Edited Module 1 for PAP Cert



QuickBooks Online 2013 Student GuideCourse 4:Recording Transactions inQuickBooks Online41910003509645Copyright? 2013 Intuit Inc. All rights reserved.????????????????????????????????????????????????????????????? Trademarks?2013 Intuit Inc. All rights reserved. Intuit, the Intuit logo, and QuickBooks, among others, are registered trademarks of Intuit Inc. Other parties’ marks are the property of their respective owners.Notice to ReadersThe publications distributed by Intuit Inc. are intended to assist accounting professionals in their practices by providing current and accurate information. However, no assurance is given that the information is comprehensive in its coverage or that it is suitable in dealing with a client’s particular situation. Accordingly, the information provided should not be relied upon as a substitute for independent research. 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Readers should verify statements before relying on them.Table of Contents TOC \o "1-3" \h \z \u Course Overview PAGEREF _Toc340161238 \h 4Module Opening PAGEREF _Toc340161239 \h 4Objectives PAGEREF _Toc340161240 \h 4Training at a Glance PAGEREF _Toc340161241 \h 5QBO Plus Test Drive PAGEREF _Toc340161242 \h 6Background Information PAGEREF _Toc340161243 \h 6Preferences Pre-work PAGEREF _Toc340161244 \h 7Lesson 1: Money In PAGEREF _Toc340161245 \h 8Income List PAGEREF _Toc340161246 \h 8Money Bar PAGEREF _Toc340161247 \h 8Filter PAGEREF _Toc340161248 \h 11Batch Actions PAGEREF _Toc340161249 \h 12Income List Additional Features PAGEREF _Toc340161250 \h 12Printing from the Income List PAGEREF _Toc340161251 \h 13Export to Excel PAGEREF _Toc340161252 \h 13Receive a Payment PAGEREF _Toc340161253 \h 15Sales Receipts PAGEREF _Toc340161254 \h 16Customer Charges PAGEREF _Toc340161255 \h 18Customer Refund or Credit PAGEREF _Toc340161256 \h 20Billable Time PAGEREF _Toc340161257 \h 22Billable Expenses PAGEREF _Toc340161258 \h 25Lesson 2: Money Out PAGEREF _Toc340161259 \h 28Writing Checks PAGEREF _Toc340161260 \h 28Spending Cash PAGEREF _Toc340161261 \h 30Entering Credit Card Expenses PAGEREF _Toc340161262 \h 32Debit Cards PAGEREF _Toc340161263 \h 34Handling Debit Card Transactions or Bank Charges PAGEREF _Toc340161264 \h 34Entering Bills PAGEREF _Toc340161265 \h 35Paying Bills and Writing Checks PAGEREF _Toc340161266 \h 36Paying One Vendor PAGEREF _Toc340161267 \h 39Paying Multiple Vendors PAGEREF _Toc340161268 \h 42Refund Receipts PAGEREF _Toc340161269 \h 43Lesson 3: Other Functions with Transactions PAGEREF _Toc340161270 \h 44Downloaded Transactions PAGEREF _Toc340161271 \h 44Assign and Categorize Downloaded Transactions PAGEREF _Toc340161272 \h 45Accept Downloaded Transactions PAGEREF _Toc340161273 \h 47Edit a Downloaded Transaction PAGEREF _Toc340161274 \h 50How QuickBooks Online Analyzes Matches PAGEREF _Toc340161275 \h 51Types of Matches for Downloaded Transactions PAGEREF _Toc340161276 \h 53Find Matching Transactions PAGEREF _Toc340161277 \h 54Match to Multiple Transactions PAGEREF _Toc340161278 \h 54Unmatch a Downloaded Transaction PAGEREF _Toc340161279 \h 55Handle Duplicate Downloaded Transactions PAGEREF _Toc340161280 \h 56Exclude Downloaded Transactions PAGEREF _Toc340161281 \h 56Disconnect or Delete Bank or Credit Card Accounts PAGEREF _Toc340161282 \h 57Recurring Transactions PAGEREF _Toc340161283 \h 58Creating a recurring template PAGEREF _Toc340161284 \h 58Creating Just a Template PAGEREF _Toc340161285 \h 58Printing PAGEREF _Toc340161286 \h 60Adobe Acrobat Reader PAGEREF _Toc340161287 \h 61Lesson 4: Inventory and Purchase Orders PAGEREF _Toc340161288 \h 63Product and Services List PAGEREF _Toc340161289 \h 64Set Up a Product for Inventory Tracking PAGEREF _Toc340161290 \h 65Purchase Products for Inventory with a PO PAGEREF _Toc340161291 \h 66FIFO Lots PAGEREF _Toc340161292 \h 68Selling Inventory Products PAGEREF _Toc340161293 \h 69Lesson 5: Journal Entries PAGEREF _Toc340161294 \h 70What is a Journal Entry? PAGEREF _Toc340161295 \h 70Why Make Journal Entries? PAGEREF _Toc340161296 \h 70What Does a Journal Entry Look Like? PAGEREF _Toc340161297 \h 70Course Conclusion PAGEREF _Toc340161298 \h 72Course OverviewModule OpeningWorking from a QuickBooks Online Plus trial company, you will explore the use of paying vendors and other expenditures. You will cover forms and transactions related to getting money into your company. This training will also cover Inventory and Purchase Orders as A/P and A/R transactions. Important to accountants and customers alike is the function of Journal Entries. ObjectivesIn this module, you will work through a hands-on activity to:Create transactions related to receiving money: Money InCreate transactions related to spending money: Money OutUtilize the “Income List” tool in your daily workflowUtilize Inventory and identify its relationship to Purchase OrdersUtilize Journal Entry’s for making “Backend” transactionsTraining at a GlanceLessonsTopicsDescriptionMoney InIncome ListSales ReceiptsCustomer ChargesCustomer RefundsRefund Receipts Time ActivityExplore the types of transactions that bring money into a company. There will be many activities to create receipts and receive payments. Money OutWriting ChecksSpending CashEntering Credit Card ExpensesDebit CardsEntering BillsPaying Bills and Writing ChecksPaying One VendorPaying Multiple VendorsSomeone once said, “You have to spend money to make money”. This part of the training will help you learn the correct way to account for the checks you write. In most cases, paying the bills in QuickBooks Online requires you to have a bill matched to a payment so that reporting is correctly displayed.Other Functions with TransactionsDownloaded transactionsRecurring TransactionsPrintingThis is an overview of several additional functions related to transactions like, Downloading Transactions for the bank, setting up recurring transactions and Printing.. Inventory and Purchase OrdersProduct and ServicesSetup a Product for Inventory TrackingPurchase Products for Inventory with a POSelling Inventory ProductsThis training will help you setup inventory correctly and match the sale of your products to invoicing and vendor purchases using Purchase Orders. No one wants to run out of a certain “hot” selling item in inventory. Journal EntriesJournal Entries OverviewTransaction & Accounting in QuickBooks OnlineSometimes it requires a Journal Entry to correct or change reporting data. This training will help you make those kinds of changes “behind the scenes”. QBO Plus Test DriveLessons in the Activities Handbooks include hands-on exercises in a QuickBooks Online Plus “test drive”. The test drive uses a sample company file called Craig’s Design & Landscaping Services. It can be accessed through the following link: don’t have to create an account or sign in; just complete the security validation and click Continue. This test drive is designed for you to explore and try out new things without worrying that you will break something or make a mistake. It is not designed to retain any changes you make. Once you close the QBO Plus test drive, it is completely refreshed, so please remember to allow sufficient time to complete each activity. But don’t worry if you have to close the test drive before you are finished! You can always begin again. Note: The test drive uses the QuickBooks Online Plus plan. It contains some features that are not available in QuickBooks Online Simple Start or Essentials. In addition, some features, such as the Apps Center tab and in-product Help are not enabled at this time. However, this is subject to change.Background InformationYour primary business is to provide customers with reliable, excellent landscaping services. Craig’s Landscaping also builds gardens and fountains for residential and business customers. You purchase merchandise, supplies and services “on account.” Your company writes checks to pay these vendors. The merchandise is inventory for your company to resell. You require purchase orders to effectively track inventory. On occasion, some of your transactions have errors that need a Journal Entry correction. Preferences Pre-workPlease log into the QBO Plus Test Drive at if you haven’t already done so, and set the following preferences:Go to Company>Preferences>Sales Form Entry>Estimates.For Estimates billing method select Yes, I want the option of including both?Pending?and?Accepted?estimates on invoices.In the Message to customers on estimates only area enter, This is an estimate only.Still in Preferences, go to Products and Services>Quantity on Hand, and click Quantity on Hand (Inventory tracking).Go