computerized accounting with quickbooks pro

USING

with

QuickBooksPro 2006

software

Computerized Accounting with

QuickBooksPro

Kathleen VillaniQueensborough Community College

James B. RosaQueensborough Community College

QuickBooks 2005 update 7/19/06 3:49 PM

ISBN-13: 978-0-7638-2944-5ISBN-10: 0-7638-2944-7

© 2007 by EMC Publishing, a division of EMC Corporation875 Montreal WaySt. Paul, MN 55102(800) 535-6865E-mail: [email protected] site: www.emcp.com

All rights reserved. No part of this publication may be adapted, reproduced, stored in aretrieval system, or transmitted in any form or by any means, electronic, mechanical,photocopying, recording, or otherwise, without prior written permission from the publisher.

Printed in the United States of America

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QuickBooks Pro 2005 compared to QuickBooks Pro 2006 software 3

INTRODUCTION

In Computerized Accounting with QuickBooks Pro 2005 you learnhow to operate QuickBooks Pro by entering common daily businessactivities in the program windows using sample companies. Youalso learn the behind-the-scenes accounting that QuickBooks Pro isrecording. You can achieve these same goals using our book withQuickBooks Pro 2006.

There are three differences in QuickBooks Pro 2006 as compared toprior versions of QuickBooks Pro: Centers (new), Lists (revised),and EasyStep Interview (revised).

Centers

The first difference is the display of “Centers.” By default, inQuickBooks Pro 2006 the following Centers are activated:

Home CenterCustomer CenterVendor CenterEmployee Center Report Center

Also by default, when a company file is first opened, the HomeCenter window is displayed:


You can access the Customers or Vendors Centers by clicking onthe tabs on the left of this Home Center window, by using theNavigation bar (below), or by using the Main Menu bar. You mayleave the Home Center window open, you may close the HomeCenter window, or you may set the default for this window not toappear on opening. (Click Edit, Preferences, Desktop View, removethe check mark next to Show Home page when opening a companyfile.) We suggest closing the Home Center window.

Under the Main Menu bar, is the Navigation bar:

You may access any Center by clicking on the appropriate icon onthis bar. These Centers are also accessible from various drop-downmenus on the Main Menu bar. To remove the Navigation bar, clickon View, then click Navigation bar. We suggest removing theNavigation bar. We will access the Centers when needed by usingthe Main Menu bar.

Lists

The second difference is in the choices offered in the Lists drop-down menu. The concepts presented in the text are illustrated usingthe various List and Activities windows in QuickBooks Pro that areaccessed using the Main Menu bar. In QuickBooks Pro 2006, youmay no longer access the Vendor List (chapter 2), Customer: JobList (chapter 3), and Employee List (chapter 9) from the Lists drop-down menu. These Lists must now be accessed from the appropriateCenter. The Payroll Item List (chapter 9) is accessible only from theList menu after indicating that you will enter payroll data manuallyas opposed to subscribing to QuickBooks payroll service. Thisservice is chosen by using the QuickBooks Pro Web site. Detailedexplanations for these chapters are provided below. Note that theChart of Accounts List (chapter 4) and the Item List (chapter 5) arestill accessed using the List menu.

4 QuickBooks Pro 2005 compared to QuickBooks Pro 2006 software



List Menu – QuickBooks Pro 2005: List Menu – QuickBooks Pro 2006:

EasyStep Interview

The third difference is the design of the EasyStep Interview window(chapter 6 and chapter 7). First, the display of the pages in EasyStepwindow is completely different. Second, substantially lessinformation is entered in the EasyStep Interview window as in priorversions of QuickBooks Pro. In the text, chapter 6 is devoted tocreating a new company file (New Company Setup) by enteringinformation in the EasyStep Interview window, and chapter 7customizes the company file using the information previouslyentered in the EasyStep Interview window. Chapter 8 illustrates analternative method of creating a new company file by skippingEasyStep Interview. In QuickBooks Pro 2006, the EasyStepInterview windows are streamlined and obtain a minimal amount ofinformation. Upon completing the revised EasyStep Interviewwindow, the remaining company information is now enteredfollowing steps previously used when skipping the EasyStepInterview. The result is that the bulk of chapter 6 and all of chapter7 are no longer necessary when using QuickBooks Pro 2006.Therefore, when using QuickBooks Pro 2006, we recommend usingonly chapter 8 – New Company Setup: An Alternative – SkipEasyStep Interview.



