Establish the Database for New Businesses



Establish the Database for New Businesses

To establish a new data base:

On the menu bar, click File > New company. The following screen appears:

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Click Start Interview at the right of the screen to move to the next page of the interview.

Note Click Next at each step of the interview to move on. Do not press the Enter key.

Click Back at the bottom of the screen to return to the previous screen if you want to make alterations.

The following screen appears:

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Enter the details of the business:

|Details |Then… |

|School Uniform Supplies | |

|130 Main Road | |

|Rivertown |Click Next |

At the next screen, use the pull-down list

|Field |Enter |Then |

|Type of business |Product sales/Retail |Click Next |

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Click on Individual Tax Return to select. Click on Next

At the next screen, accept July for the start of the financial year (or use the pull down list to select July if this is not already showing). Click on Next twice.

At the Create company file screen, click Next to save the set up details in the hard drive. Click Save. This takes a couple of minutes.

The name of the business now appears at the top of the screen. The next screen is Customising QuickBooks for your Business. Click Next to begin the Preferences which allows other features to be established:

|Field |Select |Then |

|What do you sell? |Products only |Click Next |

|Do you track tax? |Yes |Click Next |

|Do you want to create estimates in |No |Click Next |

|QuickBooks? | | |

|Do you want to create sales orders before you|No |Click Next |

|tax invoice your customers? | | |

|Do you want to use sales receipts in |Yes |Click Next |

|QuickBooks? | | |

|Do you want to use billing statements in |No |Click Next |

|QuickBooks? | | |

|Do you want to use invoices in QuickBooks? |Yes |Click Next |

|Do you want to use progress invoicing? |No |Click Next |

|Do you want to keep track of the bills you |Yes |Click Next |

|owe? | | |

|Do you print cheques? |I don’t currently print |Click Next |

| |cheques and I don’t plan to | |

|Do you want to track inventory in QuickBooks?|Yes |Click Next |

|Do you want to track time in QuickBooks? |No |Click Next |

|Do you have employees? |No |Click Next twice |

|Select a start date to start tracking your |Accept 01/07/2007 |Click Next |

|finances | | |

|Would you like to add an existing bank |Yes |Click Next |

|account? | | |

Key in NAX Cheque for the name of the bank account

Click on or after 01/07/2007 to select. Click Next three times.

Income and Expenses

At the next screen, you will be required to review the income and expense accounts for your business. Click beside any account which is not required, to remove the tick. If in doubt about which accounts you need, leave all accounts ticked because those which are listed but not used will be included in the chart of accounts but will not appear on the reports.

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Click on Next twice, then on Finish as the interview is completed.

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This next screen is the Home screen showing the most commonly used sections of QuickBooks. Access to these is obtained simply by clicking on the appropriate icon. There are other ways of navigating around QuickBooks. The top line of the screen (menu bar) has pull down menus which can be used to access the same functions as the icons on the screen. The icons on the second top line can also be used.

Set Up “Lists”

To allow us to enter the details of the purchase and sale of inventory and the details of suppliers and customers, lists are created in QuickBooks. The use of the pre-entered information means that the processing of transactions is much more efficient.

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Entering items

On the Home page, click on Items and Services, or click on Lists > Item list on the menu bar.

At the bottom of the next screen, click on Item > New and the following box appears:

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In the type field, select Inventory part.

Complete the form to enter the details of the first inventory item.

|Field |Key in |Then |

|Item name |Skirt | |

|Purchases description |Girl’s Uniform Skirt | |

|Cost |40 | |

|Tax code (drop down list) |NCG | |

|COGS account |Accept Cost of Goods Sold | |

|Sales description |Will have filled automatically, or| |

| |key in Girl’s Uniform Skirt | |

|Sales price |75 | |

|Tax code (drop down list) |GST | |

|Income Account (drop down list) |Sales | |

|Inventory Asset account |Accept Inventory Asset |Click on Next |

The form will clear as the details are saved. Key in the information for the second inventory item below.

|Field |Key in |Then |

|Item name |Trousers | |

|Purchases description |Boy’s Uniform Trousers | |

|Cost |35 | |

|Tax code (drop down list) |NCG | |

|COGS account |Accept Cost of Goods Sold | |

|Sales description |Will have filled automatically, or| |

| |key in Boy’s Uniform Trousers | |

|Sales price |65 | |

|Tax code (drop down list) |GST | |

|Income Account (drop down list) |Sales | |

|Inventory Asset account |Accept Inventory Asset |Click on OK |

The screen will return to the Item list and the two items entered will be showing on the list.

