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Beginning QuickBooks 2010Student Guide

Jane Freund, Instructor [email protected]

Sponsored by the Idaho SBDC

www.idahosbdc.org

mailto:[email protected]

http://www.idahosbdc.org/






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QuickBooks 2010 Student Guide

Getting Started

Lesson 1



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Lesson Objectives To gain an overview of the course and the topics to be covered

To know how QuickBooks works and how you can get around in QuickBooks

To learn common business terms used by QuickBooks

To see how to exit QuickBooks



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Using FormsYou record most of your daily business transactions on a QuickBooks form, which looks justlike a paper form.

But after you provide the information on a QuickBooks form, QuickBooks does theaccounting for you in the background.

Notes



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Using ListsThe list is another basic feature. You fill out most QuickBooks forms by selecting entriesfrom a list.

QuickBooks has lists where you can store information about customers, vendors, employees,items or services you sell, and so on. Lists save you time and help you enter informationconsistently and correctly.

When you’re filling out an invoice form and you select a customer name from theCustomer:Job list, QuickBooks not only fills in the name but also fills in the address, the payment terms, and the customer’s sales tax, based on the information previously enteredabout that customer.

Here’s an example of the Customers & Jobs list in the Customer Center.

Notes



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Using RegistersRegisters contain a record of all the activity in one account.

Just as you use your paper checkbook register to see a record of all the transactions in yourchecking account—checks you’ve written, other withdrawals you’ve made from youraccount, and deposits—a QuickBooks register contains a record of all the activity in oneaccount. Almost every QuickBooks account has its own register.

Here’s an example of the register for an accounts receivable account.

Notes



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Getting Around in QuickBooks Manage your open windows: QuickBooks displays one window at a time.

Using the menu bar: You can find all commands on the menu bar.

Using the icon bar: The icon bar allows you to manage your business more quicklyand provides quick access to the Centers.

Making the Home page your starting point: The Home page provides a graphicalrepresentation of the workflow, organized into logical groups.

Getting an overview of your company: The Company Snapshot gives you real-timeinformation about how your company is doing and provides a location where you cankeep track of the tasks you need to perform.

Notes



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All the Accounting You Need to KnowAbout the chart of accounts:

Chart of accountso The chart of accounts is a complete list of your business’ accounts and their

balances

When you keep books for a company, you want to track:o Where the income comes fromo Where you put ito What the expenses are foro And what you use to pay them

You track this flow of money through the chart of accounts

Notes



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All the Accounting You Need to KnowAbout assets, liabilities, and equity:

Assetso Include what you have and what people owe youo The money people owe you is called your accounts receivable, or A/R for

short. QuickBooks uses an accounts receivable account to track the moneyowed you.

o The rest of your company’s assets may include checking accounts, savingsaccounts, petty cash, fixed assets (such as equipment or trucks), inventory,and undeposited funds

Liabilitieso What your company owes to other peopleo The money you owe for unpaid bills is your accounts payable, or A/P for

short. QuickBooks uses an accounts payable account to track the money youowe different people for bills.

o A liability can be a formal loan, an unpaid bill, or sales and payroll taxes youowe to the government.

Equityo Equity is the difference between what you have and what you oweo Equity = Assets – Liabilities

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All the Accounting You Need to KnowCash versus accrual bookkeeping:

Cash basiso Income is recorded when money (sales) is received and expenses when money

(bills) are paid

Accrual basiso Income is recorded when at the time of the sale and expenses when you

receive the bill

Important : When you create reports in QuickBooks, you can switch between cash andaccrual reports at any time, regardless of which bookkeeping method you have chosen for tax purposes.

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All the Accounting You Need to KnowMeasuring business profitability

The balance sheeto A snapshot of your company on one date. It shows:

What you have (assets) What people owe you (accounts receivable) What your business owes (liabilities and accounts payable) The net worth of your business (equity)

The profit and loss statemento A profit and loss statement or income statement shows income, expenses, and

net profit or loss

Statement of cash flowso Shows receipts and payments during a specific accounting period

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All the Accounting You Need to Know

General journal transactions: Traditional accounting method Known as double-entry accounting Total amount in the Debit column equals the total amount in the Credit column Each amount is assigned to an account in the chart of accounts To view the journal entry for a transaction, select the transaction and press Ctrl-Y Modify the report and choose to display the Credit and Debit columns

Notes



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Exiting QuickBooks

Unlike most other Windows programs, QuickBooks doesn’t require you to save your data before exiting. It does an automatic save while you’re working with QuickBooks and every

time you leave the program.

To exit QuickBooks, from the File menu, choose Exit .

To prevent or minimize data loss, you should make regular backup copies of yourQuickBooks company data. In the event of a data loss you can restore your data from the backup copy.

To make a backup copy, from the File menu, choose Save Copy or Back Up .

Notes



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Lesson 1: Getting startedReview questions

1. List the three main ways you enter data in QuickBooks. ________________________, ________________________, ________________________

2. List three ways to access features in QuickBooks. ________________________, ________________________, ________________________

3. What bookkeeping method does QuickBooks use to create most reports?

_____________________________4. Which of the following would you not include in the chart of accounts?

a Checking accountb Vendor recordc Depreciation expensed Accounts payable

5. Which of the following is an asset?a Accounts Payable

b Accounts Receivablec Company delivery vand Both a and be Both b and c

6. Checking, savings, and petty cash should be set up as which of the following accounttypes in QuickBooks?a Expenseb Other current assetc Bankd Equity

7. Which of the following best describes a balance sheet?a A summary of a company’s finances over the past yearb A financial snapshot of a company at a specific point in timec A summary of a company’s revenue and expenses for a fiscal yeard None of the above



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Review activities

1. Run the Balance Sheet Standard report from the Reports menu.

2. Use the Report Center to generate the Profit and Loss Standard report.3. Open the Vendor Center and select Cal Gas & Electric. Open the journal entry for the

check dated 11/25/2007. How much is the amount in the Debit column and to whichaccount is it assigned? How much is the amount in the Credit column and to whichaccount is it assigned?



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Answers to review questions

1. List the three main ways you enter data in QuickBooks.

Forms, lists, registers

2. List three ways to access features in QuickBooks.

Menu bar, Icon Bar, Centers, Home page

3. What bookkeeping method does QuickBooks use to create most reports?

Accrual, but you can see any report (except transaction reports) on a cash basis bychanging the reporting preference.

4. Which of the following would you not include in the chart of accounts?a Checking accountb Vendor record

c Depreciation expensed Accounts payable

5. Which of the following is an asset?a Accounts Payableb Accounts Receivablec Company delivery vand Both a and b

e Both b and c

6. Checking, savings, and petty cash should be set up as which of the following accounttypes in QuickBooks?a Expenseb Other current asset

c Bank d Equity

7.

Which of the following best describes a balance sheet?a A summary of a company’s finances over the past yearb A financial snapshot of a company at a specific point in time c A summary of a company’s revenue and expenses for a fiscal yeard None of the above



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Setting Up

Lesson 2



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Lesson Objectives To discuss decisions that must be made before using QuickBooks

To create a new QuickBooks company using the EasyStep Interview

To set QuickBooks preferences in the Interview

To record the opening balance for a checking account

To enter customers, jobs, vendors, accounts, and items

To practice using the QuickBooks Help tools

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Creating a QuickBooks CompanyA QuickBooks company contains all the financial records for a single business. Before youcan use QuickBooks, you need to tell QuickBooks about your business so that it can set upyour company file.

EasyStep Interview walks you through setting up your business:

o Company Informationo Chart of accounts based on your industryo Company organizationo Sales informationo Sales tax informationo Estimateso Sales receiptso Preferenceso Business start dateo Creating an account and entering the opening balanceo Reviewing the chart of accountso Completing company file setup

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Starting the EasyStep InterviewTo begin adding a new company:

Start QuickBooks.

8. Select Create a new company or choose New Company from the File menu.QuickBooks displays the EasyStep Interview window.

Notes



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Entering Company InformationTo create a new QuickBooks company file:

At the Welcome window for the interview, click Start Interview to begin.

9. In the Company Name field, type Lockhart Design and press Tab.

10. Press Tab again and type 94-1234567 as the Tax ID number.

Notes



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Entering Company Information11. Type the following information in the Street address, City, State, and Zip fields:

1239 Bayshore Road

Middlefield, CA 94432

12. Now enter the following information in the Phone and Fax fields:

Phone: 650-555-1234 Fax: 650-555-5678

13. Next enter the email and Web addresses for Lockhart Design.

Email: [email protected] Web site: [email protected]

14. Click Next .

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Using a Preset Chart of AccountsTo choose your company industry to create a chart of accounts:

In the “Select your industry” window, scroll down the list and select Retail Shop orOnline Commerce from the industry list.

15. Click Next .

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Selecting How Your Company Is OrganizedTo select your company organization:

Click Sole Proprietorship to select it.

16. Click Next .QuickBooks needs to know the starting month of your fiscal year.

17. Since Lockhart Design’s fiscal year started in January, leave January selected andclick Next .

18. In the Set up administrator password window, click Next .

19. Click Next to save the company file.

20. Make sure that QuickBooks is set to save the file in the QBTrain folder you set up inthe first lesson.

21. In the “Filename for New Company” window, select Save to accept the default

filename of “Lockhart Design.”

Notes



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Indicating What You SellYou need to indicate what your business sells. In general, businesses either sell products orservices, or both. Margaret Lockhart provides consulting services as well as selling products,such as fabrics.

To indicate what you sell:

Click Next in the “Customizing QuickBooks for your business” window.

On the “What do you sell?” window, click Both services and products .

22. Click Next .

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Entering Sales InformationFor retail companies, you need to indicate how you want to enter sales. QuickBooks uses thisinformation to set recommendations for a retail-type business. Margaret Lockhart does not doretail sales on a daily basis, so she will record her sales as they occur.

To indicate how you enter sales:

On the “How will you enter your sales in QuickBooks?” window, click Record each saleindividually .

23. Click Next .

24. On the “Do you sell products online?” window, click I don’t sell online and I amnot interested in doing so .

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Entering Sales Tax InformationYou should turn the sales tax setting off only if you never charge sales tax. Margaret Lockharttypically charges sales tax, so we’ll turn on sales tax in her company file.

To setup QuickBooks to track sales tax:

Click Next to move to the “Do you charge sales tax?” window.

Click Yes for the question, “Do you charge sales tax?” Then clickNext .

QuickBooks automatically creates a current liability account, called Sales TaxPayable, that keeps track of the sales tax you collect in your business.

Notes



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Creating Estimates

If you provide any type of estimate or bid—even a verbal quote—there are many reasons touse estimates in QuickBooks.

Prepare professional-looking itemized estimates, bids, quotes, or proposals for yourcustomers.

Create an invoice from the estimate with just one click. QuickBooks then creates aninvoice using information from your estimate.

Create reports that compare your estimated costs and revenue against your actualcosts and revenue.

Compare your actual costs against what you estimated. Track which estimates are still active and easily update each estimate as you continue

to negotiate with your customers.

To create estimates for your business:

On the “Do you want to create estimates in QuickBooks?” window, click Yes .

Click Next .

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Using sales ordersIf your customers sometimes place orders for items that you don't have in stock or are not yetready to invoice for, use a sales order in QuickBooks to track the sale.

To set up sales orders:

On the “Tracking customer orders in QuickBooks” window, click Yes .

Click Next .

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Using Sales Receipts

If your customers pay you in full at the time of purchase, use a sales receipt in QuickBooksto track the sale.

You can use a sales receipt to: Track each sale Calculate sales tax Print a sales receipt Create a summary of sales income and sales tax owed Summarize daily or weekly sales on a sales receipt

To set up sales receipts:

On the “Using sales receipts in QuickBooks window, click No.

Click Next .

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Choosing a Start Date

The start date is the date for which you give QuickBooks a financial snapshot of yourcompany assets and liabilities.

To choose a start date:

On the “Using Accounts in QuickBooks” window, click Next .

25. On the “Select a date to start tracking your finances” window, select “Use today’sdate or the first day of the quarter or month.”

26. Enter 12/31/2008 and then click Next .

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Entering Opening BalancesThe balance sheet accounts in the QuickBooks chart of accounts start with an opening balance of zero. Before you begin working in QuickBooks, you need to enter an opening balance for each balance sheet account as of your start date.

To enter the checking account opening balance:

On the “Add your bank account” window, make sure Yes is selected and then click Next .

Type Checking as the name of the account.

For “When did you open this bank account?,” click Before .

27. Click Next .

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Entering Opening BalancesFor Statement Ending Date, type 12/28/2007 .

In the Statement Ending Balance field, type 8359.00 .

28. Click Next .

29. When QuickBooks asks if you want to add another bank account, click No. Thenclick Next .

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Reviewing the Chart of AccountsThe chart of accounts is made up of five types of accounts common to all businesses—theincome and expense accounts used by the Profit and Loss Statement, and the asset, liability,and equity accounts used by the Balance Sheet. Each time you enter a transaction,QuickBooks will prompt you to categorize it into one of these five types of accounts.

Because you chose an industry from the list earlier in the Interview, QuickBooks has alreadycreated income and expense accounts for your company.

To review the chart of accounts:

In the “Review income and expense accounts” window, scroll through the presetaccounts to get an idea of what is included.

Click Next .

Notes



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Finishing the Interview To leave the EasyStep Interview and save your changes, clickFinish .

After you have completed the EasyStep Interview, use the information in the help optionsdescribed later to help you make changes and adjustments to your company file.

Next, you’ll complete the company file setup.

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Adding CustomersIn order to bill customers with QuickBooks, you need to add your customers.Note : You can also add customers and vendors as you perform everyday tasks. For example,if you enter the name of a new customer when filling out an invoice, QuickBooks will prompt you to enter information about this customer. You can choose from two quick setupoptions: Quick Add and Set Up. Quick Add adds the name to the list and you add detailslater. Set Up lets you enter the details right away.

To add a customer:

First, close the QuickBooks Learning Center and the QuickBooks Coach, if either isopen.

Click Customer Center in the icon bar.

Click the New Customer & Job menu button, and then choose New Customer .

In the Customer Name field, enter the name of the customer as you'd like it to appear onyour Customers & Jobs list. For this exercise, type Smith, Lee , and then press Tab.

30. Press Tab in the Opening Balance field to leave this field blank.

For now, leave this field blank. Lockhart Design is planning to set up one or more jobs for this customer. QuickBooks will calculate and track the overall balance forthis customer from the balances you enter for the individual jobs.

31. In Address Info tab, click in the First Name field and typeLee .

32. Press Tab and type M . as the middle initial and in the Last Name field, type Smith .

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Adding Customers33. Press Tab to go to the Address field, and then press Enter after Lee M. Smith.

Type 43 Hampshire Blvd and press Enter.

Type East Bayshore, CA 94327 .34. Click the Copy button to copy the address to the Ship To field. Click OK in the Add

to Ship To Address Information window.

35. Click OK to add this customer.

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Adding a Job39. Click the Job Info tab and choose In Progress from the Job Status drop-down list.

Job status information is for your records—it gives you a way to keep track of each

job.

40. For the Start Date, type 12/15/08 and press Tab.

41. In the Projected End date, type 3/15/09 and press Tab.

42. Click OK .

43. If you see a message about a past or future transaction, click Yes to save thetransaction.

The job now appears under Smith, Lee in the Customers & Jobs list.

44. Close the Customer Center.

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Setting Up Additional AccountsDuring the EasyStep Interview, you added one checking account for Lockhart Design.

There are two basic types of accounts:

Balance sheet accounts, such as savings or checking

Accounts used to group transactions for reporting purposes, such as income andexpense accounts

Income and expense accounts track the sources of your income and the purpose of eachexpense. When you record transactions, you usually assign the amount of the transaction toone or more income or expense accounts.

Notes



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Setting Up Additional AccountsIn the EasyStep Interview, you selected “Retail Shop or Online Commerce” as the industryfor Lockhart Design. QuickBooks created a chart of accounts based on the retail industry.However, Margaret Lockhart also receives income from design consulting. She needs tomodify the chart of accounts to add an income account for consulting.

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Setting Up Additional AccountsYou may need to add one or more of the following accounts:

Income accounts to track new sources of income

Expense accounts to track new types of expenses

Bank accounts when you open new checking, savings, or money market accounts atyour bank

Credit card accounts when you acquire new credit cards

Other kinds of balance sheet accounts to track specific assets, liabilities, or equity

A complete list of your business’ accounts and their balances appear in the chart of accounts.

You use a chart of accounts to track how much money your company has, how much moneyit owes, how much money is coming in, and how much is going out.

For Lockhart Design, you’ll add an income account for her consulting income.

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Setting Up Additional AccountsTo add an income account:

From the Lists menu, choose Chart of Accounts .

Click the Account menu button and choose New.

In the Add New Account window, choose Income and then click Continue .

Click in the Account Name field, and typeConsulting .

From the Tax Line Mapping drop-down list, choose Sch C: Other business income .

54. Click Save & Close , and then close the Chart of Accounts.

Notes



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Adding ItemsIn QuickBooks, an item is anything that your company buys, sells, or resells in the courseof business, such as products, shipping and handling charges, discounts, and sales tax (ifapplicable). You can think of an item as something that shows up as a line on an invoiceor other sales form.

QuickBooks provides several different types of items. Some—such as the service item orthe inventory part item—help you record the services and products your business sells.Others—such as the subtotal item or discount item—are used to perform calculations onthe amounts in a sale.

For Lockhart Design, you’ll set up a service item for billing the time used for initialconsultation for a design project. You’ll assign it to the new Consulting income account.

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Adding ItemsTo add an item:

From the Lists menu, choose Item List .

55. Click the Item menu button, and choose New .

56. In the New Item window, choose Service from the Type drop-down list.

57. Click in the Item Name/Number field and type Initial Design Consultation .

58. In the Description field, type Initial design consulting .

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Adding Items59. Click in the Rate field, and type 40.

60. In the Tax Code field, choose Non-Taxable Sales from the drop-down list.

61. In the Account field, choose Add New .62. In the Add New Account screen, enter Consulting in the Account Name field, then

click Save and Close.

63. Click OK to add the new item to the Item List.

64. Close the Item List.

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Entering Historical TransactionsIf your QuickBooks start date is before today’s date, you need to enter past transactions sothat you have complete financial records from the start date forward. It is important to enterhistorical transactions in this order:

1. All sales (sales receipts, invoices, or statement charges)

2. Customer payments received for outstanding invoices after the start date

3. Bills received since the start date

4. Bills paid since the start date

5. Deposits made to any of the accounts since the start date

6. Any other checks written (other than bills) since the start date

Notes



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Getting Help While Using QuickBooksQuickBooks provides extensive help in various formats. When you have questions,QuickBooks provides:

• Onscreen Help to provide conceptual information and step-by-step instructions.• Tutorials on key tasks. These are available by choosing Learning Center Tutorials

from the Help menu.• Live Community to provide instant access to frequently asked questions and experts

who can answer your own questions.

The onscreen Help provides several different types of information:

• Conceptual explanations of how to apply QuickBooks to your particular businesssituation.

• Step-by-step instructions.• A search engine that provides you with a list of topics related to the word or phraseyou enter.

• Information relevant to the task you are currently performing.

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Getting Help While Using QuickBooksTo find a topic in onscreen Help:

From the Help menu, choose QuickBooks Help .

Click the Search tab.

Type customers and click the arrow button.

QuickBooks Help displays a list of topics related to customers.

65. Click Edit or change customer information .

QuickBooks displays the topic in the screen lower portion of the help window.



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66. Close the Help window.

