double clicking on that takes us to the register, closing this back out. Closing this back out. We scroll back down, we see the long term payable here, double clicking on that. We see that the 5000 have been removed and now we're basically left with the balance of the other loan, the long term loan. And that's what we're gonna have to deal with next time. Remove. We removed the one loan that was totally short term. The other loan we have in place has a short term and long term portion. So that one's gonna be a little bit more difficult because we'll just have to remove port of it. So now that we've seen one loan that's completely short term versus long term, next time we'll try to look at these Amer tied. We will look at these amortization tables and see the portion that needs to be moved when part of it is short term, and part of it is long term. 91. 10.15 Short term portion of loan Adjusting Entry QuickBooks Pro 2018: Hello. In this presentation, we will break out the short term portion of a loan payable within QuickBooks Pro 2018. Last time we looked at a loan payable what we had to reclassify it from a long term to a short term loan payable. This time, we will take a loan payable that has a short term and a long term portion. Look at the amortization schedule. Break out the short term portion. Give some reasoning as to why to do that, how to do that in terms of the amortization schedule and well, as how to technically do it in the QuickBooks software system. If you've been continuing along with this, we will be working with the get great guitars problem. If not, that is OK. We will be doing adjusting interest entries within QuickBooks, breaking out the short term and long term portion of a loan. If you have the backup file to this point, you can restore it by going to file open and restore the backup file. If not, that's OK. If we do have the open windows tab open in order to open the open windows toe happened go to view open windows list. We only have the home to have open to have the home tab open. We want to go to a company and home tab. What we're gonna do is break out current and long term portions of a loan in order to do that where you are first looking, going to look at the report for the balance sheet. So we'll go to a reports up time, scroll down to company and financial scroll down to the balance sheet standard. And we're gonna change the dates up top in the customized reports. And we're gonna have the range B 02 Let's Te'o 101 to 1 January 1st 2021 to go to 28. 21. This will be the time frame that our problem is working in, and then we're going to select. Okay? And here is our information. If we scroll down to the liabilities we see, last time we broke out the current portion of one of the loans one of our loans being a short term loan, and we had to pull the whole amount out of where the loan payable count. What set up to this short term loan payable this time we're gonna take the rest of this this long term loan payable and break it out between a short term and long term portion based on how much of the principal payments are going to be dio within a 12 month period. So if we double click on this item we see the loan was 22 then 50. The loan was at 72,000. And then during the year, we made these two payments on the loan in accordance with the amortization table, decreasing these amounts in accordance with odd the amortization table. What we will do now is look at this balance, look at the amortization table and see how much of it is current versus long term. This is something required if we were to issue that, reports Teoh externally, typically because it would be Jill accepted accounting principles to have the short term and long term payments. It's also really useful when we're looking at the financial statements to know how much is gonna be do currently and compare that to our current assets, whether we have enough cash to pay for those current liabilities. When we do this in practice, to remember that we're gonna put everything into a current portion and a long term portion . One grouping of accounts. If we have a lot of loans, more than one or two loans, we might want to actually break out each individual account. That is a loan account that might be make it easier to track. However, within the report in the financial statements, we typically just need that current portion break out in the long term portion break out. So we're gonna have those two accounts here, a current portion and a long term portion and break out whatever loans. We only have two loans within those two current and long term portions. If you have a lot of loans, you might want to put one separate account for each loan and then a separate short term or and a separate long term portion. There's a couple different ways you can form at this out. Clearly, if we're making loan payments, however, that half a interest and principal portion, it's not typically efficient for us to break out the short term and long term portion at each payment date, meaning each each payment we make, it might not be efficient for us to break out the long term and short term portion because it'll differ as we go. So what we want to do is do these adjusting entries periodically at a point in time when it makes sense, when we're really analyzed in the financial statements or distributing financial statements to external users. That's when we want to make these adjusting entries and make sure they have been inputs. Also also note that we are putting these entries in net of interest. So if you double click on these entries, we can see that they're being put in according to the amortization table, meaning they have an interest portion and a loan payable portion. We could also even set up a system in which we do the interest portion at the end of the time period as part of the adjusting journal entry. We'll talk more about that in a bit. What we'll do now is just break out the long term and short term portion first looking at her amortization table, getting an idea of what that is and how to make sense of it. I'm gonna close this back out. We're going to take a look at the amortization table. Here is the amortization table, and so we have the loan amount the payments 60. So it's gonna be five years, and then we have the rate 5% and the payment this loan is gonna be set up as a come. We might be familiar with, like a mortgage type of loan, or typically are kind of payments for auto payments or something like for finance that car or something like that, where we have both a principal and interest portion and the payment is constant, so the payment remains constant. However, the APP application between interest and principles varies as the number of payments go as the principal amount declines. The A mountain allocated to interest of the same payment goes down. The amount allocated to principal goes up, so that means that it's going to go down, but not at the principal portion will go down with each payment, but not at a constant rate until the end of the 60 payment when where we will be at zero. When breaking out the current portion of long term portion of a loan like this, it's a little bit confusing because we know that we have a loan balance here. If we look at our activity back to QuickBooks. We made two payments on this loan, so we made payment one and payment too. So we are at the balance after that second payment. If we go back to the amortization table, we should be at the balance. Right. So we're gonna go ahead and highlight that I'm gonna highlight that. And that's that's where our principal balances. The 69 8 78 back to QuickBooks is equivalent to this 69 8 78 right there. And it's our ending balance 69 8 78 Now, over that amount, we need to determine back to the immunization schedule. We need to determine how much is current and how much of a long term. In order to do that, we we need the amortization schedule. We cannot just take the payments and say, Well, 12 months of it is current current means, by definition, what we owe in the next 12 months and the logical thing to do then would be to say, Well, we have payments Of that Times 12 would give us 16 305 would be the current portion, and then the rest would be long term. That would be a reasonable assumption. However, it's not correct, because this 13 59 includes the interest portion, which has not yet happened. So that would be like pain. That would be like recording the interest expense on ah rental apartment or rental office before we actually lived in it. Knowing that we're going to pay rent in the future and therefore recording the fact that we have that current liability now, even though we haven't lived in it yet, so that's the same kind of thing is happening. We can't include these interest payments in the current portion because we haven't used the money to help us generate revenue. And therefore we don't technically, oh, it yet. So what we have to do is find just the current portion of the principal payments, and so we need this amortization schedule to do that. So the payments that are gonna be doing the next year gonna be this 1123456789 10 11 12. There's a year. If we highlight that, that's gonna be our years worth of amortization portion of our payments So here's our payments. Each time the interest changes each time, therefore the amount of principle changes each time. And so what we're gonna do is we're gonna say the current portion is going to be all of these principle portions for the next 12 months. Those they're gonna be the current portion. And if we if we then say that this is where we're at was Let's bring this I'm gonna bring this up to here. All this is the sum of the yellow items, that current portion. So we're going to say that if this is the total loan minus the current portion, this will be the long term portion. In other words, after we make 12 months of payments, we make all these payments with the interests and then the principal going down by this column, we will be at 56 7 70 56 7 70 So that's our ending. Ah, that's our long term portion. So, in essence, are journal entry will be then for this 13 109 decreasing the long term loan payable and increasing the short term portion, decreasing the long term portion to 56 7 70 recording the short term portion at 13 109 That's gonna be our Justin entry. So let's go back to we'll keep this here. Let's go back to QuickBooks and make that a Justin entry. We're going to you go QuickBooks. Now, in order to do that, let's close this back out and go back to the balance sheet so the bounce sheet is currently open. Typically, the normal way to do that is to go to banking and go Teoh. Um, so I go to company and go Teoh adjusting journal entries make adjusting journal entries, but and we wouldn't even know debits and credits in order to do that. So we'd have to debit the long term. No note and credit. I'm sorry. Debit. The short term notes payable and credit the long term note payable. If we want to do that without debits and credits, we could use the registers, and that's what we'll work with here. In order to use the registers. We can just go to the banking and we could scroll down to use register so we'll actually be able to enter these adjusting entries without knowing debits and credits, and will to say use register. And like the checking account, every account has a register. So we're gonna scroll down Teoh. The register for loan payable will use the current portion. Make sure you know which one you're in current versus long term, and we're gonna go to the current side and say OK, and we know that the current portion needs to increase by the amount that's going into the current portion. So we're gonna have the date at the end of the time period to 28 and we're gonna increase it by the current portion, according to our amortization table, which is 13 109 So we're just gonna put in the current side 1319 and then the other account is gonna be the long term side. So the long term loan payable. If we scroll up, we got loan payable current and then just loan payable. Long term is the account type. That's the one. So by doing this, we're gonna increase the current account. We are in the register, were in long term pay loan payable current, and then it's going to decrease the other account together account were assigning to which is the loan payable, So we're going to select enter, and then when we go to the balance and make sure you select, enter, by the way or else it won't record that and then we're going to go to the balance sheet and we can see that the current portion now at 19 109 If we double click on that, we see the 13 109 here double clicking on that. There's that amount. So closing this back out the current portion of our loan payable now includes two loans won the 13 109 which is the current portion of our long term loan, and then the 5000 which is just a current loan. And that matches what we have here 13 109 in our animals and morte ization table and the other loan, of course, the entire principal amount of 5000 there as well. Back to this closing that if we close this back out and then go to the long term portion, here's the long term portion 56 7 56 Double clicking on that. We see our activity. There's the Justin entry. We just made double clicking on that there's the amount. If we close this back out, we say there's that 13 109 that matches this amount here. Our adjustment. What's left? 56 7 69 56 7 69 which is our long term portion We see here or we see it after the 12 months of payment. After we make thes 12 payments, that will be the balance. Ah, year from now, the full balance a year from now. In other words, that's why it's the short term. That's why it's the long term portion, because it's where we will be at after a year of the short term payments of 13 109 92. 10.20 Accrued Interest Adjusting entry QuickBooks Pro 2018: although in this presentation we will record and adjusting entry for accrued interest with into QuickBooks pro 2018. If you can continue in along with us, we will be continuing with gets great guitars problem. If not, that is OK. We will be doing and adjusting entry for accrued interest and show how to record that adjusting entry both with a journal entry. But then we'll actually going to do it without the need for debits and credits. We currently, if you have the backup file, you could restore the backup file by going to file open and restore bring us to this point in time so that we can record the accrued interest. If not, then you can work through the problem and or watch what we're doing here and follow along for this example. We have the current windows open in order to open the current windows go to view open Windows list. We also have the home tab open that found at thes company dropped down and the home tab. What we will be doing is recording the accrued interest. In order to do that, we're gonna first look at the balance sheet to see what accrued interest is and why it would need to be recorded to do that. Let's go to the reports. Drop down, up top. We're gonna go to company and Financial and then scroll down to the balance sheet standard . We're gonna change the dates by going to the customized report up at the top. And we're gonna change that date 20101 21 January 1st 2000 to 21 to go to 28 to 1 February 28 being the month out end, we will be looking at We're gonna say, OK, here is our balance sheet. Now, last time we saw that, we had a loan payable on the books with a current portion of 18 109 and a long term portion of 56 7 69 What we need to do now, it's figure out how much of that has been interest, how much interest has accrued on these loans that have not yet been paid as of the end of the month. This is in a type of journal entry that we would do if presenting the financial statements and or wanting to interpret the financial statements at a specific point in time, not something that we're gonna dio as we go. Typically, we're not typically going Teoh record the adjustment for the amount of interest owed because we'd have to do that daily. So this is one of those adjusting entries we'd have to do at the end of the month or the end of the year in order to get a real picture of what we owe at that point in time. So in order to get an idea of that, we're gonna look at the amortization tables related to these loans. Here is the amortization table. We have a long term loan over here, and we have a short term loan. Now, the long term loan we made the second payment as of the end of the month. We are, in essence, paid up on that loan, meaning no interest has accrued because we made that second payment as of the end of the time period. So we're okay there? We're gonna go to the short term loan and on the short term loan, we're gonna pay all of it at the end of the loan payment. So we're gonna go 1 5052 at the end after borrowing 5000 it then having interest at 6% which will accumulate up to that 1 5052 And we took the loan out this loan, we recorded it, actually at the end of the month. But we're going to say that this loan was as of the beginning of the month and therefore we're gonna have one month worth of payments that we have not yet paid to give an example of the accrued interest, meaning after one month, we're going o interest of $25. Now, obviously, this loan is not ah, large amounts of the loans 2 25 may seem mix and not significant, and it may be not significant here, but the principle would be significant if the loan was larger and or when we get to a year's worth of interest, If we haven't accrued it, this could be a significant portion. So what we're going to say here is that we have we owe this payment or we owe ah, the 1 5052 at the end of the time period. And this interest is accruing as we go and we're gonna assume here that one month has happened. And we then have earned rent on the money $25 that has not yet been paid. And therefore, we are going to have to accrue this $25 meaning we're gonna payable for it. And we're going to recognize the interest expense for So, in essence, we have interest expense increasing, and we're gonna liability increasing. So if we go back to our financials, then we have a long term payable note note payable, and we have the short term portion of the notes payable. What we want to dio is not put that added interest into the notes payable, but create another account and we're gonna call it it could be called a crude engine. We're gonna call it interest payable. However, we're just gonna call it interest payable. And we're gonna have that in the current portion of our ah liability, our current liabilities portion of our balance sheet representing the fact that we owe interest on the loan that has been outstanding up till this point. So in order to do that, we could do that by going to the company and going Teoh the make journal entries company make journal entries and then debuting the account for interest, expense and credit in the account for interest payable. But we're gonna do this without debits and credits. So what, we're going to dio we are going to use a register so the registers are gonna be in a banking section and then we go to register here and we're gonna look for a register. We're gonna look for one of those two accounts with that we're gonna be using. It's gonna be on interest payable and interest expense, and we're gonna use the register for one of those accounts and then use that to increase or decrease and then apply the other side to the other account. There is a problem, however, in that we only have registers in QuickBooks for permanent accounts or balance sheet accounts, and therefore, we haven't yet set up the payable account for interest payable and the other sides and expense which doesn't have a register. So in order to use this method, we first need to create an account for the interest payable. To do that, we're going to go to the lists we're going Teoh, Go Teoh chart of accounts and then at the bottom, we're gonna go to account and we're gonna create a new account. It's gonna be in other current liabilities. So we're going to select other current liability over here other current liability, and we will then continue. And we're gonna name it interests payable. That's interest payable. That's all we're going to need within this data field. So well say save and close. And then we can go back to our banking use register, and it is open there directly because I was on the interest payable account. So I'm gonna close this out and close this out. And once that's closed, if I go back to banking, use register, then I'd have to find that in the drop down. So just note that sometimes when you go to this register, if you have certain fields open, it will go to the register where the field is open. And if you want to go somewhere else, you'll have to close that field. So we're gonna we're gonna select the account, will, so we'll select the drop down and we're looking for interest payable the account we just set up. So this is the ledger account for interest payable when we select. Okay, And now that we have this, we can say we're gonna increase or decrease this account, and then the other side will just be the other side. It's still a little bit confusing because we need to know interest payable is a liability accounts in the liabilities going up. So the liabilities going up because we're accruing interest. So we're going to say it's as of the end of the month to 28 we're gonna increase the interest payable by the amount of interest in accordance with the table, which were saying is $25. I just switched to the amortization table here and then going back to QuickBooks increase of $25 and the other account then is going to be interest expense so we could select the drop down, or we could just type in interest expense. It's gonna be an expense type account, and that will be the other side of this. And then we need to select inter for two to be entered, and we might want to put adjusting or a