Entering customers

On the menu bar, click on Customers > Customer Centre > New Customer & Job > New Customer.

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Follow the prompts to enter (tab or press the down arrow on the keyboard to move to each new line)

|Field |Key in |Then |

|Customer Name |Global | |

|Company Name |Global Grammar School | |

|Address Bill to |20 Centre Road Port Town |Press Enter to move to next |

| | |line of address |

Click Copy to copy the address into “Ship to”.

Click OK at the edit box and click Next.

Repeat the steps to set up:

|Field |Key in |Then |

|Customer Name |MacIntosh | |

|Company Name |MacIntosh Secondary College | |

|Address |326 Golden Street MacIntosh |Press Enter to move to the |

| | |next line of address |

Click Copy to copy the address into “Ship to”. Click OK at the edit box.

Click OK

The screen will return to the Customer Centre and show the list of Customers on the left.

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Entering suppliers

On the menu bar, click Suppliers > Supplier Centre > New Supplier

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Key in the information relating to the supplier into this form

|Field |Key in |Then |

|Supplier Name |Hi Fashion | |

|Company Name |Hi Fashion Tailoring Pty Ltd | |

|Address |33 Tonkin Street Glen Alta |Press Enter to move to new |

| | |line of the address |

Press OK twice, then Next, returning to the New Supplier screen. Key in the details for the next supplier

|Field |Key in |Then |

|Supplie Namer |Tuff | |

|Company Name |Tuff Clothing Ltd | |

|Address |45 Georges Road |Press Enter to move to new |

| |Northcote |line of the address |

Click OK twice and then Next to return to the Supplier Centre.

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The list of suppliers will be showing on the left of the screen. The Australian Taxation Office is included as a default on the Suppliers List.

Click X to close all open boxes .

Transactions

Enter Initial Capital

Choose from the Menu bar, Banking > Make deposits or click on the icon for Record Deposits on the Home page.

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Tab to the Date field, click the calendar symbol to enter 01/03/08 (or key in the date).

Tab to the Received from field and key in your own name.

Press tab and use “Quick add” to set up as Other. Click OK.

In the From Account field, select Opening Bal Equity or start to key it in and the name should appear.

Tab to the Amount field and enter 30000. Then Click Save and close. (If a warning box appears saying that the date is too far in the future, are you sure you want to save it, click on Yes)

On the Menu bar, click Reports > Company & Financial > Balance Sheet, to see the balance sheet on the screen.

Key in 31/03/08 in the Date field and click Refresh to show the report. (Bank (, Capital (). Close the report. (Answer No to the question Do you want to save the modified report)

Purchase Of Non Current Asset On Credit

We must open accounts for the delivery van. We need an account for Original cost in addition to the name of the asset, so that we can show the cost less depreciation. Open these accounts either before starting to process the entry, or during the processing. We will open the accounts before starting.

On the Menu bar, click Lists > Chart of accounts > Account > New to open an account or click on the icon for Chart of Accounts on the Home page

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Select Fixed Asset for the type of account. Click on Continue.

In the Account Name field key in Delivery Van.

Click Save & New to open another account.

The Type of account must be Fixed Asset (this should already show).

In the Account Name field key in Original cost.

Click Sub Account to enter (and select Delivery Van from the pull down list.

Click Save & Close. Return to the Chart of Accounts and note that the two new accounts have been added. The Original Cost account is indented as a sub account of Delivery Van. Close Chart of Accounts.

To make a journal entry in this new account:

On the Menu bar, click Company > Make General Journal entries.

The following screen appears. (If a screen states that numbers are automatically assigned to journal entries, accept this.)

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Enter the date of the transaction 02/03/08, then tab to Entry No and enter 1 (if not already shown).

Tab to Account field and select Original cost (of Delivery Van) from pull down list.

Tab to the Debit field and enter 35000.

Tab to the Tax column and select CAG.

Press the down arrow on the keyboard.

3500 appears in the Tax Column and 38500 appears in the Credit column.

In the Account field’s second line, enter Holden Ltd, press tab and use Set up to set up the account as Long Term Liability (from the pull down list for Other account types). Click Continue. Check the details on the next screen and click on Save & Close

Tab to the credit column and enter 38500 (if not already shown). Click on Save & New.

(Follow the steps for the delivery van and adapt for this transaction. Remember to open the new accounts for the Office Furniture and Original Cost as fixed assets. Use Opening Bal Equity for the account to credit. There is no GST on this transaction )

Click Save & Close.