Notes



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Lesson 2: Setting Up QuickBooksReview questions

1. During the EasyStep Interview, QuickBooks creates income and expense accounts basedon your company’s ____________________

2. When setting up a company file in QuickBooks, what does the Start Date signify?

a The date the business was createdb The first date of the company’s fiscal yearc The date the company purchased QuickBooksd The date from which you will be entering transactions in QuickBooks

3. When setting up a company file in QuickBooks at the beginning of a fiscal period, you

would normally select which of the following as the start date?a The first day of the current fiscal periodb The last day of the previous fiscal period

4. True or false: Once you have set up the chart of accounts, you cannot add, delete, ormodify accounts.

a Trueb False

5.

Before working in QuickBooks, you need to enter an ______________ ____________for each account.

6. True or false: Choosing a company organization associates a tax form with your businessin the QuickBooks file.

a Trueb False

7. In QuickBooks, linking income and expense accounts with tax lines does which of thefollowing?

a Helps keep your company profitableb Helps in preparing income taxesc Helps keep track of sales taxes you owed Both B and C



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Review activities

1. Turn on class tracking in the company file you created in this lesson.

2. Display a Help topic on using class tracking. Explain when and why you might wantto track classes.



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1. During the EasyStep Interview, QuickBooks creates income and expense accounts basedon your company’s industry .

2. When setting up a company file in QuickBooks, what does the Start Date signify?

a The date the business was createdb The first date of the company’s fiscal yearc The date the company purchased QuickBooksd The date from which you will be entering transactions in QuickBooks

3. When setting up a company file in QuickBooks at the beginning of a fiscal period, youwould normally select which of the following as the start date?

a The first day of the current fiscal periodb The last day of the previous fiscal period

4. True or false: Once you have set up the chart of accounts, you cannot add, delete, ormodify accounts.a True b False

5. Before working in QuickBooks, you need to enter an opening balance for each account.

6. True or false: Choosing a company organization associates a tax form with your businessin the QuickBooks file.

a True b False

7. In QuickBooks, linking income and expense accounts with tax lines does which of thefollowing?

a Helps keep your company profitableb Helps in preparing income taxes

c Helps keep track of sales taxes you owed Both B and C



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Working with Lists

Lesson 3



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Lesson Objectives To edit the company chart of accounts

To add a new customer to the Customers & Jobs list

To add a new vendor to the Vendor list

To learn about custom fields, and to practice adding custom fields

To see how to manage lists in QuickBooks

Notes



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Using QuickBooks ListsQuickBooks lists organize a wide variety of information, including data on customers,vendors, inventory items, and more. Lists save you time by helping you enter informationconsistently and correctly. Such as:

Names, addresses and other information about customers

Contact information for vendors

Descriptions and prices for products and services

Notes



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Editing the Chart of AccountsThe chart of accounts is your most important list because it shows how much your businesshas, how much it owes, how much money you have coming in, and how much you’respending.

To display the chart of accounts:

67. From the Lists menu, choose Chart of Accounts .

68. Scroll through the list.

The Chart of accounts displays balance sheet accounts first, followed by income andexpense accounts.

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Editing an AccountTo edit an account:

In the chart of accounts, select Checking .

Click the Account menu button, and then select Edit Account .

In the Description field, type Great Statewide Bank .

69. Click Save & Close .

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Adding a SubaccountTo add a subaccount:

In the chart of accounts, click the Account menu button and then chooseNew .

QuickBooks displays the Add New Account: Choose Account Type window.

70. Select Expense .

71. Click Continue .

72. In the Account Name field, type Trade Pubs .

73. Select the “Subaccount of” checkbox, and then selectDues and Subscriptions .

74. In the Description field, type Trade Publications .


QuickBooks displays the new subaccount.

76. Close the chart of accounts.

Notes



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Working with the Customers & Jobs ListThe Customer Center stores names, addresses, and other information about your customers.It also holds information about the jobs or projects you may want to track for each customer.

To add new customers:

Click Customer Center in the icon bar.

77. Click the New Customer & Job menu button (at the top of the Customer Center),and select New Customer .

78. In the Company Name field on the Address Info tab, type Godwin Manufacturing ,and then press Tab.

79. In the Bill To field, click at the end of the line below the company name and pressEnter.

80. Type 376 Pine Street , and then press Enter.

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Working with the Customers & Jobs ListThe Additional Info tab is where you can provide other important information, such ascustomer type (if you want to categorize your customers in some way), payment terms, andsales tax information.

To add additional information to a customer record:

Click the Additional Info tab.

In the Type field, type Industrial .

Press Tab.

Click the Quick Add button to add the customer type to the list.

In the Terms field, type Net 30 .

In the Tax Code field, selectNon

.In the Tax Item drop-down list, select Out of State .

Notes



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Working with the Customers & Jobs ListThe Payment Info tab is where you enter customer account numbers and credit limits. Youcan also record information about each customer’s preferred payment method. For customerswho pay by credit card, you can enter credit card numbers and expiration dates.

To add payment and credit information to a customer record:

Click Payment Info .

In the Credit Limit field, type 2000.

In the Preferred Payment Method drop-down list, choose Check .

85.

ClickOK

to add the customer and close the New Customer window.86. Close the Customer Center.

Notes



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Working with the Employee CenterTo add a new employee:

Click Employee Center in the icon bar.

87. Click New Employee at the top of the Employee Center.

88. In the First Name field, type Marlene .

89. In the Last Name field, type Duncalf , and then press Tab.

90. In the SS No. field, type 123-45-6789 .

91. In the Gender field, select Female .

Notes



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Working with the Employee Center

92. In the Date of Birth field, type 7/18/82 .

93. Click the Address and Contact tab.

94. In the Address field, type 195 Spruce Avenue, #202 .

95. For the City, State, and Zip fields, type Bayshore, CA 94326 .

96. In the Phone field, type 415-555-1111 .

97. In the Change tabs field, select Employment Info .



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Working with the Employee Center

98. In the Hire Date field, type 11/26/2007 .

99. Click OK .

100. When QuickBooks asks if you want to set up payroll information, click LeaveAs Is .

QuickBooks updates and displays the Employee list with the new employee’s nameadded.

101. Close the Employee Center.

Notes



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Working with the Vendor Center

The Vendor Center is where you record information about the companies or people fromwhom you buy goods or services.

To add a new vendor:

Click Vendor Center in the icon bar.

102. Click New Vendor at the top of the Vendor Center.

103. In the Vendor name field, type Hughes Electric .

104. In the Company Name field, type Hughes Electric , and then press Tab.

105. Click in the Name and Address field, after the company name displayed on

the first line, and press Enter.106. On the second line of the Address field, type P.O. Box 2316 .

Notes



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Working with the Vendor Center107. Press Enter to move to the next line.

108. Type Middlefield, CA 94432 .

109. In the Contact field, type David Hughes .110. In the Phone field, type 510-555-6666 .

111. In the Fax field, type 510-555-6667 .

Notes



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Providing Additional Vendor InformationThe Additional Info tab in the New Vendor window is where you can enter a vendor type (ifyou want to categorize your vendors), payment terms, your credit limit, the vendor’s taxidentification number, whether this vendor is eligible for a 1099 form, and your opening balance.

To add information to a vendor record:

Click the Additional Info tab.

In the Account No. field, type 123-445 .

In the Type field, type Subcontractors .

In the Terms field, choose 2% 10 Net 30 .

In the Credit Limit field, type 2000 and press Tab.

Click OK .

112. Close the Vendor Center.



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Adding Custom Fields

116. In the next blank Label field, type Date of last review .

117. Click the Employees checkbox to select it.

118. Click OK .

119. If you see an informational message, click OK .120. In the Pager Number field, type 415-555-9876 .

121. Click OK to close the Edit Customer window.


Notes



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Adding Custom FieldsTo add custom fields for items:

From the Lists menu, choose Item List .

In the Item list, select Lk Doorknobs .

Click the Item menu button, and then choose Edit Item .

Click Custom Fields .

Click Define Fields .

In the “Use” column, click the first blank checkbox to select it. Then typeStyle in theLabel field.

123. Click OK to close the window.

124. In the “Custom Fields for Lk Doorknobs” window, type Round in the Stylefield.

125. Click OK to close the Custom Fields for Lk Doorknobs window, and thenclick OK to close the Edit Item window.

126. Close the Item list.

Notes



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Managing ListsTo sort a list manually:


127. Click the diamond to the left of the Owner’s Draw subaccount of Owner’sequity.

128. Click and hold the mouse button, and drag the pointer upward until you see adotted line directly below Owner’s Equity.

129. Release the left mouse button.

130. To re-sort the list alphabetically, click the Account menu button, and selectRe-sort List .

131. Click OK .


Notes



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Managing ListsTo sort a list in descending order:

Click Customer Center on the icon bar to display the Customer Center and Customers &Jobs List.

133. Click the arrow to the right of the View drop-down list to expand theCustomers & Jobs list.

134. Click the Balance Total column heading.

135. Click the column heading again.

136. To return to the order you started with, click the large diamond to the left of

the Name column heading.137. Click the collapse arrow to the right of the window to collapse the Customers

& Jobs list.


Notes



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Managing ListsIn most lists, you can combine two list items into one. For example, you may find that you’ve been using two customers (because of different spellings) when you really need only one onyour Customers & Jobs list. You can merge list items in the Chart of Accounts, Item,Customers & Jobs, Vendor, Employee, and Other Names lists.

To merge items on a list:

From the Vendors menu, choose Vendor Center .

Double-click the entry for Hughes Electric.

In the Vendor Name field, type C.U. Electric .

Click OK .

Click Yes .

Close the Vendor Center.

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Managing ListsYou can rename any list item. When you make the change, QuickBooks automaticallymodifies all existing transactions containing the item.

To rename a list item in the chart of accounts:

From the Lists menu, choose Chart of Accounts to display the chart of accounts forRock Castle Construction.

In the chart of accounts, select Checking .

Click the Account menu button, and choose Edit Account .

In the Account Name field, type Master Checking Account .

Click Save & Close .

Close the chart of accounts.

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Managing ListsYou can delete list items if you have not used them in any transactions. If you try to delete alist item that is used in a transaction, QuickBooks displays a warning that the item can’t bedeleted. If you don’t want to use a list item but you can’t delete it, you can make it inactive.

To make a list item inactive:

On the Home page, click the Customers button (left side of the Home page).

Select Milner, Eloyse in the list. (Select her name, not the job.)

Right-click the name and choose Make Customer:Job Inactive .

To see inactive list items, choose All Customers from the View drop-down list.

Leave the Customer Center open.



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Managing ListsYou can print a QuickBooks list for reference, or you may print a list to a file to use in yourword processor or spreadsheet. QuickBooks prints the Customers & Jobs list as it appears onthe screen. For example, if the Customers & Jobs list is expanded and sorted by balance total,QuickBooks prints the expanded list sorted by balance total; if the list is collapsed,QuickBooks prints just the customer name, the balance total, and active status.

To print the Customers & Jobs list:

In the Customer Center, click the Print menu button, and then choose Customer & JobList .

Click OK to bypass the List Reports message.

Click Print .

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Managing ListsTo print information on one customer:

In the Customers & Jobs list, select the customer whose details you want to print.

Click the Print menu button, and then choose Customer & Job Information .

Click Print .

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Managing ListsIf you want to print information for selected customers only, you can generate and filter theCustomer Contact report for those customers. You can also modify the report to include thecolumns that you want.

To print information for selected customers:

From the Reports menu, choose List , and then choose Customer Contact List from thesubmenu.

Click Modify Report .

Click the Filters tab.

Select Customer in the Filter list.

In the Customer field, choose Multiple customers/jobs .

Make sure Manual is selected then click to put a checkmark next to those customers forwhich you want to print contact information.

Click OK to close the Select Customer:Job window.

Click OK to close the Modify Report window.

Print the report.

Notes



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Lesson 3: Working with ListsReview questions

How many custom fields can you set up for items?a 4b 5c 7d 20

139. Which of the following forms and windows could potentially be populatedwith information from the Vendor list?

a Purchase ordersb Billsc

Write Checksd All of the above

140. Which of the following activities cannot be accessed from the Customers &Jobs list in the Customer Center?

a Create statementsb Assess finance chargesc Enter credit card chargesd Receive payments

141. On which tab of the Edit Customer window would you enter a customer’s

payment terms (for example, Net 30 Days)?a Address Infob Additional Infoc Payment Infod Job Info

142. A customer has three warehouses and you are installing an overhead door ateach location. The best way to track this in QuickBooks would be to:

a Set up each location as a separate customerb Set up a separate job for each location under the customer

c Enter all work as one order under the customerd Use a custom field to track each location



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143. Products you sell would appear on which of the following lists?

a Vendor listb Employee listc Chart of Accountsd Item list

144. A subcontractor would appear on which of the following lists?

a Vendor listb Employee listc Customers & Jobs listd Item list

145. Name at least three lists on which you can merge items.

a ________________________________________b ________________________________________c ________________________________________

146. True or false: You can delete list items that are used in transactions.

a Trueb False



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Review activitiesAdd the following customer using the data below:

- Customer Name: Alla Rozenvasser

- Opening Balance: $234.00- Company Name: Rozenvasser Advertising- Contact: Alla Rozenvasser- Bill to: 300 Main Street, Suite #3, Middlefield, CA 94432- Phone: 415-555-6767- Fax: 415-555-9090- Alt. Contact: Shannon Stubo- Type: Commercial- Credit Limit: $2500- Terms: Net 15- Tax Item: San Domingo

147. Add a new vendor using the data below:

- Vendor: Martin Drywall- Contact: Sean D. Martin- Address: P.O. Box 76, Middlefield, CA 94432- Phone: 555-5432- Fax: 555-6565- Account: 082-4343- Type: Subcontractors- Terms: Net 30- Credit Limit: 1,000.00

148. In the Customers & Jobs list, select Ecker Designs. Answer the followingquestions:

a What is the job status for Ecker Designs’ office repairs?b What is the number of the most recent invoice and how much was it?c What happened on December 11th?

149. In the Vendor Center, locate sales tax payment transactions. Answer thefollowing questions:

a Who is the vendor?b How many payments have been made?c What is the total amount of payments that have been made?



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How many custom fields can you set up for items?

a 4b 5

c 7d 20

153. Which of the following forms and windows could potentially be populatedwith information from the Vendor list?

a Purchase ordersb Billsc Write Checks

d All of the above

154. Which of the following activities cannot be accessed from the Customers &Jobs list in the Customer Center?

a Create statementsb Assess finance chargesc Enter credit card charges

d Receive payments

155. On which tab of the Edit Customer window would you enter a customer’s payment terms (for example, Net 30 Days)?

a Address Infob Additional Info

c Payment Infod Job Info

156. A customer has three warehouses and you are installing an overhead door ateach location. The best way to track this in QuickBooks would be to:

a Set up each location as a separate customerb Set up a separate job for each location under the customer

c Enter all work as one order under the customerd Use a custom field to track each location

157. Products you sell would appear on which of the following lists?

a Vendor listb Employee listc Chart of Accounts

d Item list

158. A subcontractor would appear on which of the following lists?



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a Vendor list b Employee listc Customers & Jobs listd Item list

159.

Name at least three lists on which you can merge items.a Chart of accountsb Itemc Customer & Jobs

d Vendor e Employee f Other Names

160. True or false: You can delete list items that are used in transactions.

a Trueb False



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Working with Bank Accounts

Lesson 4



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Lesson Objectives To learn how to work with registers for QuickBooks bank accounts

To demonstrate how to open a register

To learn the features common to all registers

To learn when and how to make entries directly in the register

To demonstrate how to reconcile a QuickBooks bank account

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Writing a QuickBooks CheckTo write a check:

161. In the Banking area of the Home page, click Write Checks .

162. Select the To be printed checkbox.

163. In the Pay to the Order of field, type Cal Telephone .

164. Press Tab to move to the Amount field.

165. Type 156.91 , and press Tab.

166. Click in the Account column on the Expenses tab, and then choose Utilities:Telephone .


168. From the Banking menu, choose Use Register .

169. Click OK to accept Checking as the account whose register you want to see.

170. Close the Checking account register.

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Using Bank Account RegistersTo open a register (when no form is open):


In the chart of accounts, double-click the Savings account.

Review features common to all registers: The register shows every transaction that affects an account’s balance and lists

them in chronological order. The columns in the register give specific information about the transaction. On every transaction line, QuickBooks shows the account’s running balance.

171. Close the Savings register window.

172. Close the Chart of Accounts.

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Entering a Handwritten CheckSometimes you need to write a check on the spot for items you did not plan to purchase.QuickBooks lets you write the check, and then enter it later in the checking account registeror on the check form.

To enter a handwritten check in the checking account register:

From the Banking menu, choose Use Register .

Click OK to accept Checking.

Click in the Number field in the blank transaction at the bottom of the register, thendouble-click to highlight the number that QuickBooks prefills.

Type 1204, then press Tab.

In the Payee field, type Bayshore Office Supply , and then press Tab.

Click Quick Add .

173. Keep Vendor selected and click OK .

Notes



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Transferring Money Between AccountsTo transfer money:

From the Banking menu, choose Transfer Funds .

In the Transfer Funds From field, choose Checking .In the Transfer Funds to Field, choose Savings .

In the transfer Amount field, type 5000.


Click OK at the message because the money has already been transferred in person.

Notes



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Marking Cleared TransactionsTo begin reconciling an account, you need to tell QuickBooks which account you want toreconcile. Then you can provide information from the top part of your bank statement.

To reconcile your account:

From the Banking menu, choose Reconcile .

In the Account field, make sure Checking is selected.

In the Statement Date field, type12/15/2007 .

In the Ending Balance field, type 34592.98 .

In the Service Charge field, type 14.00.In the Service Charge Date field, type 12/15/2007 .

Click Continue .

Select Mark All .

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Marking Cleared Transactions179. In the Checks, Payments and Service Charges section, click to clear the

checkmarks for all items with dates later than 12/12/2007.

180. Repeat the process in the Deposits and Other Credits section–click to clear thecheckmarks for all items with dates later than 12/12/2007.

181. Click Reconcile Now .

182. In the Select Reconciliation Report window, make sure Both is selected, and

then click Display .183. Click OK at the message that QuickBooks displays.

184. Examine the two reports to see what they show and then close the reportwindows.

Notes



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Viewing Cleared Checks in the RegisterTo view cleared checks in the register:

From the Banking menu, choose Use Register .

Click OK to accept Checking .

Scroll through the register to view the cleared items.

Close the Checking account register.

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Locating Specific Transactions

You can use the QuickBooks Find command to search for specific checks you’ve written.For example, suppose you want to find all checks greater than or equal to $500.00 that

you’ve written during the current year.

To use the Find feature:

From the Edit menu, choose Find and then select the Advanced tab.

Select Transaction Type from the Choose Filter list.

Select Check from the list of transaction types.

Select Date from the Choose Filter list, and then choose This CalendarYear-to-date .

Select Amount from the Choose Filter list, and then click >=.

Enter 500.00 and click Find .

Close the Find window.

Notes



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Lesson 4: Working with Bank AccountsReview questions

What does the ending balance in a QuickBooks bank account register represent?a Only transactions that have been printedb All transactions entered in the register, including checks that haven’t yet been printed

185. What preference allows you to have QuickBooks prefill the amount from the previous transaction with a payee?

a Automatically prefill last amount for this payeeb Automatically prefill last amount for this namec Automatically recall last transaction for this named

Automatically recall previous transaction for this payee186. What preference allows you to have QuickBooks prefill the expense account

from previous transactions with a vendor?

a Automatically prefill last account for this vendorb Prefill accounts for vendor based on past transactionsc Automatically recall last transaction for this vendord Prefill accounts for this payee based on the last transaction

187. True or false: All income and expense accounts have a register associated withthem in QuickBooks.

a Trueb False

188. ________________________ is the process of making sure that yourchecking account record matches the bank’s record.