D j entry and, uh, accrued interest and enter for the note and then we can go back to our balance sheet. And if we scroll back down, then we should have our interest payable accounts here on the balance sheet showing a liability for that interest. That is due for the fact that we've earned money or we've been using money for which we have not yet paid, and therefore or the rent or interest on it. There's the amount there's the adjustment for clothes, this back out and we then look at the other side. It's gonna be on the income statement going to the reports going to company and financial and profit and loss changing the dates 20101 uh, 21202 28 to 1. Scrolling down. There's our interest expense here. If we double click on that, we see the 25 double quick. And on that, there's our item. So there's the accrued interest expense. This journal entry will reduce net income and will increase the liability. What we're gonna do next time is we're actually going to reverse this entry as of the first day of the next month, and this is only gonna happen for some of the adjusting journal entries that not all of them. And the reason this is we're going to do this for some interest is, ah, process, um, reasoning, meaning if we're doing the adjusting entries as of the end of the month, and we have that separate process than the data entry, which is often done by a whole different department, then often it's easier for us to do some of the data entry on more of a cash basis or more of a different system, then then to have to deal with our Justin entries. In other words, if we go back to the balance sheet here when the actual payment actually happens for interest expense, we would like it to be easy for the person actually writing the check at the end of the six month period to just say, I'm going to write a check credit in cash or decrease in cash for 1 5052 and writing off the interest in accordance with this amortization table of 1 52 and then, um, putting the other side to decrease the loan payable. What we don't want them to have to do is deal with our reversing entry. So what we're gonna do is reverse are reversing entry as it the first day of the next time period. And therefore, when this becomes do, they could just go according to the amortization table and not to be confused with this interest payable that we put on the books. What that does if we go back to QuickBooks, is it makes it this correct as of the end of the month. And then it's not exactly going to be correct once we do the adjusting entry in January 1st . But it will then be correct once we make this payment. Once this payment happens, so we're gonna we're gonna keep on adjusting our adjusting entries to to make everything correct as of the end of the month. And then we're gonna try to make it as easy as possible for the bookkeeper, not have to deal with reversing our Justin entry in their normal bookkeeping process. And we'll see that as we dio with a couple of these journal entries, some of them will have that reversing entry. Some of them will not. And our goal is to set up a system. So you want to think about a system that you can set up that will be worked full and will do what you wanted to do. It will give us the information we want. It will give us the regulatory needs we have to in order to report the financial statements . And it wont mess up our normal accounting process as we do the normal day to day journal entry. 93. 10.25 Invoice Adjusting Entry QuickBooks Pro 2018: Hello. In this presentation, we will record and adjusting journal entry for an invoice that was created in March but for which the work was done in Fragile, wary. So we have to bring back that work or bring back that information from the invoice to February. If you've been following along with us, we will be continuing with the get great guitars problem. If not, that is okay. We're gonna be doing and adjusting journal entry for an invoice that was created in the following month for which we are doing the financial statements and therefore according to the revenue recognition and matching principle, we need to bring back the revenue for that invoice in the time period that it was earned, as well as any related expense, including cost of goods sold. That's what we'll do at this time. This is a good practice as well, just to get an idea of what is being recorded in terms of the journal entry. When we create an invoice, if you have the backup up to this time, you can restore the backup going to file and restore. If not, that's OK. We can follow along. We can work through the problem to get to this point in time. We currently have the current windows open. In order to open the current windows, you go to the view tab and open window list. We also have the home to have open here so that can be found at the company and home tab. What we will do is we're going to go to the balance sheet first, take a look at our objective, and then we'll go back and look at the invoice that we will be adjusting. So we're gonna go to the reports up top. We're gonna go to company of Financial and then down to the balance sheet standard. We're gonna change the dates to the dates were working out in customized reports. We're gonna create a range so that when we drill down on the information, we can see the range 0101 to 1 January 1st 2021 202 28 to 1 February 28 2021. We're going to say, OK, this is our information, what we have here and what's open. One other report and that's gonna be report. Let's be the profit and loss reports. We're gonna go to the company and financial and profit and loss and select the date range once again of no one, No 1 to 1 January 1st 2021 2 02 28 to 1. And this is going to be the information that we're gonna be working out. So our cut off date, in essence, is February 28th. What we're saying here is there's an invoice that should be recorded here. This is our income account. If we double click on the income account and we go through, these invoices were saying that there's an invoice here that should be here, which is not which was entered as of the following month. And we need to pull it back in accordance with the revenue recognition principle. Now, this could happen for a couple different reasons. One, oftentimes that happens with a service company. Because when when in the normal process of us creating an invoice, we will have to track everybody's time. If we're doing guitar lessons, for example, we'd have to track everyone's time, created the bill, then send out the bill. So it is very possible that the work was done. The lessons were done in se in this case February, but the invoice didn't go out until March, and therefore the revenue didn't get recorded to March in terms of a perfect accrual system , even though this little icon says a cruel what that really means is QuickBooks is being driven by when the invoices created and so being the invoice creation is win QuickBooks records revenue rather than when cash is received when we have this little a cruel icon selected. If, however, the invoice was made after the time when revenue was recognized, it's still not in accordance with revenue recognition principles. And we should bring that back if we were to formally create the financial statements and really low know how we're doing in a current month in terms of how much we earned. And if we wanted to make these reports for outside users, we should have that revenue included in the report at the time that we did the work. So we need to pull that back to this point now. I haven't created the invoice at this time because I'm actually gonna create the invoice and then show you this report again and see what it would look like and how we would detect that. Or one way we can detect that, and then we'll go back to here. Now, we're not gonna do this with the service item. We're gonna do this with an inventory item rather than the service revenue for an invoice, because we want to see the whole journal entry. The most complex journal entry, one that deals with not alleges revenue but with cost of goods sold. This. So this is a situation where we sold a guitar that the guitar invoice was entered in March . But we actually shipped the guitar in February. And therefore when we look at the shipping documents, according to those we should have in the inventory or the sale recorded in February, so we need to pull that back. So what I'm gonna do is I'm going to show what the invoice looks like first by creating the invoice in March, and then we'll take a look at it, and then we'll discuss on how we can pull that that revenue back into the current time period that it was actually earned. So we're gonna create an invoice for March, so I'm gonna select, create invoice. And we're going to say the customer is going to be Sam the guitar Man. And we could just type that in there. And we're gonna say Then the date is gonna be, 03 0 to 21. So march 2nd, 2021 after our cut off date is when this invoice was entered. We're gonna show that what's gonna happen when we enter this so that we can then re create it with a new adjusting journal entry. It's journal entry number 19. All this information will be the same. We're gonna change the terms, Teoh, Uh, Net 30. The item that we will have is going to be that E l p guitar QuickBooks automatically assigns tax. That's good. We're gonna have quantity will be one of those. So here will be our invoice. We do want sales tax, so I'm gonna go down to the bottom and we're going to say that tax will be applied. Okay. And so there's our 500. There's the 25 sales tax. Here's our transaction. It's going to be recorded in March. Now this, we're going to say that this was recorded even though the sale happened prior to this date , even though the sale happened in February. So for whatever reason, we didn't enter the invoice until after the guitar was actually shipped until actually, after we earned the revenue, we're gonna record this and see what it looks like in March. And then we're gonna talk about how to pull it that information back. So if we record this, it's going to do a few things. It's going to increase revenue by the 5000. It's gonna increase the accounts receivable by 5 25 It's going to increase the payable in terms of sales packed payable by 25. And then it's going to increase. Its gonna decrease inventory by amount. We don't see here, but we will see it when we when we analyze this process and then it's going to record a cost of goods sold. We need We need to know all that in order to make this adjusting entry and understand what is going on. So we're going to say, saving clothes and then go observe that. So we'll say saving close and yes, and then we'll go back to our reports. We're gonna go to our reports. And now we're gonna look for the for the next time period. So I'm gonna look for the month after what we are working with, which is going to be 0301 2103 31 21. And here's that information. We're gonna do that same thing for the balance sheet and we could see it here. We're good customized reports and change the range again toe 0301 2103 31 21. And okay, so here is gonna be our reports as of next month of falling month of the month of our cut off that we're making a financial statements for If we go back to the profit and loss, we see that we have that revenue of the 505 100 here. There it is. There we double click on it. Here it is. Here. If we close that back out, we have the cost of goods sold. We don't see that on the invoice, but it has been created from the envoys. If we double click on that, we see the item. If we double click, there's the invoice. So the cost of goods sold its 400 closing this back out. Closing this, going to the balance sheet, we're going to see that we have the receivable double clicking on the receivable, double clicking on that. There's the receivable for the 5 25 If we close that out and close this out, we also see that we have the payable in terms of the sales tax payable here of 1 25 Double click on that double. Click on that there. Is that So we're gonna close this out and close this out. Gonna go back to the profit and loss because it's easier to see here it being our only transaction in the profit and loss for the next month. And this is how we would really pick this up. We would go through the merchandise sales and try to see the recent sales in the following month and say, Did we really earn the revenue in that time period? Or was the revenue earned prior to that? How can we know if it was merchandise? We can ship the shipping documents. If it was something like time that we did service like a tar lessons, then we can see the dates, we could go back to the data and see when the actual work was done. That's when we should be recording the revenue. So for whatever reason, we recorded this invoice in after the guitar was shipped, and therefore we have this problem where the 500 is recorded in the month of March. We need to pull it back to the month of February. Within QuickBooks. It is possible for us to just double click on this double click on this and change the date . And we typically, however, we often don't want to do that because there might be a legitimate reasons for having the date within QuickBooks. And if it was a normal service business, that might just be our normal process that we bill every couple weeks, and we want to keep that process in our normal process and then just doing adjusting entry . It also could be that this invoice was already applied out. We might have already paid it out. It might be tied to a purchase order, so it might be something typically within accounting systems. We don't go back and change the dates. Many accounting systems will not let us do that is better toe have an audit trail, often times. So for that reason, we're not gonna go back and do that adjustment. What we're gonna do is just a journal entry to make our financial statements correct as of the cut off date as of February 28 with just a journal entry. And ah, and then and not mess with the actual invoice. So we're gonna pull this information back to February. There are a few different ways we can do this with the traditional way would be that we would go to a company up top and we would make a journal entry and just make a journal entry image and reverse everything that happened in terms of debits and credits. But if we don't know the debits and credits, we could do this without the deputy credit. So we're going to do this with registers and try and put this in place with registers. So first we're gonna think about this sales half of this, this journal entry. So when we think about the sales half, we have this 5000 here in revenue. The other side of that went Teoh accounts receivable. And so the accounts receivable is up top here. So we had the 5 25 and accounts receivable in the 25 that is in the sales tax payable. So those that's we're gonna deal with first. So what we're gonna do is just pick a register that is in one of those areas. We can't pick the income statement, Reg, register of revenue and therefore will have to pick either accounts receivable or sales tax payable. The accounts receivable register is a little bit different in its format, and therefore we're gonna put this in place, actually, by looking at the sales tax payable register. So we're gonna we're gonna go to the sales tax payable register and try to see if we can put this information into that register without using debits and credits. So we're gonna go to the banking up top. We're gonna go to use register, and instead of the checking account, we're gonna scroll down to the sales tax payable, which is gonna be a liability. So we have sales tax payable, and okay, here is our sales tax. Now, this one went up by the $25 we can actually see the transaction up here. So what we're gonna do is we're gonna bring that back into February. So we're going to say this is as 02 28 to 1, we're gonna record it again. But as of our cut off date and we're gonna tap through this, I'm going to see if we can not what? We will need a vendor. So we'll say it's the same vendor New York State type of that New York state. And then it's gonna be the amount billed will be 25. And then what we would like to do is put the other accounts, but there's gonna be two of them that will be affected here. So we're gonna say, split this account and there should be two other accounts effect. I was gonna be a little bit tricky to think about the other two accounts that will be there . There's 25 then we made a sale of merchandise sale. That's gonna be the revenue or income account. Remember that if we looked at the invoice, the income account was for 500. So we're going to say that there's 500 there. The merchandise sales gonna be 500. We're gonna have to put it in at the negative 500 I'll try to explain that in a bit. And then the other account that's going to be affected is going to be the accounts receivable accounts receivable. And that will be for the full amount of 500 sales, plus the 25 or 5 25 Whenever we have a receivable, we will need a customer. So we have to put the customer in there because QuickBooks will not let us record it unless we have to customer. And I believe we created the customer here for Sam the guitar man. All right, so that's gonna be our our entry. Now, this is a little bit confusing because we're trying to avoid debits and credits, and we still have problems in this format, even though we're tryingto avoid them by having pluses and minuses. So if we if we read this, we're saying we're trying Teoh increase the payable of 25. We know there's two other accounts affected, which would be the sales and the receivable. Typically, when we work it in this format with registers, there's only one of their account affected. So if this account was going up by 25 the other would do whatever it needs to do quick, quick, we just say, OK, I'm gonna do whatever else I need to do to the other side debit or credited in accordance with whatever's needed. In this case, we have two other accounts, and therefore we have to do some figuring on, you know, which is increasing or decreasing without using debits and credits so we could use some trial and error. We know the other two accounts are gonna be the merchandise sales. We sold it for 500 the receivable. They owe us the sales price plus the 25 5 25 If we put it in there incorrectly and we try to record it, QuickBooks will say you're out of balance and then we can switch these two and and then we could figure out what is the correct amount. If you wanted to do this with a journal entry, the more typical kind of way to do this with debits and credits, I would say we would say that we're gonna debit the accounts receivable by the 5 25 we would need the customer field. Then we would credit the merchandise sales for for the 500. And that would be the the, uh, sales price. And then we'd have the payable that we would have to credit for the added 25 here. So let's go ahead and record this and we'll see what happens. So we're gonna go to the balance sheet, and if we go to the accounts receivable up top, I'm gonna change the date to the 0101 to 1. And if we scroll down here, we now have entered it there. So we've kind of duplicated this amount. There it is. On the month after here it is at the cut off date that we wanted at. So that looks correct. We're gonna close that were just duplicating this transaction. If we go to the sales tax payable, we see right here with double click on that, and we changed the date in the beginning. Day 20101 to 1 and scroll further here. We should see that again. We just basically duplicated this amount with that transaction. That's what we want cause we want to pull it back into this month. So we've recorded two times, in essence, closing this back out. If we go to the profit and loss we go Teoh merchandise sales, same item changed the beginning day. No one, no 1 to 1. We see the double of that 500 so we pulled it back into to 28. So we have that side looks correct. Now we're gonna record the other side of it, which is the cost of goods sold sides that's caused a good sold and the other side is the balance sheet of inventory. So if we scroll up to inventory and double click on inventory and we change, we got that 400 so double clicking on that there's being created by this here, So we're gonna duplicate that as well. And we're gonna do that with our registers. So we're gonna try to go into the inventory asset register and do the same process to pull the inventory account created by this transaction back into the prior month. So we will go to banking, we're gonna go to use registers, and we will go to the inventory asset register and okay, the date when we're gonna pull it back to 0 to 28 to one or cut off date, and we're going to just try to duplicate this 400. So it's going to be 400 and it's going to go to the Accounts receivable account. It's not. It's not going to go to the accounts receivable account for us. It's going to go to the cost of good sold account. The other side's gonna be cost of goods sold. The reason it's got accounts receivable appears because it's it's showing the split. So if you were able to see all the accounts would have to double click on it and there's the invoice, and then we can interpret what is happening. So it's trying to tell us there's a bunch of other accounts involved. We did ours in two journal entries to transactions, and therefore we're just going to This one will be easier than the last one in that there's only one other account. The inventory is increasing by the four is decreasing by the 400 the other side then is going to the cost of goods sold. That expense related Teoh the inventory being used in order to help generate revenue. We're gonna go ahead and record this and then if we go back to the balance sheet and we go to our inventory, we're gonna double click on it. We're gonna change that beginning range again. 