to Vendors & Purchases and make sure Manage bills and Purchase Orders are selected. The Custom Fields section opens.Add a custom field called Delivery Date.Select Custom Transaction numbers. Click Save.Lesson 1: Money InEveryone loves to receive money. Accounts Receivable is simply you allowing your customers to purchase your goods and services “on account”. These accounts usually turn into cash within 30 to 60 days. Since you are using the Accrual Basis for accounting, these transactions appear on your Balance Sheet. Transactions you will be exploring are as follows:Income ListSales ReceiptsInvoicesEstimatesReceiving PaymentsStatementsCredit MemosRefund ReceiptsIncome ListThis feature is not just a list of Sales Receipts or Invoices. It is a “Command Center” to track customer transactions like, Estimates and Invoices. It allows clients to action on those transactions. What are the benefits of using the Income List?It helps to manage workflow and reduce errors.Small biz owners will save time by putting client tasks in one central location. Spend more time on business analysis and planning not on cleaning up the books. Money BarThe Money Bar gives you a graphic way to instantly sense how income (potential and received) is moving through your business. It shows:Unbilled items: estimates and unbilled time and costs (charges)Invoices that you have open, and those that are overduePaid items (sales receipts and invoices) for the last 30 daysEach area of the Money Bar is a general category of income (or potential income). If you click a category, like Overdue or Paid, the list below changes (or "filters") to show you just those items that belong to the category.For example, to focus on just overdue invoices, click the red Overdue category in the bar. To return to an unfiltered view of the list, click Clear Filters/View All next to the Filter button.You can also?filter the list?by customer, date, transaction type, and more.Clicking the bar opens a list of specific information for the following:UnbilledUnpaidOverduePaidFilterYou can filter or narrow what you see in the Income List so you can focus on only the items you're interested in.You can narrow the list by:Form type (invoice, sales receipt, credit memo, or estimate)Payment status (open, overdue, fully paid, pending, accepted, closed, rejected, expired)Delivery status (to be printed, to be sent)DateCustomerBatch ActionsSend or print multiple items with?Batch Actions.Income List Additional FeaturesWorking with columns is a great feature for organizing your views to meet business needs. Here are several features:Sorting by column – You can sort using column headers in the Income List to group similar transactions together. This is useful if you want to see all transactions for a specific customer, date, amount, and so on. To sort, simply click a column header, like Date or Name. The list is sorted by whatever column has an up or down arrow in the header. To sort in reverse order, click the column header again.Selecting columns for the list – You might want to display some columns but not others. You can also add columns for the custom fields you set up in Company Preferences>Sales Form Entry.To select columns for the list:Click?Edit Columns?at the top right of the list.Select the columns you're interested in.Click?Apply.Resizing columns: You can resize columns easily by dragging. Rest your pointer over a column header and move it to the header's right edge. When the double-headed arrow appears, click and hold the mouse button down while dragging the edge to the right or left. Note: You cannot resize columns if you are “zoomed in.” Press CTRL and the minus key to zoom back out.Some columns appear by default and can't be hidden.Printing from the Income List Printing from the Income List is handy for a number of reasons. You can:Print the transactions themselves (invoices, sales receipts, estimates), either individually or in a batchPrint packing slips for invoices and sales receipts, either individually or in a batchPrint the Income List itselfTo print a single transaction, select Print from the drop-down list of actions for the transaction you want to print.To print a batch of transactions:Select the transactions you want by selecting the checkboxes at the left of each row.Click?Batch Actions?and select?Print Transactions from the drop-down list.To print packing slips?(invoices only), follow the same steps as printing transactions, but choose Print Packing Slip from the Action button or the Batch Action button.Export to ExcelJust like many features in QuickBooks Online, you can export to Microsoft Excel.Income List WorkflowThis activity will guide you through a typical Income workflow in QuickBooks Online. Create an Estimate: Go to Customers>Income List.Click Create New and select Estimate. The Estimate window opens.In the Customer drop-down list, select Amy’s Bird Sanctuary.Under the Product and Service column, click the drop-down arrow in row 1 and select Design. The description, quantity, rate, and amount are prefilled. Notice that the custom message you added earlier appears in the Customer Message area.Click Save.Your customer has accepted your estimate, and you have completed the work. It is time to create an invoice for the customer.Create an Invoice.Still in the Income List, click Estimates on the Money Bar.On the line with Amy’s Bird Sanctuary under Status, click Pending. The estimate opens.Change the status from Pending to Accepted, and then click Save. The workflow returns you to the Income List.In Amy’s Bird Sanctuary, in the Action column, click Copy to New Invoice. QuickBooks Online creates the invoice.Note: At this time, there are no progressive invoicing capabilities in QuickBooks Online.Click Save.Your customer has promptly paid the invoice and it is time to receive the payment.Receive a PaymentClick Open Invoices on the Money Bar.In the row for Amy’s Bird Sanctuary, in the Action column, click Receive Payment. QuickBooks Online creates a Receive Payment form.Enter the following:Pmt Method – CheckRef# – 123In Deposit To – select CheckingClick Save.Sales ReceiptsCreating a Sales Receipt is always a good thing. You are receiving payment for business.You have a client that needs a sales receipt for their record keeping.Creating Sales ReceiptsGo to the Customers tab and select the Income List link.Select the Sales Receipt link under the Create New drop down list.Enter the following information on the customer receiptCustomer – Amy’s Bird SanctuaryUnder Product/Service – Concrete (Note: the description will pre-fill)Amount – 1000.00Under Product/Service – FountainAmount will pre-fill at 275.00Payment Method – CheckRef# – 123Deposit to – CheckingClick Save.Note: A common mistake is entering a Sales Receipt, then ALSO going to the Receive Payments screen and recording a Payment. This results in recording the money twice. So the bank balance is incorrect and the Accounts Receivable balance holds a credit for this customer, or in other words, showing that you owe them.Customer ChargesCustomer StatementsIt is important that every transaction for a customer must be handled with a Sales Form or it will not appear in that customer’s register and many of their reports will not even show the customer’s name. To track a customer’s transaction activity, QuickBooks Online uses customer statements.There are two categories of statements: Specific Customer StatementsBatched Customer StatementsYou have been asked by a customer for a statement of their recent purchases.Creating Customer StatementsOn the Customers tab, click Customer Center.Select Freeman Sporting Goods > 0969 Ocean View Road.Select Statement from the New Transaction menu. The Create Statement window opens.Notice the three choices of statements. Click Explain these choices.Accept the defaults and click the OK to view the Statement.Click Back.Let’s do an Open Item statement for Freeman Sporting Goods:Select Statement from the New Transaction menu. The Statements window opens.Select Open Item, and then click OK.View the statement.For batched Customer Statements:On the Customer tab, select Statements. The Statements window opens.Select the Balance Forward type.Leave the default dates.Unselect the No statements dated [today’s date] box, and then click OK.Notice the list of statements you can send in batch form.Customer Refund or CreditCredit MemosWhat's the difference between?credit?memo, a?credit?and a refund??A?credit?memo?is a posting transaction which can be applied to a customer's invoice as a payment or reductionA?credit?is a non-posting transaction that you can include later on a customer's