Look at the balance sheet again (adjust the date) to see the effect of these transactions on the accounting equation. Scroll down to see the full report. (Delivery Van ( Office Furniture (, Liabilities (, Capital ()

Purchase Of Trading Stock On Credit

Click Suppliers > Receive Items and Enter Bill or, on the Home page, click on the down arrow beside the Receive Inventory icon and select Receive inventory with bill

The following form appears:

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Enter the supplier name Hi Fashion (the name appears as soon as you key in the first letter) or use the drop-down list to select.

Tab to Date and enter 02/03/08.

Tab to Amount, enter 17600.

Tab to the Item field and select Skirt from pull down list.

Tab to the Qty column and enter 400. Click Save & New.

Repeat these steps to enter the details for the purchase of the trousers (total amount $11550). Click Save & Close.

Click Lists > Item List to check that the stock on hand has appeared on the listing of items.

Click Reports to look at the adjusted balance sheet (adjust date). (Inventory ( Accounts payable ( Tax Payable ()

Sales of Trading Stock on Credit

On the Menu bar, click Customers > Create Invoices or click on the icon Invoices on the Home page.

The following sales invoice appears

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Click To be printed at the bottom of the screen to remove the tick.

In the Customer field select Global.

Tab to the Date field to key in 06/03/08.

Key in invoice number 406.

Tab to Terms and select Net 30 days.

Tab to the Quantity field and key in 80.

Tab to the Item field and select Skirt.

The calculation of the amount occurs as soon as the item is entered.

Locate the cursor on the second line, enter 45, and select Trousers.

Click Save & New to repeat the steps for the next sales to MacIntosh Secondary College on 20/03/08. Click Save & Close.

Click Reports > Company & Financial to look at the Profit and Loss statement (adjust the Date fields to show 01/03/08 to 31/03/08 and click on Refresh), followed by the Balance Sheet (date 31/03/08).

(Sales, Cost of goods sold and Net Income on P/L, Accounts Receivable (, Inventory (, Tax payable (, Net Income ( on B/S)

Click Reports > Sales > by customer: detail (adjust dates) to see the sales for the month.

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Cash Payments – Expenses and Drawings

Click Lists > Chart of Accounts > Account > New, to open an accounts for Drawings (equity), Lease of shop fittings (expense), Electricity (expense) and Wages (expense).

On the chart of accounts, place the cursor at the beginning of Drawings – it becomes a cross. Click and drag Drawings so that it appears below Retained Earnings.

Click Banking > Write cheques.

The following cheque form appears:

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Note The balance at the top of the screen is adjusted after each cheque is written.

Click “+” to advance the dates.

Instead of using the drop-down lists, the names of the payees and the account names appear as typing is commenced if they are already on the list.

The balance displays at $30000.

Tab to the Cheque Number field, key in 1329.

Tab to the Date field, key in 07/03/05.

Tab to the Payee field, key in Baywatch Insurance.

Tab, then use Quick add to set up the name as Other. Click OK.

Tab to Amount, enter 550.

Tab to the Account field, choose Insurance (the amount should already be entered). Tab to the Tax field and select NCG. Click Save & New.

Repeat the steps to key in the details for each of the other cheques. (remember – no GST on wages and drawings.) Click Save & Close.

Click Reports > Company & Financial > Profit and Loss > Standard (adjust dates and Refresh) to see the effect of these transactions. Check the Balance Sheet at 31/03/08 (Bank ↓ Net Income ↓)

Cash Receipts – Cash Sales

On the Menu bar, click Customers > Enter sales receipts or click the icon for Sales Receipts on the Home page.

The sales receipts form appears.

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Note: The default setting for Receive Payments in Quickbooks is to debit the money received into an account called Undeposited Funds. This appears as a current asset on the balance sheet. The amount is not included in the total of funds banked until it is transferred to the Bank Account. If preferred the amount can be debited directly into the Bank Account. To do this, click Edit > Preferences > Sales & Customers > Company Preferences and unselect Use Undeposited funds as default deposit to account. The screen above shows the drop down box which then appears on the bottom of the Sales Receipt form The Bank account must be selected from the drop down list.

At the bottom of the form, make sure that Deposit to is selected and select the bank account. Make sure that there is no tick in To be printed.

Tab to the Date field and key in 06/03/08

Tab to the Item field, and select Skirt, enter the quantity 120.

On the next line, in Item list click Trousers and key in the quantity 100. Click Save & Close.

Cash Receipts - Collections From Debtors (Accounts Receivable)

On the Menu bar, click Customers > Receive payments, or click on the icon for Receive Payments on the Home page.