USING QUICKBOOKS PRO 2006

Listed below is a summary by chapter that provides a detaileddescription of the variations between QuickBooks Pro 2005 andQuickBooks Pro 2006 when using the Computerized Accountingwith QuickBooks Pro 2005 text with QuickBooks Pro 2006software. Note that when figures below are labeled with numbers,these pictures replace the figure displayed in the text. Figures notlabeled with numbers are not displayed in the text and are displayedhere to supplement this update. There were some other minorchanges made in QuickBooks Pro 2006 that have no effect on thetext and are not listed here.

Data Files

As with all versions of QuickBooks Pro, you may open a companyfile from the CD in a later version of QuickBooks, but once openedin a later version, you cannot then open the company file in anearlier version. All company files on the CD that accompanies thetext can be used in QuickBooks Pro 2006.

CHAPTER 1- INTRODUCTION TO QUICKBOOKS PRO

Replace the second sentence on page 8 with:

The first time you open a company file in QuickBooks Pro 2006, anAlert may appear regarding alerts for backups. Click Mark As Doneand a window will appear titled Welcome to QuickBooks Pro 2006.

Updating Company Files to QuickBooks Pro 2006

(not in the text)

Follow steps 1–4 on page 9 of the text. In QuickBooks Pro 2006,when you open a company file from the Computerized Accounting



with QuickBooks Pro 2005 text CD, you will see the Update File toNew Version dialog box.

Key YES and then click OK. You will receive a message that youmust backup your data. Click OK.

You will then see the QuickBooks Backup dialog box.



Click the Browse button. The Back Up Company to dialog boxappears.

Indicate the location to Save in and the File name for the backup,then click Save. You will be returned to the QuickBooks Backupdialog box. Click OK. You will receive two warnings. The firstwarning is about backing up onto your hard drive. Click Yes. Thesecond warning cautions that upon updating the file you will nolonger be able to open the file in a prior version of QuickBooks.Click Yes. Once you update a company file to QuickBooks Pro2006, you can no longer open the file in QuickBooks Pro 2005.

The Change Password for Admin dialog box will appear:


Click OK, then at the warning click No.

Replace page 10 with:

The company file is opened. The QuickBooks Learning Center –Welcome to QuickBooks Pro window appears. Remove the checkmark in the box to the left of Show this window at startup, thenclick the X (Close button) to close the window.

Once a company file is open, the main window of QuickBooks Prochanges. (See figure 1-6 (2006).)

FIGURE 1-6 (2006)

The company name, CH1 Kristin Raina Interior Designs, is nowdisplayed in the Title bar. Under the Main Menu bar is theNavigation bar and the Icon bar. These two bars are displayed onthe same row.

The bars may be separated by clicking and dragging the divider:

The remainder of the screen displays the Home Center window.

To close the Home Center window:

1. Click on the X in the upper right corner of that screensection. (Note: clicking the other X at the top right of thescreen will close QuickBooks.)


Title BarwithCompanyName

NavigationBar

Icon Bar

HomeCenterWindow



To close the Navigation bar:

1. At the Main Menu bar, click View.

2. At the View menu, click on the Navigation bar to removethe check mark.

To close the Icon bar:

1. At the Main Menu bar, click View.

2. At the View menu, click on the Icon bar to remove thecheck mark.

Backing Up a Company File

Do not confuse the backup procedures above with those listed in thetext on pages 11–13. The backup procedures above are followedwhen updating a company file in a newer version of QuickBooksPro. The backup procedures in the text are used to make backupcopies of working files. Continue to follow the backup proceduresin the text.

On page 12, replace step 1 with:

1. Click file, then click Back Up. The Portable Company FileFeature window appears:


Place a check mark in the box to the left of Do not displaythis message in the future and click OK. Then theQuickBooks Backup dialog box appears. (See figure 1-7 inthe text.). Continue with steps 2–8 in the text.


9. Click OK. If the Home Center page appears, click X toclose.

Restoring a Company File


13. If the QuickBooks Learning Center – Welcome to QuickBooksPro window appears. Remove the check mark in the box to the leftof Show this window at startup, then click the X to close thewindow. Close the Home Center window and the Navigation bar, ifnecessary.

CHAPTER 2 – VENDORS

On page 25, replace step 5 of opening the company file with:

5. If the QuickBooks Learning Center and Home windowsappear, click X to close them.



Vendor Center

(not in the text but precedes The Vendor List)

In QuickBooks Pro 2006 many activities for vendors are groupedinto a Vendor Center. The Vendor Center incorporates information



and some of the activities that were previously accomplishedthrough the Lists, Vendors, and Reports menus. This Center acts asa centralized activities center where you can add, edit, or delete avendor, enter bills and payments, and view historical informationfor each vendor. In addition, several reports, such as theQuickReport and Opens Balance Report, are now available here.(You may need to maximize the window to view all fields ofinformation.)