189. How can you determine whether or not a check has been cleared inQuickBooks?

a A checkmark displays in the bank account registerb The word “Cleared” is stamped on the check in QuickBooksc All of the aboved None of the above



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190. True or false: If you are tracking bills with Accounts Payable and havealready entered a bill, you should pay the bill by writing a check from the WriteChecks window.

a Trueb False

191. Which of the following might affect a bank account reconciliation?

a Interestb Depreciationc Service chargesd Both a and ce All of the above

192. When would you not want to use the Write Checks window when paying bills?

a When paying sales taxb When paying payroll taxesc When using a handwritten checkd When paying bills you track with Accounts Payablee None of the abovef Both a and bg a, b, and d



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Review activitiesUse the checking account register to enter a handwritten check for $76.95. Use the next

available check number and make the check payable to Express Delivery Service, fordelivery of a new sign. Assign the check to the Freight & Delivery expense account.

Write a QuickBooks check to Bayshore Water for $143.87 to pay this month’s water bill.Assign the check to the Utilities:Water expense account.

Find all the checks in the sample file that were written for $3000.00 and more. Howmany checks are there?



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What does the ending balance in a QuickBooks bank account register represent?

a Only transactions that have been printedb All transactions entered in the register, including checks that haven’t yet been printed

193. What preference allows you to have QuickBooks prefill the amount from the previous transaction with a payee?

a Automatically prefill last amount for this payeeb Automatically prefill last amount for this namec Automatically recall last transaction for this name

d Automatically recall previous transaction for this payee

194.

What preference allows you to have QuickBooks prefill the expense accountfrom previous transactions with a vendor?

a Automatically prefill last account for this vendorb Prefill accounts for vendor based on past transactions

c Automatically recall last transaction for this vendord Prefill accounts for this payee based on the last transaction

195. True or false: All income and expense accounts have a register associated withthem in QuickBooks.

a Trueb False. Only balance sheet accounts (excluding Retained Earnings) have registers

associated with them.

196. Reconciling is the process of making sure that your checking account recordmatches the bank’s record.

197. How can you determine whether or not a check has been cleared inQuickBooks?

a A checkmark displays in the bank account registerb The word “Cleared” is stamped on the check in QuickBooksc All of the above

d None of the above



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198. True or false: If you are tracking bills with Accounts Payable and havealready entered a bill, you should pay the bill by writing a check from the WriteChecks window.

a Trueb False You should use the Pay Bills window to write the check.

199. Which of the following might affect a bank account reconciliation?

a Interestb Depreciationc Service chargesd Both a and c

e All of the above

200. When would you not want to use the Write Checks window when paying bills?

a When paying sales taxb When paying payroll taxesc When using a handwritten checkd When paying bills you track with Accounts Payablee None of the abovef Both a and bg a, b, and d



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Using Other Accounts in QuickBooks

Lesson 5



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Lesson Objectives To introduce the other account types available in QuickBooks

To learn how to track credit card transactions in QuickBooks

To reconcile a credit card account

To see how to make a credit card payment

To discuss the different types of asset and liability accounts you can create and seehow to track assets and liabilities in QuickBooks.

To introduce the subject of equity and QuickBooks equity accounts

Notes



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Other Account Types in QuickBooksIn this lesson, you’ll learn about these types of QuickBooks Accounts:

• Credit card accountsUsed to track transactions you pay for with a credit card .

• Asset accountsUsed to track both current assets (those assets you’re likely to convert to cash oruse up within one year, such as inventory on hand) and fixed assets (such as long-term notes receivable and depreciable assets your business owns that aren’t liquid,such as equipment, furniture, or a building).

• Liability accountsUsed to track both current liabilities (those liabilities scheduled to be paid within

one year, such as sales tax, payroll taxes, and short-term loans) and long-termliabilities (such as loans or mortgages scheduled to be paid over terms longer thanone year).

• Equity accountsUsed to track owner’s equity, including capital investment, draws, and retainedearnings.

Notes



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Entering Credit Card ChargesQuickBooks lets you choose when you enter your credit card charges. You can enter creditcard charges when you charge an item or when you receive the bill. Your choice depends onwhether you like to enter information into QuickBooks incrementally or all at once. Theadvantage to entering charges when you charge an item is that you can keep close track ofhow much you owe. In addition, if the charge is for a particular job, you can keep track ofhow much you’re spending on that job.

To enter a credit card charge:

201. From the banking menu, choose Enter Credit Card Charges .

202. In the Credit Card field, select CalOil Card .

203. In the Purchased From field, select Bayshore CalOil Service .

204.

Click in the Amount Field, and then double-click to select the entire amount.205. Type 30 and then press Tab.

206. Click the Expenses tab.

207. In the detail area, click the Account column and assign the charge to theAutomobile: Fuel expense account.

208. Click Save & Close to record the transaction and close the window.

Notes



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Reconciling a Credit Card StatementTo reconcile a credit card statement:

From the Company menu, choose Chart of Accounts .

Click CalOil Card in the list once to select it.

Click the Activities menu button, and then choose Reconcile Credit Card .

In the Statement Date field, enter12/15/2007 .

In the Ending Balance field, type 101.02 .

Press Continue.

Notes



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Paying a Credit Card BillTo write a check for the bill now:

In the Write Checks window, make sure Checking is listed as the bank account.

215. Click in the Pay to the Order of field and select CalOil Company as the nameof the credit card company.

216. Click the To be printed checkbox to select it.

217. Click Save & Close to record the transaction.


Notes



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Setting Up Asset Accounts to Track DepreciationTo add subaccounts:

In the chart of accounts window, click the Account menu button, and then choose New.

229. Select Fixed Asset and click Continue .

230. In the Account Name field, type Cost .

231. Select the “Subaccount of” checkbox, and selectTrailer as the parentaccount.

232. Leave the opening balance blank.

233. Click Save & New .

234. Repeat steps 3, 4, and 5 to add a second subaccount to the Trailer fixed assetaccount. Call the subaccount Depreciation , and leave the opening balance blank.


Notes



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Entering Depreciation TransactionsTo enter a transaction for depreciation:

In the chart of accounts, select the Depreciation subaccount for the trailer.

236. Click the Activities menu button, and then choose Use Register .

237. In the Decrease column, type 1300 and press Tab. This is the depreciationamount.

238. In the Account field, select Depreciation Expense .

239. Click Record .

240. Close the register window.

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Tracking a Loan with a Long-Term Liability Account

A Long-term Liability account tracks debts that your business is not likely to pay off within ayear. The most common long-term liabilities are loans that you expect to pay off in more

than one year.

To add a long-term liability account:

In the chart of accounts, click the Account menu button, and then choose New.

241. In the Add New Account window, select Other Accounts Types and thenchoose Long Term Liability from the drop-down list.


243. In the Account Name field, type Trailer Loan .

244. Do not enter an Opening Balance.


Notes



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Tracking a Loan with a Long-Term Liability AccountBecause this is a new loan, you are either receiving money to deposit in your bank account orreceiving a new asset. In this example, you received an asset (the new trailer), so you need toshow an increase in the asset’s Cost account.

To record an increase in the asset’s Cost account:

In the chart of accounts, double-click the Trailer:Cost subaccount .

246. In the increase field, type 30,000 .

247. In the Account field, select the Trailer Loan liability account.

248. Click Record .249. Close the register window.


Notes



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Tracking a Loan with a Long-Term Liability AccountYou can enter the Trailer on the Fixed Asset Item list. Tracking fixed assets using the FixedAsset Item list enables you to record such information about an asset as purchase date and price, whether the asset was new or used when purchased, and the asset's sale price if youdecide to sell it. You can also generate customizable reports listing all your fixed assets.

To create a fixed asset item:

From the Lists menu, choose Fixed Asset Item List .

251. Click the Item menu button, and select New .

252. In the Asset Name/Number field, type Trailer .

253. Enter the following information to complete the Purchase Information section: Item is: New Purchase Description: Trailer Date: 12/15/2007 Cost: 30,000 Vendor/Payee: East Bayshore Auto Mall

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Tracking a Loan with a Long-Term Liability Account254. Enter the following information to complete the Asset Information section:

Asset Description: White trailer with company logo Serial Number: 123456789 Warranty Expires: 12/15/2010

255. Click OK.

256. From the Asset Account drop-down list, choose Trailer:Cost .

257. Click OK .

258. Close the Fixed Asset Item list.

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Tracking a Loan with a Long-Term Liability AccountWhen it's time to make a payment on a loan, use the Write Checks window to record a checkto your lender. Assign part of the payment to a loan interest expense and the remainder toloan principal.

To record a payment on a loan:

From the Banking menu, choose Write Checks .

259. In the “Pay to the Order of” field, type Great and then press Tab.

260. For the dollar amount of the check, type 500.00 .

261. Click the Expenses tab, and then click in the Account column and choose theInterest Expense: Loan Interest expense account.

262. In the Amount column highlight the amount that QuickBooks prefilled andthen type 225.00 .

263. Assign the remainder of the expense ($275.00) to the Trailer Loan liabilityaccount.

264. Click Save & Close to record the payment.

When you record the transaction, QuickBooks automatically updates the accounts affected bythis transaction:

In your checking account, QuickBooks subtracts the amount of the check from your balance.

In the expense account that tracks interest, QuickBooks enters the interest amount asan increase to your company's interest expense.

In the Trailer Loan liability account, QuickBooks subtracts the principal amount fromthe current value of the liability (reducing the amount of your debt).

Notes



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Lesson 5: Using Other Accounts in QuickBooks Review questions

Accumulated depreciation is typically set up as what type of account in QuickBooks?a A subaccount of a fixed asset accountb A subaccount of a current asset accountc A subaccount of a liability accountd An expense account

265. Equity type accounts would be used to track which of the following?

a Capital investmentsb Drawsc Retained Earnings

d All of the above266. Which of the following would likely be considered a long-term liability?

a Vehicle loanb Accounts payablec Rentd Credit card account

267. Retained Earnings is defined as which of the following?

a The amount of money that a business retains for paying its employeesb The earnings from non-essential business servicesc The amount of interest saved from paying off a loan earlyd The accumulation of a company’s net income or loss from its start date

268. Which of the following would not decrease the value of a company’s equity?

a The company paying corporate dividendsb The company incurring a net loss for the fiscal yearc An owner drawing money out of the companyd The company taking a loan out to purchase a new asset



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Review activitiesAssume that the owner of Rock Castle Construction has taken out a loan and purchased acomputer system for $15,000. He wants to track the accumulated depreciation and cost of thesystem in two separate fixed asset accounts.

Create a fixed asset account called Computer System and two subaccounts—one for Costand one for Accumulated Depreciation.

269. Create a long-term liability account to track the loan.

Enter the amount of the loan as an increase in the asset’s Cost account. Assign thetransaction to the loan liability account.



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Accumulated depreciation is typically set up as what type of account in QuickBooks?

a A subaccount of a fixed asset account b A subaccount of a current asset accountc A subaccount of a liability accountd An expense account

270. Equity type accounts would be used to track which of the following?

a Capital investmentsb Drawsc Retained Earningsd All of the above

271.

Which of the following would likely be considered a long-term liability?a Vehicle loan

b Accounts payablec Rentd Credit card account

272. Retained Earnings is defined as which of the following?

a The amount of money that a business retains for paying its employeesb The earnings from non-essential business servicesc The amount of interest saved from paying off a loan earlyd The accumulation of a company’s net income or loss from its start date

273. Which of the following would not decrease the value of a company’s equity?

a The company paying corporate dividendsb The company incurring a net loss for the fiscal yearc An owner drawing money out of the company

d The company taking a loan out to purchase a new asset



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Entering Sales Information

Lesson 6



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Lesson Objectives To learn about the different formats available for sales forms

To save sales and purchase forms in Portable Document Format (PDF)

To practice creating a new invoice

To learn the purpose and use of the QuickBooks Item list

To see how QuickBooks records the information you enter on sales forms

To memorize an invoice transaction for reuse

To add a new item to the Item list

To add a new price level to the Price Level list

To associate a price level with a customer

To create invoice letters

To generate reminder statements

To create sales orders (QuickBooks: Premier and higher)

To track backorders (QuickBooks: Premier industry editions)

Notes



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For Payment in the FutureAny time you make a sale in your business, you record it in QuickBooks on a sales form. Asales form can be an invoice (when you expect payment to come later), a sales receipt (whenyou expect payment at the time you make the sale), or a credit memo.

The type of sales form you use depends on whether you expect payment in the future or atthe time of the sale. If you expect to receive payment at some future date, you enter aninvoice.

To display a completed invoice form in QuickBooks:

274. Click the Create Invoices icon on the Home page.

275. Click Previous to display the previously created invoice.

276. Close the Create Invoices window.

Notes



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For Payment at the Time of SaleIf you receive full payment at the time you make a sale—either by cash, check, or creditcard—you fill out a sales receipt instead of an invoice. Like the invoice, the QuickBookssales receipt includes information about the items or services purchased, but it also includesinformation about how payment was made.

To display a completed sales receipt in QuickBooks:

Click Create Sales Receipts on the Home page.

If the Integrated Payment Process window appears, clickNo Thanks or Show me later.

Click Previous to view the previously entered sale.

277. Close the Enter Sales Receipts window.

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Filling in the Line Item AreaOn the bottom half of the invoice, you list each service or product you’re selling on its ownline, along with the amount the customer owes for that item. Because information aboutindividual items is on separate lines, the lines are called line items.

But items are not just products you sell or services you provide to clients. Line items can beanything you might want to put in the detail area of an invoice, like a discount, a subtotalline, a markup, or a sales tax calculation.

To complete the line item area of an invoice:

In the Item field, type the letters rem (for Removal).

278. Press Tab.

279. Type 40 in the Quantity column.

280. Press Tab to have QuickBooks update the invoice total.

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Completing the Sales FormTo complete and record the invoice:

Click the Print Preview button at the top right corner of the Create Invoices window.

Click Zoom In and use the scroll bars to see the invoice items at greater magnification.

Click Close .

In the Create Invoices window, record the sale by clicking Save & Close .

QuickBooks records the invoice in your accounts receivable register. If this were a salesreceipt, QuickBooks would record the sale in your Undeposited Funds account until youdeposit the money at the bank, or record a deposit in the bank account you specified in theEnter Sales Receipts window. (The option to select an account into which you want todeposit the payment is only available when the Sales & Customers preference “UseUndeposited Funds as a default deposit to account” is turned off.)

Notes



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Completing the Sales FormThe accounts receivable register keeps track of how much money your customers owe you.

To see the Accounts Receivable register:


281. In the chart of accounts, double-click the Accounts Receivable account.

282. Select the sale we just recorded in the register (for Doug Jacobsen).

283. Double-click the entry.

284. Keep the invoice window open, you’ll use it in the next exercise.

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Memorizing a SaleMany of the sales you make in your business are ones you repeat again and again. Forexample, you may have a standing monthly order from a customer, or you may performessentially the same services for more than one client. QuickBooks lets you memorize salesforms so that you don’t have to retype the information.

To memorize the invoice:

Make sure you have the invoice you want to memorize displayed on your screen.

285. From the Edit menu, choose Memorize Invoice .

286. In the Name field, type a description that helps you recognize the memorizedinvoice, or keep the default description QuickBooks has provided.

287. Click OK .

288. Close the Create Invoice, Accounts Receivable, and the Chart of Accountswindows.

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Memorizing a SaleWhen you memorize an invoice, QuickBooks adds it to the Memorized Transaction list.

To recall a memorized sale:

From the Lists menu, choose Memorized Transaction List .

Double-click the transaction you just added.

Click Save & Close to record the invoice.

Press the Esc key to close the Memorized Transaction list.

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Entering a New Service ItemWhen you begin using your own QuickBooks company file, you’ll need to create your ownline items to include on your invoices. In the next exercise, you’ll see how to add informationto the Item list.

To create a new service item:

From the Customers menu, choose Item List .

Click the Item menu button, and then choose New.

In the Type field, select Service from the drop-down list.

In the Item Name/Number field, type Plumbing .

Click the Subitem of checkbox to select it.

In the drop-down list below the Subitem of field, select Repairs .

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Entering a New Service Item289. In the Description field, type Plumbing repairs and maintenance and press

Tab.

290. In the Rate field, type 55.291. In the Tax Code drop-down list, select Non .

292. In the Account field, select Construction:Labor from the drop-down list.

293. Click OK to add the new item to Rock Castle Construction’s Item list.294. Close the Item list.

Notes



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Creating New Price LevelsFor each price level you create, you assign a name and percentage increase or decrease to theitem’s base sales price. You can create up to 100 price levels to use on invoices, salesreceipts, estimates, and credit memos.

To create a new price level:

From the Lists menu, choose Price Level List .

From the Price Level menu button, chooseNew.

In the Price Level Name field type Commercial .

Leave “decrease” selected in the “This price level will” field, and then type10 in the percentage field.

From the “Round up to nearest” drop-down list, choose 1.00 minus .01 .

Click OK .

Close the Price Level list.

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Using Price Levels on Sales FormsTo use a price level associated with a customer:

Make sure Lew Plumbing - C is selected in the Customers & Jobs list.

295. Click the New Transactions menu button and choose Invoices from the drop-down menu.

296. Press Tab.

297. Click in the Item column and choose Framing .

298. In the Quantity field, type 8.

299. Click below Framing in the Item field and choose Wood Door:Exterior fromthe drop-down list.

300. In the Quantity field, type 2 and then press Tab.

Notes



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Using Price Levels on Sales Forms

301. Keep the invoice open and choose Item List from the Lists menu.

302. In the Item list, go to Framing. Note that the price for framing is $55.00, butthe rate on the invoice is $49.99—10 percent less than the base sales price, rounded tothe nearest dollar minus one cent.

303. Scroll to the Wood Door:Exterior item and note that the base sales price is$120—10 percent greater than the rate listed on the invoice using the Commercial price level. It appears on the invoice as $107.99, including the discount and roundingsettings.


305. Record the invoice by clicking Save & Close .

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Assigning Price Levels to Individual Line ItemsIn addition to associating price levels with customers, you can also use price levels on anindividual basis on sales forms. The following are some examples of when you might want todo this.

You’ve associated a price level with a customer, but want to charge the base sales price for an item on a sale to that customer.

You want to use a price level for one or more items, but you don’t want to assign a price level to the customer for whom you’re recording the sale.

To apply a price to a single line item:

In a sales form with line items, click in the Rate column and select the price level youwant to use from the drop-down list that displays.

Notes



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Creating Invoice LettersTo create an invoice letter:

From the Reports menu, choose Customers & Receivables , and then choose OpenInvoices from the submenu.

In the report window, scroll down until you see the listings for Anton Teschner:SunRoom.

Double-click on the line for invoice # 60.

In the Create Invoices window, click the down arrow next to the letter and envelope iconto display the drop-down list.

Select Prepare an Invoice Letter ,

If QuickBooks prompts you to find letters, click Copy .

ChooseCover Letter

.

Click Next .

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Creating Invoice Letters306. Type Tom Ferguson in the Name field and then type President in the Title

field.

307. Click Next .308. You don’t need to save the letter for this exercise, so close the Microsoft

Word file without saving.

309. In QuickBooks, click Cancel because you don’t need to print envelopes now.

310. From the Window menu, choose Close All .

Notes



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Generating Reminder Statements Reminder statements summarize a customer's account with a company by listing recentinvoices, credit memos, and payments received. You can use reminder statements when you bill through invoices but want to remind your customers about delinquent payments.