The following form appears:

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In the Received From field select Global.

Note that the balance for Global Grammar School is shown in the Customer Balance field.

Tab to Amount field and key in 5000

Tab to the Date field, key in 16/03/08.

Click Deposit to and select the bank account

Click Save & New.

Repeat the steps for second receipt. Click Save & Close.

Click Reports > Customers & Receivables > A/R Ageing summary (adjust dates) to see the adjusted balances for the accounts receivable.

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Click Reports > Customers & Receivables > Customer Balance Detail (adjust dates) to see all the transactions relating to each customer.

Cash Payments - Payments to Creditors (Accounts Payable)

Click Suppliers > Pay Bills. Or click on the icon for Pay Bills on the Home Page.

The following form appears:

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Click Show all bills to see the totals owing. Check that the bank account and balance at the end are displayed at the bottom of the screen.

Click Assign cheque no.

Key in the date 30/03/08.

Click in first column to insert a tick against Hi Fashion.

Click Amount to pay field for Hi Fashion and key in 10000.

Click in first column to insert a tick against Tuff..

Click Amount to pay field for Tuff Clothing and key in 8000.

Click Pay Selected Bills.

At the next box, select Let QuickBooks assign the cheque numbers. Click OK.

Check that the details are correct on the next box and click Done.

Click Reports > Suppliers & payables > A/P Ageing summary to see the adjusted balances (adjust dates and refresh).

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Check the listing of items to see the stock balances after the transactions.

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Reports and Graphs

In Reports > Reports Centre, look at the range of reports which are available.

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On the list on the right, Company & Financial reports are displayed. Select Profit & Loss>Standard and print the Profit and Loss statement after adjusting the dates.

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Return to the report centre, select Balance Sheet & Net Worth > Standard

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Scroll down the balance sheet to see the complete report.

Check other appropriate reports – stock items, accounts receivable and accounts payable aged summaries (check Date fields).

In Reports > Company & Financial > Income & Expense graph (adjust the Date fields):

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Move cursor over any part of the graph and a magnifying glass appears, double click and more details appear for the item - further graphs and the figures that are behind them.

Some analysis by percentage of the expenses that have been incurred is presented on the side of the graph.

Double click on any item on the report allows you to drill down to the actual document. For example, double click wages and the graph for wages only appears, double click again and the ‘Transaction Detail by Date’ for the wages appears. A further double click on the transactions brings up the original cheque drawn for the wages.

Many other graphs are available at the relevant sections of the Reports menu.

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01/03/08 Pay $30000 into bank account as the opening capital

02/03/08 The business buys a delivery van $35000 on credit from Holden Ltd (plus $3500 GST).

02/03/08 The owner contributes office furniture to the business $6000

The business buys stock on credit:

02/03/08 400 skirts from Hi Fashion Tailoring Pty Ltd on credit $16000 (plus $1600 GST)

02/03/08 300 pairs of trousers from Tuff Clothing Ltd on credit $10500 (plus $1050 GST)

06/03/08 Sell 80 skirts and 45 trousers to Global Grammar School on credit $8925 (plus $892.50 GST) Inv 406

20/03/08 Sell 50 skirts and 60 trousers to MacIntosh Secondary College on credit $7650 (plus $765 GST) Inv 407

Payments other than wages and drawings include GST

07/03/08 Pay disability insurance $550 ($500 plus $50 GST) to Baywatch Insurance Chq 1329

08/03/08 Pay wages $600 Make cheque to Cash Chq 1330

09/03/08 Owner draws cash cheque (1331) for drawings $800

10/03/08 Pay Lend Lease $1760 for lease on shop fittings for 2 months ($1600 plus $160 GST) Chq 1332

25/03/08 Pay electricity to City Power Chq 1333 $319 ($290 plus $29 GST)

25/03/08 Pay wages $600 Chq 1334 (cash cheque)

25/03/03 Pay wages $600 Chq 1334 (cash cheque)

06/03/08 Cash sales 120 skirts

100 trousers

16/03/08 Receive payment from Global Grammar School $5000

25/03/08I[`dgr“”•–œ«³¸Îðó÷þ O S Š ‹ ± Ô Ö × 67GKNz?²¸¼½¿ÀÂÃÅÆÏüøüóüóüëüÝüÖüÒüÒüËüÃü Receive payment from MacIntosh Secondary College $6000

30/03/08 Pay Hi Fashion Tailoring Pty Ltd $10000 on account

30/03/08 Pay Tuff Clothing $8000 on account

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