20101 to 1 scroll through their and their We've duplicated it at the to 28. So there it is. There. We pulled it back to the account we needed in the time frame we needed in closing this. Go into the profit and loss if we double click on the cost of goods sold. Change that beginning range 0101 to 1. There again, we see that we pulled it back here to that 400. So that's what we're looking to do. I'm gonna close this back out, and that's what we have done now is pulled that information back to the date we wanted. If we want to look at that in summary, we're going from a 101 to one, Teoh Uh 02 28 to 1. And we're saying that we now have in the income statement that we the time frame, that it should be in this invoice has been recorded and pulled back into that date, recording the appropriate amount of revenue and expenses. If we go to the merchandise sales, we see that amount of revenue here related to this transaction. If we go to the cost of goods sold, we see the 400 costs and get sold. And if we go to the balance sheet and change that date, range again from a 101 to 1 to 12 or 20 to 28 21. We then see the accounts receivable here scrolling down of the 5 25 and we really we should see the payable in terms of the sales tax payable double clicking on that of the 25. So there's that information now. This was a longer process, of course, because this was a process with recording the the invoice, and we did so not by creating another and voice, but by doing something similar to creating journal entries working with the registers. Now you'll note that we have created this our financial to be correct as of the cut off date. As of it date of the financial statements, which is February 28 2021. But we have, in essence, don't duplicated this this transaction, we've duplicated that sale. We've duplicated the the accounts that are affected from that invoice that was created in March. So what we need to do now is go back and do a reverse an entry. So next time, we'll do a reversing entry, and we will reverse, uh, this transaction as of the first day of the next month so that we don't duplicate it as of the time the invoice was actually generated in the next month. 94. 10.30 Reversing Entry Accrued Interest QuickBooks Pro 2018: Hello. In this presentation, we will enter reversing entries for accrued interest into QuickBooks pro 2018. If you've been continuing along with us, we will be continuing with the get great guitars problem. If not, that's OK. We're gonna be talking about reversing entries and how toe enter a reversing entry for accrued interest A bit about what reversing entry is why they might be used within an accounting system as well. If you have the backup file up to this time, you can restore that by going to file and re storm. We're gonna have the open windows open by going to the view tab and open window list. Within the open windows, we have the home page open to open the home page, go to a company and home page when it closed the balance sheet right now and just take a look at the home page and start from here. We're gonna be talking about the adjusting entry process and a reversing entry for the adjusting entry process. Adjusting interest are gonna be done at the end of the time period. They're trying to put everything on an accrual basis as of the point time that we're really looking at the financial statement and or distributing the financial statements last time we did in adjusting entry for accrued interest. Now we're going to a reversing entry. Some of the adjusting entries will require or could use a reversing entries one system that can be used in order to make things more efficient between the data input that normally happens throughout the process and the adjusting process at the end of the period. So in order to see this, we will go to reports up top. We're gonna go to company and financial and scroll down to the balance sheet standard. We're gonna change the dates to the date range we're working on by going to customize reports up top dates from 0101 to 1 to 12 0 let's make it. 02 28 to 1. So january 1st, 2021 to February 28th to doubt in 2021. Okay, we see our balance sheet here scrolling down. We're looking at this $25 interest that was done with an adjusting journal entry, and we'd made that at the end of the time period saying that We owe interest on a loan that is outstanding right now of this $25 and we have a expense that we should be recording in this time period that we are covering related to that, even though we have not yet paid it. What we want to do now is reverse this journal entry so that when we pay the interest on the loan, we do not have to worry about this reversing process. In other words, when we pay the loan payments, typically we want the the accounting department to just be able to write the check in accordance with whatever system we have, whether that be recording it in accordance with the cruel the amortization table that came with alone or writing a check to the loan itself and having us just adjusted. What we don't want them to have to dio is figure out how much of the of the a cruel needs to be reversed at the point in time we write the check. One reason for that is that often times the accounting department, the day to day journal entries is different from the adjusting process, which may be done by another department or by an outside c p. A firm, and therefore we want to reverse that and not mess up the normal accounting process. That's what reversing entries do. They're not perfect, but they help us to make that separation and have the two departments do their thing without having the overlap messing each other up. So what we're gonna do is we're going to reverse this and reversing injuries always happen on the first day of the next time period. So we are. We got our financial statements, correct. If anybody wants him, if we want to read them as of 2 28 the end of this month, then they are correct that $25 is correct right there. We're going to reverse it as of the first day of March, and that will reverse it out so that we won't have to worry about that entry when we make the normal payment. So let's see what that looks like. First, let's take a look at this 25 and double click on that double click on this item. We entered this suggesting entry through the register, and we're going to do the same thing here through the register in terms of the reversing process. So this is one way we could get to the register. If I close this out and close this out the other way, we can get to the register, is go to the banking drop down, and then go to use register. We're gonna select in the drop down, and we're looking for that interest payable again. So we're gonna go to the current liabilities. We have the interest payable right here, and we will select that item and we'll see. There's the 25 right there. All we're gonna do is reverse that. We're gonna make the next day of the next month, so it's gonna be 0301 to 1. And instead of an increase, we are going to decrease by that 25 and then we're going to say that the other side of it is going to be interest, expense, interest expense. Now, this is gonna look funny when we record this and we'll explain why and why we would want to do this, but we're gonna reduce this amount back down to zero and put the other side to interest expense. We're going to say record And then let's go back to the balance sheet and see if it does what we hope it to do. What do we hope it to do as of March? We expect this to go away, so we're in Fed February 28th. If I change this date to one day next and refresh, then there's no longer that that a cruel there, it's gone. Now. If I go Teoh, if I want to see what happened, we can go back to the register, of course, and see that it went to zero, and that's why it's no longer there. So if we go back to the balance sheet, that's what we have there. If we go to the profit and loss, then reports scrolling down to company and financial scrolling to the first reports, profit lost standard changing the date range from 0101212 12 Let's make it 202 28 to 1 January 1st 2021 Teoh, February 28th 2021. We then see that $25 right there and interest expense. That's what we want there because it needs to be included in an expense in order to really make our net income proper at the end of the day, if we make this the first day of the next month. However, if we say we want now go Teoh 01 Sorry. Over three 01 21 203 31 21 the next month. Then we have this negative interest there, and that should look kind of funny. We shouldn't have a negative interest expense. That's kind of weird. And the reason we have a negative interest expense is because of that reversing entry that we just entered. This is actually incorrect right now, and it will not to be correct until we make the interest payment in this time period or make the adjusting entry at the end of the time period. So this isn't a perfect system, is the point Thes reversing entries is a system that works in that it makes things correct as of the cut off date. As of the date, we make the financial statements as of the end of the month and then it's not perfect in the prior time period because it results in this case to a negative expense which looks really funny shouldn't happen, but it will be correct. Once the normal interest payment is made, then this negative piece and that positive piece that will be recorded when we make the normal interest payment will net out to the proper amount that should be recorded in this month. So at that point in time, we'll be okay again. And then at the end of the month, once we do are adjusting, process will be okay again. So the point here is that this mix is correct, kind of on a periodic basis as of the end of the month, once we do the adjusting entries, which we really have to do anyways to be really accurate. And it's not a perfect system in the interim periods. But as long as we recognize that, then it can be a system that that works for us going forward. And it kind of separates that the duties between the outside c p, a firm doing, adjusting process, or ah, separate department, doing the adjusting to process and the people that are actually entering the date of the day to day data, not having to deal with reversing those adjusting processes 95. 10.35 Reversing Entry Accounts Receivable QuickBooks Pro 2018: Hello. In this presentation we will enter a a reversing entry for the adjusting entry of accounts receivable within QuickBooks Pro 2018. If you've been continuing with us, we will be continuing with the get great guitars problem. If not, that's OK. We're gonna be talking about reversing and adjusting entry that was made at the end of the time period of the purpose of the adjusting entry and the reasoning of the reversing process as well as the function. And how do we do the reversing process? If you have any backup filed to this point, you can restore that by going to the file and re storm. We currently have the open windows tab open, which you can go to at view and open window list. The only open window being the home tab at that at this time, if you want to open the home tab, if it's not open at this point, go to the company and home page to open the hometown. We're gonna talk about a reversing entry, four accounts receivable and first we have to look at why did we put that accounts receivable journal entry in there? What's the point of reversing it. And remember, we looked at this last time. We have a prior presentation of the adjusting entry for on invoice. The the issue is that an invoice would have been entered after the cut off date and therefore the revenue would have been entered after the cut off date for which the work was actually done before the cut off date. And therefore, the revenue that QuickBooks has generated for the invoice was posted after the date in which we needed to be posted in. In other words, in this case, it was posted in March. That's when the invoice was generated, and we needed to pull that in that income back into February in accordance with the revenue recognition principle. In order to do that, we reverse the whole invoice. We didn't want to change the invoice. We don't want to change the dates on it because that's really not proper accounting. Oftentimes we can't do that. There might be other things that are connected to the invoice, and really, we would like to have a paper trail in which the invoices that in there as its original format and make any adjustments that we need to at a later point. And so we made a reversing entry, basically making the journal entry related to a creation of an invoice into the adjusting process as of the end of the time period. Now we're going to reverse that. So let's take a look at what happened here. We're gonna go to the reports up top. We're gonna go to company and Financial, and we're gonna scroll down Teoh the balance sheet standard. We're gonna change the dates going to go to customize reports up top. And the dates are gonna be a 10121202 28 to 1 January 1st 2021 to February 28th 2021. And then we're going to scroll down to what happens with this envoy. So if we look at accounts receivable Weaken see part of this transaction, and if we scroll down, we see that this is the invoice that we created. So this is not it's actually not an invoice note that what we did is create a journal, a general journal that will mirror what would happen in the invoice. The invoice, actually having been created in the following month. So if we double click on this item, this is how we generated it. We didn't do a journal entry. We used that register in order to to generate this invoice. If we close this back out, close this back out. And if we go to the profit and loss by going to the reports up Top company and financial profit and loss changing the dates 2010121202 28 to 1. We're gonna look at the merchandise sales and we'll see this same information, so we'll double click on the merchandise sales. And there's that general journal again recording the revenue here in the sales item. So I'm gonna close this back out. The other side of it is in the cost of goods sold here, double clicking on that. Here's the cost of that inventory 400. If we double click on that, that's another registered journal entry that we put here and closing this back out. We're back here. So in essence, when we create a nen voice, we know that accounts receivable is going up. We know that sales is going up here. We know that cost of goods sold went up, and we know that inventory is going down and taxes payable is going up. So all that is happening when we create the invoice and we adjusted that invoice back into this time period. Now, let's take a look at the next month, the month of March, We're going to say that that is going to be 030121203 31 to 1. And so march 1st, 2021 to March 31st 2021. We have this invoice here. This is the only thing we have so far. And this is the invoice that we entered in March that we have to then pull back to February because at the point, the invoice was generated was a point after the date in which the work was actually done. Meaning the work was done in, um, February. And we wrote the invoice in March QuickBooks recording the inventory or the revenue in March. So if we double click on this, here is the actual invoice that we basically recreated with with general Journal entries in February. And what happened when we did that, then we made February Correct. But as of this point in time, then we're gonna close this back out, close this back out. As of this point time when this was recorded now it's been recorded twice, meaning this 500 $100 of revenue was recorded in February, the correct time period. And now it's recorded again in March. So what we need to do is have a reversing entry, and we're going to reverse what we did in order to put that journal entry into February. You'll note that this invoice was in there as of something like March 5th. I believe it was. The reversing interest, however, are not gonna be reversed as of the date of this invoice that it's reversing. Typically, we're gonna put them all in there. As of the first day following the month that the adjusting entry was made a Justin entry made as of the end of February, reversing entry then made the first day after or march 1st. So there's gonna be a couple days. In other words, between that point time march 1st and the point in time that this invoice was created where the financials are kind of wrong on an accrual basis where that isn't reported and that's okay because we made it correct as of the financial statement date. And then it's going to be correct as of the end of the month, it will be correct as of the date that this, um, invoice was created. So we're going to reverse what we did in terms of an adjusting entry at the end of 12 31 as of March 1st of the following month. So let's do that. I'm gonna change the dates back. I'm going to go to say, back to go to Let's go back to 010121202 28 to 1 back to the prior timeframe. Now there's two sides of this entry that we have to reverse. Typically, we would reverse these entries by doing a journal entry by going to the company and going down to make journal entry. But in an attempt not Teoh use debits and credits. We are using the registers in order. Teoh do this. So we're gonna do this with registers. Looking at plus and minus is, rather than looking at debits and credits is going to be the same type of concept, However, so we have these sales. We know that part of the reversing process was that we had accounts receivable go up. We had sales go up, and the other side of that is the, um the payable for the sales tax payable. If we go back to the balance sheet, that's actually the register. That it's easiest for us to use is gonna be this sales tax payable account. We're gonna go into the sales tax payable and basically record that half of the journal entry. So in order to do that, we're gonna go to the banking up top, we're gonna go to use register, and we're gonna look for that sales tax payable. So if I scroll down, we're looking for the register of the sales tax payable. There it is. And we're going to say, OK, we can now see what has happened before. So this is the actual invoice that we made this reversing entry for. So this entry happened in March. We made this adjusting entry this general journal entry as of the end of February in order to reverse this and now we're reversing this entry right here. So this is going to be as of March 1st, and we're basically gonna gonna do the reverse of this item here. So if we look at what this item, we see that we had billed items, so we're gonna be in the paid section, and then we have this split here. So if we want to see that split, sometimes QuickBooks will let us use the split icon and show us this split there. So there's the split. So we want to do the reverse of this. Meaning we're going to go into the paid 25. We're gonna go into merchandise sales, have a positive 500 then accounts received will have a negative 5 25 So let's close that back up. We're gonna go into the paid section as of march 1st we want to be on the paid side for 25 and then we're gonna select the split instead of just one account. We need to accounts and see what that split will be. One account is gonna be the sales account for merchandise sales. The amount of merchandise sales with 500. We're gonna put a negative 500 which in essence is the opposite of what we did here. Because we're reversing this journal entry. The other side's gonna be accounts receivable, and we're gonna put a positive 5 25 in essence, because that's reversing this transaction appears the opposite of what we did here. And then we're gonna choose the customer, which will be Sam the Guitar Man. We gotta have a customer or QuickBooks will not let us post anything. Teoh the accounts receivable account. Now this is one of those areas where this ledger putting it in this ledger is almost as difficult as it is surely more difficult if we understand debits and credits as using journal entries. However, if we don't understand debit secrets, we can use the register and proper, possibly use a little bit of trial and error in order to work with the register. Typically, the registers work best when there's only two accounts involved in a transaction. And when that's the case, we could basically say we're gonna do whatever we need to do to one side of the transaction and then just point to another account. And QuickBooks can, in essence, debit and credit the correct accounts in this case, there's three accounts involved that makes it a little bit more difficult. But we know what's happening in terms that we know that sales is going up on our on our invoice or sales is being affected. On our in Bush, we are reversing sales of the 500. We know that we're reversing the accounts receivable of 5 25 the sales plus the sales tax. And we know that the accounts payable is affected by the amount of not the accounts cable, this sales tax payable by the amount of the sales tax. So let's go ahead and see if it lets us record this. If we're not in balance, it wouldn't let us record this. And we can use some trial and error to try to figure out which way these things are going using the registers. So we're gonna record this. We needed to add a vendor, hear? So I added the vendor of New York state sales tax for that 25 say record there we have that information. If we go back up to the balance sheet now, we are going to look at the first date in March, so I'm gonna changes. Toe 03 31 21 1st day in March and we have the sales tax payable. If we double click in the sales tax payable, I'm gonna change the from range 20101 to 1 and tab through this. We have. We have our Justin entry here. We have the reversing of the adjusting entry in the first day of the next month, and then we have recorded again, this being the actual invoice that was recorded or in reverse. This is the original