Reminder statements are different than other “forms” in QuickBooks such as invoices, salesreceipts, or checks. Because QuickBooks already has all the information you need to createreminder statements, you don't have to fill them out. Instead, you review the information thatwill appear on each statement, decide whether to add finance charges, and print them.

To generate reminder statements:

Click Home to display the Home page, then click Statements .

In the Enter Statement Date and Type section of the window, select the All open

transactions as of Statement Date option.Click to select the Include only transactions over checkbox.

Leave the number of days past due field entry at 30.

In the Select Customers section, select All Customers .

In the Select Additional Options section, click to select theShow invoice item details onstatements checkbox.

Click Assess Finance Charges.

Click Unmark All.

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Generating Reminder Statements311. In the Assess column, click to put a checkmark in the row for the 155 Wilks

job for Pretell Real Estate.

312. Click Assess Charges .313. Answer Yes when QuickBooks displays the message telling you that finance

charges have already been assessed today.

314. Click Preview .

315. Click Close .

316. Close the Create Statements window.

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Processing Sales OrdersSales orders are not available in QuickBooks: Pro. To proceed through this exercise, youmust be using QuickBooks: Premier or a higher edition.

In this exercise, you’ll create an invoice from a sales order. You display a report to see ifthere are any open sales orders. The report shows that there is an open sales order for Lumberfor Fran Smallson. Rock Castle now has sufficient quantity on hand to fill the customer’sorder, so you can close the sales order and invoice the customer.

To create an invoice from a sales order:

From the Reports menu, choose Sales and then choose Open Sales Orders by Item .

Double-click the sales order for Decking in the report window (Sales Order #2 for FranSmallson).

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Processing Sales Orders317. In the Create Sales Orders window, click Create Invoice menu button on the

toolbar and choose Invoice .

Creating the invoice from the sales order links the sales order and invoice, whichmeans that when you invoice the customer for items on the sales order, those itemsare marked as closed.

318. Leave the Create invoice for all of the sales order(s) option selected, andclick OK .

319. Click Save & Close in the Create Invoices window.

320. Close the report window and the Report Center.

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Tracking BackordersYou must be using QuickBooks: Premier Accountant Edition, Retail Edition, Manufacturingand Wholesale Edition, or Enterprise Solutions Edition to complete this exercise.

Using certain industry-specific QuickBooks Editions, you can use sales orders to track itemsthat customers have ordered, but that are out of stock. Tracking backorders on sales orders,invoices, and other sales forms shows exactly what still needs to be shipped out. Tracking backorders on purchase orders shows what is still expected to be received from a vendor.

To create a sales order and track backorders:

On the Home page, click Sales Orders .

In the Customer:Job drop-down list, select Roche, Diarmuid:Room Addition .

Click in the Item column and select Frames:Exterior Frame from the drop-down list.

In the Ordered column, click the Availability icon.

Click Close, and then type 4 in the Ordered column.

Press Tab, and then click OK at the two messages that appear.

Type 40.00 in the Rate column.

Press Tab again to have QuickBooks update the total.

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Tracking Backorders321. In the Create Sales Orders window, click the arrow next to the Create Invoice

menu button on the toolbar and choose Invoice .

This links the sales order and invoice, which means that when you invoice thecustomer for items on the sales order, those items are marked as closed.

322. Click Create invoice for selected items and click OK .

323. Make sure 2 appears in the To Invoice column and click OK to invoice forthe two exterior frames you have in inventory.


QuickBooks creates an invoice for the two door frames in stock and puts the othertwo on backorder.

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Receiving ItemsTo receive items into inventory:

From the Vendors menu, choose Receive Items .

In the Create Item Receipts window, choose Perry Windows & Doors from the Vendordrop-down list.

Click No at the message that appears.

In the Item column, select Frames:Exterior Frame .

Press Tab twice to go to the Quantity column and type 10.

Press Tab and QuickBooks updates the amounts.


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Receiving ItemsTo fill Diarmuid’s order:

From the Customers menu, choose Create Sales Orders .

Click the Previous button to display Diarmuid’s sales order.

In the Create Sales Orders window, click the Create Invoice menu button on the toolbar.

Click Create invoice for selected items and click OK .

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Receiving ItemsMake sure 2 appears in the To Invoice column and click OK to invoice for the two

exterior frames for Diarmuid’s room addition.

325. Click Save & Close to save the invoice and close the Create Invoices window.

326.

On the Home page, click Sales Orders .327. Click the Previous button to display Diarmuid’s sales order.

Notice the sales order now indicates that it has been invoiced in full.328. Close the Create Sales Order window.

Notes



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334. From which list (or lists) does QuickBooks get the information for A, B, andC in the graphic below?

a __________________________________b __________________________________c __________________________________

335. List the item types used in the line item area of the invoice above.

_____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________

A

B

C



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Review activitiesCreate an invoice for Rock Castle Construction that uses the new Repairs:Plumbing line

item. Create the invoice for a new customer by adding information to the Customerlist “on the fly.”

Filling out a sales receipt is similar to filling out an invoice form. Create a sales receiptfor a customer of Rock Castle Construction, and select the Undeposited Funds option.(You need to select this option only if the preference to use that account as the defaultdeposit to account is not set.) After you create the sales receipt, open the UndepositedFunds account register to see the transaction QuickBooks created automatically.

Create a new price level for Rock Castle Construction for their January sales event. Youwant all the prices to be 10% off and rounded to the nearest $.95. Then, create aninvoice and add some items. Apply the January Sales Event price level and see theaffect on the price listed. How would you change the price level so that all prices arerounded to the nearest $.49?



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346. On which of the following can you not use price levels?a Invoicesb Sales receiptsc Credit memos

d Purchase orders

347. QuickBooks: Pro allows you to assign price levels to which of the following?

a Specific customersb Individual line items on sales forms

c Both a and b d None of the above

348. If a wood door costs $120.00 and you set the rounding option to 1.00 minus.11, what price would appear on an invoice for the wood door?

a $120.11b $120.89

c $119.89 d $119.11

349. True or false: Price levels affect Discount items.

a True b False (Price levels only affect Service, Inventory, Non-Inventory Part, and

Inventory Assembly items)

350. Which of the two methods described in this lesson for providing customerswith information about overdue invoices allows you to assess finance charges?

a Invoice letters b Reminder statements



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Receiving Payments & MakingDeposits

Lesson 7



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Recording Payment in Full for a Single JobIf you’re receiving payment at the time of a sale, and you fill out a sales receipt, QuickBooksrecords a customer payment. When you invoice a customer, and you receive payment later,you enter the payment in the QuickBooks Receive Payments window.

To record a payment in full:

351. From the Customers menu, choose Receive Payments .

352. In the Received From field, select Violette, Mike: Workshop from the drop-down list.


354. In the Amount field, type 4735.73 and press Tab.

355. In the Payment Method field, select Check from the drop-down list and then press Tab.

356. In the Check # field, type 6745.


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Entering a Partial PaymentTo enter a partial payment:

In the Received From field, select Ecker Designs:Office Repairs from the drop-downlist.

Press Tab to move to the Amount field, and then type 1000. Then press Tab again.

Click Un-Apply Payment .

In the Payment column, type 1000 as the amount you want to apply to the second invoice,and then press Tab.

In the Pmt. Method field, leave Check selected.

In the Check # field, type 5678.

Leave the “Leave this as an underpayment” option selected.Click Save & New to record the partial payment and clear the window.

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Applying One Payment to Multiple JobsTo apply one payment to multiple jobs:

In the Receive Payments window, select Cook, Brian from the Received From drop-down list.


359. In the Amount field, type 7812.63 and then press Tab.

360. In the Pmt. Method drop-down list, confirm that Check is selected.



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Entering OverpaymentsIf a customer sends you an overpayment, you simply enter the amount in the ReceivePayments window, and QuickBooks keeps track of the additional payment. When thecustomer has future invoices, you can apply the overpayment to those amounts—you caneven apply the credit directly to the invoice.

To enter the payment:

In the Received From field of the Receive Payments window, select Pretell RealEstate:75 Sunset Rd . from the drop-down list.

Press Tab and type 12500 in the Amount field.

Press Tab again.

Select the Refund the amount to the customer option.

Click Save & New .

In the Issue a Refund window, click OK .

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Handling Down Payments & PrepaymentsIf a customer makes a payment before you’ve invoiced him for services (for example, he may be making a down payment or paying a retainer fee), you can still record the payment at theReceive Payments window. However, because you don’t have any invoices to which to applythe payment, QuickBooks records the payment as an unused payment (just like anoverpayment).

QuickBooks holds the unapplied amount with the customer’s name. The next time you enterthat customer in the Receive Payments window, QuickBooks displays the credit amount inthe Unused Credits area. The customer’s balance also reflects the credit amount.

To enter the down payment you’ve received:

In the Received From field, select Abercrombie, Kristy:Kitchen from thedrop-down list and then press Tab.

363. Type 1000 in the Amount field and then press Tab.

364. Leave the Leave the credit to be used later option selected.

365. In the Pmt. Method field, make sure Check is selected.



368. Click OK in the message that displays.

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Handling Down Payments & PrepaymentsTo create an invoice for a customer who made a down payment:

From the Customers menu, choose Create Invoices .

In the Customer:Job field, select Abercrombie, Kristy: Kitchen from the drop-downlist.

QuickBooks displays the Available Estimates window. You don’t want to create theinvoice from the estimate listed, so click Cancel .

From the Template drop-down list, choose Custom Invoice .

Click in the Item column, select Removal from the Item drop-down list, and then pressTab.

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Handling Down Payments & Prepayments369. In the Quantity column, type 40 and press Tab.

370. Click Apply Credits to apply the down payment amount made earlier towardsthis invoice.

371. Click Yes at the message that displays.

372. This is the credit that you want to apply to the invoice, so clickDone .

373. Click Save & Close to record the transaction.

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Making DepositsWhen you use the Enter Sales Receipt window (for a sales receipt where you receive payment on the spot), the Receive Payments window (for payments on invoices), or a payment item on an invoice, QuickBooks keeps track of the money you’ve received until youdeposit it in the bank. When you receive payments from customers, you can either depositeach payment directly into a QuickBooks bank account or you can group payments togetherto be moved to that account at a later time. QuickBooks allows you to choose the method you prefer for depositing payments.

To select payments to deposit:

From the Banking menu, choose Make Deposits .

Click to select the payments you want to bring to the bank.

Click OK .

In the Deposit To field, make sure that Checking is selected.

If you have money to deposit that is not the result of a payment you received for asale, you can enter it in the detail area of the window. For example, if you received a premium refund from your insurance vendor, you would enter it here.

Click Save & Close to record the deposit.

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How QuickBooks Handles the DepositTo view the Undeposited Funds account:


In the chart of accounts, double-click the Undeposited Funds account.

Close the account register window.

In the chart of accounts, double-click the checking account.

Close the checking account register and the chart of accounts.

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Getting Cash Back from a DepositTo record getting cash back from a deposit:

On the Home page, click Record Deposits .

In the Payments to Deposit window, select the payment from Doug Jacobsen.

Click OK .In the Make Deposits window, type Petty Cash in the “Cash back goes to” field and

press Tab.

When QuickBooks displays a message telling you that Petty Cash is not on the accountlist, click Set Up .



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Processing Credit Card Payments

To process credit card payments from your customers, you must have a merchant account. Amerchant account is an account with a merchant account processor (or a financial institutionacting as a processor) that enables you to enter and process credit and debit card transactions.There are two ways to obtain a merchant account.

• Use the QuickBooks Merchant Service.You apply for this service online from within QuickBooks or over the phone. Onceyour account is activated, you can enter and process your customers' credit card payments directly from QuickBooks.

• Use a non-QuickBooks merchant account (a merchant service that is not integratedwithin QuickBooks).You can use a non-QuickBooks merchant account that you've signed up for through a

financial institution. These services usually require the use of a credit card swipeterminal to process your customers' credit card payments. You can enter theinformation into QuickBooks manually as you would enter other QuickBookstransactions.

Notes



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Lesson 7: Receiving Payments & Making DepositsReview questions

A company has set up three different jobs for a single customer. The customer writes onecheck to make a partial payment on open balances for all three jobs. In QuickBooks,that payment...

a Must be applied to the first invoice for the first job for the customerb Must be applied to the most recent invoice for the customerc Can be applied to any combination of invoices and jobs for the customerd Cannot be applied to any invoices or jobs for the customer until full payment isreceived

379. QuickBooks supports which of the following types of payment scenarios?

aDown payments for products or servicesb Overpayments from customers

c Partial payments from customersd All of the above

380. True or false: You can enter a customer payment directly in the customerregister.

a Trueb False

The _______________ _____________ account acts like a “cash drawer” and is used to

hold funds until you deposit them into a bank account.True or false: QuickBooks allows you to print deposit slips that you can take to the bank.

a Trueb False



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A company has set up three different jobs for a single customer. The customer writes onecheck to make a partial payment on open balances for all three jobs. In QuickBooks,

that payment...a Must be applied to the first invoice for the first job for the customerb Must be applied to the most recent invoice for the customerc Can be applied to any combination of invoices and jobs for the customer

d Cannot be applied to any invoices or jobs for the customer until full payment isreceived

381. QuickBooks supports which of the following types of payment scenarios?

a Down payments for products or servicesb Overpayments from customers

c Partial payments from customersd All of the above

382. True or false: You can enter a customer payment directly in the customerregister.

a Trueb False You must enter payments in the Receive Payments window.

The Undeposited Funds account acts like a “cash drawer” and is used to hold funds untilyou deposit them into a bank account.

True or false: QuickBooks allows you to print deposit slips that you can take to the bank.

a True b False



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Using QuickBooks for Accounts PayableSome business owners, especially if they own smaller, home-based businesses, pay their billswhen they receive them. Most business owners, however, find it more convenient to pay billsless often. (They also like keeping the cash in the company for as long as possible.) If youdon’t plan on paying your bills right away, QuickBooks can help you keep track of what youowe and when you owe it.

The money you owe for unpaid bills is called accounts payable . QuickBooks uses theAccounts Payable account to track all the money you owe. Like any QuickBooks balancesheet account, the Accounts Payable account has a register where you can view all your billsat once.

To see the Accounts Payable register:


384. Double-click Accounts Payable in the list to open the register.

The register keeps track of each bill you have entered, shows you the due date, andkeeps a running balance of all the bills you owe. As a business owner, this helps youforecast your cash flow, and the QuickBooks reminder system helps you pay your bills on time.

385. Press Esc twice to close the open windows.

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Entering BillsWhen you receive a bill from a vendor, you should enter it into QuickBooks as soon as youcan. This keeps your cash flow forecast reports up to date and doesn’t give you the chance toset aside a bill and forget about it.

To enter a bill:

From the Vendors menu, choose Enter Bills .

In the Vendor field, type Willis Advertising , and then press Tab.

When QuickBooks displays a message telling you that Willis Advertising is not on theVendor list, click Quick Add .

In the Amount Due field, type 1500.

Click in the Bill Due field.

Click in the Account column on the Expenses tab and typePrinting .

Press Tab to accept Printing and Reproduction as the account.

Type 1450 to change the amount from 1,500 to 1,450.

Click in the Account column below Printing and Reproduction.

From the drop-down list, choose Freight & Delivery , and then press Tab.

Click Save & Close to record the bill.

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Paying BillsWhen you start QuickBooks or open a QuickBooks company file, a Reminders windowappears that tells you whether you have transactions to complete, such as bills to pay ormoney to deposit. (If you don’t see the Reminders window, turn it on by choosingPreferences from the Edit menu.)

When QuickBooks tells you that you have bills due, you can display the Pay Bills windowand select the bills you want to pay.

To pay a bill:

From the Vendors menu, choose Pay Bills .

Select the “To be printed” option.

Select the Willis Advertising bill by clicking in the column to the left of the bill.

Click Pay Selected Bills .

You could print the checks at this point, but for this exercise click Done .

Notes



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How QuickBooks Records Your Bill PaymentWhen you pay a bill through the Pay Bills window, QuickBooks makes an entry in theaccounts payable register, showing a decrease of $1,500 in the total payables. It also creates acheck from your checking account to pay the bill.

To see the entry in the accounts payable register:


In the chart of accounts, double-click the Accounts Payable account.

Close the accounts payable register.

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Applying Vendor Discounts to Bill PaymentsIf you take advantage of discounts for early payment offered by some vendors, you canrecord the discounts directly in the Pay Bills window. You can set up QuickBooks to trackthe discount amounts.

To apply a discount for early payment:

On the Home page, click Pay Bills .

Select Due on or before , and then type 1/16/2008 and press Tab.

From the Sort Bills By drop-down list, choose Discount Date .

Click to put a checkmark next to the bill for Hamlin Metal with a due date of 1/10/2008.

Click Set Discount .

From the Discount Account drop-down list, choose Construction:Discounts given totrack the discount amount.

Click Done .

Click Pay Selected Bills .In the Payment Summary window, click Done .



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Lesson 8: Entering and Paying BillsReview questions

You use the ______________ ______________ account to track money that you owe tovendors.

386. List the two steps involved in using the accounts payable features inQuickBooks:

a ________________________________________________________________b ________________________________________________________________

When you make a payment (from the checking account) in the Pay Bills window, you cansee the transactions in the __________________ and _______________ ______________ registers.

True or false: When tracking accounts payable in QuickBooks, the Enter Bills window isthe only place you can enter bills and vendor credits.

a Trueb False

387. Which of the following tasks can you perform in the Pay Bills window?

a Enter a partial payment on an outstanding billb Make a payment using a credit cardc Pay all outstanding billsd All of the above

You paid a vendor $1,000.00 through the Pay Bills window (using the Checkingaccount). QuickBooks automatically creates a journal entry that:

a Deletes the bill.b Shows $1,000.00 as a Credit in Accounts Payable and shows $1,000 as a Debit inthe Checking account.c Shows $1,000.00 as a Debit in Accounts Payable and shows $1,000 as a Credit inthe Checking account.d Shows $1,000.00 as a Debit in Accounts Payable and shows $1,000 as a Credit inthe Accounts Receivable.



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Review activitiesWrite a check to a vendor, assigning the amount to more than one expense account.

Enter a bill in the Enter Bills window, and then view the bill transaction in the accounts

payable register.Pay the bill using the Pay Bills window.



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You use the accounts payable account to track money that you owe to vendors.

388. List the two steps involved in using the accounts payable features inQuickBooks:a Enter bills b Pay bills

When you make a payment (from the checking account) in the Pay Bills window, you cansee the transactions in the checking and accounts payable registers.

True or false: When tracking accounts payable in QuickBooks, the Enter Bills window isthe only place you can enter bills and vendor credits.

a Trueb False You can also enter bills and vendor credits directly in the accounts payable

register, which may allow for faster data entry.

389. Which of the following tasks can you perform in the Pay Bills window?

a Enter a partial payment on an outstanding billb Make a payment using a credit cardc Pay all outstanding billsd All of the above

You paid a vendor $1,000.00 through the Pay Bills window (using the Checkingaccount). QuickBooks automatically creates a journal entry that:

a Deletes the bill.b Shows $1,000.00 as a Credit in Accounts Payable and shows $1,000 as a Debit inthe Checking account.c Shows $1,000.00 as a Debit in Accounts Payable and shows $1,000 as a Credit in

the Checking account.d Shows $1,000.00 as a Debit in Accounts Payable and shows $1,000 as a Credit inthe Accounts Receivable.