invoiceA?refund?is a posting transaction which is used when reimbursing money to a customer. (Refunds are covered in the Money Out section of this course.)This means that credit?memos?are used to offset an existing customer balance. Credits?can be included only on an invoice. Also, credits?don't affect a customer balance until they are included on a saved invoice.Refunds on the other hand?are used to show money given back to a customer to refund for services the customer is not happy with,?to offset a?credit?balance,?merchandise or service not received, or?an overpayment.You will create a credit memo that will be applied to a future invoice for Kate Whalen.Creating a Credit MemoGo to the Customers tab and select Income List.Select the Credit Memo link under the Create New drop down list.Enter the following information:Customer – Kate WhalenProduct/Service – DesignLeave the amount at $75.00Click Save.Note: The Income List is a powerful tool for one stop Money In transactions. It is also possible to access these same functions through the Customers tab and associated links.Billable TimeEntering time for your billing and employees doing work for you is an important feature in QuickBooks Online. Billing functions and Time Sheets record these transactions. There are two types of time sheets you can use:Weekly time sheets: Useful for entering or seeing several days' worth of activitiesSingle activity time sheets: Useful for entering or editing one day or event at a timeHow to fill out time sheetsTo entering a single timed activity:Go to the Customers tab and select Income List.Click Create New, and then select Time Activity.Choose a name from the?Employee?list or add a new employee.Enter the?Date?the activity occurred.(Optional) Choose a Location. If you don't see it, location tracking is turned off.?(Optional) Choose a Class.?If you don't see Class, class tracking is turned off.?Choose a Customer if you want to bill the activity to the customer or track expenses for the customer.If you want time activities to automatically appear on invoices,?Bill customers for time?must be turned on. If you want to be able to track customer expenses,?Expense tracking by customer?must be turned on.If you use services to enter time, choose the?Service that represents this activity. If you don't see a Service field, Use services is turned off for your company.If you're billing the activity to a customer, check Billable. If you are allowed to change the rate at which an activity is billed, be sure the?Bill @ rate/hr?is correct.?Select?Taxable?if you need to charge sales tax on this activity.Enter a description of the activity.?If you use services, the Description is filled with the service's description. You can edit it. If the activity is billed to a customer, the Description appears on their invoice, depending on your preference settings.?Enter the amount of time worked in Time. If you want, you can check?Enter Start & End Time?and enter the amount of time that way, instead.Click?Save.Filling out a weekly time sheetClick Weekly Time Sheet,?(or, from the Employees menu, choose Weekly Time Sheet).Choose a name from the?Employee?list, or, add a new employee.Choose the week for which you want to record activities, and click?OK.For each type of activity, enter an activity line:Customer – Choose a Customer if you want to bill the activity to the customer or track expenses for the customer. If you want time activities to automatically appear on invoices, Bill customers for time must be turned on. If you want to be able to track customer expenses, Expense tracking by customer must be turned on.Location – (Optional) Choose a Location. If you don't see it, location tracking is turned offClass – (Optional) Choose a Class. If you don't see Class, class tracking is turned offService – If you use services to enter time, choose the Service that represents this activity. If you don't see a Service field, "Use services" is turned off for your company. Billable – If you're billing the activity to a customer, check Billable. If you are allowed to change the rate at which an activity is billed, be sure the Bill @ rate/hr is correct. Select Taxable if you need to charge sales tax on this activity. Description – Enter a description of the activity. If you use services, the Description is filled with the service's description. You can edit it. If the activity is billed to a customer, the Description appears on their invoice, depending on your preference settings. For each day of the week this activity occurred, enter the number of hours spent on this activity for that day.You can add more activity rows, and enter different time amounts for different days.Power Tip:?If the activities for this week are similar to last week's, you can copy last week's time sheet.Click?Save.Editing a time activityFind the activity to edit from the Find feature or Employee tab and locate the employee.Make changes and click?Save.If the activity is billed to a customer, any changes you make are also reflected on the customer's invoices. If a change affects an invoice that has already been sent to the customer, you may want to resend the invoice.Deleting a Time ActivityFind the time activity you want to delete.Click Delete.If the activity was marked billable, but hadn't actually been on an invoice to a customer, there are no consequences of deleting it.If the activity was billable and was on a customer's invoice, it is removed from the invoice. You may want to notify the customer and resend the invoice.If the activity was billable, was on a customer's invoice, and the customer already paid for it, deleting the activity gives the customer credit. You may want to notify the customer.Billing CustomersTo bill time to a customer, check?Billable?on a time activity. If you don't see a Billable checkbox, billing customers for time is turned off for your companyOn weekly time sheets, each activity has its own line and its own?Billable?checkboxThat activity's description, date, duration, rate, and total amount to bill then automatically flow to the customer's next invoiceYou can also have your activities billable by default, or show your customer time worked but not billedBillable ExpensesWhat are billable expenses?The?Use billable expenses?preference puts a?Billable?check box on purchases you make (using?Enter Bill,?Write Check, Credit Card Expense, or Enter Cash Purchase, for example). Selecting?Billable lets you specify that an expense should automatically flow to a customer's next invoice.To turn on Billable Expenses:Open Preferences.Click the?Vendors & Purchases?section.Select?Use billable expenses.If you have the Sales Tax feature turned on, select Charge sales tax?if you want the Tax checkbox selected by default for billable expenses.Review and set the preferences for marking up and tracking billable expense income.Click?Save.Turning on?Use billable expenses?forces?Expense tracking by customer?and?Multiple split lines?to be on, so you can more easily enter billable expenses.To enter a billable expense:Enter a billable expense using?Enter Bill,?Write Check,?Credit Card Expense, or?Enter Cash Purchases.Note the following fields?in the Expenses and Products and Services tables:Account?or Product/ServiceChoose the expense account?or product/service?appropriate for what you purchased for the customer.AmountEnter the cost of what you purchased for the customer. You can enter a calculation.If that cost is less than the total amount of the transaction, enter a separate detail line for each different amount.DescriptionEnter a description of what you purchased for the customer.?This appears on the customer's invoice.CustomerChoose the customer who will be billed for the expense. If you don't see a Customer field,?Expense tracking by customer?isn't set up.?BillableCheck the box. If you don't see a Billable column, billable expense tracking isn't set up.MarkupOptional.TaxDepends on how you made the purchase.?Tell me more. This column appears only if a Billable column appears and if sales tax is turned on.Applying Unbilled Time and CostThe Income List has feature to view and gain access to your unbilled activity. This list will display unbilled charges and time for work your company has performed.The unbilled charges, credits, expenses and time table at the top of a new Invoice screen displays non-posting transactions for which your customer has not been billed. Depending on your preferences settings, this table may include unbilled charges, credits, expenses, and time. To include these unbilled transactions on a new invoice, select the checkbox next to each transaction you want to include. You may