invoice that was recorded in the wrong date in March, which we pulled back to February in order to adjust for it. And then we've reversed it in the following month so that these two will will match out and not cause a problem. So we're gonna close that back out. We should see the same kind of effect in the accounts receivable. If we scroll up accounts receivable, double clicking on the accounts receivable, changing the beginning day 20101 to 1. Refreshing this Once again, we see our Justin entry. We see it being reversed as of the first day of the next month. And then we see the actual invoice. Or in other words, the invoice was originally created in the wrong month. We re created it in February, and then we reversed it the first day of the next month in order to cancel these two out and not have this entered two times. So we're gonna closes back out again, we're gonna go to the profit and loss. And if we take a look at the profit and loss and double clicking on the merchandising sales , we have the this is the current period. So the period in which we made the financial statements as of and we have the 500 in the New York State sales tax there, if we look at the next period 03 31 to 1, then we can see the full items here. So here it is, in terms of our Justin entry hears us reversing it in March. And here's the actual invoice. So the same kind of pattern happening, or in other words, here it is recorded in this in the wrong month. Here it is us fixing it with an adjusting entry. Here's our reversal of that adjusting entries so that this has not entered two times. If we close that back out now, we're gonna do the same thing for the second half of the transaction. That being the decrease or the increase in cost of goods sold, and the other side of that is the inventory going down. So if we double click on this item, we see this 400 right there. That's our Justin entry. This is what we're going to reverse. I'm gonna close this back out, and I'm gonna go back into that register back into a register from the balance sheet, the other side of this being the inventory. So we're gonna try, go into the inventory registered to reverse this. So in order to do that, we're gonna go to the banking, we're gonna go to use register, and we're gonna scroll down to the register that registered the inventory assets register, clicking on that And here are our items. So here is our adjusting entry. As of the end of March, are February. Here is the actual invoice. And here is us where we're going to just fix this. So we're going to reverse this back out. So this journal entry it only has two up two accounts. So it should be easier this time in the last one. And know what we did here We have the decrease side. So to reverse it, we're just going to go to the increased side here and the other account here. What's cost? A good sold. We'll have the same mother account cost of goods sold. So we're just reversing this item out. Then we will record this and see if it does what we hope it should do. So we will record this going to close this back out, and then if we go through our balance sheet now, if we look at our inventory, here's our inventory. Double clicking on that. If we change the date range from 0101 to 1 to the end of the month, here's our three items again. Here's our adjusting entry as of the end of the month. Here's our reversing of the adjusting entry as of the first day of the next month, and here's the actual invoice that was created in the incorrect month. If we close this out and go to the other side of this on the profit and loss and we take a look at the cost of goods sold and change the dates from 010121203 31 to 1. We see that same activity here. Here's our journal entry, bringing it back into the to the month it needs to be in. Here's the error that happened or the invoice that was created in the wrong month. And then here's us doing our reversing entry. In other words, here it is in the wrong month. It was entered in the wrong month, right? Transaction, Wrong month. Here's us pulling it back into the correct month and then here's us, reversing it as of the first day of the next month. So that would complete the reversing process for a, um, invoice. And if you can understand this reversing process in this entry process, then they're doing a really good job of understanding what an invoice is actually doing in terms of recording the invoice, because by understanding this process, you first have to know what the invoices doing and know all the accounts that are affected in order for you to then enter the transaction to mimic what the invoices doing without an actual invoice, but through journal entries and or through a register format, as we have done in the reversing entry process. And then you actually have to reverse that reversing entry, doing kind of the opposite of what an invoice does as of the next time period. So if you can, really, if you can kind of understand what's going on here, you're really gonna get a good idea of what's going on when you record on invoice. 96. 10.40 Prepaid Insurance Adjusting Entry QuickBooks Pro 2018: hello. In this presentation, we will enter adjusting entries related to prepaid insurance within a QuickBooks Pro 2018. If you've been following along with us, we will be continuing with the get great guitars problem. If not, that's OK. We will be doing adjusting entries related to insurance, discussing what they are, how to do them and why to do them. If you have the back up to this point, you can restore that at the file tab and restore. If we we currently have the open Windows list open in order to open the open Windows list to go to view open Windows List. The only open window is the home page at this time that is at company and home page. What we're gonna do now are adjusting entries those entries at the end of the time period in order to make the financial statements correct. At that point, they are part of the normal process. They're not problems or heirs that have been made by the accounting department and in specific with relation to insurance. We often set up the insurance in such a way that we say when we write the check for the insurance. We're just going to say, Write a check, credit the check and debit prepaid insurance, because by insurance is nature, we typically buy it for at least a month, but often times more than a month in advance to us using the insurance. And therefore, if we just expense it at the point in time that we buy it, then it's gonna distort our income statement pretty badly because we're gonna have this huge expense at the point. Time that we bought the insurance, even though it's really covering the other months when we when we compare month to month, we end up with a problem. So let's take a look at that and let's take a look at how we can adjust that. So we're gonna go to the reports up, Tom. We're gonna go to company and financial scroll down first to the balance sheet, and we're going to select, then the date range going to the customized reports, and we're going to select a 10121202 28 to 1 January 1st 2021 to February 28th 2021. There is our balance sheet. We will be concentrating this time on this. 11,000 there in prepaid insurance. Double clicking on that. We see that we have the 11,000 here happened at the end of January that we paid for this. If we double click on that, we see that we actually wrote a check for this amount. The thing to note here is that we put this to prepaid insurance rather than insurance expense, which might be what we would think that we would want to put it to is insurance expense. However, if we did put into an insurance expense, by the way, that's not a problem. We can do that basically, that reversing of this adjusting entry in order to adjust for that. But let's see why that might be a problem. And under an accruals basis system, why? It's not really proper to do that. So we're gonna close this out. Also note that as we do this, I'm gonna close this out. The fact that we have, in a cruel thing checked off here and not cash does mean that QuickBooks is out trying its best to record on accrual basis rather than a cash basis, however, does not necessarily mean that we're all on an accrual basis. We do what we do still need to make it these adjustments in order to be really on an accrual basis in terms of reports that we want to process. And so let's look at some of these differences and why that one might be the case. So if we go to reports up top, we go to company and financial and we go to profit and loss standard. We can change the date range from 0101 uh, 2120 3/3 let's go. So 0 to 28 21 So january 1st 2021 Teoh February 28 2021. Now you can imagine what would happen if we put that 11,000 as an expense here. It's currently on the books as an asset. If we put it as an expense specifically in the month of January for $11,000 we would then show not income but a loss for that time period. Because of that $11,000 now, in one sense, it's true that we spent $11,000 but if we were to compare, say January on have that $11,000 expense to February in which we didn't pay the 11,000. But for which the insurance is covering us for it doesn't seem quite proper. We would like to use the matching principle to apply that out. We'd like to say February, we did Justus good all else equal as we did in January and we had We should be applying the same amount of insurance. Given the fact that the insurance is covering both January and February, we shouldn't be measuring February's performance. In other words, based on the fact that they did better because we didn't buy the insurance in February and we bought it in January. We shouldn't be docking January's performance simply because that's when the insurance happened to be purchased, but the insurance with purchased for six months. So what we need to do is allocate that in order Teoh cover the time period that's being covered by the insurance one system to do that. One good system of doing that is to set up the insurance when we purchase it, not as an expense, as we have here, but a prepaid account. So if we go back to the balance sheet. That, in essence, is what we have done here. So we're just going to set up the system. Whenever you write a check for insurance, it's not gonna go to insurance expenses going to goto prepaid insurance. And then at the end of the time period at the end of the month or the year, our adjusting department ourselves or on outside C p A firm can go in and make the adjustments necessary to be in a proper, cruel basis. What would that adjustment to be? Then? We'd have to say, OK, well, here's what we paid for the insurance in this case, we're gonna assume that that covered 12 months. So we paid 11,004 12 months. We paid for it at the end of or the at the end of January or the beginning of February, and that means that one of those 12 months have now passed. So what we're gonna do is we're just gonna take that 11,000 divided by 12 months and about $916.66 and we can round here. This doesn't need to be exact for these adjusting entries as long as we want it to be, something that's materially worthwhile for us to do. So we're going to say it's gonna be nine hundreds. Just say 917 will be the amount rounding to the dollar that we will make the adjustment four. And the adjustment is going to be recording the expense related to that one month and decrease in the prepaid insurance meaning the ass. It's gonna go down. We no longer have this insurance that we're gonna consume in the future without having to pay for more of it. And we're gonna recognize the fact that we consume the use of the insurance by being covered over the prior month. Typically, the way to do this would be to go to company and make journal entries. And if we knew debits and credits, we would debit, insurance expense and credit prepaid insurance for that 917. But we're gonna do this with registers so that we can not use the journal entries and try to try to use the journal entries as few as possible and just use a registered to do basically the same thing. So we're gonna go to the banking here and we're gonna go to Youth Register and we're gonna look for that prepaid insurance it will selected. They dropped down. We're gonna go Teoh Prepaid Insurance and OK, and we're gonna make our Justin entry as of the end of month as of 02 28 to 1. And we're going to say that this account is going to go down so it's gonna be a decrease of 917 and then all we have to do is choose the other account, which in our case, is going to be insurance expense. We could select the drop down and find it, or we could just type in insurance expense. There it is. There's the expense account tab. And what QuickBooks basically saying is saying Okay, we want to decrease this account, that we are in the prepaid insurance and then we're gonna do the opposite to the insurance expense, which Quikbook can just know that that's the debit or the credit on do the other to the other. And so that's what's happening here. So, in essence, this is a journal entry. It's going to be decreasing the asset account, which is a credit and it's gonna be debuting. The insurance expense account will be the other side. And if we just look at the increase in decreasing use, some trial and error, we can we can see that it's going the right way. So we're going to say OK, and then go back to our balance sheet and see if it does what we wanted to do. What we wanted to dio. We want that 11,000 to go down to this number. So let's see that will go to the balance sheet. Here is prepaid insurance and in essence, that's what should be left. There is 11 months worth of insurance, right? So we said it was It was 916 about for each month. If we multiple at that times 11 the number of months we have left, we have about 10,083 left that we will be consuming over the next 11 months. So then we're gonna go down to the profit and loss since if, if it does what we expected to do here, that is, the prepaid insurance is recorded. Here's the insurance expense. If we double click on that insurance expense will see that There are a couple items in there that are were posted to the wrong area and prior presentation. So I'm gonna go ahead. I'm gonna correct that in a format that bye bye, adjusting them here. So I'll show you had to do that. And I'm also gonna tell you that, you know, quickbooks allows us to make these types of adjustments of justice entries. Some software will not. What? We would have to make it a journal entry to do this. So let me show you what the air is, and ah, and then we'll go ahead and fix that. So if we double click on these are two of them Ah, this account went to insurance expense, and it should be going to interest expense. So typing that in too quickly, it should be insured interest expense. So I'm just gonna change that account and then say, saving close and there's the item now. So if we do that to the two items that are in there, then what we have done is move the expense account. Those two Adams should have been an expense but interest expense, and then the insurance expense here. If we double click on that item will now solely be this 917 the one month worth of insurance expense. And that's gonna be the other side of the item. It's going to be decreasing our net income, so note that these adjusting entries have put us into a loss down here. 97. 10.45 Depreciation Adjusting Journal Entry QuickBooks Pro 2018: hello. In this presentation, we will record an adjusting entries related to depreciation on equipment within QuickBooks Pro 2018. If you've been following along with us, we will be continuing with the get great guitars problem. If not, that's OK. We will be recording Justin Journal entries related to depreciation, discussing what they are, how to record them and why to record them. If you have the backup filed to this point, you could restore that at the file and re storm. We currently have the open windows open here to open that view and open Windows list. We also have the company home to have open at company and home page. At this point, we will be recording the adjusting entry for depreciation, that being the entry needed in order to decline the value or reduce the value of depreciation. To take a look at that, we're going to look at our reports. So let's go to reports up top. Let's go down to company and financial. We're going to scroll down to the balance sheet first, and we will then select the date range, and I'm gonna go up here to customize reports and have the date range of 010121202 28 to 1 January 1st 2021 to February 28th 2021. And okay, so here is our report. We're concentrating on this 103,000 in equipment. If we double click on that, there are a couple items that we have within the equipment section. And what we would need to do here is determined what the life of these equipments are and how are we going to depreciate this equipment over time? In other words, when we buy the equipment, we typically will pay for it or put it on credit or finance it. And then instead of putting it on the books as an expense, we put it on the balance sheet as an asset. And the difference is something that if it's an asset, it's something that's gonna help us generate revenue in the future. That's why we have it were, in essence, invested in the equipment to help generate revenue in the future. We haven't yet consumed it. We haven't yet used it in order to help us generate revenue. That's what we hope to do in the future as we do so we should write off the cost when we do so, if we close this back out. So that's that 103 If we go to the income statement or the profit loss go into reports going to company and financial and the profit and lost for No. One No. 1 28 Teoh to 28 21 hold on a second. Should goto 0101 21 Teoh 0 to 28 21. So january 1st 2021 to February 28 2021 is the period that we are working in and note that we do not have, of course, that expense here. Now remember, we paid for 103,000 during the first couple of months here in the format of either cash that we paid or financing, and therefore you would think, maybe that we should be putting that 103 on the income statement because we actually bought it. But at this point, if we did that know what would happen, we have $100,000 loss here, and that's not really accurate because really That equipment is on the books as an asset. If we close the company, we could sell it and still get some value back from it. And that's why we're gonna put it on the books as an asset, and then we're gonna depreciate it over time. So it is the case that we should have some expense related to those assets, but it should be related to the part of the asset that we actually consumed in order to help us generate this revenue in accordance with the matching principle. So that's what we're going to try to do here. We're gonna try to take going back to the balance sheet this 103,000 and allocate the amount of use that we got out of it in this time period in order to help generate revenue there by matching the expense related to the cost of this asset two of these assets to the time period in which they helped us generate revenue and reducing this furniture and fixture account. You would think by doing that, we would have an expense called furniture and fixture expense, and we would be just reducing this account. It directly. But because this is an estimate than what we're gonna do is we're gonna create another account called Accumulated Depreciation. And that'll tell the reader, Look, this is what we bought it for. And now we think it went down in value by the accumulated appreciation. So the book value will be the difference on the balance sheet and then the income statement account that's gonna be an expense will not be furniture equipment expense. Rather, it will be depreciation expense. So that's what depreciation is. In essence, we're gonna do a quick calculation that in real life we'd have to take those pieces of equipment and depreciate each of them in a depreciation schedule, often something that is going to be done by an outside c p. A firm to help out. It's possibly that we keep the depreciation schedules on different types of schedule, depending on how we're going to run the depreciation process, because we could have a different depreciation schedules for the books versus the tax code . Or we might just want to follow the tax code that might make it easier. But let's just do a quick calculation to get an idea of what we're doing here, we're gonna take this 103,000 and we're gonna apply a kind of straight line depreciation. If you are to do that's get some advice on what the useful life is going to be and what the depreciation calculation should be. But this is gonna be the concept here. We're gonna take the 103,000. We're gonna assume that at the end of its useful life, the useful life and are examples gonna be 10 years at the end of 10 years after we've used up this equipment and consumed at all, and it's no longer useful to us. We think that we can still scrap it for the medal or whatever ports within the equipment for 10,000. So we're gonna take that 103,000 minus 10,000. And that's gonna give us 93,000 that we're going to depreciate over the useful life, which were estimated to be 10 years. We believe we're gonna have this thing for 10 years. It's gonna help us generate revenue for 10 years. At the end of that 10 year time, we can still sell it for the scrap. They call it scrapped 10,000 and therefore we have to depreciate 93,000 over that 10 year time period. So the straight line method would just be would divide that by 10 years, and that would give us 9300. We're gonna appreciate this time just one month's worth, however, So if we take that and divide it by 12 we're gonna depreciate 775 this month. And so the entry to do that would be a debit to depreciation expense, reducing our net income. And we're gonna make a new account which we're gonna credit, which is