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Analyzing Financial Data

Lesson 9



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Lesson Objectives To discuss some of the tools QuickBooks gives you for analyzing financial data:

QuickReports, preset reports, and graphs

To create a QuickReport

To add a column to a report

To learn how to move a column in a report

To learn about the types of preset reports QuickBooks offers

To practice creating reports and viewing them onscreen

To customize a report by changing how it looks and the data it covers (filtering)

To learn how to process reports in batches

To save reports as Portable Document Format (PDF) files

To learn how to export a report to Microsoft Excel

To practice filtering reports in Microsoft Excel

To learn about the types of graphs QuickBooks offers

To create and customize several graphs

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When to Use a QuickReportOne of the fastest ways to see a report on your QuickBooks data is to create aQuickReport. QuickReports are predesigned reports that give you information about theitems you’re currently viewing on screen. Whenever you have a list, a register, or a formdisplayed, you can click a button to have QuickBooks create a QuickReport.

To see what you owe a vendor:

390. Click Vendor Center on the icon bar.

391. Select Patton Hardware Supplies .

392. In the Reports for this Vendor section, click the QuickReport link.

393. Leave the report open; you will use it in the next exercise.

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Zooming In on a QuickReportAll QuickReports contain a summary of individual transactions. To help you betterunderstand the information presented in reports, QuickBooks lets you trace report datato the individual transaction level using QuickZoom.

When you position the mouse pointer over a number in a report and you see the QuickZoomsymbol (a magnifying glass with a Z in it), you can double-click the number to display theoriginal transaction in QuickBooks.

To see more detail about an item:

Position the mouse pointer over the item receipt dated 12/05/07.

Double-click the item receipt.

Click Save & Close to close the window.

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Customizing QuickReportsTo move a report column:

Position your mouse pointer over the Trans # column that you added to the QuickReport.

394. Hold down the left mouse button and drag the Trans # column to the rightuntil you see an arrow between the Date Column and the Num column.

395. Release the mouse button.

QuickBooks places the Trans # column between the Date column and the Num column.

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Creating a Balance Sheet Comparison ReportThe balance sheet comparison report compares the current year against the previousyear in both dollar amount and percentage.

To create a balance sheet comparison report for Rock Castle Construction:

In the Report Center, choose Company & Financial , scroll down to the Balance Sheet& Net Worth section, and then choose Prev Year Comparison .

396. Scroll the report window to see more of the report.

397. Click the Collapse button to see the difference.

The Collapse button hides subaccounts, jobs, and subclasses. Amounts aresummarized under the main heading. This button affects both the onscreen and printed report.

398. Click Expand to return to the original report display.399. Keep the report displayed on your screen. You’ll use it in the next exercise.

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Filtering ReportsYou can customize preset reports the same way you customize QuickReports. In this exerciseyou’ll customize the balance sheet comparison report and filter it to include only thetransactions you specify.

Report filters let you set custom criteria for the transactions you want included in a report.When you filter a report, QuickBooks includes only those transactions that match the rulesyou create.

To filter a preset report:

With the balance sheet comparison report displayed, clickModify Report on the report button bar.

Click the Filters tab.

In the Filter scroll box, make sure Account is selected.

In the Account field, choose All assets .Click OK .

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Saving Reports as a PDFTo keep a record of the information in the report as it exists today, you can save the report inPortable Document Format (PDF).

To save a report as a PDF file:

With the report open, choose Save as PDF from the File menu.

Navigate to the folder in which you want to store the file, and enter a filename.

Click Save .

Close the report window.

Click No when QuickBooks asks if you want to add this report to the Memorized Reportlist.

Go to the Window menu and chooseClose All

.Click Home in the icon bar.

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Creating and Customizing a Sales ReportTo create a sales report:

From the Reports menu, choose Sales , and then choose Sales By Customer Summary from the submenu.

To customize a report:

In the Dates field, select Custom from the drop-down list.

400. In the From field, enter 01/01/2007 .

401. In the To field, enter 01/31/2007 and press Tab.

402. From the Dates field, choose All from the drop-down list.

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Using QuickZoom in a Preset Report

To QuickZoom on a report item:

Position the mouse pointer over the $11,105.00—the amount for Anton Teschner’s sunroom.

Double-click $11,105.00 .

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Memorizing Preset ReportsTo memorize a report:

From the Reports menu, choose Accountant & Taxes , and then choose Income TaxSummary .

403. On the report button bar, click Memorize .

404. Leave the name of the report as is.

405. Click the Save in Memorized Report Group checkbox to select it, and thenchoose Year End from the drop-down list.

406. Click OK to memorize the report and add it to the Year End memorized reportgroup.

407. Close the income tax summary report.

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Adding Reports to Memorized Report GroupsTo add memorized reports to a memorized report group:

In the Memorized Report List window, select the report 1099 Summary--Year End .

Click the Memorized Report menu button, then choose Edit Memorized Report .

Leave the report name as is.

Click the Save in Memorized Report Group checkbox to select it, and then chooseYear End from the drop-down list.

Click OK .

In the Memorized Report List window, select the report calledBalance Sheet--Year End .

Click the Memorized Report menu button, and then choose Edit Memorized Report .

Leave the report name as is.

Click the Save in Memorized Report Group checkbox to select it, and then chooseYear End from the drop-down list.

Click OK .

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Adding Reports to Memorized Report GroupsTo display a memorized report:

In the Memorized Report list, select Balance Sheet--Year End .

Click Display .

Leave the report open.

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Printing ReportsTo print a report:

With the balance sheet summary report displayed, click Print .

Click Preview to see how the report will look when you print it.QuickBooks displays a preview of your report onscreen.

Click Close to close the Print Preview window.

Close the Print Reports window, and then close the report.

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Processing Reports in GroupsTo batch process reports:

In the Memorized Report list, select Year End .

Click Display .

QuickBooks opens the Process Multiple Reports window. You can use this windowto display or print the selected reports. You can also change the date range for reportsin this window before you display or print them by clicking in the From or Tocolumns.

Leave all three reports selected and click Display .

From the Window menu, choose Close All .

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Sending a Report to Microsoft ExcelOccasionally, you may want to change a report’s appearance or contents in ways that aren’tavailable in QuickBooks, filter report data in ways that you can’t in QuickBooks, or run“what-if” scenarios on your QuickBooks data.

You can send reports from QuickBooks to Microsoft Excel. Since the changes you make inExcel don’t affect your QuickBooks data, you’re free to customize reports as needed, andeven change data to run what-if scenarios.

To send a report to Microsoft Excel:

From the Reports menu, choose Company & Financial , and then choose Balance SheetStandard .

On the Report button bar, click Modify Report .

In the “Add subcolumns for” area, click the Previous Period checkbox, and then clickthe $ Change and % Change checkboxes.

Click OK .

On the Report button bar, click Export .

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Sending a Report to Microsoft Excel408. On the Basic tab, make sure that a new Excel workbook is selected.

409. Click the Advanced tab.

410. Under Formatting options, click the Colors checkbox to clear it.411. Under Excel features, select the Auto Filtering checkbox.

412. Click Export .

413. Leave the report open in Excel; you’ll use it in the next exercise.

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Filtering a Report in Microsoft ExcelWithin Microsoft Excel, you can filter on any column of data using a drop-down list at thetop of the column. Using the drop-down list, you can apply a number of preset filters orcreate your own custom filter.

To filter a report in Microsoft Excel:

In the Excel window, click the down arrow in the $ Change column of the balance sheetreport, and choose (Custom...) .

In the $ Change field, choose is less than from the drop-down list.

In the field to the right, type 0.

Click OK .

Close Excel without saving the report.

Close the balance sheet report in QuickBooks.

Choose No when QuickBooks displays a message asking if you want to memorize thereport.

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Creating an Income and Expense GraphIf you want your business to be profitable, you need to keep an eye on your expenses.The income and expense graph shows you exactly what you’re spending and where.

You should be especially concerned with the proportion you’re spending relative to theincome you receive. As a simplistic example, if you’re earning only $20,000 in income, youdon’t want to spend $30,000 in expenses.

To create an income and expense graph:

From the Reports menu, choose Company & Financial , and then choose Income &Expense Graph .

QuickBooks can display only 10 accounts at a time. To display more accounts, click theNext Group button at the top of the graph window.

Notes



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Creating an Income and Expense GraphTo display income accounts instead of expense accounts:

Click Income at the bottom of the graph window.

Click By Customer .

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Using QuickZoom with GraphsTo help you better understand the information shown in the graphs, QuickBooks letsyou trace graphical data using QuickZoom graphs.

To display the sales for Anton Teschner:

Position the mouse pointer over the Teschner, Anton slice of the pie chart.

414. Double-click the Teschner, Anton slice.

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Using QuickZoom with GraphsTo display a report describing the transactions for a given month:

Position the mouse pointer over the bar representing November 2007. The pointer turnsinto the QuickZoom symbol.

Double-click the bar.

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Using QuickZoom with GraphsTo display the first transaction in the report:

Double-click any of the lines in the report for Invoice #60.

From the Window menu, choose Close All .

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Customizing How Graphs DisplayYou can customize graphs to control what data they include and how the data is displayed. Inthis exercise, you’ll change the display from three-dimensional (3D) to two-dimensional (2D)graphs.

To change from 3D to 2D:

From the Edit menu, choose Preferences .

In the left panel, click Reports & Graphs .

Click Draw graphs in 2D (faster).

Click OK .

Click Report Center.

Choose Sales . Then from the Sales by Customer list, choose Sales Graph .

Close the graph.

Close the Report Center.

Notes



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Lesson 9: Analyzing Financial DataReview questions

_________________________ is the tool that allows you to drill down on summaryreports and graphs in QuickBooks.

415. When can you generate a QuickReport?

a Only when viewing an active customer or accountb Only when viewing a list, register, or formc Only at the end of the current fiscal periodd Only when viewing balance sheet accounts

416. In which report category would you find a list of open invoices?

a Company & Financialb Salesc Customers & Receivablesd List

Report _______________________ let you set custom criteria for the transactions youwant to include in a report.

Once you’ve customized a preset report to meet your needs, how can you save yoursettings so you don’t have to customize the report each time you run it?

a Choose Save Settings from the Report menub Choose Save Setting from the File menu

c Click Memorize on the button bard Click Modify, and then choose Memorize

True or false: Once you’ve exported report data to Excel, you can send modified data back to QuickBooks.

a Trueb False



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QuickZoom is the tool that allows you to drill down on summary reports and graphs inQuickBooks.

417. When can you generate a QuickReport?a Only when viewing an active customer or account

b Only when viewing a list, register, or formc Only at the end of the current fiscal periodd Only when viewing balance sheet accounts

418. In which report category would you find a list of open invoices?

a Company & Financialb Salesc Customers & Receivables

d List

Report filters let you set custom criteria for the transactions you want to include in areport.

Once you’ve customized a preset report to meet your needs, how can you save yoursettings so you don’t have to customize the report each time you run it?

a Choose Save Settings from the Report menub Choose Save Setting from the File menuc Click Memorize on the button bar

d Click Modify, and then choose Memorize

True or false: Once you’ve exported report data to Excel, you can send modified data back to QuickBooks.

a Trueb False



Intermediate QuickBooks 2010Student Guide

Jane Freund, Instructor [email protected]

Sponsored by the Idaho SBDC www.idahosbdc.org








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Setting Up Inventory

Lesson 10



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Turning on the Inventory FeatureThe QuickBooks inventory feature is turned on in your exercise file, but you’ll review how toturn on this feature so you become familiar with QuickBooks preferences. If you need totrack inventory for your company, you can turn the feature on while completing the EasyStepInterview. If you want to turn on the inventory feature after you’ve completed the EasyStepInterview, follow this procedure.

To turn on the inventory feature:

1. From the Edit menu, choose Preferences .

2. Select Items & Inventory from the left panel.

3. Click the Company Preferences tab.

4. Click the Inventory and purchase orders are active checkbox to select it.

5. Click OK .

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Entering Products into InventoryMany small businesses that stock inventory don’t know the number of units they have onhand or on order at any given time, and have no way of getting that information quickly.Using QuickBooks to manage your inventory, you’ll be able to track the number of items instock and the value of your inventory after every purchase and sale.

As you order inventory items, receive the items, and later sell the items from inventory,QuickBooks tracks each inventory-related transaction. You will know the status of yourinventory and will have a more accurate picture of your business’s assets.

To enter a product into inventory:

1. From the Vendors menu, choose Item List .

2. Click the Item menu button, and then choose New .

3. In the Type field, choose Inventory Part from the drop-down list.

4. In the Item Name/Number field, type Cab 2015 (2015 is the style number).

5. Select the “Subitem of” checkbox, and then choose Cabinets from the drop-down list.

6. In the “Description on Purchase Transactions” field, type Kitchen Cabinet #2015 , andthen press Tab to move to the Cost field.

7. In the Cost field, type 169 .

8. In the Preferred Vendor field, choose Thomas Kitchen and Bath from the drop-downlist.



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Entering Products into Inventory9. In the Sales Price field, type 225 .

10. Leave the Tax Code setting as is.

11. In the Income Account field, choose Construction: Materials .

12. Press Tab to move to the Asset Account field.

13. In the Reorder Point field, type 15 .

14. In the On Hand field, type 20 , and then press Tab to move to the Total Value field.

15. Click OK to close the New Item window.


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Creating Purchase OrdersOnce you enter your current products and vendors into the Item and Vendor lists, you’ll needto order products to keep your inventory stocked.

When you order items from a vendor, you create a purchase order.

To order a product using a purchase order:

1. From the Vendors menu, choose Create Purchase Orders .

2. In the Vendor field, choose Perry Windows & Doors from the drop-down list.

3. In the Item column, select Frames: Exterior Frame from the drop-down list.

4. In the QTY field, type 10 .

5. In the Vendor Message field of the purchase order, type Please rush ship this order .

6. Click Save & Close to record the purchase order.



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Receiving InventoryWhen you receive the items you have ordered with your purchase order, you have to enterthe items into inventory. You can receive items with a bill or without a bill. This exerciseshows you how to enter into QuickBooks inventory items you’ve received when the bill forthose items will follow later.

To receive inventory without a bill attached:

1. From the Vendors menu, choose Receive Items .

2. In the Vendor field, choose Perry Windows & Doors from the drop-down list and pressTab.

3. Click Yes .

4. Click the third purchase order (#40, dated 12/15/2007) to select it.

5. Click OK to move the information to the item receipt.

6. Click Save & Close to process the receipt.

QuickBooks processes the items and adds them to your inventory. If you display theItem list, you’ll see that you now have 10 additional door frames on hand.

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Entering a Bill for InventoryIf you've entered an item receipt for inventory, but the bill hasn't arrived yet, you can stillrecord the bill amount in QuickBooks. Entering the bill as shown in this exercise records theamount in your accounts payable account so you can track how much you owe.

When the bill comes, you pay the bill just like you would pay any other bill in QuickBooks(from the Pay Bills window).

To enter the bill:

1. From the Vendors menu, choose Enter Bill for Received Items .

2. In the Vendor field, select Perry Windows & Doors in the drop-down list and press Tab.

3. Select Received items (bill to follow), dated 12/15/2007.

4. Click OK .


6. Click Yes if another dialog box appears.

QuickBooks changes the item receipt to a bill in the Accounts Payable account and liststhe bill in the Pay Bills window. If you look at the Accounts Payable, you’ll see that the

balance increased by $200.00, based on the bill entered for Perry Windows & Doors.

Because you must have inventory on hand before you can enter a sale for inventory parts,we recommend that you enter your item receipts before entering sales.

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Manually Adjusting InventoryWhen you have spoilage or send out samples of your products, you can adjust your inventorymanually.

To adjust the inventory manually:

1. On the Home page, click Adjust Quantity on Hand .

2. In the Adjustment Account field, type Inventory Adjustment and press Tab.

3. Click Set Up in the window telling you that Inventory Adjustment is not in the accountlist.

4. In the Account Type field, choose Expense from the drop-down list, if it is not selectedalready.

5. Click Save & Close to close the Add New Account window.

6. In the Qty Difference column for Wood Door: Interior wood door, type –2 (the number ofdamaged doors), and then press Tab.


Notes



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Tracking Finished GoodsYou must be using QuickBooks: Premier or higher to follow the exercises in this section.

Inventory assembly items allow you to create an item that contains assembled materialunits (finished goods) you buy or produce, track as inventory, and resell.

Note that inventory assembly items in QuickBooks are appropriate for indicating “light”assembled items on sales forms and in reports. QuickBooks does not track inventorythroughout a manufacturing process.

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Setting a Default MarkupWith QuickBooks, you can add a markup to your basic costs by entering a default markup

percentage. QuickBooks uses this percentage to calculate the sales price of items that have both a cost and a sales price.

You'll see the effect of the default markup percentage when you create inventory part, non-inventory part, service, and other charge items. When you enter the item's cost,QuickBooks calculates the sales price and enters it in the Sales Price field. For example,entering a cost of $10.00 when the markup is 25% causes QuickBooks to fill in the sales

price as $12.50. If you don't want to use the default markup for an item, you can change thesales price that QuickBooks fills in.

To set the default markup percentage:


2. Click Time & Expenses in the left panel.


4. In the Default Markup Percentage field, type 20 and press Tab.

5. Click OK .

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Adding a Labor Item to Use in AssembliesSuppose you have plans to sell all the items needed for installing a door as a kit. You’ll alsoneed to account for the labor needed to assemble the kit. To do this, you’ll create an“Assembly Labor” item.

To create a labor item to use in assemblies:

1. From the Lists menu, choose Item List .

2. Click the Item menu button and select New .

3. In the Type field, select Service .

4. In the Item Name/Number field, type Assembly labor .

5. Click the checkbox for This service is used in assemblies or is performed by asubcontractor or partner.

6. In the Description on Purchase Transactions field, type Direct Labor , and then pressTab.

7. In the Cost field, type 20 , and then press Tab.

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Adding a Labor Item to Use in Assemblies

8. From the Expense Account drop-down list, choose Payroll Expenses .

9. From the Tax Code drop-down list, choose Non-taxable Labor .

10. From the Income Account drop-down list, choose Construction:Labor .

11. Click OK .

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Creating Inventory Assembly ItemsCreating assembly items in QuickBooks is a two-part process: first you define an assemblyitem, and then you build the assembly. Assembly item units are not added to inventory andassembly components (inventory parts or other assemblies) are not deducted from inventoryuntil you build the assembly.

Inventory assembly items can include inventory part and other assembly items only. If youwant to include a different type of item (a service item to charge for labor, for example), thenyou must include the assembly item and service item in a group item.

All items included in an inventory assembly item must be defined in the Item list. You candefine them before you create the inventory assembly item, or as you create the assemblyitem. Note, however, that you cannot edit the items included in the assembly item once it’s

been used in transactions, or saved with a quantity on hand.

To create an inventory assembly item:

1. In the Item List, click the Item menu button and select New .

2. In the Type field, select Inventory Assembly .

3. In the Item Name/Number field, type Exterior Door Kit .

4. Type 199 in the Cost field, and then press Tab twice.

5. In the Description field, type Complete exterior door kit and press Tab.

6. In the Income Account field, select Construction:Materials from the drop-down list.

7. In the Bill of Materials section, click in the Item column.8. In the Item drop-down list, select Frames:Exterior Frame , and then press Tab.

Notes



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Creating Inventory Assembly Items

9. In the Qty field, type 1, and then press Tab.

10. In the Item drop-down list, select Hardware: Doorknobs Locking Exterior , and then press Tab.


12. In the Item drop-down list, select Hardware: Brass Hinges , and then press Tab.


14. In the Item drop-down list, select Wood Door: Exterior , and then press Tab.

15. In the Qty field, type 1.

16. In the Item drop-down list, select Assembly labor , and then press Tab.


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Building Finished GoodsTo build an inventory assembly:

1. From the Vendors menu, choose Inventory Activities , and then choose BuildAssemblies from the submenu.

2. In the Assembly Item field, select Exterior Door Kit from the drop-down list.

3. In the Quantity to Build field, type 2.

QuickBooks warns you when you do not have sufficient inventory items on hand tocomplete a build. If you choose to build an assembly and do not have enough componentsin inventory to build the number of assemblies you have specified, you can postpone the

build by marking it pending. If you don’t mark the build as pending, you have to reducethe number of assemblies or you won’t be able to save the build.