want to see more detail about the transaction, click its link. You can also quickly select an entire group of transactions, by selecting the top level checkbox, such as Time Charges.When you view an invoice you've already saved, the table includes transactions you already included on the invoice, plus all the available unbilled charges that you can add to the invoice.Lesson 2: Money OutAccounts Payable (A/P) are any transactions related to money you owe. This includes bills or credit that you have arranged with vendors. AP transactions are considered "accrual basis" of accounting where expenses are reported on an income statement in the period when they occur or expire. These transactions are entered in the Vendors tab. The other method is called "cash basis" where expenses are reported on the income statement when the cash is paid out. These types of transactions are entered on the Banking tab.These are examples of Money Out transactions:Writing ChecksSpending CashEntering Credit Card ChargesEntering Debit CardsEntering BillsPaying Bills and Writing ChecksPaying One VendorPaying Multiple VendorsRefund ReceiptsYou have some vendor invoices and receipts on your desk that need to be accounted for. It is time to spend some money. Let’s start with paying some cash basis expenses.Writing ChecksThere are many reasons for spending money: Paying vendors for work completed or items to resell Paying vendors for utilities, office supplies, overheadPaying employeesPaying yourselfThe following activity will help you understand the Money Out process. In this next exercise, you will write a check for equipment rental from the checking account.Writing a CheckYou called Jenni to take a look at your computer, which was making a funny noise. Jenni spent some time diagnosing the problem and determined that the fan was dirty. She cleaned the fan, and all is well. Time to pay Jenni.On the Banking tab select Write Check, and then enter in the following information:Bank Account – CheckingPay to the Order of – Computers by JenniAmount – $70 Using the Itemized by Account feature helps to track expenses. In the Itemize by Account section, Account column; select Maintenance and Repair – Expenses > Computer Repairs - Expenses.Type in a description One hour @ $70 per hour. In the Customer column, click the Why link to read this pop-up window. The help topic when to link an expense to a particular customer. This expense is not related to a customer.You want to print checks later, so check the To be printed box at the top at the top of the screen.Click Save.Spending CashThe next transaction is a receipt from Office Depot for some stamps that were already purchased. You notice that it says that the stamps were purchased with cash. You need to set up a Petty Cash account in QuickBooks Online so that you can track the use of this cash. In this section you will learn how to:Use QuickBooks Online in-product Help to learn how to complete a simple taskSet up a petty cash accountTransfer fundsEnter a cash expenseYou realize that you have to set up a petty cash account, but aren’t sure how. Setting-Up a Petty Cash AccountIn the upper right corner of any screen, under the Feedback button, click How Do I. The Help Topics window opens with suggested topics for whatever screen you have open.Click Index and in section 1 search for Petty Cash.In section 2, double-click Setting up a petty cash account. That topic opens in a new window.Click the What is petty cash link, and then read the description. After reading the help file you now understand: Petty cash can be used for small purchases that are made easier paid for with cash. This should be easy to set up.Follow the steps in Help to create a petty cash account. Once you create the account, you need to put some money in it.On the Banking tab, click Transfers.Transfer $200 from the Checking account to the Petty Cash account. Click Save.Now you can enter that sales receipt from Office Depot.Entering a Cash ExpenseOn the Banking tab, click Cash Expense.Select the new Petty Cash in the Cash Account field.Select Add New in the Purchased From: field, and then enter Office Depot in the Name field. Leave the Vendor drop down as is.Click Quick Add.Enter 35.00 in the Amount.Select Office Expenses for the Account.Enter Stamps in the Description field.Click Save.Entering Credit Card ExpensesSo far you have written a check and recorded the use of petty cash in QuickBooks Online. You pick up the next piece of paper in the stack. It’s a receipt from Robertson & Associates. You needed some legal advice about starting a business, and then used a Visa Card to pay for legal expenses. Entering a Credit Card ExpenseGo to the Banking menu and select Credit Card Expense link.Enter the following information:Select Visa in the Credit Card fieldSelect Robertson & Associates in the Purchased From fieldEnter in $500 in the Amount fieldSelect Legal and Professional Fees: Lawyer-Expenses as the Account at the bottomClick Save.The credit card transaction you just saved will be debited and credited between the Legal and Professional Fees: Lawyer-Expenses expense account and the Visa credit card account. Just when you think you have this whole program figured out, the next piece of paper in the pile has you really confused. It appears that Robertson & Associates made a little mistake. They overcharged you by a half-hour. The receipt is a credit for the overcharge of $100.00 that was placed back on the Visa card. Should you try and edit the amount? That’s when you notice the Charge and Credit options!Correcting an Overcharge on an ExpenseYou don’t need to edit the original transaction. You can create a new one that represents what really happened. The original charge was made and then the mistake was discovered and the difference was credited back to the Visa card in a separate transaction.Still on the Credit Card Expense screen, select Visa in the Credit Card field.Select the Credit.Select Robertson & Associates in the Purchased From field, and enter in $100.00 in the Amount field.Select the Legal and Professional Fees: Lawyer-Expenses account.Click Save.Debit CardsDebit Cards are as popular as credit card these days. Small businesses are no exception. From what you have seen so far of QuickBooks Online, how do you think you should record a purchase made with a debit card?Hint: Where does the money come from when using a debit card? You guessed it:Handling Debit Card Transactions or Bank ChargesTo record purchases made with a debit card, ATM card, check card, or EFT transaction, use?Write Check. Also, use these steps to track a bank charge such as a monthly fee, or fee for printed checks. In other words, any funds going out of any bank account should be tracked this way.Pay special attention to these fields in Write Check:Bank AccountSelect the banking account from which you're spending the funds.To Be PrintedDo not select.Check #Check number,?ATM withdrawal, or other useful notation.DateThe date of the transaction.AccountAn expense account to categorize the purchase or bank charge. If you are getting cash back from a purchase, see below.What if I'm getting cash back?If you are giving your vendor an extra amount for the transaction so you'll get cash back, just track the cash on an additional split line.Select your petty cash account for the?Account.Enter the cash you're getting back as the?Amount.Entering BillsYour stack of paperwork seems to be mostly invoices from vendors for products and services that you have ordered. It looks like you will be creating more checks to print. First, we need to enter some bills to pay.Entering a BillEnter a bill for Chin’s Gas and Oil.Go to the Vendor menu and select the Enter Bill link.Select Chin’s Gas and Oil in the Vendor field.Enter $155.00 in the Amount field.Enter today as the Due Date.Select the Automobile Expenses: Fuel Expenses expense account. Click Save.Paying Bills and Writing ChecksNext in your stack of paperwork is an invoice for Ellis Equipment Rental, another Vendor you occasionally use. But this time you navigate to the Write Check screen and begin to create a check for Ellis Equipment Rental. Paying BillsGo to the Banking menu and select Write Check.Select Checking in the Bank Account field.Select Ellis Equipment Rental in the Pay to the order field.You get a confirmation message.Click Yes. The Bill Payment screen opens.Once you are at the Bill Payment screen you notice that it is very similar to the Write Checks screen with the same payment account field. But instead of Itemize by Account you see a Bill listed for $75.00. Select Bill, and then click Save.If you click the blue Bill