The Vendor Center contains the following parts:

Vendors Tab Lists all vendors with current balanceowed.

You can display all vendors, activevendors, or only vendors with balances.

Transactions Tab Lists all transactions for listed vendors.

New Vendor Button Used to add a new vendor.

New Transactions Button Used to enter a bill or pay a bill.

Vendor Information Displays background and transactioninformation for the vendor selected inthe Vendor tab.



Edit Vendor Button Used to edit background informationfor the vendor selected in the Vendortab.

Edit Notes Button Used to include narrative informationspecific to a vendor.

In addition to the foregoing, once a vendor is selected you canright-click the mouse anywhere on the Vendors tab to display ashortcut menu to accomplish most vendor related activities. (Seefigure 2-4 (2006).)

FIGURE 2- 4 (2006)

The Vendor List

In prior versions of QuickBooks Pro, the Vendor List contained afile for each vendor and was accessed from the Lists menu. Readthe information describing the Vendor List on pages 26 through 28of the text, stopping at Adding a Vendor. This information is nowdisplayed in the Vendor Center.

Adding a Vendor

On page 28, replace steps 1–3 with:



1. Click Vendors, and then click Vendor Center.

The Vendor Center opens with a list of vendors on theVendor tab, and information is displayed for the first vendoron the list. (See figure 2-3 (2006).)

FIGURE 2-3 (2006)

2. At the Vendor Center window, click New Vendor. The NewVendor window appears. (See figure 2-5 in the text.)

Then continue with steps 4–6.


7. Click the X to close the Vendor Center window.

Deleting a Vendor


1. Click Vendors, and then click Vendor Center.

2. At the Vendor Center window, select (highlight) LakesAdvertising but do not open the file. (See figure 2-8(2006).)

3. From the Main Menu, click Edit Vendor and then clickDelete Vendor.




4. The Delete Vendor warning appears. Click OK. The vendorfile will be deleted.

5. Close the Vendor Center window.

FIGURE 2-8 (2006)

Editing a Vendor


1. Open the Vendor Center and double-click MinneapolisElectric & Gas Co. This will open the file in the edit mode.(See figure 2-9 in the text.)

Vendor and Financial Reports

The procedures to view and print the vendor reports from theReports menu outlined in the text remain unchanged in QuickBooksPro 2006. However, since the Vendor List is no longer accessedfrom the Lists menu, the procedure to view the Transactions List byVendor has been changed. This report will now be accessed usingthe Vendor & Payables reports of the Reports menu.


To view and print the Transaction List by Vendor report-


1. Click Reports and then click Vendors & Payables.

2. At the Vendors & Payables submenu, click Transactions listby Vendor.

Then continue with steps 5 through 8 as outlined on pages49 to 50 of the text.

CHAPTER 3 – CUSTOMERS

On page 67, replace step 5 of opening a company file with:




Customer Center

(not in the text but precedes The Customer:Job List)

In QuickBooks Pro 2006, many activities for customers are groupedinto a Customer Center. The Customer Center incorporatesinformation and some of the activities that were previouslyaccomplished through the Lists, Customers, and Reports menus.This Center acts as a centralized activities center where you canadd, edit, or delete a customer, create invoices, record customerpayments, enter credit memos, and view historical information foreach customer. In addition, several reports, such as the QuickReportand Opens Balance Report, are now available here.



The Customer Center contains the following parts:

Customers & Jobs Tab Lists all customers and jobs withcurrent balance due. You can displayall customers, active customers, oronly customers with balances.

Transactions Tab Lists all transactions for listedcustomers.

New Customer & Job Used to add a new customer and/orButton job.

New Transactions Button Used to create an invoice, enter salesreceipts, payments, and credit memos.

Customer Information Displays background and transactioninformation for the customer selectedin the Customer & Jobs tab.

Edit Customer Button Used to edit background informationfor the customer selected in theCustomer & Jobs tab.

Edit Notes Button Used to include narrative informationspecific to a customer.



In addition to the foregoing, once a customer is selected, you canright-click the mouse anywhere on the Customer tab to display ashortcut menu to accomplish most customer related activities. (Seefigure 3-3 (2006).)

FIGURE 3-3 (2006)

The Customer:Job List

In prior versions of QuickBooks Pro, the Customer:Job Listcontained a file for each customer. Read the information describingthe Customer:Job List on pages 68 through 70 of the text, stoppingat Adding a Customer. This information is now displayed in theCustomer Center.

Adding a Customer


1. Click Customers and then click Customer Center. TheCustomer Center opens with a list of customers on the




Customer & Jobs tab, and information is displayed for thefirst customer on the list.