gonna be a contra account. And it's gonna be called accumulated depreciation. So let's take a look at that. If we were to do that, normally we would go to the company and we would go to make journal entries, and we would debit depreciation, expense, increasing the expense and credit accumulated appreciation. However, we're gonna do this without journal entries, and we're gonna try to do this with just registers. There are only two accounts involved. One is gonna be accumulated appreciation, one depreciation expense. We can't go to the expense register because there is not one. And therefore we're gonna have to find the accumulated depreciation register. You can't see that one here, That that account is here because it currently has nothing in it. But it is in our lists. If we go toe lists and we go to chart of accounts and we go to the fixed asset, we have this accumulated appreciation. This account we didn't generate weak it was generated by QuickBooks. When we set up the company, just about any company will typically have it if you choose whatever account type you have . In other words, we chose in this case, the merchandising company. When we set up QuickBooks, QuickBooks then gave us a set if it accounts, including this account of furniture, equipment and the related accumulated depreciation. So what we're gonna do is go to the register. I'm gonna do that by going to banking, use register, and then scroll down to that accumulated depreciation register and then select that item. Here is the register. Nothing's in it at at this time. We're gonna make our transaction as of 02 28 21 the end of the month that we are working on . Now. These registers are actually more tricky than putting in journal entries if we understand debits and credits. But if we don't understand deputy credits, we can work with these things and you some trial and error to figure this out. There's only two accounts to this transaction, so we could try to see which way this thing's going to go. Now we're looking at this account of accumulated appreciation. It's a Contra asset account. You would think it would be increasing. But I think QuickBooks is saying that it because it's a type of asset because it's connected to the furniture and fixture, then it's going to be a decrease to the total asset accounts. So it's actually in the decrease column, and that's something you would have to just use some trial and error, which I have done in order to know that that's the case. So we're gonna record that and see if it does what we wanted to dio. So I'm gonna put in the 7 75 here, and then we're going to go to the other side of this, which is just gonna go to depreciation expense. So if we selected the drop down, if we go down. We see depreciation expense is going to be down in the expense area. Another account we didn't set up. However, it is an account that typically almost all types of accounts within QuickBooks will set up if we choose to use their set up options. So we're gonna put in depreciation expense. Type that in here. There it is. It is an expense tab. There will be our journal entry. Only two accounts affected. We are are using the register for accumulated depreciation. The other account going to depreciation expense. We're gonna record this and see if if it does what we hope it to do, what do we hope it to dio? We hope that it will decrease total assets, and we hope that the expense will be going up in the expense debit direction, decreasing net income. Let's check it out. So we'll close this out. And it's kind of funny that if we look into the fixed assets section, we've got this new account now accumulate appreciation now that it has a balance and it's above the furniture and fixture. Typically, that's not the way it would be. Why it's QuickBooks putting it that way. because both these accounts are in the same account type and it then it's an alphabetical order from there. So in order to kind of fix that, it would be more proper. We'd have to use account numbers in order to fix that. But that's a bit more of a complication. So we're just gonna deal with the fact that it's a little reverse here. This is the account that we would have here. We can also make this, by the way, a subsidiary account. And that's another way. Weaken. We could deal with that, but it's okay. We're gonna put this is the main account, that 103,000. And this is the depreciation. Therefore, what we are saying here is that our reader, we're telling our reader we bought this equipment for 103,000 and we think that it has depreciated for this time period the first month of 7 75 And therefore the book value is 102 225. That's how much we still have current that we're gonna use. We're going to consume it through use over the next. In this case, nine and 11 9 years and 11 months. And if we look at the other side of this, we go to the profit and loss and we scroll down. We should have depreciation expense. It is an expense increasing the expenses and the expenses then will decrease net income. So we're now currently at a loss. We have this other expense of 7 75 related to the depreciation. 98. 10.50 Unearned Revenue Adjusting Entry QuickBooks Pro 2018: Hello. In this presentation, we will record an adjusting journal entry four unearned revenue in QuickBooks Pro 2018. If you are following along with us, we will be continuing with the get great guitar problem. If not, that's OK. We will be recording an adjusting journal entry four unearned revenue at the end of the month explaining what it is, why we're doing and how to do it. We If you have the backup file, you can restore that by going to the file and restore to get us to this point in time. We currently have the open windows to have open at thieve you open Windows list to have this tab open, which we highly recommend and we have The home tab is the only open window within the open window list that found at company and home page. We're gonna have an adjusting journal entry which will be recorded at the end of the time period, making our financial statements correct as of the end of that time period. As of that point in time, the concept of under and revenue is often one of the more confusing types of adjusting journal entries. When we're learning this in theory, and it's a little bit different of a problem that we're going to show here within QuickBooks. So we'll take a look at the theory and how it's a little bit different within QuickBooks and how QuickBooks record things a bit differently in order to account for this unearned revenue and what we need to dio at the end of the time period to make it proper in accordance to accepted accounting principles for the adjusting process. So in order to do that, let's go. To reports up top, we're gonna go to the company and financial, and we will go to the balance sheet standard. We're going to adjust the dates up here. Customized reports and the dates are gonna be 010121202 28 to 1 January 1st 2021 to February 28 2021. Okay, and here is our information. Now, when we see this typically in theory type questions, what happens is that I'm gonna go back to the home page real quick, normally in a normal process, in terms of our customers, we're going to get an invoice, then we're going to receive payment after we invoice or we're going to receive payment at the same point in time. But there are some types of industries in which we're going to receive payments before we invoice the client, meaning we're going to get paid before we do the work. And there's a lot of industries, and it's actually a growing number of industries what that's gonna happen, because it happens a lot if we're a newspaper distributor. Clearly we get paid before we do the work. And if we are, um, something like to have a concert or something like that, that's where we sell movie tickets before we actually perform the concert, The concert being the point in time that we should really be recording the revenue, not the point in time we get money because we haven't really earned it yet. We haven't performed the concert at the point in time that we receive the money, so there's gonna be many instances in our case we're selling guitars, and in that case we may get a pre order for a guitar that we will then go and order for a customer, and in so doing, we may want to get a deposit before we start doing the work, or if we're gonna do some kind of maintenance on the guitar or something, like an AMP or something like that, then we may want to get a deposit before we start doing work on that project. And therefore we're getting the money before we start doing work in a theory problem, usually in a textbook problem. What happens when we do that is when we get the money, we're gonna debit or increase the cash account, and we're gonna credit rather than revenue. We're going to credit unearned revenue and typically will have an under and revenue on the books. And then we'll have to figure out how much of that revenue has been earned and then take it out of under and revenue and record income at that point in time. In the QuickBooks concept, the way we've been building this problem, it's a bit different, and that part of the reason for that is the way QuickBooks is set up and the way Quickbooks can tie together the customer payments with the pre payments with the invoice. So what we're trying to do is we're trying to say that QuickBooks is going to have a receive payment before we create the invoice. Meaning we're getting money before we do the work. But we would still like to tie the fact that we got that money to the invoice that we will create in the future. In order for a quick books to be allowed to do that, they've got to use the customer field and in order to use the customer, feel they have toe link it to accounts receivable. So, in essence, if we go back to the balance sheet When we did this when we received this payment, if we go back here, if we received this payment, it did not. We dept. We increased cash. We've received cash. But we didn't credit or we didn't increase this account. This liability account called under and revenue as we would do. In theory, QuickBooks made a negative receivable and said so instead of increasing the liability, it made a negative receivable. So let's see what that means on the balance sheet. If we go to the balance sheet, normally we would have, um we know that that cash went up after we deposited it cash went up under positive funds went up and then we deposited into cash and the other side would be a liability called Under and revenue. However, QuickBooks didn't do that. It put it into a negative asset account. So instead of having a positive liability wreck, reconcile ing or representing that we know work in the future, we have a negative receivable on on the balance sheet. Let's see what that looks like in terms of a report by customer free Go to reports and we go Teoh customers and receivables and we scroll down to the customer balanced detail. I'm gonna go all the way to the bottom here, and we could see on example of this. We have this $300 of negative $300 in the customer receivable for string music. That shouldn't be. We shouldn't have a negative receivable. There's no such thing as a negative receivable. That means that we owe somebody else something, and if we owe somebody else something that's a liability, it's not an acid. It's not a receivable. So if we double click on this and see what we did here, it's a customer payment. So that's that icon that shows that we received payment. We received payment. Did not apply it to an invoice that was prior Lee created. And therefore, we have no reason. QuickBooks is saying, Hey, you got no reason to have this money. You didn't do anything, toe. Earn it. So basically, you owe the money back until you earn it until you create an invoice and say that I'm linking this invoice to this money we got. And that's what Quickbooks is waiting for us to dio. So I'm gonna close this back out instead of creating a liability for 300. It created this negative asset. So it's reducing our accounts receivable on QuickBooks it saying, I'm sitting here waiting for you to tie this thing out to an invoice the way it properly, you know, should be. And then well, then we'll have a been a work. It will be in balance then. So that's fine. That works for QuickBooks, and that ties out the receivables, and that allows us to to tie that credit to the invoice and everything is great. However, when we report the financial statements, it doesn't work well because it's not proper, cruel faces. We shouldn't have a negative receivable. What we should have is an on asset on the books for receivables and this liability asset showing that we owe something in the future. We owe work in the future or we have to pay back at $300. So what we need to do is just do a journal entry to take this out of accounts receivable and then put it into the under on revenue account. That's what we will do here. Typically, we would do that by going to the company tab up top and make journal entry. And once we make the journal entry, we would debit the accounts receivable, increasing it back for that negative amount in it, and then credit the liability account a liability account we will create called unearned revenue. But we're gonna do this with register, So we're gonna try doing this without debits and credits and just look at the registers in order to do this. So I'm gonna close this back out, and we're gonna go back down here and note the accounts. A stable red account is here and note that we don't have any unearned revenue account yet. If we go to the chart of accounts just to check the chart of accounts by going to view Ansari going to lists and chart of accounts. It should be in other current liabilities that we would have unearned revenue and we don't have one here, So we're gonna set that up, I'm going to set up under and Revenue, and then we're gonna use that register in order to record this journal entry. So we're in lists and we're in chart of accounts and we're going to go to account at the bottom and new. We're gonna add a new account, and it's gonna be in other current liabilities. So we'll select the item down here. We're gonna make it other current liability account and continue, and we're going to name it unearned revenue. So it's an unearned revenue account. It's gonna be a liability account, even though it has the name revenue in its. So be careful there. This is all we need within this window. So we're gonna say save and close and there is that amount now to go to the register, we could double click on it, but typically, I close this out. And just to show whether register. I usually go to banking and use register and then selected the drop down. And we're going to go to the other current liabilities that we have just made here. And we're looking for unearned revenue there. So we're gonna select that and okay, and then here is our register. So this is gonna be a liability account. What we're gonna do is increase this liability accounts by that amount of the 300. That was, Ah, negative receivable. So we'll go to the negative receivable. Let's open our report back up again. We'll go to the reports, We're gonna go to the customers and receivables and we're gonna go to the customer balanced detail right here. Scroll back down. It's gonna be 300 for the string music, so we're gonna go back to our unearned revenue, and it's going to be on increased to the under in revenue of 300. And the other side is it is going to go to accounts receivable. So I'm gonna select the drop down scroll up, and we're looking for accounts receivable. Now this screen note it's not allowing me to enter a customer for receivable, so when we select enter. It may not let me do it, and I'll have to use this split screen down here. But I'm gonna show that as we go notes that when we use this register, it's a little confusing to know if we're increasing or decreasing the account. It would be easier actually to use debits and credits in the journal entry if we understand journal entries. But given there's only two accounts, we can use these registers and try to use a bit of a trial on air to make it do what we want to dio within these registers. So we're gonna say record and it says no, we gotta choose a customer. So I'm gonna say, OK, why does it do that? Well, it says that if I want something in accounts receivable, I'm gonna go back to the balance sheet. It's telling me that this number right here has to be able to reconcile to the account the sub subsidiary account, which is the customer balance detail here. And it's telling us we can't do that unless you tell us a customer to apply it to, so it won't let us supply out anything to accounts receivable unless we choose a customer for that reason. So we're then going to go back Teoh the under in revenue and I'm gonna select the split strict account and we want to choose the customer. And if we go to the the detail again, customer balanced detail, we're looking for that string music. So that's the one back to unearned revenue and we're gonna go to string music. So there it is. String music is the customer. If we select record now, it should do it. And there it is. And let's go and see if it does what we wanted to do, what we wanted to do. We wanted to have a liability account increasing by that 300 we wanted to increase the accounts receivable to reverse out that negative 300 amount. So if we close this back out, go back to the balance sheet, it should have increased. This amount will check that in the detail. And if we go to the unearned revenue, there's the 300 liability. So there's the 300 liability representative fact that we owe something in the future that being service, if we don't do the work we owe the 300 back and the other side is going to be in accounts receivable. If we double click on that item, scroll down to the bottom. There's are adjusting entry. If we double click on that, there's our entry here. I'm gonna close this back out. Close this back out, and then go to the customer Balanced detail scroll back down. Here it is, right there. So we're saying we removed it in essence from the accounts receivable and put it into the liability. And that's how we're going to to deal with this. And this would be back to the balance sheet, the proper reporting of of that amount. So, QuickBooks, the way QuickBooks does it is great for the functioning of it to tie everything else. We're just gonna make this a Justin entry as of the end of the month for any of those negative receivables that are there. So that when we look at the report, weaken, differentiate and see that we that we don't have a negative receivable. We've got receivables, and we've got a liability that we owe ah, service in the future for 99. 