link, you can see the bill has been paid and itemized by account.QuickBooks Online will guide you to bills you have entered to be paid at a later date should you select the Write Checks link from the Banking tab. To shed a little light on what might be somewhat confusing, let’s use the help features in QuickBooks Online to explore a further explanation. Difference between Pay Bills and Write ChecksClick the Help link at the top of the QuickBooks Online screen. QuickBooks Online Support opens.Search for pay bills write checks.Open the KB 1193: What is the difference between Pay Bills and Write Checks?Now it all makes sense. Once you enter a bill using the Enter Bill feature, you need to pay that bill using the Pay Bills feature. If you use the Write Check screen, the bill and the Check will not be linked together. Now you understand the reason for the confirmation message. Ellis Equipment Rental had an outstanding bill. When you started to write a check rather than use Pay Bills, QuickBooks Online wanted to make sure you were using the correct screen. Remember, that the Enter & Manage bills feature is not available in Simple Start.Paying One VendorThere are two ways to handle bills from?vendors:When the bill date is different from the pay date, use?Enter Bill/Pay Bills. (Accrual basis accounting)When the receipt date is the same as the date paid, use?Write Check,?Credit Card Expense?or?Cash Expense?depending on how you made the payment. (Cash basis accounting)For example, when you?receive your electric bill, which is not due till the end of the month, use?Enter Bill?to track what you owe. When you pay it at the end of the month, use?Pay Bills?or?Pay?One?Vendor?to clear the bill and generate the check.If you bought supplies at Office Depot and immediately paid for?them, record the transaction using?Write Check,?Credit Card?Expense or?Cash Expense?skipping the?Enter Bill?and?Pay Bills?steps altogether.?If you're using an electronic method of payment, you should still use?Write Check?but just enter EFT where the check number is.?If you originally used?Enter Bill?to record the bill, use?Pay Bills?or?Pay?One?Vendor?to close it out. (Using?Write Check, Credit Card Expense or Cash Expense?after entering a bill will not link the two transactions, and the bill will still be unpaid on reports.)Paying One VendorIn order to get to know QuickBooks Online better you decide to try paying just one Vendor first. Some time has lapsed and you receive a reminder to pay the phone bill you entered earlier.Go to the Vendors menu and select Pay One Vendor.Select Checking account in the Payment account field.Select Cal Telephone in the Vendor field.You notice that besides the bill you entered earlier, there is an earlier bill for 98.07 that is still not paid. Since cash is tight this month, you decide to pay Cal Telephone $98.07 bill first. Check the $98.07 bill. The amount appears in the check and in the Bill Payment column.Click Save.Now that we saw what happens when we pay a prior bill, let’s see what happens if we accidentally overpay Cal Telephone.Handling an Overpayment to a VendorGo to the Vendors menu and select Pay One Vendor.Select Checking account in the Payment account field.Select Diego’s Road Warrior Bodyshop in the Vendor field. In the Bill Payment section, a bill that was entered for $121.03 appears and we can see that we currently have a balance of $121.03 for that bill.Enter in $131.03 in the Amount field. Note the Amount Overpaid $10.00 in red at the bottom of the Bill Payment form.Click Save.What do you think we happen with the $10.00 overpayment? If you click Pay One Vendor and select Diego’s Road Warrior Bodyshop, and then click the + sign next to Total Credits, the $10.00 appears as a credit for the next billing.Paying Multiple VendorsOK, so paying one vendor is pretty easy. But isn’t QuickBooks Online supposed to make things easier and more efficient. Let’s pay all the remaining bills at once!To paying Multiple Vendors at once:On the Vendors menu, select Pay Bills.Click Show all bills.Leave the Payment Account at Checking.Check the boxes next to all of the vendors or click the Select All button.Leave the default at Printed check in the Payment Method section.Click Pay Bills.Refund ReceiptsWhen you are issuing a refund (with a check or cash) to a customer, you can enter a refund receipt for your records. You can't directly print or send the refund receipt; however, you can print the associated refund check automatically.Unfortunately, you have a customer who was not completely satisfied with your design work and you choose to issue a refund.Creating a Refund ReceiptGo to the Customers tab and select Refund or Credit. (It might be under the More drop down.)Select Refund.Select Refund for goods or services that didn’t satisfy the customer, and then click OK. The Refund Receipt screen opens.Enter the following information:Select Cool Cars in the Customer fieldSelect Design as the Product/ServiceKeep the default of $75.00 in the Amount fieldSelect Check as the Refund MethodSelect the Checking account in the Refund From fieldLeave “To be printed” checkedNote the message at the bottom on the refund screen. What do you think would happen if you used Write Checks for a refund?Click Save.Lesson 3: Other Functions with TransactionsDownloaded TransactionsIf you can't connect your bank, you may still be able to get your bank data into QuickBooks Online. Many banks give you the ability to download a data file with your transactions. If the file is a Web Connect or .QFX file, you can?upload it to QuickBooks Online.Watch a Demo about Downloaded TransactionsOn the Banking tab, click Downloaded Transactions.In the upper right hand corner, click Watch Video.Assign and Categorize Downloaded TransactionsFor each downloaded transaction, QuickBooks Online analyzes all the information received from the bank and tries to give you the best possible suggestion for accepting the transaction.To review a downloaded transaction:On the?Downloaded Transactions?page, select a row by clicking it. The?Description?column gives you a clue about the type of transaction it is. (Tip:?Click a column header, like?Description, to sort similar transactions together.)Review the selection in the?Assign or Match?dropdown list and choose the most appropriate one:QuickBooks Online may display a matching customer or vendor name, if one exists. If one doesn't, QuickBooks Online suggests a new customer or vendor name for you. If you don't change the name, QuickBooks Online adds the name when you accept the row.QuickBooks Online might show possible matches from existing entries like payments from customers and purchases to vendors. For example, if an invoice payment matches a downloaded income transaction, QuickBooks Online suggests it as payment for the invoice.Review the selection in the?Category?dropdown to see if it's accurate. If the entry is either Uncategorized Income or Uncategorized Expense, choose a more specific category from the list. You can create additional categories (called "account" elsewhere in QuickBooks Online) as needed.(Optional) Select a class or location, if these fields appear in the row. These fields only appear if you set up classes or locations in company preferences.Note: You can quickly assign a single category to multiple transactions. Click the checkbox for each row you want assigned to a particular category. Click?Categorize?at the top of the list and select the category you want. Click?Accept Selected?to accept the transactions.Accept Downloaded TransactionsAfter you assign and categorize a transaction, you accept it into QuickBooks Online so it becomes part of your business finances. Transactions that aren't accepted can't be tracked or reported on, so this is an important task.To accept a transaction:Select a row and review it, making choices in the?Assign and?Category?dropdown lists.Click the?Accept?button for the row. The transaction disappears from the list and moves to the?Accepted Transactions?tab. You can make additional changes there, if you need to.To accept multiple transactions at once:Review and categorize several transactions, but don't accept them. Reviewing can be more efficient if you:Click a column header, like?Description, to sort similar transactions together.Assign a single category to multiple transactions. Click the checkbox for each row you want assigned to a particular category. Click?Categorize?at the top of the list and select the category you want.2766429862965Click the checkbox for each row you want to accept. (Tip: Click the checkbox next to?Date?at the top of the list to select all rows on the page.)At