You have enough inventory to build two assemblies, so you can proceed with the build.

4. Click Build & Close .

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Using Units of MeasureUsing units of measure can show what quantities, prices, rates, and costs are based on. Youset up the units of measure and assign them to Service, Inventory Part, Non-inventory Part,Inventory Assembly, and Group items. Some businesses need to track transactions using onlya single unit of measure. For example, a business buys inventory by the gallon and sells bythe gallon. Service businesses also may track by only one unit of measure, such as by thehour. Other product-based businesses buy, sell, and stock inventory items in multiple units ofmeasure. A business may receive inventory in one unit, store it in another, and sell and shipthe items in a third unit of measure. Service businesses might also use multiple units ofmeasure, for example if they bill by the hour and by the day.

QuickBooks provides two different ways or modes for assigning units of measure to items:single unit of measure per item and multiple unit of measure per item. The following editionsof QuickBooks support only the Single U/M Per Item mode:

QuickBooks: Premier QuickBooks: Premier Non-Profit QuickBooks: Premier Professional Services

The following editions of QuickBooks support both the Single U/M Per Item and MultipleU/M Per Item modes:

QuickBooks: Premier Accountant QuickBooks: Premier Contractor QuickBooks: Premier Manufacturing & Wholesale QuickBooks: Enterprise Solutions (all editions except Retail)

Notes



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Setting Up Multiple Units of MeasureIf you buy, stock, or sell items in different units, set up multiple units of measure. Forexample, choose this mode if you buy an inventory item by the gallon and sell it by theounce, or if you sell consulting services by both the hour and the day.

If you choose Multiple mode, you define unit of measure sets that you can assign to items. Aunit of measure set consists of a base unit (usually the smallest unit used to track a certaintype of item) and any number of related units (defined as containing a certain number of baseunits). For example, you could create a unit of measure set called “Length by the inch” with a

base unit of inch and related units of foot (containing 12 inches) and yard (containing 36inches).

To turn on multiple units of measure in a company file for the first time:

1. Choose Preferences from the Edit menu.

2. Click Items & Inventory , and then click the Company Preferences tab.

3. In the U/M section, click Enable .

4. Select Multiple U/M Per Item .

5. Click Finish .

6. In the Preferences window, click OK .

QuickBooks must close all open windows to switch to multiple units of measure.

7. Click OK at the message that appears.

Notes



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Assigning Units of Measure to ItemsRock Castle sells countertops that can be customized according to a customer’s wishes. Onecustomer who is remodeling a kitchen wants Italian marble for the countertop. Rock Castlehas a non-inventory part item called Counter for materials they purchase on behalf of acustomer but that they don’t normally carry in stock. Rock Castle purchases the marble insquare meters, but charges the customer by the square foot. To track the different units ofmeasure, you’ll assign units of measure to items.

To assign multiple units of measure to items:

1. Click Home on the icon bar to open the Home page.

2. On the Home page, click Items & Services to open the Item List.

3. Select the non-inventory part item called Counter .

4.

Click the Item menu button and select Edit Item .

5. From the U/M Set drop-down menu, choose Add New .

This starts the unit of measure wizard where you set up the base unit and any relatedunits.Choosing multiple units of measure lets you define a base unit and multiples of that baseunit. Since Rock Castle buys the marble countertop in square meters and sells thecountertop in square feet, you define a measure set for area.



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Assigning Units of Measure to Items

6. Select Area as the unit of measure type.

7. Click Next .

8. Select Square foot (sqft) as the base unit.

The base unit should be the smallest unit of measure used for an item when purchasing it,tracking it in inventory, and selling it. In QuickBooks, the base units of items are used tocount inventory, generate most inventory reports, and perform quantity-relatedcalculations.

9. Click Next .

QuickBooks displays the window where you define the units related to the base unit.Related units make it possible to show quantities of the same item in differentmeasurements in different places in QuickBooks.

10. Click in the Add column for Square Yard and Square Meter.

Notice that QuickBooks has already calculated the number of base units the related unitcontains in the # of sqft column.



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Assigning Units of Measure to Items11. Click Next .

Next, you’ll select the default unit of measure to use when buying this item and when

selling and shipping this item.

12. From the Purchase drop-down menu, select square meter .

Since Rock Castle buys by the square meter, that’s what you want to appear by default on purchase orders for this item.

13. Leave the Sales default as square foot and leave the Shipping default blank.

14. Click Next .

15. Click Finish to accept the name of this unit of measure set that QuickBooks suggests.

16. Click OK in the Edit Item window.

Notes



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Using Units of Measure on Sales FormsRock Castle needs to order the marble for the kitchen remodel. In this exercise, you order themarble using a purchase order, and see how you could easily convert from one unit ofmeasure to another unit within the same measure set.

To convert units of measure on sales forms:

1. In the Vendors area of the Home page, click Purchase Orders .

2. On the purchase order, select Custom Kitchens of Bayshore .

3. Click in the Item column and select Counter .

4. In the Quantity column, type 10 .

5. Click the down arrow in the U/M column to open the conversion menu.6. Click Save & Close .

Once you've created a unit of measure set and assigned it to an item, you can easilyconvert to other units of measure within the set when you add the item to a transaction.



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Lesson 10: Setting Up InventoryReview questions

1. True or false: The Purchase Orders account does not affect the balance sheet or incomestatement.

a Trueb False

2. You placed an order with a vendor for inventory parts. The items have arrived, but youhave not received the bill yet. Which option should you choose from the Vendors menu?

a Enter billsb Receive items and enter billc Receive itemsd

Enter bills for items received3. True or false: You must have inventory items on hand before you can enter a sale for

them.

a Trueb False

4. You complete a physical inventory and discover that you have five more of a particularitem than show in QuickBooks. How do you update the inventory records inQuickBooks?

a Complete the physical inventory worksheetb Enter an item receiptc Adjust the quantity using the Adjust Quantity/Value on Hand windowd None of the above

5. Which of the following provide you with a list of all purchase orders created in a file?

a QuickReport on the Purchase Orders accountb Purchase Orders list reportc Open Purchase Ordersd All of the above



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Review activities1. Enter a new inventory item using the following information.

Item Name/Number: Kitchen counter

Purchase Description: Kitchen counter Cost: 280.00 COGS Account: Cost of Goods Sold Preferred Vendor: Patton Hardware Supplies Sales Description: Same as Purchase Description Sales Price: 340.00 Income Account: Construction:materials Asset Account: Inventory Asset Reorder Point: 5 Qty on Hand: 6

2. Create a purchase order for 20 Standard doorknobs.3. Receive the 20 Standard doorknobs into inventory and record the bill for the doorknobs.

4. Process the bill and pay for the 20 Standard doorknobs.



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1. True or false: The Purchase Orders account does not affect the balance sheet or incomestatement.

a True b False

2. You placed an order with a vendor for inventory parts. The items have arrived, but youhave not received the bill yet. Which option should you choose from the Vendors menu?

a Enter billsb Receive items and enter billc Receive items

d Enter bills for items received

3.

True or false: You must have inventory items on hand before you can enter a sale forthem.

a True b False

4. You complete a physical inventory and discover that you have five more of a particularitem than show in QuickBooks. How do you update the inventory records inQuickBooks?

a Complete the physical inventory worksheetb Enter an item receiptc Adjust the quantity using the Adjust Quantity/Value on Hand window

d None of the above

5. Which of the following provide you with a list of all purchase orders created in a file?

a QuickReport on the Purchase Orders account b Purchase Orders list reportc Open Purchase Ordersd All of the above



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Tracking and Paying Sales Tax

Lesson 11



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Lesson Objectives To get an overview of sales tax in QuickBooks (the steps involved in tracking,

collecting, and paying it)

To see how to set up QuickBooks to track sales tax

To see how to apply sales tax to a sale

To learn how to determine a business’s sales tax liability

To write a QuickBooks check to the appropriate tax agency for sales tax liability

Notes



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Overview of Sales Tax in QuickBooksTo use QuickBooks to track and pay your sales tax:

Set up your tax rates and agencies.

Indicate who and what gets taxed.

Apply tax to each sale.

Find out what you owe.

Pay your tax agencies.

Notes



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Setting Up your Tax Rates and AgenciesSome businesses need to apply more than one sales tax to their sales; for example, they maycollect a state sales tax as well as several county sales taxes. You need to create a separatesales tax item for each tax whose amount you must report (not necessarily for each tax youcollect—some states want you to report state sales tax and county sales tax as separate items,while others let you report them as one item).

Even if you’re paying more than one type of tax, you usually want your customers to see oneoverall tax amount, not separate taxes for the state and county. You’ll learn how to do that inthis lesson.

To add a sales tax item:


7. Click the Item menu button, and then choose New .8. In the Type field, choose Sales Tax Item .

9. In the Sales Tax Name field, type Bayshore .

10. In the Description field, type Bayshore City .

11. In the Tax Rate (%) field, type 1.

12. In the Tax Agency field, type Bayshore Tax Agency .

13. Click OK .

14. Click Quick Add .

15. Click OK .

If QuickBooks prompts you to add “Bayshore” to the dictionary, click Add .



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Grouping Single Taxes TogetherEven if you collect a combination of sales taxes (for example, city tax and county tax) thatyou report separately, you probably don’t want to confuse customers by showing separatetaxes on your invoices or sales forms. QuickBooks lets you group some or all of your taxitems so that customers see a single tax amount on your invoices and sales receipts. Insteadof a sales tax item, you’ll be creating a sales tax group.

To create a sales tax group:

16. With the Item list displayed, click the Item menu button, and then choose New .

17. In the Type field, choose Sales Tax Group .

18. In the Group Name/Number field, type Bayshore Group .

19. In the Description field, type Sales Tax, Bayshore .

20. Click in the Tax Item column, and then choose Bayshore .21. Click on the second line in the Tax Item column, and then choose San Tomas .

22. Click OK .

Notes



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Identifying Your Most Common TaxIf you want QuickBooks to apply sales tax to your invoices and sales receipts, you have totell it which sales tax item or group is the one you use most often. Once you do that,QuickBooks applies that sales tax when you fill out an invoice or a sales receipt. (You canchoose a different sales tax from the sales form if you don’t want the default tax.)

To set up a default sales tax:


24. In the Preferences window, click the Sales Tax icon in the left panel, and then click theCompany Preferences tab.

25. In the “Most common sales tax” field, make sure San Tomas is selected.

26. Click OK .

Notes



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Indicating Who and What Gets TaxedThe next step in setting up sales tax is to indicate who and what gets taxed. You have to tellQuickBooks whether or not a customer is taxable and assign a default tax item or tax groupto that customer.

You must also distinguish between taxable and non-taxable items on the Item list.When you add an item to the Item list, there’s a place in the window where you can indicatewhether you charge tax for the item. QuickBooks remembers this information, and showswhether or not an item is taxable when you enter the item on a sales form.

To indicate a taxable item:

27. In the Item list, select Doorknobs Std (under Hardware).

28. Click the Item menu button, and then choose Edit Item .

The code in the Tax Code field is a taxable code, which tells you that this item is taxable.When you choose the item to be included on a sales form, QuickBooks knows that theitem is taxable and automatically applies the default sales tax (San Tomas sales tax with arate of 7.75%).

29. Click OK to close the Edit Item window.


Notes



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Indicating Who and What Gets TaxedIn the same way that you can specify that an item in the Item list is taxable, you can indicatewhether or not a particular customer is taxable or non-taxable in that customer’s record.

To see an existing customer record:

31. Click Customer Center on the icon bar.

32. Select Jimenez, Cristina .

33. Click Edit Customer .

34. Click the Additional Info tab.

The tax code selected indicates that transactions with this customer are subject to salestax. Because it is the default sales tax, the San Tomas tax item is assigned automatically.However, this customer is located in Bayshore, which has just instituted its city sales tax,

so change the tax item to Bayshore Group.

35. In the Tax Item field, choose Bayshore Group .

36. Click OK .


Notes



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Applying Tax to Each SaleIf you’ve set up a default sales tax, assigned taxes to your customers, and marked taxableitems you sell as taxable, QuickBooks automatically calculates and applies the tax when youmake a sale.

To apply tax to a sale:

38. On the Home page, click Create Invoices .

39. In the Customer:Job field, choose Jimenez, Cristina:Utility Shed . (Select both thecustomer and the job.)

40. In the Template field, select Custom Invoice from the drop-down list.

41. Click in the Item column and select Doorknobs Std .

42. In the Quantity column, type 4, and then press Tab.

43. Click Save & Close.

Notes



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Determining What You OweIf you’re required to collect sales tax from customers, you also have to make periodic

payments of the sales tax you’ve collected. QuickBooks gives you three ways to determinethe amount of your sales tax liability: the sales tax liability report, the Sales Tax Payableregister, and the Pay Sales Tax window.

To create the sales tax liability report:

44. From the Reports menu, choose Vendors & Payables , and then choose Sales TaxLiability .

45. In the Dates field, choose This Month-to-date .

The sales tax liability report shows the total taxable sales as of a date you choose, totalnon-taxable sales, and the amount of sales tax you owe each tax agency. QuickBooksdisplays the sales tax liability report on an accrual basis (unless you changed the defaultsetting in the Sales Tax Preferences window). The report shows exactly how much salestax you collected.

46. Close the sales tax liability report.

47. If QuickBooks asks if you want to memorize the report, click No .

Notes



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Determining What You OweIf you’d like to see where your sales tax revenue is coming from, you can run the sales taxrevenue summary report, which shows you the sources of all taxable and non-taxable salestransactions, broken down by individual sales tax codes.

To run the sales tax revenue summary report:

48. From the Reports menu, choose Vendors & Payables , and then choose Sales TaxRevenue Summary from the submenu.

49. Close the report.

Notes



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Determining What You OweEach time you write an invoice or sales receipt that includes sales tax, QuickBooks enters theinformation in the sales tax payable register. QuickBooks keeps track of transactions for alltax vendors in the same Sales Tax Payable account.

To see the sales tax payable register:

50. From the Company menu, choose Chart of Accounts .

51. Click Sales Tax Payable once to select it.

52. Click the Activities menu button and select Use Register .

Each entry in the register is a single tax transaction. Taxes you record on invoices andsales receipts appear as increases, and payments you make to tax agencies appear asdecreases. The ending balance of the register is your current tax liability. Notice howsome transactions have the same invoice number. When you record two tax rates on thesame invoice or cash sale, the register shows a separate transaction for each tax agency.(This is because you have to make separate payments to individual tax agencies.)

53. Close the register.


Notes



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Paying Your Tax AgenciesWhen it's time to pay sales tax, you use the Pay Sales Tax window to write a check to yourtax agency or agencies. Suppose Rock Castle Construction is ready to make a sales tax

payment.

To make a sales tax payment:

55. On the Home page, click Manage Sales Tax .

56. In the Manage Sales Tax window, click the Pay Sales Tax button.

57. Select the To be printed checkbox.

58. In the “Show sales tax due through” field, type 12/15/07 , and then press Tab.

QuickBooks displays tax agencies and the amounts you owe.

59. To mark them for payment, click the Pay All Tax button.

60. Click OK .

61. Close the Manage Sales Tax window.

Notes



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Lesson 11: Tracking and Paying Sales TaxReview questions

62. Which of the following statements is false?a You can set up both taxable and non-taxable itemsb You can associate different sales tax rates with different customersc QuickBooks automatically sets up your sales tax rates based on the city and stateyou enter in the Company Information window.d All of the above

63. Use a ___________________ ______________________ ____________________ itemto combine multiple sales tax items into one amount on sales forms.

64. Which of the following can you use to determine your sales tax liability?

a Sales Tax Payable account registerb Pay Sales Tax windowc Sales tax liability reportd All of the above

65. To correctly affect sales tax liability, you should make payments to tax collectingagencies from which QuickBooks window?

a Write Checksb Pay Sales Taxc Either a or bd None of the above

66. In what part of the program do you assign sales tax codes and items to customers?

a In the Sales Tax Code listb On the Customer tab of the New or Edit Item windowc On the Additional Info tab of each customer’s record in the Edit Customer windowd None of the above



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Review activities67. Create an invoice for Pretell Real Estate’s 155 Wilks Blvd. job, for 10 interior wood

doors and 2 exterior wood doors.

68. After you record the invoice, open the sales tax payable register to see how QuickBookshas recorded the tax due from the invoice.



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69. Which of the following statements is false?

a You can set up both taxable and non-taxable itemsb You can associate different sales tax rates with different customersc QuickBooks automatically sets up your sales tax rates based on the city and state

you enter in the Company Information window.d All of the above

70. Use a sales tax group item to combine multiple sales tax items into one amount on salesforms.

71. Which of the following can you use to determine your sales tax liability?

a Sales Tax Payable account registerb Pay Sales Tax windowc Sales tax liability reportd All of the above

72. To correctly affect sales tax liability, you should make payments to tax collectingagencies from which QuickBooks window?

a Write Checksb Pay Sales Tax

c Either a or bd None of the above

73. In what part of the program do you assign sales tax codes and items to customers?

a In the Sales Tax Code listb On the Customer tab of the New or Edit Item windowc On the Additional Info tab of each customer’s record in the Edit Customer window

d None of the above



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Doing Payroll with QuickBooks

Lesson 12



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Setting Up for PayrollBy default, the QuickBooks payroll feature is turned on and it is turned on in the exercisefile. If you want to turn off payroll in your own company file, follow the procedure below.

To turn payroll off in a company data file:

74. From the Edit menu, choose Preferences , and click Payroll & Employees in the left panel.

75. Click the Company Preferences tab and select No payroll .

76. Click OK .

Notes



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Setting Up for PayrollQuickBooks maintains a list for everything that affects the amount on a payroll check and forevery company expense related to payroll. This list is called the Payroll Item list. There are

payroll items for compensation, taxes, other additions and deductions, and employer-paidexpenses. QuickBooks uses payroll items to track individual amounts on a paycheck andaccumulated year-to-date wage and tax amounts for each employee.

To view the Payroll Item list:

1. From the Employees menu, choose Manage Payroll Items , and then chooseView/Edit Payroll Item List . (You must have payroll turned on to see this choice.)

2. Close the Payroll Item list.

Notes



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Setting Up for PayrollYou won’t add a new payroll item in this lesson, but if you need to add an item after you’veset up payroll in QuickBooks, you can use the following procedure.

To add a payroll item:

77. From the Employees menu, choose Manage Payroll Items , and then choose View/EditPayroll Item List .

78. Click the Payroll Item menu button, and then choose New .

79. Choose EZ Setup and click Next .

80. QuickBooks displays the Add new payroll item window, which steps you through the payroll item setup process.

81. Select the type of payroll item you want to create. Then, click Next .

82. Follow the onscreen instructions to create the payroll item.

83. When you are done, click Finish .84. Close the Payroll Item list.

Notes



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Setting Up Employee Payroll InformationQuickBooks calculates payroll for each employee on the basis of that employee’s pay rate,filing marital status, exemptions, and so on. The Employee list stores general informationabout each employee, as well as payroll information.