10.55 Reverse Unearned Revenue Adjusting Entry QuickBooks Pro 2018: Hello. In this presentation we will enter a a reversing entry for Anna Justin entry that was made for unearned revenue within QuickBooks Pro 2018. If you've been working along with us, we will be continuing with the get great guitars problem. If not, that's OK. We're gonna be talking about reversing entries specifically a reversing entry having to do with an entry made two unearned revenue and in so doing, talking a bit about what reverse and entries are why they would be needed and what unearned revenue is and why it is needed. If you have the back up to this point, you can restore that by going to the file and restore the backup. We're gonna have the open windows open over here. So you gonna go to view and open windows in order to open the open windows. We currently only have the home tab open to open the home tab. You go to the company and home page. We're gonna be reversing an unearned revenue journal entry that was made as an adjusting process. In order to understand what that is, we're gonna first go to the balance sheet and see where the under in revenue has been entered. So we will go to reports up top. We're gonna go to company and financial and scroll down to the balance sheet. We're gonna change the dates up here in the date ranges to the range we are on, which is 010121202 28 to 1 and say, OK, here is our information. The journal entry that we are looking at is in the liability section where we have this unearned revenue of $300. What we have done is increased the liability of $300 taking it out of the receivable account. So the other side of his transaction is up here in the accounts receivable. We double click on that. We see the 300 hear the other side going to unearned revenue, double clicking on that. Here's the entry that we made in order to do that. If we close this out, close this out Back to the balance sheet. One more report to see what we have done in why we have done it. We're gonna go to reports up top. We're going to go to customers and receivables and scroll down to the customer balanced detail, going all to the bottom of this report all the way to the bottom. What we see the string guitars and we see this payment of the $300 that $300 wasn't being applied to anything. An hour journal entry here then created a positive $300 to net to that out to zero. In essence, we took this negative amount, increased the total accounts receivable by it and then transferred the balance to a liability. Unearned revenue. Why? Because this $300 represents a payment from string guitars as a deposit on a guitar they have not yet received. And within QuickBooks, it's best for us to enter that as a payment within the customer section, so that when we later on created invoice, it will match it up to that invoice. However, for accrual accounting, it's not exactly right because it creates a negative receivable, meaning it reduces the receivable at this point when really it should be increasing a liability, that liability unearned revenue. So at the end of each month, we want to fix that. We want to fix that and show it properly when we report the financial statements. Therefore, we increased the accounts receivable by that 300 bringing that balance for string guitar string music down to zero. And then we put it into the liability that works for the financial statements that makes our financial statements correct, meaning every ports, the correct liability. And it reports the correct accounts receivable. However we this system works well for QuickBooks. So what we want to do now is after the date that we make the financial statements, we want to reverse this entry that we just made and go back to the system that QuickBooks is using for the normal day to day process, so that when we do eventually make the invoice to tie out to this payment, it will tie out properly. So now that we have everything correct if we go back in the balance sheet on the balance sheet as of 2 28 meaning scrolling down, we have this $300 balance here. As of that date, as of the first date of the next month, we're going to go ahead and reverse that item eso that we're back to where we were buff over that so that QuickBooks can run the way QuickBooks wants to run. So we're gonna make a journal entry, in essence, that will reverse this transaction to reverse an entry for the unearned revenue. And normally, to do that, we would go to customers at the top, and we we would go. I'm sorry. We'll go to company at the top and make a journal entry, and we'd have to reduce the unearned revenue. We would do that. It's a credit balance account, so we would do that with a debit, and then we would credit the accounts receivable. However, we're gonna try to do that. We will do this without doing debits and credits. Therefore, we're gonna choose this account under revenue within the register and use the registers to record this adjusting entry. Let's do that. We're gonna go to banking up time, we're gonna go down to a use register. We're gonna choose not the checking account, but scrolling down to the register we would like to use, which is a liability register. And we will go to the unearned revenue, unearned revenue And OK, so here is the transaction we had prior as of the end of the month. We are going to make this as of 0301 to 1 the first day of the next month, and we're gonna do the opposite thing to it's the last time we increased this account. But this time we're gonna decrease this account and reverse this out. The other account will be accounts, receivable, accounts, receivables the other side of this transaction and note that whenever we've put something to count accounts receivable, we will need a customer. We don't have a customer field here, but if we select the split item, then we have a customer field. And remember that customer was string music. I believe we could We could type that in there String music tab. And there it is. So there's the 300 to string music, and we're gonna go ahead and record them, and in essence, this will create a journal entry. It meaning we're gonna do this to this account, the under revenue, and then QuickBooks is going to say, OK, the other accounts gonna be accounts receivable. So QuickBooks is gonna do what it needs to do here and apply the other side, the other debit or credit to the other side, and we just need to go in and see if it does what we expect it to do, then what we wanted to do and see if we went the correct way with this transaction, what we wanted to do. We would like to see the unearned revenue go to zero as of 31 And as of that same date, we would like to see the accounts receivable related to string guitar go back to where it was, meaning we owe string guitar having a negative receivable. Let's see if that happens. We go to the balance sheet up top back in the open window section, scroll down to the liabilities. We still see this unearned revenue here because we're still at this same date range. But if we make the date range change in essence, if we go back up to the customized report and change this end date to the next month 03 31 to 1 and then and then closes back out, we convince you that it goes away. Why? Because if we go back to the open windows, it's now at a zero balance and therefore not showing up on the financial statements going back to the balance sheet if we scroll up to the accounts receivable. If we double click on that activity and scroll down, we see that we have the 300 here and we have the 300 there, this 300 being our adjusting entry and this 300 being the reversal of that adjusting entry , making us get back to where we originally were. In order to Seymour context of that, we can go to the customer balance detail over here, scrolling down to that customer. We see that here is the payment hears us making it correct, reducing that payment back down to zero as of the end of the month, the financial statement date. And then here's of putting us back to that original negative 300. That string music now owes us back to the original point we were at prior to the adjustment 100. 10.55 Reverse Unearned Revenue Adjusting Entry QuickBooks Pro 2018: hello. In this presentation we will generate reports including a journal which we will use in order to analyze the adjusting entries we made at the end of the month, as well as the reversing entries we made the day after. We will look at those and compare them in contrast to the balance sheet and see how those journal entries have affected the balance sheet as well as the income statement within QuickBooks Pro 2018. We will then export these reports to excel. If you've been working along with us, we will be continuing with the get great guitars problem. If not, that's OK. We will be looking at a few reports, including a journal, to see how we can assess the journal, how we can use the journal and order to see what we have done and whether we have done it correctly. Also taking a bit of a look at debits and credits in terms of the journal, which we haven't seen too much of within QuickBooks, we won't be recording debits and credits, but we'll use the journal to see what Quickbooks is really doing as we've used the register and we'll look at the balance sheet and the income statement and then print all those out or export them. I should say to excel, If you have the backup file up to this point, you want to go to the file tab and restore the backup file. We currently have the home page open. The home page can be found at the company tab home page. We also have the open Windows list open over here. To open that, you need to go to the View tab, an open window list. We are going to be looking at a journal in the last couple presentations. What we have down has done a few entire financial statements or enter data for two months. We then created the adjusting journal entries as of the end of February in order to make our financial statements correct. As of that time period, that's gonna be the adjusting process often done by a separate department or even an outside c p. A firm to help get those financial statements right for presentation to like a creditor or something, or for internal use, internal decision making and or for taxes. At the end of the year, we in doing So we made some adjusting entries and some of those we actually need to reverse or they're going to kind of mess up our normal processing of recording transactions within the system, and therefore we reversed them. So what we're gonna do now is take a look at what we put in there and see what what we put in there. Why? How can we assess what happened to it? And this is a good process. If we're doing the adjusting entries, if we want to learn a bit about the debits and credits process and or for working with a c p a firm and we're trying to see what they are doing and what they have entered into our system and how it may be affecting what we do or not, how well that process is taking place and maybe some areas where it could be improved upon . So in order to do that, we will start off, go into the reports up top, and we're gonna scroll down to the accounting and taxes, and we will then go to the journal. So we're looking at the journal report and we're going to say Okay, here, here is our report. We're gonna change the date range. We're gonna change it to the point in time that we made those adjusting entries, which is the end of the time period. We made the financial statements, which in our case was owed Teoh 28 21 the end of February 28 2021. We are working in the future, and we're gonna keep the same date. 0 to 28. 21. We're only looking at those transactions that happened on this date. And more specifically, we're looking at the transactions that were the journal entries. The adjusting entries we made. What we want to do then, is try to look by type. Now, instead of using journal entries, in which case we would actually weaken search by journal entry. We used the register, the general journal most the time. This is the type of transaction we used. So when we look at the transaction types here, we see that we have checks. We've got the sales payments. We got the liability check. We got the bills. When? When we did our Justin entries, we didn't use the forms typically to do them what we did is we enter general journals, so if we sort this by general journals, we can get an idea of what it is we have done in terms of the adjusting process at the end of the month, if you're working with with a C p a firm, by the way, they're probably not going to use the general journal. They're gonna use journal injuries, and then you could search this by journal entries. But in essence, we're going to see what has been done in terms of debits and credits. So this reports a bit different than what we have seen before. You'll note that it does have a debit and credit column, and we can see the debits and credits when we think about this. In terms of the financial statements, we can think of those deputy credits and then go to the financials and try to figure out what actually happened to the financial statements and thereby figure out if the debit or credit made a particular account go up or down. And so, even if we don't know deputy credits, we could kind of use some trial on air to see what this report is doing to our financial statements. So what we're gonna do a sort this report? So we're gonna go to the top here customized reports, and we will want Teoh sore to this report Here gonna sort it and we're going to sort it by type, sorted by type there. And we'll just say OK, and now we can scroll through and we can find that the sore team that we want we sorted by this column. So here's all the journal entries that we made and so we can see the debits and credits related to these journal entries. So here's journal entry here for office furniture and we debited office furniture and credited the the loan payable. And then here we debited loan payable and credited the current portion. And then here we had loan payable current, and then we ah, that was a credit and we debited loan payable here We credited the interest payable and debited interest expense. Now it would be even better if we had put a memo and all of our Justin entries that they were adjusted interest as we did with this one and this one That would be useful. Memos are nice. Eso would be good to take the time to do that. But we can see this information here. So what we're gonna do now is open the balance sheet. Just take a look at a couple of these and see if we can see how this journal can relate to the balance sheet and see what happened. What's going on with these debits and credits compared to the balance sheet and then the income statement. So we'll go to the reports up, Tom, we're gonna go to company and financial and scroll down to the balance sheet. I'm gonna change the date range up here to customize report and will change a 20101 to 1 to , uh, make it, um 02 28 to 1. And OK, so here is our report. If we toggle back and forth, then well, it's open. One more. It's open the profit and loss to you. So we'll go to the reports up top company and financial and the profit and loss as well. And then we'll just change the dates. 0101212 02 28 to 1. And there we have it. Then we're gonna go back over here and look at our journal. So we're in our open windows were in the journal. Let's just take a look at a couple of these. So we're gonna scroll down. We're gonna take a look at this item here where we debited the loan payable. And then we credited loan payable current portion. So if we you recall that one when we did it, you might you might remember what happened to it. Let's see if we can recall this. If we do that, we go back to the balance sheet. We're gonna look at these two accounts and drill down on the loan, payable on loan payable current and see if we can can't see what these debits and credits are doing. So if we go back to the balance sheet and scroll down to the payables area, we see the lone table current is right there. If we double click on that to see the detail, we see this information. And here's our Justin entry that has the 5000. It's increasing this loan payable account. So if we go back to the general journal, we said that we credited the current portion so that credit right there is increasing the transaction report from zero by 5000 to 5000. So that's what that transaction is doing. If we go to the other, increase in this liability count if we go to the other side of it, Uh, and go back to the balance sheet back to the balance sheet and go to the loan payable long term right there. Double click on that. We can see that this 5000 is decreasing the balance in the long term. PayPal. So if we go back to the to the general Journal, the long term portion was being debited. So that debit decreased the transaction here in the transaction detail on turn in terms of the liability for the long term portion so we could go through there and we can kind of check and check off those items if we go back to the General Journal and we were to do that with some of these other accounts and just go back and forth and see what happened. We see a similar trend with this item here. It's got similar journal entry, and then we would see here we've got the interest table. We credited interest payable, so interest payable is a credit balance account. This is going to increase the interest. Payable interest expenses is a debit balance account. This is going to increase interest expense as well. So if we went through those accounts would kind of see what is happening with these journal entries. This journal entry is saying that we have sales tax payable. That's a liability, and this would increase the sales tax payable. This is a sales that's revenue that would increase the revenue account, and this is receivable that would decrease the receivable. And if we went through these individual accounts, we can kind of see the debits and credits how these things relate to debits and credits. However, in essence, that's what we have done. And if if you're checking everything off and you want toe, see if you have all the information that you've been working through, as we do here, this is a great report. To do that you can go through here and just check everything off that the journal entries have been in there properly. If you see a journal entry here, that's a general journal that is not on your report, then you want to check the dates first, changed the date to some wider date range and see if you can find more general journals. That and see if they if it the date problem, very likely that we could have put it in there as of the first day of the next month. That's one of the reversing journal entries. And then you just need to change the date. Teoh Pull it back to this month, and if it's not there, then you can you can add it. There's any differences in numbers. Obviously, QuickBooks lets you change those fairly easily. And if you do so, if you if you able to change all that, then the balance sheet then should remain in balance. So if we were OK before this point and all those adjusting entries were correct, then the balance sheet should be in balance. If you scroll through the balance sheet and just take anti everything off, then you should be OK. They're as well as the income statement. You would go through that and you take anti everything off. The income statement should be OK, so you're gonna check those two amounts. What we're gonna do now is print all this stuff out or exported to excel. We're gonna export to the balance sheet, the income statement and the general journal as of the two months ended February 28th. So let's do that now. I'm going to start with the balance sheets and then I'm gonna go to the income statement or the profit and loss, and then we'll go to the general Journal. We're gonna create one Excel document that's gonna have all this input together and just show all the detail for us. And it'll look nice and organizing organized. So we're gonna go up to the Excel up top and we will create a new worksheet. And within that worksheet, we're actually gonna create a new workbook. This is the 1st 1 we have made so far for this section. So we're going to say export, it should then open up, excel and put this information or export to the same information to it. Here it is. Couple things like to do here was go to the view tab up top and view tab and then go to the Windows Group and unspool it this item. So it's unspool it. And then if we go down here to the page layout icon and click on that, you'll see that it does have the header here. So that looks good. And then if we go back here to the normal view, then we're going to just rename this tab. I'm just gonna rename it so balance sheet here, and it's going to be that will be it. So we've got the balance sheet, and I'm gonna go ahead and save this in file, save as and scroll down. I'm gonna put it on the desktop, and we're going to put it into the folder that we have created get great guitars and we're gonna make it in section 10 and were put section 10 reports. That's what we have there and save it. And then I typically like to close it so that it QuickBooks will then open it back up for the next report. So I'm gonna close that out, and then we're gonna go to the profit and loss, and then I'm gonna go ahead and export this in the same fashion, except that we're gonna export it to a new tab in that workbook that we just made. So we're gonna create new worksheet within the same workbook. Next item. However, we're gonna go to an existing workbook and then locate that workbook we just created by browsing Drop down and Section 10 is where I put it and we're gonna put it right there. It's gonna export that to that. Once we do that, it's gonna open up that same Excel sheet. Once again, it's gonna create a new tab. It's gonna export this information to that new tab and then we will go in there and make the normal adjustments we make, which are going to the view time going to the Windows group, unspool it in the pains and then checking that the header looks like what we want. There's the header going back to the normal view. I'm gonna drag the tab now to the right hand side would like to see it so they put it in the left. We want to put it on the right hand side, double clicking on the name, changing the name to just P and l and OK, and then I'm gonna go ahead and save that. I don't need to change the location. It's always it's already where we would like it to be. And so it say yes. So all we need is this floppy disk icon, which no one really knows what a floppy disk is anymore. But we're gonna go ahead and close that out, and then we're gonna go to the journal once again. This we're gonna print the journal now, so we'll do the same thing going to go to the Excel. I'm going to create a new worksheet, and it will then go to an existing workbook. However, we're gonna browse within that Were that within our computer and there's the workbook we wanted to go to double clicking on that and then exporting should then open up Excel, create a new tab, export this information to the new tab. Once it does so, then we will go do our normal adjustments, including changing the view tab so that the split screen is gone and changing the name. So we will go to the view tam, we're going to go to the windows, unspool it that we're gonna pull this to the right hand side, right hand side, all the way to the end, and I'm gonna call this journal entry report. And then it's gonna be as of ah oh, too 21. And note that this one if we go to the page layouts tab, it's clearly not on on when This is not how we would want to print this would not want to present to this to somebody. So in order to fix that, we can work on that and adjust that some When we do have to print it, then it looks a little nicer. And so what we're gonna do is make it landscape and first and see if that changes our problem. So we'll go back to the normal view. We will go to the file tab, we're gonna go down to print option, and we're gonna change this port for, ah, portrait or the invasion to that landscape orientation. And see if that does what we would like it to do. If I scroll down, it looks better. But I still got these other columns on the other sheet. So if that's the case, we I'm gonna go back, and that landscape didn't quite do it. Now I could try to change a couple things like these columns don't really need these empty columns so I could try to go back and delete all those and was going to dilate the empty columns because I don't need those and see if that changes and puts it back on the one page as we would like it to do so. I'm just clicking on the calling itself, right. Clicking and deleting the columns. Click in the column right click and dilating and clicking to call him right click and deleting quick in a column right click and deleting, and it looks like that did pull us right into where we need to be. So if we go back to the file time and we go back down to print, we see that we do have everything, at least on one column wide. It's more than one page, but