the top of the list, click the?Accept Selected?button. All the selected transactions disappear from the list and move over to the?Accepted Transactions?tab. Edit a Downloaded TransactionYou can make changes to a downloaded transaction, whether it's unaccepted or accepted. You can add notes or change how you assigned or categorized a transaction. You can also undo an acceptance, and even exclude a transaction from being included in your business finances.To add notes about a transaction:On either the?Unaccepted?or?Accepted Transactions tab, click a row to select it.Click the small?Details?tab underneath the row. The row expands and details about the transaction and a?Notes field appear.Enter the notes you want to capture about the transaction, and then click?Save.Note: Any notes you add remain in the Details section of the row. They're not available in the corresponding QuickBooks transaction.To change an assignment or category for a transaction:On the?Unaccepted Transactions?tab, click a row to select it.Click the?Assign?dropdown list and make your changes.Click the?Category?dropdown list and make your changes.Note: You can't change the assignment or category from the Accepted Transactions tab. You can change them only on the Unaccepted Transactions tab or in the corresponding QuickBooks transaction.To undo an acceptance:On the?Accepted Transactions tab, click the checkbox for the row you want to unaccept.Click the?Undo?button at the top of the list. The transaction moves back to the?Unaccepted Transactions?tab.How QuickBooks Online Analyzes MatchesWhat QuickBooks Online suggests for each downloaded transaction depends on whether you have existing QuickBooks Online transactions or not.If you have no QuickBooks Online transactions yetQuickBooks Online suggests a new vendor (for debits/withdrawals) or customer (for credits/deposits) and leaves the category as Uncategorized Income or Expense. You can change the name or category before accepting.If you already have QuickBooks Online transactionsIf you have one exact match, QuickBooks Online displays the customer or vendor and suggests a category (often Uncategorized Income or Expense)If you have more than one exact match, QuickBooks Online displays Possible matches found in the row. When you select that row, you select the Match to option and choose from one of the matches in the drop-down list.If you have QuickBooks Online transactions, but none of them exactly match the downloaded amount, you have two choicesIf you know you don't have a matching QuickBooks Online transaction, you can accept the name and category QuickBooks Online suggests, or make changes before clicking AcceptIf you have QuickBooks Online transactions—or multiple transactions—that belong to that downloaded amount, you can search for a specific QuickBooks Online transaction or even match to multiple QuickBooks Online transactionsTypes of Matches for Downloaded TransactionsWhen QuickBooks Online downloads transactions from the bank, it analyzes the bank data against your QuickBooks Online data.For bank deposits and credits, it looks at:Both deposited and undeposited paymentsPayments received against invoices (on the Receive Payment page)Sales receiptsDeposits or payments you entered yourself in the bank or credit card register in QuickBooks OnlineDeposits you entered from the Banking > Deposits pageJournal entries and other positive or credit transactions you created in QuickBooks OnlineOpen invoices and partially paid invoicesNote:If you match and accept a transaction to an open or partially paid invoice, QuickBooks Online automatically creates a?receive payment transaction?in the background for you.For bank withdrawals and debits, it looks at:Payments you've entered for a vendor (not?the bill itself, but the?payment?you entered for the bill, as on the Pay One Vendor or Pay Bills pages)Expenses you entered using the Write Checks, Credit Card Expense, or Cash Expenses pagesExpenses or debits you entered directly in the bank or credit card register in QuickBooks OnlineJournal entries and other negative or debit transactions you created in QuickBooks OnlineFind Matching TransactionsSometimes QuickBooks Online can't find a matching QuickBooks Online item for a downloaded transaction, or it finds one that isn't the right one. In that case, you can search to find a better match.To find a match:On the?Downloaded Transactions?page, select a transaction.Click?Find matching transactions. If you don't see this option. Click?Match to?and select?Find matching transactions?from the list.In the?Match Transactions?window, type text to help you find the transaction: a name, part of a name, an amount, and so on. Then, click?Find.If the transaction you want to match to is outside the date range displayed, change the dates to help find the transaction you're looking for. Select the?to?and?from dates and click?Apply.When you find the item you're looking for, click its checkbox in the list on the left. Then, click?Add.If the total amount is the same as the downloaded transaction amount, click?Save. If the amounts are different, you can?match to multiple transactions?to make the amount equal.When you're satisfied with the match, click?Accept. The transaction moves to the?Accepted Transactions?tab.Match to Multiple TransactionsYou can match a downloaded transaction amount to more than one QuickBooks Online transaction.Say you received payment for three invoices with three separate checks for $100 each. You grouped them with other undeposited funds and made you made one deposit for $300 at your bank. In this case, you'd want to match the $300 downloaded amount to the three $100 payments you received against those invoices.To match a downloaded transaction to multiple QuickBooks Online transactions:On the?Downloaded Transactions?page, select a transaction that you know represents multiple QuickBooks Online transactions.Select the?Match to?option and select?Find matching transactions?from the list.In the?Match Transactions?window, select the transactions on the left that add up to the downloaded transaction amount.Click?Add. The items you selected move to the Selected matches?list on the right.Be sure the total amount matches the downloaded amount by doing one of the followingIf the total amount matches the downloaded amount, that's good. No further action needed.If the total amount is more than the downloaded amount, remove some of the matches until the difference is 0, or go adjust the QuickBooks Online transaction amounts and then try matching againIf the total amount is less than the downloaded amount, select more matches, or go adjust the QuickBooks Online transaction amounts and then try matching againClick?Save.When you're satisfied with the match, click?Accept. The transaction moves to the?Accepted Transactions?tab.Unmatch a Downloaded TransactionYou might sometime want to undo the matches you made to a downloaded transaction. It doesn't matter whether you matched to a single QuickBooks Online item or multiple items.To undo a match for an accepted transaction:On the?Downloaded Transactions?page, click the Accepted Transactions?tab.Find and select the downloaded transaction you want to unmatch.?(Tip: To find your transaction more easily, click a column header to sort up or down by amount, date, description, and so on.)Select the checkbox for the row.Click?Undo.The downloaded transaction moves back to the Unaccepted Transaction tab. If you matched the downloaded amount to existing QuickBooks transactions, those items are "freed up" to be matched again. If you let QuickBooks Online create a new QuickBooks transaction for the match, that new item is deleted.Note: You can also undo a match to a single QuickBooks transaction directly from that transaction. Just click Unmatch near the top of the page.Handle Duplicate Downloaded TransactionsOccasionally, you might encounter duplicate downloaded transactions from your financial institutions. You'll need to exclude or delete the duplicates.You exclude?unaccepted?duplicates from the Downloaded Transactions pageYou delete?accepted?duplicates from the bank registerBefore doing either, compare two transactions to verify they're duplicates:On either the?Unaccepted?or?Accepted?tab of the Downloaded Transactions?page, select a transaction and click its?Details?tab (directly beneath).Make a note of the details: transaction ID, description, date, amount, and so on.Click?Details?again to close the pane, and repeat these steps for the other transaction.Once you're certain you have duplicates:If you haven't accepted the downloaded duplicate yet, exclude itIf you already accepted