2. At the Customer Center window, click New Customer &Job and select New Customer. The New Customer windowappears. (See figure 3-4 in the text.)



8. Close the Customer Center window.

Deleting a Customer


1. Click Customers and then click Customer Center.

2. At the Customer Center window, select (highlight)Valueline Development Corp. but do not open the file. (Seefigure 3-8 (2006).)

FIGURE 3-8 (2006)

3. From the Main Menu, click Edit Customer and then clickDelete Customer:Job. Click OK at the Delete Customer:Jobwarning. The customer file is now deleted.

4. Close the Customer Center window.


Editing a Customer


1. Open the Customer Center and double-click Plaza PizzaPalace. This will open the file in the edit mode. (See figure3-9 in the text.)

Customer and Financial Reports

The procedures to view and print the customer reports from theReports menu outlined in the text remain unchanged in QuickBooksPro 2006. However, since the Customer List is no longer accessedfrom the Lists menu, the procedure to view the Transactions List byCustomer has been changed. This report will now be accessed fromthe Customer & Receivables reports of the Reports menu.


To view and print the Transaction List by Customer report-

1. Click Reports and then click Customers & Receivables.

2. At the Customers & Receivables submenu, clickTransactions List by Customer.

Then continue with steps 5 through 8 in the text.

CHAPTER 4 – PERIOD-END PROCEDURES

In this chapter, the Chart of Accounts List is accessed from the ListsMenu as is done in prior versions of QuickBooks Pro.


1. Click Lists (from the Main Menu bar), then click Chart ofAccounts. The Chart of Accounts List window appears.




All List windows have three drop-down menu buttons on thebottom of the window. The first menu button represents the name ofthe List, in this case Account. The second menu button is Activities,and the third menu button is Reports. These menu buttons areshortcuts you can use instead of using the Main Menu drop-downmenus to access commands.

2. At the Chart of Accounts window, click the Account menubutton. A drop-down menu appears.

3. On the Account menu, click New. The New Accountwindow appears with the Type List displayed. (See figure4-3 (2006).)


FIGURE 4-3 (2006)

CHAPTER 5 – INVENTORY

QuickBooks Pro 2006 can be used with chapter 5 as illustrated inthe text.

CHAPTER 6 – NEW COMPANY SETUP: Part I and

CHAPTER 7 – NEW COMPANY SETUP: Part II

With the revisions to the EasyStep Interview in QuickBooks Pro2006, we recommend only using the Skip EasyStep Interviewmethod of New Company Setup illustrated in chapter 8.

CHAPTER 8 – NEW COMPANY SETUP:An Alternative



Note that on page 264 in the second paragraph under theIntroduction, any references to chapters 6 and 7 are no longerapplicable, nor are any other occasional references to chapters 6 and7 in any parts of this chapter.

Chapter Problem

(See figure 8-1 (2006).)

FIGURE 8-1 (2006)

Skipping EasyStep Interview

On page 265, replace the first paragraph and steps 1 and 2 with:

The EasyStep Interview is designed to guide you through the stepsto create and begin the setup of a new company file. An alternativemethod of New Company Setup is to skip the EasyStep Interview.



1. Read the Getting Started page, and then click SkipInterview. The Creating New Company window appears.

(Note that figure 8–2 in the text is no longer applicable.)Continue with steps 3–9.


10. Close the QuickBooks Learning Center and the HomeCenter windows by clicking the X in each window. Youmay remove the Navigation bar by clicking View from theMain Menu bar and then clicking the Navigation bar, andyou may remove the Icon bar by clicking View from theMain Menu bar and then clicking Icon bar.

Note in figures 8-5, 8-6, and 8-7, the display of the Icon baron the left is slightly different; otherwise, all picturesremain the same as in the text. (See figure 8-5 (2006).)

FIGURE 8-5 (2006)


1. Click Customers, and then click Customer Center.

2. At the Customer Center window, click New Customer &Job and select New Customer. The New Customer windowappears.



Then follow steps 4–11 in the text.


1. Click Vendors and then click Vendor Center.

2. At the Vendor Center window, click New Vendor. The NewVendor window appears.

Then follow steps 4–9 in the text.

CHAPTER 9 – PAYROLL

On page 323, step 4,(see figure 9-1 (2006).)

FIGURE 9-1 (2006)

The Payroll Item List

Unlike QuickBooks Pro 2005, the QuickBooks Pro 2006 versiondoes not automatically set up a Payroll Item List when you activatethe full payroll feature in the Preferences window. In order to createa Payroll Item List, and also to process payroll, you first will haveto set up payroll through the QuickBooks Web site. You must dothis before you can follow the Payroll Item List steps beginning onpage 326 of the text.