it is one column wide, and that's really what we want here. Now, if that was not the case, if it wasn't the case that it fits, we could go back to the print screen and go toe print. And if we couldn't figure anything out to adjust the margins, the last resort is to go to the ah, counting the scaling option down here. You don't want to fit it to one page because that doesn't make any sense. It'll make it really small. So just to show you how it makes it really small because we don't want it one page long, we just want one page wide. So if we had, if we had to, we could go to fit to all columns toe one page, and that would do pretty much pretty much the same thing. But that's kind of the last case resort. So to do that, if you could do that, if you can adjust the margins, then it won't make the size all funny. And when you have multiple tabs that you'll be printing, you won't have all the funny different tabs with different sized texts and whatnot. If you can just adjust the margins. All right. Going back to QuickBooks, back to QuickBooks. Now, we're gonna go and we're going to the same thing now, But now we're going to look at the next day that reversing journal entries. So we're back in the journal report, but we're gonna change the dates now. We're gonna change the day 20301 21 and 0301 21. And so now we have these items here that are just thes reversing entries that we had, and so there was a couple of them that we have these reversing entries for. And these are items where we're saying the adjusting process is necessary to make the balance sheet correct as of the balance sheet date, but it messes our normal journal are normal process up in the following time period. So what we're gonna do is the system we're gonna put together is that we're gonna put in the adjusting journal entries, make the financial statements, issue the financial statements as they should be in accordance with the accrual principle. Then we're gonna reverse thes things as of the first day of the next time period, putting us back to the process that we are in the process that works for our normal day to day transactions. Or in other words, if you think about it in two different departments, we're gonna do what we're gonna have the adjusting department as of the end of each month or each year, do the adjustments needed to have external reports, internal reports and ah the tax returns all done properly. And then we're going to reverse that information so that we can do what the other department does. That the accounting normal accounting department process, which which will put us back into the normal routine that we will have done. So these are going to be those reversing entries that we've had here. And so there's gonna be these three again. You can go back and forth to the balance sheet in the income statement and to see what happened here. If we go to the balance sheet and we changed the range Teoh ending Now, at 03 I'm gonna make the end of the month 31 21 and say Enter, then you can go through some of these reversing entries and say, Okay, what do we do in these journals, For example, we could go down to this item here where we had the merchandise sales and accounts receivable reversing for that 5 25 We go back to the balance sheet and we grow up to the accounts receivable and double click on that item. We should see a reversing that reversing entry for the 5 25 so here it is on 51 Ah, the 5 25 here on 31 the 5 25 year. And so if we look at what happened here, we could see a 5 25 here. And then it was This was the adjusting journal entry that happened here. Is that reversing journal entry? And here's the actual invoice. So if we were to read this out, what would happen? We said, Well, this invoice went in there as of the date 32 But it should have been in there as of 2 28 the month that we were making the reports for rather than going and adjusting the dates here because we may not want to do that, many systems won't let us do that. And there might be some other reasons. We don't want to adjust the date, including we might have a purchase order tied to and some other things tied to it. We would rather keep the the paper trail there. Therefore, we made an adjusting journal entry to reverse it as of 31 and then as a star. As of 2 28 there's our reverse enters our Justin entry and Then we reversed that entry as of 31 Teoh put it back in essence, to where we originally were, these two then canceling out the original invoice being the only invoice that's really affecting the books after that point. So these two journal entries are us making the financial statements where they need to be the adjusting department, being us, making the journal entry where they need to be as of the end of the financial statement and then reversing what we did. So we don't mess up what has already been done through the through the normal accounting system, which may have been, ah, done perfectly properly in accordance with the normal accounting system to do what we need to do there. So, in essence, you go through back through there. But I'm gonna close this out and we're gonna go back to the journal entries and we're going to then print this out in the same format and 1/2 this information there as well. And this is often one of the areas. If you, uh do you have an outside c p a firm or something, helping you out with the adjusting entries at the end of the year and you see something funny happening at the end of the year or some accounts that you don't understand on. If it's messing things up, its product might be that these reversing system isn't being put in place properly. You might want out. Look at this reversing entries and see if if there's any way that you could make the financial statements right as of the end of the month and still have a system of reversing them so that you don't have toe do it yourself, that you can go with your normal process and have that system set up as you go. So let's go ahead and export this. We're gonna goto XO, and we're going to create a new worksheet. However, we're gonna put that in the existing workbook and we're going to browse, select the workbook that we want and then export this year. Then open up that X aims Excel file export this information to a new tab within that file. Put that tab somewhere. We're gonna put that tab then and drag it to the right hand side. So we're gonna drag it all the way to the rain and these were going to be journal entries that we wanna have. So I'm gonna double click on the name and type journal entry, and we're gonna make it. 3.1 The entries that we have there, we'll do a similar adjustment process here. I'm going to go to the View Tam and View tab, and we're gonna go to the windows and unscrew it. That And if we go to the layout page layout item, we could see that we have the headers here. We could see it's not printing as we would like, So I'm gonna go back to the normal view, and then I'm gonna go ahead and delete all the columns, as we did before, and I deleted the total column and that's it. There's only one total there. So I'm gonna go ahead and delete that, as we did before, delete this delete bad. It's going to delete all the columns and try to put this on one page so it looks nice. So then delete that we're gonna delete that. We're gonna delete this, I'm going to select hold down control and I can highlight non adjacent columns and right click on them and delete them all at one time. And that looks like it does what we want. If we go back to the file time and go to the print screen. Ah, we have even in the portrait orientation looks like it's doing what we want there. If you want to keep it in conformity, we wouldn't want to put it into a landscape to keep it. Make it look like the other reports that when we put him out, they all are going the same way and what not. So I'm gonna close this back out in any case, and that's gonna be the end. Those were the reports that we want to have here. 101. 11.10 Budgeted Profit and Loss QuickBooks Pro 2018: hello. In this presentation, we will create a a budget profit and loss or budgeted income statement within QuickBooks Pro 2018. If you've been following along with us, we will be continuing with these get great guitar problem. If not, that's OK. We will be discussing on how to create a budget within QuickBooks Pro 2018 using the profit and loss budget First. If you have the backup file up to this point, you can restore that by going to the file and restore the backup. We currently have the open Windows tab open to open the open Windows tap to view and open Windows List. We also have the home tab open at this time, which can be found at the company and home page. We are going to at this quaint create a budget. First off, we would like to take a look at what we have so far in Data's. We have get great guitars. We've entered two months of data. Let's take a look at the profit and loss and think of that at the base point for our budget . There's many different ways that we can start to think about how we're gonna use the budget How we should put together. How should we should plan the budget? We'll talk just a little bit about that. But we're really going to get into the function of how to actually make the budget within QuickBooks and then use it. Teoh. Make some reports and use some comparisons within QuickBooks. So let's go to reports and we're going to go down to company and financial and we're looking for the profit and loss that standard. And we're gonna look at the month of February because that's more the full month that we have seen so far in terms of our data. So we're going to select tap and say, 02 28 to 1 and, well, let's make it as it the beginning of the months 0201 So february 1st, 2021 to go to 28 to 1 February further 2021 to February 28th 2021. This is really the first full month of data we started in January, but we really got going in February. So this is the start of the day that we really would start our budget on next month. In the next month and the rest of the year, we really gonna look at what happened in the past, what's and what we believe will happen in the future and use some type of projections in order to do that in our budget. What we're gonna do is enter the data, actually fruit from January on so that we can then have some reports that we're gonna report. So we're gonna use this data to enter the budget as of January, even though we've already entered the data for January and in February and then project out in the future and show some of the functions that QuickBooks has in order. Teoh put in that data. If we were starting at this point time, we may just use this data to start at February and then move forward from there. There could be some reasons why we would want to enter data and genuine February so that we can have ah, years comparison when we move on to the following year. But in essence, we're gonna use this data to put into January and February and then print some reports so that we can see what the budgeted versus the actual would be. So let's go ahead and make the profit and loss budget. We're going to go to the drop down tab up top where it says company and we're going to scroll down to the planning and budgeting icon. We want to set up budgets. So we're gonna set up budgets and we're gonna get this window to set them up. Now, we're gonna be in the future. Of course. I'm one of the in 2021. We have two options. We have the profit loss in the balance sheet. We want to stay with the profit and loss this time. Profit and loss really is kind of the traditional main piece of the budget because that's what we're measuring performance by. How are we going to do in terms of performance? So we're going to say next on that no additional criteria. So we're gonna keep this here next and create a budget from scratch. That's what we will be doing. We're gonna create it from scratch. If we have the prior data, however, we may my way may want to try to do use that data in order to be that base point for us to start the budget here, and then we can move on from there. But we're gonna create this from scratch and say finish and this will be our budget. Now, in essence, we're gonna be putting the budget from January to December. That's gonna be the budget that will be set up by QuickBooks based on when our for our year end is so We decided here our year end was a December 31st year in traditional year end, and therefore they're giving us that 12 month time period for the budget. We could start here in March, given the fact that we've entered data for January and February. But what we want to do is put in data for the entire year for a couple of reasons. One, we want to be able to have a comparison so that when we run reports, we can have comparative reports and it is sometimes useful toe have data for the entire year as well. When we start doing comparisons year over year s, so that's what we're gonna dio and essence. When we make the budget, we're gonna look at the profit and loss this being our full profit loss in February when we had a full month of activity and really take that data and try to adjust it to what we think is gonna happen in the future based on future activities and what we plan to happen. But we typically start with that base point. So, in essence, that's what we're gonna do here. However, we're gonna be entering the data into, um, January. So what? I'm gonna start by entering this data line by line. We're gonna start entering data just line by line, and so we're gonna have the 1st 1 merchandise inventory or merchandise sales. This is our sales, Adam going to say 500. Now, we're gonna assume that it's gonna increase throughout the time period. And there's a couple different ways that we could do that. We could manually put in what we think's gonna happen each month, or we can use some type of increasing function within QuickBooks who has some basic functions that we could use. QuickBooks does so we could copy it across. That would have the same amount. If we think it's gonna change, we can have the adjust row amounts down here. So we're gonna use a just row amounts for this particular item and we can say we want to adjust the first month or the current month we're on. We want to select the currently selected month. If we select the currently selected month, we then should have this enable calm, pounding item down here. And that's what we want to see. So we then could increase this by either percentage or we could decrease it by percentage or by a dollar amount. Ah, increase or decrease by dollar. And if we want to increase it by percentage, we just need to leave the percentage sign. If we want to increase it by a dollar amount, then we would remove the percentage sign. So I'm gonna we're gonna have the increased by percentage here for the merchandise sales. And one reason to have that is that we would think that the merchandise sales would increase at the same percentage as the cost of goods sold. And so if we just increased by the same percentage, we can keep that relationship the same. So I'm going to say this is gonna increase 15% now. I want to have it compounds. I don't want to just increase 15% next time. I want to increase 15% each time and compound throughout the year. So we're gonna have that be the compound ing. And then and so we check this item here to do that and say OK, and then we should have 15 500 increasing 15% each month that we have a steady increase of the 15% for the merchandising sales each month, we're gonna go to the rent music equipment. That's gonna be another revenue account. We're gonna estimate 1000 month here and I'm not gonna copy it across again. We're going to say that this is going to increase, so we're gonna just The amounts are just the amounts, and we're gonna have the current selected month. However, this time I'm gonna delete the dollar sign, and I'm gonna increase it by a dollar amount of 1000. And I'm going to say that that's going to increase Ah, compound as well. So we'll say. OK, and there's the dollar amount. It's increasing by $1000 each month. So we had 1000 of revenue by the end of December. We're hoping that that will be at 12,000 in the month. Then we're gonna have the sales discount, which I'm going to skip the sales discount. And that's an account that was not on our profit and loss. We didn't use it last time, period, but it is on the financial on the list of accounts given to us by QuickBooks. And if we don't like some of those accounts and we don't think we're gonna use some of them , we might want to go through that list and delete some of them us that we don't have to deal with them in something like this. We're gonna say then that the service revenue is going to be estimated at 25 and I'm gonna go down here and do the same Adjust Rose and we're gonna say current month and I'm going to say that is going to increase by a state. A set dollar amount of 500. So we'll say OK, and we have, ah, $500 increase across the months here. We're not gonna put anything into the UN categorize income. We're then going to go to the cost of goods sold next item and we're gonna put 400 there, and that's gonna increase by that same 15% we put in the sales. So we're gonna go to adjust rose amount, and we will just the current, and we're gonna make that a percentage by not deleting the percentage sign and make that a 15% increase Enable calm pounding and Okay, so that increases 15% across the board, and then we're just gonna put in the rest of the stuff, and we're just going to copy most of these across. So we have the bank service charge and we're gonna put $10 I'm just gonna copy that across . I want that to just be the same. All we need to do then say copy across and we get the same report all the way across, and then we want to go to depreciation. So, depreciation in January, we're gonna put 775 and then just copy that across. That's gonna be the same all the way across, and then insurance. We're going to say that's $1000 and then copy that across. That's going to be the same all the way across, and then interest expense. We're gonna put 300 and we're gonna copy that across. Then we'll have Internet expense of 150. Just copy that across. We're gonna go down to payroll expense. Payroll expense. 6000. We'll copy that. Across. We've got telephone expense scrolling down to telephone expense. 350. Copy that across. And then utilities schooling down to utilities. 650. Copy that across. So those are going to be the items that we're gonna have again. We have some other items here that are not filled out. And we might We may look at that. If we have the chart of accounts and skip that might give us some ideas of some other items were missing here. But if we're not looking at using those, we could go in and delete those from the budget. They won't show up on the budget. If there's a zero in there, just like they won't show up on our our reports when there's nothing in those account balances. Once we have completed this process, we're going to say save and okay, and close that back out. And then we could take a look at some of the reports that happen generated to do that, we're gonna go to the reports drop down, up at the top were going down Teoh budgets. So we're gonna select the budgets item, and we're gonna look first at the budget overview. We're gonna keep it at the profit and loss rather than changing to the balance sheets. Our only option at this point are only budget. We have a report for we're going to say next and it's gonna be ah, account by month and next and then click finish and we will do so. So here is our report. Now it's going to show us the entire year we got January through December and then it will give us the totals there. There's a few ways we can obviously manipulate this report one way being we might just want to see the 1st 3 months. That's the activity we have so far. So we're gonna give those 1st 3 months and see what we've got. So it's at January 1st, 2021 203 31 to 1. So january 1st, 2021 Teoh march 31st 2021 this is what we believe will happen in that first quarter. Those 1st 3 months. We've already got data for the 1st 2 so we can look at a comparison from there and then through March. And so here is our data. Through that time period, we can see that we do have a loss as of the end of that time period. Given the fact that mainly our payroll is ah is fairly high in comparison. So if we were to bring this out through the whole year, if we changes back out, if we could make the end it 12 31 to 1, then we could see that. Ah, we're recording the first few years that first few months that we're gonna have this loss and then that's typical for many start of business is to have losses even in the first year or two. And then we're hoping that the trend will increase and will have revenue towards the end if we total it up and we're closing out the year with 32 1000 about 33,000 of income as projected over the entire year. So this is our first year of operations, of course. And we've got the losses that were projected are projected in the first quarter. And so if we take a look at that first quarter again, bring that down to 03 31 to 1. Here is that first quarter and we're gonna go ahead and export this report to excel. So in order to do that, we're gonna go to excel up top. We're gonna create new work sheet. We will also have a new workbook that's being the first workbook that we are exporting to for this new project, this new section. So we're gonna say, export, that should open up excel. It should create a tab with an excel and then export this data to that tab. Once it does so, then we're gonna go in there and make a few adjustments to that tap, including we're gonna just the tab name, and we're gonna adjust the view. So I'm gonna go to the View tab over here, and we're gonna go to the windows and split. We're gonna unspool it it and then go down to the layouts view down here and bring this up just and