the duplicate,?delete it from the registerExclude Downloaded TransactionsExcluding a downloaded transaction is an easy way to keep a personal expense out of your business finances.If you exclude a transaction, your bank register won't reconcile because the bank balance and QuickBooks Online balance won't match. If you don't reconcile your bank statements with QuickBooks Online, this is fine.If you do reconcile your bank registers (or your accountant makes you), track your personal expenses by adding yourself as a vendor and assigning the transactions to an owner's equity account (often called an?owner's draw).Note: If you use excluding to remove duplicate downloaded transactions, your balances?will?match and you'll be able to reconcile.To exclude a transaction:On the?Unaccepted Transactions?tab, click the checkboxes for the rows you want to exclude.At the top of the list, do one of the following:For nonduplicate transactions, click?Exclude and select?Exclude?from the listFor duplicate transactions, click?Exclude?and select?Exclude as Duplicate?from the listThe transactions move to the?Accepted Transactions?tab and show — Excluded or Duplicate — in the?Assign?or?Match?column. The transactions aren't tracked or reported as part of your business finances. They won't appear in any associated account registers or reports. Note: There is a checkbox to show excluded transactions from appearing on the Accepted tab.Disconnect or Delete Bank or Credit Card AccountsYou can delete (disconnect) an account's connection, which stops QuickBooks Online from downloading your transactions from your financial institution. You can set up a new connection, if needed, for any accounts you disconnect.You can also completely delete an account from QuickBooks Online. But?exercise caution! You can't restore a deleted account, and it may have unintended consequences. If you're unsure, check with your accounting professional before deleting an account.To disconnect an account:From the?Banking > Downloaded Transactions?page, select the account you want to change, and then click the?Edit?button at the bottom of the accounts list.On the?Account Information?page, click?Delete Connection?(on the right).Confirm that you want to delete the connection and stop downloading transactions. The account stays in QuickBooks Online, but isn't automatically updated with downloaded transactions.Choose?Banking > Downloaded Transactions?to return to the Downloaded Transactions page.To delete an account:Be sure you understand the consequences of completing deleting an account.From the?Banking > Downloaded Transactions?page, select the account you want to change, and then click the?Edit?button at the bottom of the accounts list.On the?Account Information?page, click?Delete?(on the left).Confirm that you want to delete the account, and then confirm again.Choose?Banking > Downloaded Transactions?to return to the Downloaded Transactions page.Recurring TransactionsCreating a recurring templateWhy create recurring templates?There are two ways to start creating a template:To just create a template, start from the Recurring TransactionsTo start from an existing transaction and create a template from it, find the transaction and then make it recurringCreating Just a TemplateOpen the Recurring Transactions,?or, from the Company menu, choose Recurring Transactions.Click?New.Select the type of transaction to create, and click OK.Enter a?Template Name.Choose a?Template Type.If you are creating an invoice template, you can specify that it should include unbilled charges.?What are unbilled charges?If you are creating a scheduled or reminder type of recurring template, click?Edit Schedule?and fill out the schedule.Fill out the rest of the transaction, as usual:For a scheduled type of template, fill out all the details of the transaction because you won't have a chance to edit each occurrence of a real transaction before it is createdTip:?For a reminder or unscheduled type of template, you don't have to fill out every field. You can enter just the data that you know will need to be repeated in each occurrence, because you can edit each occurrence before it is actually created.Click?Save Template.PrintingYou can also enter the Print Checks queue at any time from the Banking menu. You are now in the Print Checks queue. All checks that have been marked to be printed bill will be listed here. If you look at the list you will see the check you created for Ellis Equipment Rental and the checks that you created using Pay One Vendor and now Pay Bills. The top part of the screen contains instructions for printing alignment and setup. Click the Hide Instructions checkbox to collapse the instructions section. Now that you are actually printing the checks (using print stock purchased from Intuit!) you will need to tell QuickBooks Online the current check number to use.Enter your Starting Check #.Click the Select All button at the bottom so that you can print all the checks in the queue.Click Print. Adobe Acrobat ReaderAn Adobe Acrobat Reader window will open with a preview of all the checks that are to be printed.IMPORTANT: Notice the reminder at the bottom of the Adobe Reader Screen – Did you remember to click the Print icon? In order to print the check, you must click the Print icon at the top of the window.Since we do not want to actually print checks, you will have to pretend that your checks did print.Click the Finished button at the bottom of the Adobe Reader window.Click Yes, I clicked on the Print icon... Why do you think QuickBooks Online needs to ask these questions?Click OK.IMPORTANT: Customers sometimes ignore the above prompt and still use the Write Check screen when they should have used Pay Bills. They know in the real world the vendor was paid, yet the next time they run the Unpaid Bills report or open the Pay Bills screen QuickBooks Online tells them the Bill has not been paid. Lesson 4: Inventory and Purchase OrdersA feature unique to QuickBooks Online Plus can track the quantity,?purchase?costs, sales?revenue,?and cost of goods sold?for?your?inventory items. Here?are some key?points:The value of?an?inventory?item in your books is?the?amount?you paid?for?itProducts using inventory tracking must be assigned an inventory asset account, a sales of product income account and a cost of goods sold accountThe balance of the inventory asset account appears on the Balance Sheet reportRecording the?purchase?of?an?inventory?item increases?the?Inventory?Asset?account on your Balance Sheet report by the cost of the item?and increases the Quantity on Hand units?for?that itemRecording the sale of?an?inventory?item decreases?the?Inventory?Asset?account by the original cost of the item?and?decreases the Quantity on Hand units?for?that itemThe Cost of Goods Sold (COGS) represents the cost incurred by your company for purchasing goods to resellThe COGS is not realized until a product is sold. The COGS account is an expense account. The difference between revenue from the sale of a product and the product’s COGS is called the Gross ProfitAs products are sold from inventory, their costs are removed from the Balance Sheet report and transferred to the COGS account on the Profit & Loss reportQuickBooks Online uses the FIFO accounting method to figure the COGS. FIFO stands for First-In, First-OutRecording this sale?also?increases the Cost of Goods Sold?account (COGS)?by the original cost of the item and?increases the Sales of Product Income?account by the?amount your customer paid you?for?the item. The difference between the income?amount?and the COGS?amount is your gross profit on that item.FIFO requires that products being tracked for inventory in a particular product group must be homogeneous in nature. Homogeneous means – of the same or similar in nature. For example, if you are tracking 5’ Orange Trees in your inventory, all trees in that product category must be the same. At times, you might pay more?for?some units of?a?given product than?for?other units?due to price fluctuations. When this happens, QuickBooks Online uses FIFO to?manage the cost?accounting?as you sell units of that product. Product and Services ListBefore setting up inventory and working with purchase orders, the QuickBooks Online Products and Services List needs explanation. Why use products and services?Products and services let you:Create products and servicesCreate subs Items and JobsEnter charges on invoices and use in estimatesQuickly enter a consistent description and price/rate in transactionsReport on income?and/or expenses?from different products or servicesSet up products or services that are either taxable or