To set up payroll for manual processing:

1. Click Employees, and then click Add Payroll Service.

2. At the Add Payroll Service submenu, click Learn AboutPayroll Options and then click OK at the warning message.You will be connected to the QuickBooks Payroll ServiceWeb site. (Picture may vary.)

3. Scroll down part of the page. Next to Information on how toenter payroll information into QuickBooks if you don’t useQuickBooks Payroll, click the Learn More link.


LearnMore


4. At the Calculating Payroll Manually page, click SetQuickBooks to Enable Manual Paycheck Entry.

5. Click OK at the two warning windows. QuickBooks Prowill now include a Payroll Item List as part of the Listsmenu and will allow you to process payroll manually. Oncepayroll has been set up you can proceed with the PayrollItem List beginning on page 326 in the text.

On page 328, replace steps 3 and 4 with:

3. At the Payroll Item menu, click New. The Add a newpayroll item page appears. On the first page is the list ofpayroll item types. For each payroll item listed in thePayroll item type page, there are several pages ofinformation that are displayed as you click Next.

(Note that figure 9-6 in the text is no longer applicable.)Continue with steps 5–14 in the text.


3. At the Payroll Item menu, click New. The Add a newpayroll item window appears.



Set QuickBooksto EnableManualPaycheck Entry


Employee Center

(not in the text but precedes The Employee List)

QuickBooks Pro 2006 has grouped many activities for employeesinto an Employee Center. The Employee Center incorporatesinformation and some of the activities that were previouslyaccomplished through the Lists, Employees, and Reports menus.This Center acts as a centralized activities center where you canadd, edit, or delete an employee, add new payroll items, and viewhistorical information for each employee. In addition, severalreports, such as the QuickReport, Payroll Summary, and PayrollTransaction Detail reports, are available here.

The Employee Center contains the following parts:

Employees Tab Lists all current employees. You candisplay active employees, all employees,or only released employees.

Transactions Tab Lists all transactions for selectedemployees.

New Employee Button Used to add a new employee.



Related Activities Button Used to add a new sales rep and payrollitem.

Employee Information Displays background and transactioninformation for the employee selected inthe Employees tab.

Edit Employee Button Used to edit background information forthe employee selected in the Employeestab.

Edit Notes Button Used to include narrative informationspecific to an employee.

Adding an Employee


1. Click Employees, and then click Employee Center.

2. At the Employee Center window, click New Employee. TheNew Employee window appears. At the Change tabs field,click on the drop-down arrow. (See figure 9-19 in the text).

The New Employee window has three sets of informationtabs: Personal Info, Payroll and Compensation Info, andEmployment Info. The Personal Information tabs are theinitial display.


Page 340 (See figure 11-13 (2006).)



FIGURE 9-25 (2006)

Text from the second paragraph on page 342 to the top of page 343(up to Paying an Employee) is superseded by the previous steps onpages 18 and 19 of this update to activate preparing payrollmanually.

Paying an Employee


2. At the Pay Employees warning window, click PayEmployees Anyway. The Select Employees To Pay windowappears.

Form 941


5. At the QuickBooks Payroll Tip window, click No, turn offpop-up messages for products and services, and then clickOK.



CHAPTER 10 – BANKING


CHAPTER 11 – JOBS AND TIME TRACKING

In QuickBooks Pro 2006, Jobs are added through the CustomerCenter.

On pages 413–414, replace steps 1–4 with:

1. Click Customers, and then click Customer Center. TheCustomer Center window appears.

2. At the Customer Center window, select (highlight)Hamilton Hotels, but do not open the file. (See figure 11-1(2006).)

FIGURE 11-1 (2006)

3. Click the New Customer & Job button, and then click AddJob. The New Job window opens. Notice that the New Job



window carries over information from the Hamilton Hotelsfile. (See figure 11-2 in the text.)


On page of text 415, replace step 7 with:

7. If the information is correct, click OK. You will be returnedto the Customer Center window. Notice that Lakeside Hoteljob is listed below the Hamilton Hotels file as a subfile.(See figure 11-4 (2006).)

FIGURE 11-4 (2006)

Page 424 (See figure 11-13 (2006).)



FIGURE 11-13 (2006)


1. Click Employees and then click Enter Time.

2. At the Enter Time submenu, click Use Weekly Timesheet.

CHAPTER 12 – CUSTOMIZING YOUR COMPANY FILE




NOTES:


QuickBooks 2005 update 7/20/06 10:45 AM

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computerized accounting with quickbooks pro

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