the layout to view and we could see that the name is up top. That's what we would expect going back down to the normal view. Here is our information. We're gonna rename the tab by double clicking on the TAM, and they're gonna call it P and l profit and loss budgets. So profit and loss budget. I'm gonna click off of that. I'm going to go ahead and save this reports. I'm gonna goto file tab up top. We're gonna save as browse locate where we would like to say that I'm gonna put it on the desktop and look for the folder that we have been working with going to get Great guitars were in section 11 and we're gonna just call it a section 11 reports and save. And yes, I typically like to close this out as we go to the next report. So I'm gonna close this out and we're gonna go to the next report for the budget. In reports, reports drop down and we're going down to the budgets scrolling down to budget versus actual. This is the other kind of standard report that we would want to see the budget versus the actual and we're going to say next here next there and finish. And so here we have our budget versus actual. This is for the year. And of course, we have no data for anything after January and February. So if we look at January February, we've got to the budget amount Ah, and the actual amount and we the actual amount and the budget amount, and then it shows the differences. So of course, we don't have any differences O r any actual in March. So we really only have those two months of data where we can compare the budget versus actual. What we'll do is change the dates from January 1st 2021 to go to 28 to 1. So january 1st, 2021 to February 28th 2021. If we scroll back to January, we can take a look at some of these numbers were actually gonna take a look at February because that's the first full month we've actually had. If we scroll through here, we can try toe line up this report to just February so we'll scroll over the February. This is what actually happened. This is the budget. This is the difference. This is the percentage change. So if we take those numbers, we can then calculate this out. We have what actually happened to 500 minus the budget 575 For the merchandise sales giving us the difference of 1925 this percentage can be calculated as what happened The 2500 the actual divided by the budget amount of 575 That giving us the 4.34 If we make that a percent moving the decimal, two places to the right or multiplying times 100 we get that 4 34 80 So that's gonna be that amounts there. And we could do this comparison all the way through here. The total income was 16 300 versus the 5 5075 The difference is that 10,000 so is a fairly large difference in February. And if we go through here, then we've got the cost of goods sold difference the 2000 actual versus the budget. And then if you look at all the expenses down here, we have more of a static in terms of the expenses. So these air gonna be flat rates of the 20 versus the 10. And that in the 20 of course, is something that we would expect to be fairly constant mawr through the expensive. So oftentimes expenses are gonna be divided out fairly constantly throughout the year. The depreciation should be the same because it shouldn't change much. If it's a straight line depreciation, we should know what that is unless we buy more equipment and then we've got the insurance expense, the interest Ah, the Internet expense difference miscellaneous, the payroll expense difference being the 200 the telephone expense and the utilities. Now, if you want to go back through these reports and make some changes, make some adjustments to them, then you could do so you can go back to the company and go back. Teoh the balance sheet. We're looking for the planet and budgeting set up budgets. And then it'll go back to that last budget you were on. If we want to create a new one, we would create a new budget up here. But we could go back and we can tweak some of these numbers like it. It looks like we may want to do that in our and our case, given the budget versus the actual reassess what actually happened and make some changes in terms of what we believe to be happening in the future, what will happen in the future? We're now going to go back to the budget versus actual and just printed this report out or exported to that same Excel workbook that we had set up. So we're gonna go back to the report in the open windows will go to the Excel tab, and we're gonna create a new worksheet. But we will put it into the existing workbook and we'll make sure that we're going to the correct workbook. So we're gonna brows, select the drop down with workbook. We want section 11 and open that up and then export it should then open up that excel sheet we had set up in the prior export. It should create a new tab. And within that new tab, it should export this information. Once it does. So we will make our normal adjustments one being to adjust the tab, name the other being to adjust the view of it, and then we're gonna just any kind of page layout problems we will need. So here it is. I'm gonna move this over to the right hand side so that we have it. Ah, profit loss. And then the balance sheet. I'm sorry. Profit and loss. And then the profit and loss versus actual. So we're gonna say p and l double clicking and changing the name budget versus actual, and I'm going to say, Okay, we're gonna go back up to the top, We're going to save you, and Windows unspool it the pains. I'm gonna go and view that the header down here by going toothy page layout to view observing the header at the top, going back to the normal view and then seeing if we can change this and fitted onto one page wide by going to the file Tab Prince reports, and then we'll start by making it to port landscape. So we're going to change it for in portrait orientation to landscape and see if that does it. It doesn't quite do it. So what we're gonna do is go back over here. We can delete some of the columns. I'm gonna do this at one time by selecting the columns I wanted to lead and then holding down control. All these columns have no data in them. So if we delete them, we should be okay. In trying to get this report to fit on one one page, I'm gonna highlight them on, see if I could do this at one time. I like all the columns that are not relevant to this report like so once we have done so, then we can double click or right click on one of those highlighted areas and delete. And that doesn't quite do it as well. So we could now go back through, see if this is where it's gonna print. We could go back through and adjust some of the column settings at, or we can go to the file time. We could go to print, and we can change the scale down here to make it fit on one page. Fit all columns on one page. I don't want to fit everything. On one page is the columns, and that will kind of force it to fit on on one page wide. So fit all columns on one page. Note that it does make it a lot smaller of text. So you want to be careful in doing that. If you can do that, if you could fit on one page without doing that by using some other just, you know, adjusting the Collins yourself, it's probably better to do that. Gonna go back out here and then we're gonna just save this, and that'll be that'll be the end of this presentation. 102. 11.15 Budgeted Balance Sheet QuickBooks Pro 2018: Hello. In this presentation, we will put together a A budget its balance sheet within QuickBooks pro 2018. If you've been following along with us, we will be continuing with the get great guitars problem. If not, that's OK. We will put together a budget it balance sheet within QuickBooks pro. If you have the backup up to this point, you can restore that by going to the file and re storm. We're gonna have the open windows open in of this section by selecting the view tab from the drop down and open window list. We also wanted to have the home page open as it is here. You could find that at the company and home page. Up to this point, we have put in data for the 1st 2 months of the year. We will. We will be working in, which is 2021. And we're gonna put together a balance sheet in this case in terms of a budgeted balance sheet. Now, to come up with the numbers for the balance sheet, we won't go into depth on that. We're just gonna look on how toe input the balance sheet. Remember when you do a budget? The income statement is really kind of the performance statement you're looking at. So when we're looking into the future, we're typically thinking how much revenue or we're gonna have and how many expenses air we gonna have the balance sheet you can think of as in result at that in point in time after we're done with that. So that's kind of how you would think about how you would get to that in point that in balance sheet the income statements, really that performance document on how we're going to do over a certain time period. So what we're gonna dio is we're gonna put the balance sheet in there as of the end of the quarter of the end of the next month as of the end of March is going to be our budgeted balance sheet. How would we come up with those numbers? We have to look at our balance sheet before that time period. We have to consider what the budgeted income statements gonna look like. And then what? The result then will be on the balance sheet. If you know what we thought. What's gonna happen in terms of performance in terms of income actually did happen. In other words, if the sales actually happened, how much cash would be getting? How much receivables would we get? How much do we expect? We're gonna collect in cash from prior sales that were make on made on account. The payable side is going to be much the same. So we have to do a bit of analysis in order to figure out that point in time. We're not gonna get into too much detail depth in terms of how to put the numbers together . What we're gonna do now is figure out how to get those numbers into QuickBooks so we can run some reports on them. So in order to put the balance sheet within QuickBooks, we're gonna go to a company and we're gonna go down Teoh planning and budgeting. And we're gonna set up budgets. So we're gonna set up the budget, and we already have this time the profit and loss budget. What we want to do is create a new budget now, So I'm gonna create a new budget up top, and we're gonna change the date to the through the year were in its 2021 then changed this from the profit and loss the income statement type of budget to the balance sheet type budget, and then we're going to say next and finish here. So now we have a list of our balance sheet accounts and we're gonna put the bouncing as of March. So we're gonna make our budget as of March and put in our budget numbers. Like I say, I'm gonna pull these budget. I'm just gonna give the budget numbers that we can see as we put them in their the way I would work out an actual budget, just put this stuff into excel and work through the budget in terms of what we expect to happen on and then put it into QuickBooks. And the reason we ultimately want to put it into QuickBooks is because QuickBooks can run those reports very easily for us once we have the budget in place. And once the actual numbers happen once the month passes, in other words, QuickBooks will help us run a comparison very easily. So rather than us having to export it to excel and it compared to the budget, QuickBooks can run at least some reports very quickly by in putting the budget. So we may want to get do the budget outside of excel in order to plan the budget, think about the numbers, figure out what's gonna happen and then put those numbers into excel. Or we might want to use Excel or men. Put those numbers into QuickBooks, I should say, Or we might want to use QuickBooks for a fairly simplified planning budget that we could put together pretty easily based on the last time periods and then and used the futures within QuickBooks to allow us to plan out in the future as well as make some comparisons. So we have our accounts here. We're just gonna input the data. Now, remember, I am in. Remember that I am in March here. So we're starting off in March. We're gonna say cash 97 133 We're going to say accounts receivable is 9949 Inventory assets . Air 1712 Prepaid insurance, 10 083 Short term investments. We don't have any. We're going to say that the UN deposit of funds 4500. We're going to say the accumulated depreciation needs to be a negative. So make sure Is that negative? It's a contra acid account. Furniture and fixtures gonna be 103 and then accounts payable. I'm gonna skip down to accounts payable, which is gonna be 1450 The visa account is gonna be 1000 interest payable. I'm going to say it. Zero loan payable. 1654 Ah, payroll payable. I'm going to keep at zero. Sales tax is gonna be 100 loan payable. 56769 and draws will keep at the 100 and so that the total equity then should balance out. And obviously, when we're making this, we should ask, it should equal liabilities plus equity. And so I've kind of worked this out, so it should be 1 46 6 to 0 if we put everything in their correctly. So I put that in there fairly quickly. Note that we're talking about a point in time here, So we're just talking about a point in time when we're thinking about the balance sheet. So we're just gonna enter this data as of the end of the next month or the end of the quarter. That being the next point in time we are looking into and this is gonna be the activity. So if you put these numbers in, then we can save this. And what we will do isn't run some reports based on these numbers. American seat a bit better here. So once this has been input, then we're gonna say, OK, let's save it for a musk mixer. We save it and then say, OK, it should save once we say Okay, but and then we're gonna go up to reports up top. We're gonna run those same reports we're gonna go to. Except for this time. Of course, we're going to run them for the balance sheet as last time we did them for the profit and loss, and we're going to scroll down to the budget and performance of budgets down here. We're gonna look first at the budget overview. Once again, the budget overview. We're gonna want the balance sheet. There's two. Now we want to make sure that we are on the balance sheet next and finish. So here is our budgeted balance sheet. We have our date range for the entire year, but We only have data. Of course, in March. That's the only time that period that we put data into. So let's narrow the Tate Range. Teoh 30131 Teoh to 1 January 1st 2021 203 31 to 1. March 31st 2021 I'm gonna narrow it even further and make it march 1st to March 31st. March 1st 24,021 2 March 31st 2021 will give us our balance sheet here. So now we have our balance sheet, our budget, its balance sheet. Let's see if it is indeed in balance. Note it's not. It's not imbalance, meaning the total assets do not equal the liabilities plus equity. This is a common problem when we make the budgeted balance sheet and not a common problem when we make the normal balance sheet. When going through the process of generating the information through QuickBooks, why? Because when we make a normal data entry, the QuickBooks system will not let us be out of balance. So the double entry accounting system is bit complex. It's not easy to do and always being balanced. But the QuickBooks system is that it has a huge check in that Normally it forces us to be in balance. However, when we do the profit and loss balance sheet, we don't have that check. It doesn't force us to be in balance. So we have to go in there and say, Okay, so something was input incorrectly. So I'm gonna go back to my data file and say what was input incorrectly? How can I go and fix this? Something is clearly wrong. And see what that difference is if you're to creating a budget. If you're creating the balance sheet budget, then you should try to roll over the income statement, and oftentimes the difference then is gonna be in this equity section. So this equity section is often the place where you you'd want toe make the adjustment. But we could talk more about that at a later time. In any case, to fix something, you could go back to the budget. So we're gonna go to the, uh, company, and we're gonna go to planning and budget in, and we're gonna go to set up budgets again, and I'm going to scroll down, Teoh, and I'm looking at the balance sheet is what we're in and the drop down and I'm going down to march and I think it's the long term loans payable. So here we had the loans payable of the 16 and that's actually the payroll liabilities. So the long term loan payable should be 18109 and the payroll liabilities should be 1654 That's the change I'm gonna make here. So we're gonna make this change loan payable 18 109 and payroll liabilities 1654 We're gonna go ahead and save that and go back in and see if if that fixes the problem, overly when say okay. And if we go back, we've got to 25 6 So two and 2 25 802 were still off by, ah, $100 or we're off by $200. And I believe that's the draws down here. It's gonna be the draws. Usually, QuickBooks likes to report that as a negative number in the equity section, and we have it as a positive number. So if I flip that to a negative number that should be the difference. Let's go ahead and do that and see if that's to gaze. We're gonna go to company up top. We're gonna go to budget and planning and set up budgets once again and we'll scroll down to this 100 in the draws and we're gonna make that a negative 100. But let's do that one more time. Company financials. We're going to go down to the budget and planning and will make that a negative 100 right there. Once we do that, we're gonna save it. And OK, and then we have this negative 100. And so we're at 2256 So two and 2 to 5602 So we're tied out now, where are in balance? Looks like the budget is functioning. Looks like it is working. So we are going to go ahead and print this out now or save it exported to an Excel file the same excel file we started last time. When looking at the budgeted profit and loss, we're going to say Export, excel and create a new worksheet. We're gonna put it, however, into an existing workbook, so we'll put it into an existing workbook. We're gonna browse to find that workbook and select the drop down. Go to get great guitars. Section 11 is what we're gonna put it into the section 11 reports. I'm gonna double click on that, and we will then exports we're gonna export and it should then open up Excel. It should export this data to excel and then give us a new tab on our worksheet. Once it does that, we're going to rename that time we're gonna put that tab in the section that we want it to be in and possibly do some editing here. So here's the tab. I'm gonna pull it to the outside, double click on it. Changed the name we're gonna call it balance called Balance sheet Budget. And there is that we're gonna go to the, um let's go up to the view tab up top in the Windows Group when unspool it the pains and that's it. That's based on what we have. We can check to see that the headers there, we're gonna go to the page layout. We do have the header there, so that looks good. If we go back to the normal looks like it's printing all on one column. That is good. So let's go ahead and save this and then close this out and then we'll create the other common budget report. And that's going to be at reports up time scrolling down, Teoh the budgets and go into the budget versus actual budget versus actual. We want to the balance sheet. So we're gonna keep that and say next and finish. And once again, I'm gonna change the dates because we only have that one month that we're looking at. So it's gonna be 03 Uh oh! 121203 31 to 1. Now you'll recall that we stopped entering data in our problem at the end of February. So these numbers in March are actually the same numbers at the end of February because the balance sheet accounts are permanent accounts. And so that's where we were at in the in the balance sheet. And then we have the budgeted amounts. That's the amounts that we just entered in terms of the budget. Then, of course, we have the difference here. If we take out our calculator, we're gonna calculate this out percent of budget to see what it is doing here. That's gonna be the 98 995.56 divided by the 97 133 Meaning what actually happened divided by the budget is 1.1 If we make that a percent, I can multiply it. Times 100 that's gonna be 101.9%. So we're saying that the actual number is 101.9% of the budgeted number, So it's gonna be this information here. We have the similar comparison in terms of making the differences and in terms of the ratio analysis from the budget to the actual will scroll down just to show the entire report. So there's gonna be the entire report here. What we will do now is export that to our Excel worksheet once again. So we'll go to the reports up top. We will. We'll go to I'm sorry. Excel up top and we're gonna create a new Excel worksheet, and we're gonna put it to an existing workbook. Locate that workbook browsing. There's the workbook section 11 reports selecting that item more than going to export it. It's gonna open up Excel. It's gonna put this information into a new sheet within Excel. And we are then going to put that information into the format that we want. Adjusting the name to the tab, adjusting the view screen on it. Here is the report. I'm gonna drag the tab to the right. So it's the last report here. Double click on it. I'm gonna call that the balance sheet, um, budget versus actual and then go to the view tab up. Top Windows Group unspool it. The pains double check that the header is there by going to the page layout to view scrolling up. There's the header back to the normal view. Looks like it's printing on one page. That looks good. So I'm gonna go ahead and save that close then and that's gonna be it for the budgeted balance sheet