To view information stored in the Employee list:

85. Click Employee Center on the icon bar.

86. Select Dan T. Miller in the list, and then click Edit Employee .

87. Click the Address and Contact tab.

88. Click the Additional Info tab.

89. In the Change tabs drop-down list, select Payroll and Compensation Info .

90. Click Taxes .

91. Click the State tab to review the state withholdings.

92. Click OK to return to the Edit Employee window.

93. Click OK again to return to the Employee Center.



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Using Employee Defaults to Store CommonInformation

QuickBooks stores a wealth of information about each employee, but it doesn’t require youto enter the same information over and over. When you have information that applies to mostof your employees, you can enter it into your employee defaults. Then, when you add anemployee, QuickBooks automatically fills in the information stored with the defaults. You

just need to add or change any information that is different for a particular employee.

To view employee defaults:

94. With the Employee Center displayed, choose Change New Employee Default Settings from the Manage Employee Information menu button.

95. Select the Use time data to create paychecks checkbox to include pay for time enteredusing the time tracking feature.

96. In the Additions, Deductions and Company Contributions area, click in the Item Namecolumn, and then choose Health Insurance from the drop-down list.

97. In the Amount column, type 50 and press Tab.

98. Click Taxes .

99. Click Cancel to close the Taxes Defaults window.

100. Click Sick/Vacation .

101. Click Cancel to close the Sick & Vacation Defaults window.

102. Click OK to close the Employee Defaults window.



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Setting Up Payroll SchedulesYou can set up payroll schedules to group employees with the same pay frequency (daily,semi-monthly, bi-weekly, and monthly). You define how often you pay your employees,which date their paycheck is due, and which day you run payroll. QuickBooks calculatesyour upcoming payroll schedule so that you can pay your employees on time.

Using payroll schedules is a quick and convenient way to pay your employees at each pay period. You set up the payroll schedule one time, assign the payroll schedule to theappropriate employees, and QuickBooks calculates the due dates for each upcoming pay

period.

To define a payroll schedule:103. From the Employees menu, choose Add or Edit Pay Schedules .

104. Click the Payroll Schedule menu button, and then choose New .

105. Type Monthly in the “What do you want to name this payroll schedule?” field.106. Press Tab and select Monthly as the pay frequency.

107. Press Tab and select 12/31/2007 as the pay period end date.

108. Press Tab and select 12/31/2007 as the date that should appear on the checks.

109. Press Tab and choose Last day of the month from the drop-down menu.



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Setting Up Payroll Schedules110. Click OK.

111. To define the pay schedule for the employees paid weekly, click the Payroll Schedule

menu button, and then choose New .112. Type Weekly in the “What do you want to name this payroll schedule?” field.

113. Press Tab and select Weekly as the pay frequency.

114. Press Tab and select 12/22/2007 as the pay period end date.

115. Press Tab and select 12/22/2007 as the date that should appear on the checks.

116. Click OK.

117. Close the Payroll Schedule List.

Now that you’ve set up the pay schedules, you can assign each employee to the

appropriate pay schedule.

Notes



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Setting Up Payroll SchedulesTo assign employees to a schedule, choose the payroll schedule on the Payroll CompensationInfo tab of the employee record. (You can also assign employees during the Payroll ScheduleSetup process, but for this exercise, we’ll use the employee records.)

To assign a pay schedule:

118. From the Employees menu, choose Employee Center .

119. Click the Employees tab if it is not already selected.

120. Select Dan T. Miller and then click Edit Employee .

121. In the Edit Employee window, choose Payroll and Compensation Info from theChange tabs drop-down list.

122. From the Payroll Schedule drop-down list, select Monthly .123. Click OK .

124. Select Elizabeth Mason from the Employee List and click Edit Employee .

125. In the Edit Employee window, choose Payroll and Compensation Info from theChange tabs drop-down list.

126. From the Payroll Schedule drop-down list, select Weekly .

Elizabeth Mason is a non-exempt employee and she is paid weekly. Notice thatQuickBooks changes the Pay Frequency to Weekly.

127. Click OK .

128. Repeat the steps for Gregg Schnieder and assign him to the Weekly pay schedule.

Notes



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Adding a New EmployeeTo add a new employee:

129. With the Employee Center displayed, click New Employee .

130. On the Personal tab, enter the employee data as shown below.

131. On the Address and Contact tab, enter the employee data as shown below.



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Adding a New Employee138. Click Taxes .

139. From the Filing Status drop-down list, choose Married .

140. Click State .

141. In the Filing Status field, choose Married (two incomes).

142. Click OK .

143. In the Additions, Deductions, and Company Contributions area, type 15 in theAmount column for Health Insurance and press Tab.

144. Click OK .

145. When QuickBooks asks whether you want to set up additional payroll information,click Leave As Is .

146. Leave the Employee Center open.



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Running a Payroll Schedule

QuickBooks lets you print payroll checks in a batch based on payroll schedules. You maywant to process the paychecks of salaried employees in one batch, and do payroll for the

weekly employees as another batch.

To run a paycheck:

147. In the Employee Center, click the Payroll tab.

148. In the Pay Employees section, choose the Weekly pay schedule.

149. Click the Start Scheduled Payroll button.

150. Click in the Regular Pay column for Gregg O. Schneider’s name and enter 40 .

151. Click in the Regular Pay column for Michael M. Wilhite’s name and enter 25 .



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Running a Payroll Schedule


153. In the Employee column, click Michael M. Wilhite . (Be sure to click the underlinedlink for the employee name.)

QuickBooks fills in the Employee Summary area of the Review or Change Paycheckwindow, showing the gross regular pay and all of the deductions from Michael’s

paycheck. The net amount of the check appears at the bottom.

154. Click Save & Close to return to the Review and Create Paychecks window.

155. Click Create Paychecks .

QuickBooks writes a payroll check for each employee in the weekly payroll schedule for

the correct net amount, showing the deductions in the voucher area.QuickBooks confirms that you have created the paychecks. You can then choose to printthe paychecks.

156. You don’t want to print the paychecks now, so click Close .

157. Close the Payroll Center.



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Viewing the PaycheckQuickBooks records payroll checks in your QuickBooks checking account register. You cansee the check by going to the register.

To view the paycheck from the register:


159. Double-click Checking .

160. Select the paycheck transaction for Michael M. Wilhite, and click Edit Transaction .

161. Click Save & Close to close the Paycheck – Checking window.

162. Close the checking account register, but leave the chart of accounts open.

Notes



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Printing Paycheck StubsYou can print paychecks as you would any QuickBooks check. If you use voucher checks,QuickBooks prints the payroll item detail in the voucher area. If you don’t use voucherchecks, you can print a paystub to give to your employees.

To print a paycheck:

163. From the File menu, choose Print Forms , and then choose Paychecks .

164. In the First Check Number field, type 301 .

165. Make sure there’s a checkmark next to Michael Wilhite’s name, and then click OK .166. Click Print .

Notes



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Tracking Your Tax LiabilitiesAs an employer, you need to track both payroll expenses and payroll liabilities. These are thecompany payroll expenses you need to track:

Employees’ gross pay Employer payroll taxes, such as contributions to social security (FICA), Medicare,

federal and state unemployment insurance, and state disability insurance

To display the payroll expenses QuickReport:

167. In the Chart of Accounts window, select the Payroll Expenses account.

168. From the Reports menu button, choose QuickReport: Payroll Expenses .

169. From the Dates drop-down menu, choose This Month .

170. Close the QuickReport.

171. In the chart of accounts, double-click the Payroll Liabilities account.

172. Close the register.


Notes



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Paying Payroll TaxesIf you’re about to pay taxes or other liabilities, the payroll liabilities report shows you howmuch to pay. Suppose you are ready to make a tax payment, and you want to see how muchyou owe.

To create a payroll liabilities report:

174. From the Reports menu, choose Employees & Payroll , and then choose PayrollLiability Balances .

175. Click Modify Report , select Display columns by Year across the top , and thenclick OK .

176. Close the report.

177. Click No at the message asking if you’d like to memorize the report.

Notes



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Writing a Check for Payroll TaxesWhen it’s time to deposit payroll taxes with your deposit institution, use the Liability Checkwindow to fill out a QuickBooks check.

To pay payroll liabilities:

178. From the Employees menu, choose Payroll Taxes and Liabilities , and then clickCreate Custom Liability Payments .

179. In the “From” field type 11/30/2007 , and then type 12/15/2007 in the “Through”field.

180. Click OK .

181. Click in the column to the left of the Federal Withholding payroll item.

182. Click in the column to the left of the Medicare Company payroll item.

183. Click in the column to the left of the Social Security Company payroll item.

184. Make sure Review liability check to enter expenses/penalties is selected and thenclick Create .

185. In the Memo field, type EIN 96-4820567 , Form 941 .

186. Click Save & Close to record the check.

187. Click Yes if QuickBooks asks if you wish to save changes made to this transaction.

188. Close the Payroll Center.

Notes



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Review activities196. Add a salaried employee to the Employee Center. Enter the employee’s personal

information, federal and state tax information, and at least one additional paycheckdeduction. Assign the employee to the Monthly payroll schedule.

197. Run the Monthly payroll schedule and process a paycheck for the new employee.Then, view the check in QuickBooks. Open at least one payroll liability account registerto see how the paycheck changes the account’s balance.

198. Select one of the payroll expense accounts from the chart of accounts. Create aQuickReport for that expense account.



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199. What is required in order for QuickBooks to calculate payroll?Tax tables .

200. Which two accounts are typically linked to payroll items?

a Payroll Liabilities b Payroll Expenses

201. Which of the following are QuickBooks payroll item types?

a Wageb Additionc Deductiond All of the above

202. What report would you run to determine how much you owe in payroll taxes?

Payroll Liabilities Balance

203. What QuickBooks feature would you use to make setting up payroll easier when anumber of employees have the same hourly wage, pay period, and base deductions?

a Tax tablesb Employee defaults

c Payroll itemsd Assisted payroll

204. True or false: Payroll schedules are required to run payroll in QuickBooks.

a Trueb False You can still run payroll using Special Payroll in the Payroll Center.

205. Payroll schedules help you do which of the following?

a Group employees with the same pay frequency b Write bonus checksc Prepare termination checksd Pay payroll tax liabilities



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Estimating and Progress Invoicing

Lesson 13



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Lesson Objectives To learn how to create job estimates

To find an estimate in a data file

To learn to duplicate an existing estimate

To create an invoice from an estimate

To display project reports for estimates

To update a job’s status

To make an estimate inactive

Notes



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Turning On Estimates & Progress InvoicingAn estimate is a description of work or products you propose to sell to a current or

prospective customer. You can create multiple estimates for each name (customer orcustomer:job combination). If the customer accepts an estimate, you can turn the estimateinto an invoice, modifying it as necessary. When you have actual costs and revenues, you cancompare them to your estimated costs and revenues to see if you were over or under theestimate.

Estimates are “non-posting” transactions—they do not affect any financial reports or incomeand expense balances. QuickBooks allows you to create invoices from estimates either bytransferring the entire estimate to an invoice or by allowing you to choose a percentage orselected items to invoice from the estimate. The ability to bill for only a percentage of theestimate or selected items on an estimate is called progress invoicing .

To turn on estimates and progress invoicing:


207. Click Jobs & Estimates in the left panel.

208. Click the Company Preferences tab to display the job and estimate preferences.

209. Click Yes for Do You Create Estimates?

210. Click Yes for Do You Do Progress Invoicing?

211. Click OK to record your selections and close the Preferences window.

Notes



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Creating a New Job Now that you’ve turned on the estimates feature, you can add a new job for a bathroomremodel project for your customer, Ernesto Natiello. Then you’ll create an estimate for the

job.

To create a new job:


213. In the Customers & Jobs list, select Natiello, Ernesto .

214. Click the New Customer & Job menu button, and then choose Add Job .

215. In the Job Name field, type Bathroom remodel .

216. Click the Job Info tab.

217. In the Job Status field, select Pending from the drop-down list.

218. In the Start Date field, type 1/4/08 , and then press Tab.

Notes



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Creating a New Job219. In the Projected End field, type 2/28/08 .

220. Press Tab to move to the End Date field, and then press Backspace to clear this field.

221. In the Job Description field, type Remodel bathroom .222. In the Job Type field, choose Remodel from the drop-down list.

Job types give you a way to classify your jobs so you can group and subtotal similar jobson your reports. By using them, you’ll be able to determine which kinds of jobs are themost profitable for your business.

223. Click OK .

224. Click the expand arrow to show full details in the Customers & Jobs list.

Notes



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Writing an EstimateTo create an estimate:

225. In the Customers & Jobs list, select Natiello, Ernesto:Bathroom remodel .

226. Click the New Transactions menu button, and then choose Estimates .

227. Press Tab to accept Natiello, Ernesto:Bathoom remodel in the Customer:Job field.

228. Select Custom Estimate in the Template field.

229. Click in the Item column in the middle of the form.

230. Type Installation .

231. Press Tab twice to move to the Qty column.

232. Type 10 in the Qty column, and then press Tab.



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Creating Multiple EstimatesJust as you’ve completed the estimate for this customer, he calls and asks you to prepare asecond estimate for the same job. He’d like you to price a couple of different options.

Because you just created the estimate, you can open the Create Estimates window and pressPrev and that will take you to the correct estimate. However, when you don’t know where anestimate is, there are a couple of methods you can use to locate the estimate you wantquickly.

To find an estimate:

242. From the Customers menu, choose Create Estimates .

243. Click the magnifying glass icon on the button bar.

244. In the Customer:Job drop-down list, select Natiello, Ernesto:Bathroom remodel .

245. Click Find .

246. If QuickBooks asks if you want to save the current transaction, click No .

247. Keep the estimate open; you’ll use it in the next exercise.

Notes

.



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Creating Multiple EstimatesYour customer wants you to prepare a second estimate for the bathroom remodel job becausehe is considering buying the cabinets from you in addition to having you do the installationwork. First, you’ll create a duplicate of the original estimate, and then make themodifications necessary for the second bid.

To create a duplicate of an existing estimate:

248. Right-click in the body of the estimate and choose Duplicate Estimate from the listthat displays.

249. Click OK when QuickBooks notifies you that the duplicate estimate has been created.

250. Select the number in the Qty column on the line for Installation.

251. Type 18 .

252. Click in the Item column in the line below Lumber:Rough, and select Cabinets:LightPine from the drop-down list.

253. Press Tab twice and type 6 in the Qty column.

254. Click in the Item column in the line below Cabinets:Light Pine and selectCabinets:Cabinet Pulls from the drop-down list.

255. Press Tab twice and type 12 in the QTY column.

256. Press Tab and type 10 in the Cost field.

257. Press Tab.




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Creating an Invoice from an EstimateOnce you have created an estimate and the customer has approved it, you can use theestimate to invoice the customer.

Progress invoicing (also known as progress billing), lets you invoice for jobs that you workon and complete in phases. When using progress invoicing, you start by creating an estimatefor the job (you don't have to give this estimate to the customer). Then, as you complete each

phase, you can easily transfer items from the original estimate to an invoice.

To create an invoice from an estimate:



261. Click the New Transactions menu button, and then choose Invoices .

262. Press Tab to leave the Customer:Job field.

263. The customer accepted the first estimate you created, so select the line containingEstimate #35, and click OK .

264. Select Create invoice for a percentage of the entire estimate .

265. Type 33.333 in the “% of estimate” field.

266. Click OK .

267. In the Template drop-down list, select Progress Invoice .

268. Click Save & Close to record the invoice.




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Displaying Reports for EstimatesBecause you’ve just completed a progress invoice, you can see how QuickBooks records thison the job progress invoices vs. estimates report. This report shows job status, estimate total,total invoiced from the estimate on progress invoices, and the percentage of the estimatealready invoiced on progress invoices.

To display the job progress invoices vs. estimates report:

270. From the Reports menu, choose Jobs, Time & Mileage .

271. Choose Job Progress Invoices vs. Estimates .

272. Close the report window.

Notes



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Updating Job StatusEvery time you change the status of a job, you should update its job status in theCustomer:Job list. For example, the estimate for the bathroom remodel is no longer pending:Ernesto Natiello awarded you the job and you have started work.

To update the status of a job:



275. Click Edit Job .

276. Click the Job Info tab.

277. In the Job Status field, select In progress .

278. Click OK .

279. Click the expand arrow to display the full details on the Customers & Jobs list.

280. Collapse the Customers & Jobs list, and then close the Customer Center.



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Making Estimates Inactive Now that the customer has accepted one of the estimates for the bathroom remodel job andyou have started work, you might want to make the unaccepted estimate inactive. When youmake an estimate inactive QuickBooks keeps a record of it, but does not use the numbers inreports.

To mark an estimate inactive:

281. From the Reports menu, choose Jobs , Time & Mileage .

282. Choose Estimates by Job from the submenu.

283. Scroll to the section of the report that displays the estimates for Ernesto Natiello.

284. Double-click anywhere on the line for Estimate #36.

285. Click to clear the checkmark in the Estimate Active checkbox.


287. Answer Yes to the message asking if you want to save the changes you made to the

transaction.288. Close the report.



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Lesson 13: Estimating and Progress InvoicingReview questions

289. QuickBooks tracks estimates using what kind of account?a Postingb Non-posting

290. True or false: QuickBooks allows you to create multiple estimates for a singlecustomer.

a Trueb False

291. Which of the following is not an option when creating an invoice from an estimate?

a Create an invoice for the entire estimateb Create an invoice for a percentage of the entire estimatec Create an invoice for selected items or different percentages of each itemd None of the above

292. You prepared an estimate for a customer and were subsequently awarded the contract.How would you change the job status from “Pending” to “Awarded?”

a Create the invoice from the accepted estimate—this changes the status automaticallyb Use the Job Status drop-down list in the customer’s recordc Use the Job Status drop-down list in the Create Estimates windowd None of the above

293. What QuickBooks feature would you use to charge customers as you completevarious phases of a job?

a Progress invoicingb Phased invoicingc Partial invoicingd None of the above



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Review activities294. Create an estimate for the 75 Sunset Rd. job for Pretell Real Estate. The estimate is

for 6 hours of installation labor, 18.5 hours of plumbing work, and 4 hours of drywallwork.

295. Create a progress invoice for 50% of the estimate just created for the 75 Sunset Rd. job for Pretell Real Estate.



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296. QuickBooks tracks estimates using what kind of account?

a Posting b Non-posting

297. True or false: QuickBooks allows you to create multiple estimates for a singlecustomer.

a True b False

298. Which of the following is not an option when creating an invoice from an estimate?

a Create an invoice for the entire estimateb Create an invoice for a percentage of the entire estimate

c Create an invoice for selected items or different percentages of each item d None of the above

299. You prepared an estimate for a customer and were subsequently awarded the contract.How would you change the job status from “Pending” to “Awarded?”

a Create the invoice from the accepted estimate—this changes the status automatically b Use the Job Status drop-down list in the customer’s record c Use the Job Status drop-down list in the Create Estimates windowd None of the above

300. What QuickBooks feature would you use to charge customers as you completevarious phases of a job?

a Progress invoicingb Phased invoicingc Partial invoicingd None of the above



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Lesson Objectives To learn how to track time worked on a project

To learn how to invoice a customer for time worked on a project

To create project reports for time tracking and learn about other project reports

To learn how to set up items used to track time worked by owners or partners

To learn how to pay nonemployees for time worked

Notes



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Turning On Estimates & Progress InvoicingQuickBooks provides time tracking for any job. Time tracking lets you keep track of the timea person spends on each job (including sick and vacation time and time spent for generaloverhead). The person whose time you track can be an employee, an owner or partner, or asubcontractor.

To turn on time tracking:


302. Click Time & Expenses in the left panel. Then click the Company Preferences tab.

303. Make sure Yes is selected as the answer to the question “Do You Track Time?”

304. Click OK to save the preference setting.

Notes



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Entering Time DataThere are four ways to get time data into a company file:

• Enter time directly onto a weekly timesheet or single activity form in QuickBooks.• Use the Stopwatch to time an activity while you are performing it.• Use the QuickBooks Timer program to track time and then import the time directly

into QuickBooks.