non-taxable by defaultTo turn on products and servicesIf you don't see a Product/Service column on sales screens (like invoices)?and/or purchasing screens (like bills and checks):Open Preferences, or, from the Company menu, choose Preferences.Click the?Products and Services?section.Select the?Products and services?checkbox for sales and/or purchases, and click?Save.Set Up a Product for Inventory Tracking Your best selling product is the 2’ Garden Gnome that is manufactured by Gnome’s R Us, Inc. You have three vendors that can supply you with this product. Before you can purchase any of these Gnomes for your inventory, you need to set up this product for inventory cost accounting. Product Setup for InventoryGo to the Customers tab and select from the More dropdown, Products & Services List.Create a new product named Garden Gnome.Turn on tracking for Quantity on Hand (for Inventory items). If this option doesn’t appear, go to Company>Preferences>Products and Services>Quantity on Hand and select Quantity on Hand (Inventory Tracking). Click Save.Notice that the default account types change after you turn on QOH to Inventory Asset, Sales of Product Income, and COGS.Create a new Inventory Asset sub-account with 2 ft Plastic Gnome in the name.Leave the initial quantity at zero.Enter a sales Rate of $30.Create a new Sales of Product Income sub-account with 2 ft Plastic Gnome in the name.Turn on Purchase Information.Enter a purchase cost of $15.Create a new COGS sub-account with 2 ft Plastic Gnome” in the name. Save your new product.Purchase Products for Inventory with a POYou have had a successful few months selling your Garden Gnomes. It is time to create a Purchase order for more Gnomes.Buying Inventory with a POSelect Purchase Orders from under the Vendors tab.Choose Hicks Hardware and Supplies as the Vendor.Enter PO# number CL1001.Choose Garden Gnome under Product/Service.Enter a quantity of 100. Leave the rate at 15.Save PO# CL1001.Note: At this time, QuickBooks Online will not process and receive partial Purchase Orders.Go back to the Products and Services list.The quantity on hand for the Garden Gnome is still at zero. That is because the PO is still open. The 100 Gnomes will not be placed in inventory until the PO is closed and the vendor paid. The Inventory Asset account for Gnomes will also show a zero balance. POs are non-posting; they do not post to any general ledger accounts.Enter a Vendor Bill with a POGo to the Enter Bills screen (under the Vendor menu) leave the default settings for the mini interview window click next until finished.Choose Hicks Hardware and Supplies as the vendor. Click the Add Purchase Order button for PO# CL1001.Save the bill.Return to the Products & Services list.Now, the QOH for Garden Gnomes is 100. Now that the PO has been closed the inventory appears in the QOH. The Inventory Asset account for Garden Gnomes now shows a balance of $1,500.00. This is the current asset value of the 100 Gnomes you purchased at $15 each (100 X 15 = 1500). Pay Vendor with POGo to Vendors tab and select Pay Bills.Select the Show all bills radio button.Click the Hicks Hardware and Supplies bill for $1500.00. Note the amount to pay.Click Pay Bills.FIFO LotsFIFO stands for First-In, First-Out inventory cost accounting method that QuickBooks Online uses. You have now made a purchase of Gnomes from a vendor. Since QuickBooks Online uses the FIFO method of inventory cost accounting, you would have to purchase additional Gnome inventory for FIFO to predict “first in first out”. As an example:Lot #1 - 100 Gnomes @ $15 each (Hicks Hardware and Supplies PO# CL1001 at $1500)Lot #2 - 50 Gnomes @ $20 each (Gnomes Etcetera PO# CL1002 at $1000.00)Lot #3 - 50 Gnomes @ $25 each (Gnomes R Us PO#CL1003 at $1250.00)FIFO dictates that we must sell the 100 Gnomes in Lot #1 first. Note: The cash flow dictates that you must figure your inventory cost accounting using cost of FIFO lot #1 first. However, you do not have to physically remove inventory from your business in that order. Since all the Gnomes are the same (or homogenous).Selling Inventory ProductsJust as you suspected, the announcement of “Landscaper of the Month” has increased sales. People are ordering large numbers of Gnomes for home and business. But, you are not sure how QuickBooks Online will track these sales and purchases for your business. Remember that the COGS are not realized until a sale is made. Selling Inventory ProductsCreate an invoice for customer Brenda Adnerb.Select Garden Gnome for a Product/Service.Enter a quantity of 10.Sale price is $30 eachClick Save. From a Balance Sheet report, the invoice will be listed showing that the inventory account has decreased by the amount of $150 (10 Gnomes @ $15.00, the purchase cost). The amount listed with the invoice is the decrease in inventory costs that occurred when you made a sale out of your inventory. Note: the customer may find it confusing to see an invoice listed but not see the sales amount for the invoice.From a Profit and Loss report, you will see that the income for the sale of Garden Gnomes is $300.00 (10 X $30 each) while the COGS is the same as what you saw in the Balance sheet, $150.00. However, this is a positive number. The $150 increase in COGS offsets the decrease in inventory assets. Lesson 5: Journal EntriesThe Journal is an account ledger where all types of entries are recorded. Most commonly the Journal is used to record transactions that cannot be recorded in one of the specialized forms such as Write Checks, Receive Payments, Enter Bills, etc. What is a Journal Entry?In traditional accounting, a journal entry is a transaction in which:There are at least two parts – a Debit and a Credit – called distribution linesEach distribution line has an account from the Chart of AccountsThe total of the Debit column equals the total of the Credit columnWhen you record a transaction with Make Journal Entry, QuickBooks Online labels the transaction as Journal in a register and General Journal on reports that list transactions.Why Make Journal Entries?QuickBooks Online users would use Journal Entries:To record non-monetary adjustments – make accruals, deferrals, and corrections. Examples include recording depreciation, amortization, unearned income and prepaid asset adjustmentsYou prefer the traditional system of accounting – entering debits and credits in a general journal or ledgerWhat Does a Journal Entry Look Like?Account – Any account on the chart of accountsDebit or Credit – Often the first line is Debit. After you save the transaction, find it in the Recent Transactions report to see if the Debit had the desired effectMemo – (Optional) This memo appears on the account reports in the Memo/Description field and will show the transaction detailsName – Choose a customer, vendor, or employee associated with the line, if anyIf the account is Accounts Payable, the Debit line must have a vendor name associated with itIf the account is Accounts Receivable, the Debit line must have a customer name associated with itIn some situations, customers want to post amounts to specific dates to match accountant or bank reports. In some cases, a customer needs a journal entry for an account credit. Based on the date of the transaction and it’s posting, a journal entry can keep the reporting correct to whatever date you choose. QuickBooks Online will mark the change of date of the original transaction. To be able to post on a specific date other than the original transaction date, they need to make a journal entry.Making a Journal EntryPull a Customer Balance Detail report for today.Go to the Reports tab and select Customer Balance Detail.If needed, scroll down to Kate Whelan’s account.Note the transaction date for today. Go to the Banking tab and More then select Journal Entry from the dropdown.Enter the Date the transaction took place. Select today’s date.Enter an Entry Number to help you identify the transaction in reports.Enter the Design Income account on the first line with a Debit of $75.00. On that same, in the Name column, find Kate Whelan.On the second line, enter the Checking Account with a credit of $75.00.Click Save.Course ConclusionThis is a large training module with many concepts and topics discussed. You explored the creating of transaction that brings money into company. You discovered how to create receipts, spend cash and enter bills. The Vendor section of this training made the important difference of paying vendors and writing checks. Business created with a customer can be accounted for using QuickBooks Online. ................
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