• Download online timesheets using the QuickBooks Time Tracker.

QuickBooks Time Tracker works with QuickBooks for Windows 2006 or later (Pro,Premier, and Enterprise versions), updated to the most current release. Internet accessis required. Additional fees, terms, and conditions apply.

When you track time with QuickBooks, you have a choice of two forms to enter time:Weekly Timesheet or Time/Enter Single Activity window. If you want to enter time formultiple jobs or multiple days, then the Weekly Timesheet is the best choice.

Notes



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Entering Time DataIf you have employees who don’t have access to a computer or who don’t have access toQuickBooks, you can print blank copies of the weekly timesheet for your employees to fillout by hand.

To print a blank timesheet:

305. From the Employees menu, choose Enter Time and then choose Use WeeklyTimesheet .

306. From the Print drop-down menu, choose Print Blank timesheet .

307. In the Print Timesheets window, click Print .

Notes



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Recording Employee Time on Weekly TimesheetsTo enter information on a weekly timesheet:

308. On the Home page, click Enter Time , and then click Use Weekly Timesheet .

309. In the Name field, select Gregg O. Schneider from the drop-down list.

310. On the line below the existing entries, click in the Customer:Job column, and thenchoose Melton, Johnny:Dental office from the drop-down list.

311. In the Service Item column, type Installation .

312. Click in the W 12 column for the row in which you entered Johnny Melton’s job.

313. Type 8 to enter the number of hours worked on Wednesday.

314. In the Th field, type 8.

315. In the F field, type 8, and then press Tab.

The Billable column to the right of the Total column tells QuickBooks if the time will betransferred onto an invoice. A checkmark in the field indicates that you do want to

invoice the customer for time worked.If you do not plan on invoicing the customer for time worked, you can click the checkboxto remove the checkmark.

316. Click Save & Close to record the Weekly Timesheet.



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Entering MileageBy tracking your vehicle mileage, you can enter, sort, and print lists of your vehicles and themileage you've driven for work-related tasks. You can use this information for your taxdeductions and for billing your customers.

To record mileage:

317. From the Company menu, choose Enter Vehicle Mileage .

318. In the Vehicle field, select 2002 Ford Truck .

319. In the Start Date field, enter 12/12/2007 .

320. In the End Date field, enter 12/12/2007 .

321. In the Total Miles field, type 25 .

322. In the Customer:Job field, select Melton, Johnny:Dental Office from the drop-downlist.

323. In the Item field, select Mileage from the drop-down list.


325. Repeat the steps above to enter 25 miles for the same vehicle and customer:job forDecember 13 and 25 additional miles for December 14.




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Invoicing a Customer for Time and MileageTo invoice a customer for mileage:

336. In the Create Invoices window, click Add Time/Costs , and then click the Mileage tab.

337. Click Select All to select each of the lines that represents the mileage for this job.

338. You want to combine mileage on a single line, so click Options .

339. Select the Combine activities with the same service items option.

340. Click OK .

341. Click OK to transfer the mileage to the invoice.

342. Click Save & Close to record the invoice.



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Creating an invoice from a list of time and expensesQuickBooks provides a list of all billable time and expenses by customer and job that youcan use as the starting point for billing customers.

To enable displaying a list of time and expenses:


344. Click Time & Expenses in the list on the left, and then click the Company Preferences tab.

345. Click to select the Create invoices from a list of time and expenses checkbox.

346. Click OK .

To create an invoice for time and expenses:

347. From the Customers menu, choose Invoice for Time & Expenses .348. Select Abercrombie, Kristy: Remodel Bathroom .

349. Click Create Invoice to invoice Kristy for all outstanding billable items for this job.



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350. From the Template menu, choose Intuit Service Invoice .


352. Close the Invoice for Time & Expenses window.



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Displaying Project Reports for Time TrackingThe time by job summary report summarizes the total hours for each job, and the time by jobdetail report breaks down those summary figures into hours for each service item and hoursfor each customer:job.

To create a time by job report:

353. From the Reports menu, choose Jobs, Time & Mileage .

354. From the submenu, choose Time by Job Summary .

355. Scroll the report until you see the time worked for the Melton, Johnny:Dental office job.

Notice that the report shows the 24 hours for Installation work performed by GreggSchneider.

Notes



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Creating Service Items for Subcontractors,Owners, or Partners

When the company file has time data for a person who is not on your payroll, you can writechecks based on the time worked. QuickBooks can transfer time data for a specified daterange to a check. QuickBooks prefills the Items tab of a check with information from thetime data, including hours worked and rate.

When you use service items for subcontractors, QuickBooks records expenses and incomefor the work in separate accounts. You can use such items on both purchase forms and salesforms.

To set up a service item for owners or partners:


360. Click the Item menu button, and choose New .

361. In the Type field of the New Item window, choose Service from the drop-down list.

362. In the Item Name/Number field, type Planning .

363. Select the This service is used in assemblies or is performed by a subcontractor,owner, or partner checkbox.

364. In the Description on Purchase Transactions field, type Job Planning and press Tab.

365. In the Cost field, type 50 and press Tab.

366. From the drop-down list in the Expense Account field, choose the equity subaccount

called Owner’s Draw .If you pay owners (or partners) for time worked, you need a service item that records thecost of the work as a draw against equity, rather than an expense.

Notes



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Creating Service Items for Subcontractors,Owners, or Partners

367. In the Sales Price field, type 90 .

368. In the Tax Code drop-down list, select Non .

369. In the Income Account field, type Planning and press Tab.

370. When QuickBooks tells you that Planning is not on the Account list, click Set Up .

371. In the Add New Account window, make sure Income is selected in the Type drop-down list and click Save & Close .

372. Click OK to close the New Item window.

373. Press Esc to close the Item list.



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Recording Nonemployee Time Worked

To enter time for nonemployee time worked:

374. From the Employees menu, choose Enter Time . Then choose Time/Enter SingleActivity .

375. In the Name field, choose Tom Ferguson from the drop-down list.

376. In the Customer:Job field, choose Abercrombie, Kristy:Family Room .

377. In the Service Item field, select Planning from the drop-down list and press Tab.

378. Type 8 in the Duration field and press Tab.




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Preparing a Check to Pay for Nonemployee TimeWorked

In this section, you’ll learn how to create a check to reimburse an owner for time worked ona specific job.

To prepare a check for nonemployee time worked:

380. On the Home page, click Write Checks .

381. Make sure that Checking is selected in the Bank Account field.

382. Click to put a checkmark in the To be printed checkbox.

383. In the Pay to the Order of field, choose Tom Ferguson from the drop-down list.

384. Click Yes at the message QuickBooks displays asking if you want this check to pay

for time worked.385. Type 12/10/07 in the Start Date field and press Tab.

386. Type 12/16/07 in the End Date field and click OK .

387. Click Save & Close in the Write Checks window.



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Lesson 14: Tracking TimeReview questions

388. List four ways to enter time in QuickBooks.a ____________________________________________________________________b ____________________________________________________________________c ____________________________________________________________________d ____________________________________________________________________

389. For which of the following can the time tracking features in QuickBooks not be used?

a Notifying you that more staffing is required for a given projectb Tracking the cost of an employee’s gross pay by jobc Providing hours worked on an employee’s paycheckd

Invoicing customers based on time spent on a job390. Which report would you use to determine how many hours were spent on each

activity and whether or not the customer had been billed for the time?

a Time by itemb Time by namec Time by job summaryd Time by job detail

391. When paying owners or partners, you should use an ______________ account totrack the payment.

392. Which of the following is a step involved in the process for invoicing a customer fortime worked?

a Select the customer’s name in the Create Invoices windowb Click Add Time/Costsc In the Choose Billable Time and Costs window, click to select the items youwant to transfer to the invoiced All of the above



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Review activities393. Create a single activity timesheet for Gregg Schneider, for eight hours worked on the

Anton Teschner Sun Room job.

394. Transfer the time you just entered for Gregg Schneider onto an invoice for theTeschner Sun Room job.

395. Display a time by name job report to see how many hours Gregg Schneider hasworked for each job.



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Customizing Forms and Writing

QuickBooks Letters

Lesson 15



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Lesson Objectives To learn how to modify a preset invoice form

To design a custom invoice form

To see how to print invoices

To learn how to prepare a collection letter for overdue customers

To learn how to edit a prewritten letter in QuickBooks

Notes



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Creating New TemplatesQuickBooks lets you customize an invoice form to suit the needs of your business, but theremay be times when you want to design a completely different invoice form. QuickBooks letsyou do that, too. You can use the Layout Designer to create a new form design for your

business. In the Layout Designer, you can move, resize, or change the width of columns, turnon or off borders around fields, and control font type and size for each field.

To create a new invoice template:

401. From the Lists menu, choose Templates .

402. Click the Templates menu button, and then choose New .

403. Click OK to select the invoice form.

404. Click the Manage Templates button to give the template a name.

405. In the Template Name field, type My Invoice .

406.

Look at the options in the Logo & Fonts section of the Basic Customization window.407. In the Company & Transaction section, select the Phone Number checkbox.

408. Select the “Do not display this message in the future” checkbox, and then click OK.

409. Leave the Basic Customization window open. You’ll use it in the next exercise.



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Customizing Fields on FormsTo customize fields on a template:

410. Click the Additional Customization button at the bottom of the window.

411. To have the Due Date field display both on screen and on the printed form, click theScreen checkbox for Due Date to select it.

412. Click the Print checkbox for Due Date.

413. Clear the Screen and Print checkboxes for the P.O. No. field to remove the field fromthe form.

Notes



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Changing Field Order on FormsThe lower half of the standard QuickBooks invoice form is where you enter details about theitems or services purchased by the customer. You can change the order of these fields as theyappear on your invoices.

The Order column shows you how fields display from left to right on the invoice form.Currently, Item is the first column and Amount is the last column. Suppose you want the Qtyfield to appear after the Item field, and before the Description field.

Notes



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Changing Field Order on FormsTo change the order of fields on a form:

414. Click the Columns tab.

415. Double-click the Order column in the Quantity row to select the number.

416. Type 2.

417. Double-click the Order column in the Description row to select it.

418. Type 3.

419. Click the Footer tab.

420. Click the Print tab.421. Click OK to record the changes.

422. Click OK again and then close the Templates window.



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Displaying your Customized FormTo display the custom form:

423. From the Customers menu, choose Create Invoices .

424. In the Template field, choose My Invoice from the drop-down list.

425. Leave the Create Invoices window open, you’ll use it in the next exercise.

Notes



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Designing Custom Layouts for FormsHere are a few examples of what you can do with a custom layout:

Give your company name, address, and logo special treatment on the form. Forexample, you could center your logo at the top of the form and put your companyname and address in a special font immediately below the logo.

Enlarge a custom field so that it can display more information.

Position the customer’s billing address so that it coincides with the address window inthe envelopes you use.

Change the borders on fields, add background colors, and add extra text fields.

Add multiple graphics to a form.

Notes



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Drag the selected fields down about one inch. Changingthe Position of Fields on Forms


434. Select the field containing Rock Castle’s address.

435. Move the mouse over one of the dark squares on the bottom of the field and then holdthe mouse button while you drag the bottom of the field up to a point just below theaddress—the goal being to get rid of the extra space below the address so you can placethe phone number directly beneath it.

436. Scroll to the bottom of the screen and select the Phone # field.

437. Click Remove .

438. Select the field containing the numbers 555-555-5555.

439. Holding down the mouse button, drag the field so that it sits just below Rock Castle’saddress.

Notes



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Changing Field WidthsTo change the width of a field:

440. Select the field containing the telephone number and drag the right border further tothe right while holding down the mouse button.

441.

In the Layout Designer window, scroll until the Qty column is visible.442. Click the Qty column to select it.

443. Click and hold the left mouse button on the line separating the Qty and Descriptioncolumns.

444. While holding down the mouse button, drag the column line to the left (to the one-inch mark on the ruler).


Notes



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Changing Fonts, Borders, and ColorsUsing the Properties window in the Layout Designer, you can change font size and style, text

justification. You can also add, remove, or change the borders around fields.

To change fonts, borders, and colors:

446. With the phone number field selected, click Properties .

447. On the Text tab, select Left for horizontal justification.

448. Click Font .

449. In the Size drop-down list, select 12 , and then click OK .

450. Click the Border tab.

451. Click to remove the Top, Bottom, Right, and Left checkboxes.

452. Click OK to save your changes in the Properties window.

453. Click OK to save the changes in the Layout Designer.

454. Click OK to close the Basic Customization window.

Notes



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Previewing New Forms Notice that the invoice form displayed by QuickBooks doesn’t show the changes you justmade in the Layout Designer. This is because changes made in the Layout Designer onlyaffect the printed invoice and not the invoice QuickBooks displays onscreen for data entry.

To preview the invoice:

455. To see how the printed invoice form will look, click the Print Preview button (abovethe Template drop-down list.)

456. When you are finished looking at the preview, click Close .

457. Press Esc to close the Create Invoices window without saving.

Notes



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Preparing Collection Letters

461. Click Next .

462. Leave all of the names selected and click Next .

463.

When QuickBooks prompts you to choose the letter you want to use, click Friendlycollection and click Next .

464. In the Name field of the next screen, type Tom Ferguson . In the Title field, typePresident .

465. Click Next .

466. If QuickBooks displays a message about missing information, click OK .

467. Close the Microsoft Word file without saving the letters.

468. Return to QuickBooks and click Cancel .



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Editing QuickBooks LettersYou can make changes to individual letters using Microsoft Word, or you can make globalchanges by editing the QuickBooks Letter used to generate a specific letter.

To edit a QuickBooks Letter:

469. From the Company menu, choose Prepare Letters with Envelopes .

470. Select Customize Letter Templates .

471. Click View or Edit Existing Letter Templates .

472. Click Next .

473. When QuickBooks prompts you to choose the letter template you want to view oredit, click Collection , and then select Friendly collection from the list of availableletters.

474. Click Next .

475. Click your mouse pointer after the period at the end of the first sentence and the pressthe Space bar once. (You’ll insert a sentence into the paragraph.)



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Editing QuickBooks Letters

476. Type Our records show that your balance is past due .

477. Click your mouse pointer after the word is in the sentence you just typed, and pressthe Space bar again.

478. From the Insert Collection Info. Fields drop-down list on the QuickBooks CollectionLetter Fields toolbar, select Range (days) of Overdue Invoices .

QuickBooks adds the <<OverdueRange>> field to the sentence you just typed.

479. From the Word File menu, choose Save As .

480. Enter a new filename and click Save .

481. To see how this change affects the final letter output, close the letter file in MicrosoftWord, click Use Template in QuickBooks , and go through the wizard again (all of your

previous choices should still be selected).

482. When you get to the “Choose a Letter Template” screen, select the name of the fileyou just saved, and then click Next .

483. Close Microsoft Word.

484. Click Cancel in QuickBooks.



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Review activities490. Customize the Sales Receipt form to change the default title on the header from

“Sales Receipt” to “Cash Sale.”

491. Using the Layout Designer, make the columns for QTY and Rate narrower so theDescription field is wider.

492. Customize the P.O. form to include the Terms field.



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Working with Multiple Currencies

Lesson 16



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Lesson Objectives To set up a QuickBooks company file to use multiple currencies

To perform a transaction using multiple currencies

Notes



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Setting up multiple currenciesTo use multiple currencies in QuickBooks, you select the multicurrency preference and loadexchange rates either manually or automatically.

To use multiple currencies in QuickBooks:

498. Go to the Edit menu and choose Preferences .

499. Click Multiple Currencies on the left side of the Preferences window.


501. Click Yes, I use more than one currency.

502. Click Yes in the message informing you that you cannot turn this preference off.

503. Leave US Dollar selected for your home currency and click OK .

In most cases, the home currency is the US dollar (USD). Your home currency is thecurrency of the country where your business is physically located.

If you choose to set a home currency other than the US dollar, Intuit services such as payroll and online banking will not be available as these services are only available in USdollars.

Some QuickBooks information—such as income and expense accounts—always use yourhome currency.



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Setting up multiple currencies

504. Click OK when you are notified that the company file will close and be reopened.

505. Go to the Company menu, click Manage Currency , then choose Currency List .

506. Click to uncheck the box next to Include inactive .

507. Click the Activities menu button and select Download Latest Exchange Rates .

508. Click OK when notified that the exchange rates were updated successfully.

You can also enter exchange rates manually. For instructions, type enter exchange ratesmanually in the online help Search field.

509. Close the currency list.

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Buying and selling items in multiple currenciesYou can assign one currency to each of your customers and vendors.If you have an existing customer or vendor with transactions associated with them, youcannot change the currency associated with them. You should create a new customer orvendor instead.

To create a new vendor and assign a currency to them:

510. Click Vendor Center in the icon bar.

511. Click New Vendor .

512. Enter the following information for the vendor:

• Vendor Name: Deruta Ceramiche • Address: Piazza dei Consoli 4, 06053 Deruta PG, Italy • Phone: 075-123-4567

513. In the Currency list, select Euro.

514. Your screen should resemble the following figure.

515. Click OK .

516. In the Vendor Center, notice that EUR is listed next to Deruta Ceramiche.

517. Close the Vendor Center.



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Buying and selling items in multiple currenciesTo create a purchase order in a foreign currency:

518. Click Purchase Orders on the Home page.

519. For the Vendor, choose Deruta Ceramiche .

520. Click in the Item column and type Hand-painted Tiles , then click Tab .

521. Click Yes to add Hand-painted Tiles to the Item List.

522. In the New Item window, enter the following:

• Type: Inventory Part• Item Name/Number: Hand painted Tiles • Cost: 5 (in US dollars)• Sales Price: 8 (in US dollars)• Preferred Vendor: Deruta Ceramiche • Income Account: Construction Materials

523. Click OK .



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Buying and selling items in multiple currencies

524. Enter the following on the Purchase Order:• Description: Blue hand-painted 4cm tile • Qty: 100 • Customer: Abercrombie, Kristen Kitchen

525. Notice that the value of the purchase order appears in both dollars and Euros.


Notes



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Buying and selling items in multiple currenciesTo receive inventory and enter a bill from a foreign vendor:

527. On the Home page, click Receive Inventory and select Receive Inventory with Bill.

528. On the Enter Bills screen, choose Deruta Ceramiche for the Vendor.

529. Click Yes when asked if you want to receive against an open purchase order.

530. Click the column next to PO 40 and click OK .

531. Review the Enter Bills window.

532.


Notes



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Buying and selling items in multiple currenciesCreating an invoice for a customer that includes an item from a foreign vendor is the same ascreating a standard invoice. When you create an invoice for your customer, all informationappears in the currency that you have assigned to them.

To create an invoice for an item from a foreign vendor:

533. Click Create Invoices .

534. For Customer: Job, select Abercrombie, Kristen: Kitchen .

535. Click Cancel to close the Available Estimates window.

536. Enter the following information on the Invoice:

• Quantity: 100

• Item Code: Hand painted tiles • Description: Special order tile for backsplash

537. Click Save & Close.



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Lesson 15: Working with Multiple CurrenciesReview questions

538. List five QuickBooks elements that you can assign a currency to:a ____________________________________________________________________b ____________________________________________________________________c ____________________________________________________________________d ____________________________________________________________________e ____________________________________________________________________

539. True or false: You should back up your company file before you enable themulticurrency preference.

a Trueb

False



Review activities540. Create a bank account with Euros assigned to it for the currency.

541. Use the Euro bank account you created to pay Deruta Ceramiche.

beg int qb 10 combined

Documents