QUICKBOOKS ONLINE PLUS: A COMPLETE COURSE Chapter 7: Payables, Purchases, and Inventory

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1 QUICKBOOKS ONLINE PLUS: A COMPLETE COURSE 2016 Chapter 7: Payables, Purchases, and Inventory

2 Lecture Focus 2 Prepare Purchase Orders Add Inventory Items Receive Inventory Items Close Purchase Orders Merchandise Discounts and Purchases Discounts Inventory and Purchase Returns Pay Bills and Purchases with Company Credit Card Pay Sales Tax Liabilities Customize and Prepare Inventory and Vendor Reports

3 Lecture Notes 3 Lecture for Chapter 7 will not match text material Lecture designed to illustrate key points in chapter Examples and coverage may not encompass everything in the chapter In Chapter 7, Your Name s Beach Barkers is used to present lecture information Not all transactions used in reports are shown in detail Lecture for illustrative purposes only not to be completed by students Do not record transactions illustrated in lecture Google Chrome used for Web browser

4 Training and Tutorial Procedures 4 Use Test Drive Company to Drill and practice Use Your Name s Beach Barkers to Do Record and save entries pay careful attention to quantities, amounts, and dates when recording transactions with inventory Enter Additional Transactions at end of chapter to reinforce Print, export to Excel, or submit work as instructed Use dates provided in text Use 2016 as the year Note: Test Drive Company has automatic date changes built into company so dates do not always match

5 5 Accounting for Payables, Purchases, and Inventory Sell Inventory Items Order merchandise Purchase Order Stock merchandise When received Items entered on bill Purchase Order is closed Value of Merchandise added to Inventory Asset Account Pay for merchandise and bills for operation of business Use Vendor List May pay by cash, check, or company credit card

6 Inventory Valuation Summary 6 Report summarizes information for each inventory item May select to include All inventory items Active inventory items Non-zero inventory items Prepare report from Manage Products and Inventory

7 Add New Inventory Item 7 Open Products and Services List Enter New Inventory Item Click New Click Inventory Name: Books Quantity on hand: 0.00 As of date: 12/31/15 QBO does not let you record inventory transactions on the same date that item was created Text uses 2015 to avoid conflict Sales and Purchase Information (Description): Books Click Is Taxable to select Cost: 3

8 Purchase Orders 8 Prepared to order inventory items Example: 02/16/16 Order 250 Books from The Literary Dog Click Plus icon, click Purchase Order in the Vendors column Click drop-down list arrow for Choose a vendor Click The Literary Dog Enter Purchase Order Date: 02/16/16 Qty: 250

9 Open Purchase Order List by Vendor 9 Report Important to view open purchase orders Prepare Purchase Order List by Vendor Click Reports on the Navigation bar Click in textbox for Go to report Scroll through list, click Open Purchase Order List

10 Customize Report Columns and 10 Information Click Customize button Click Change Columns button

11 Add Report Column 11 Can Add and Remove Columns from Report Example: Add PO Status and Remove Ship Via To Add a column Click PO Status in Available Columns List Click Add>

12 Remove and Reposition Report Column 12 To Delete column Click Ship Via in Selected Columns List Click <Remove Reposition column Click selected column Click the Move Up or Move Down buttons Click OK Click Run Report Click Save Customizations

13 View Customized Report 13 View the report Note the column for PO STATUS

14 Receive Items Ordered 14 To record the receipt of merchandise ordered on a Purchase Order Click Plus icon, click Bill in Vendors column Click drop-down list arrow for Choose a vendor Click Vendor name The Literary Dog in example Add to Bill pane appears Click Add all or Add Purchase Order information is added to bill Inventory item shown in Item details not Account details Enter Bill Date Enter Terms if necessary

15 View Bill for Inventory Items 15 View the bill for inventory items Note: Item details used for Transaction Inventory Items Account details used for Transaction Accounts Shows 1 linked transaction Bill linked to Purchase Order When finished, click Save and close

16 View Closed Purchase Order 16 Click Recent Transactions icon next to Plus icon Click Purchase Order for The Literary Dog View Closed and Linked Bill notations Close the Purchase Order

17 Record Partial Receipt of Inventory Ordered Example: 02/18/16 Received 150 Books Open Original Purchase Order Click More button at bottom of

17 17 Record Partial Receipt of Inventory Ordered Example: 02/18/16 Received 150 Books Open Original Purchase Order Click More button at bottom of Purchase Order Click Copy New PO Opened with message Enter amount not received Do the math: Order 250 Received 150 = 100 for new PO Click Save and close

18 Revise Original Purchase Order 18 Return to original Purchase Order Enter Quantity received Click Save and close

19 View Open Purchase Orders for 19 Partial Receipt Prepare Open Purchase Order List by Vendor report Access report in Review Expenses and Purchases report category as previously instructed Enter report dates, click Run Report View the two purchase orders for The Literary Dog

20 Record Bill for Partial Receipt 20 Example: Prepare Bill for receipt of 150 Books from The Literary Dog Prepare Bill as usual Click Add on the PO for merchandise received Complete Bill

21 Record Merchandise Return 21 When returning damaged or incorrect merchandise to Vendor, prepare Vendor Credit Example: 02/19/16 Returned 5 damaged books to The Literary Dog. Received CM 278. Click Plus icon, click Vendor Credit in Vendors column Enter Payment date 02/19/16 Enter Credit Memo number 278 in Ref no. Disregard Open PO notice

22 Complete Vendor Credit 22 Click to collapse Account Details Click to expand Item Details Record Item Details Product: Books Qty: 5 View completed Vendor Credit Click Save and close

Close Purchase Order 23 When determined ordered item no longer available, manually close PO Example: 02/19/16 Remaining 100 Books on order are discontinued Open Purchase Order for 100

23 Close Purchase Order 23 When determined ordered item no longer available, manually close PO Example: 02/19/16 Remaining 100 Books on order are discontinued Open Purchase Order for 100 Books Click drop-down list arrow for Open Click drop-down list arrow on the Open button Click Closed on the Purchase Order status pop up Purchase Order is marked Closed Click Save and close

24 Purchases by Product/Service Detail 24 Report Access Purchases by Product/Service Detail report Report Category: Manage Products and Inventory Enter dates View report Note transactions for Books do not include Closed PO

25 Add Company Credit Card 25 Open Chart of Accounts to add new credit card account Example: Add new Visa credit card Click New button Enter information: Category Type: Credit Card Detail Type: Credit Card Name: Visa Click Save and Close

26 Record Credit Card Purchase 26 When using company credit card for purchase, record as Expense Example: 02/19/16 Use Company Visa to purchase 5 ink $40 each + 8% sales tax = $216 from Super Office Click Plus icon, click Expense in Vendors column Payee: Super Office Payee is person or company receiving payment In textbox next to Payee, click drop-down list arrow Click Visa for the account

Continue Recording Expense 27 Enter Payment Date: 02/19/16 Click drop-down list arrow for Payment Method Click Visa Complete Account Details Line 1 Remember: Account Details for

27 Continue Recording Expense 27 Enter Payment Date: 02/19/16 Click drop-down list arrow for Payment Method Click Visa Complete Account Details Line 1 Remember: Account Details for transaction account Item Details for inventory items Account: Office Supplies The Asset account Tab to Amount Enter 216 Do not separate tax from amount Tab to Memo, enter Printer Cartridges

Record Credit Card Credit 28 When Credit Card purchase is returned, complete Credit Card Credit Example: 2/19/16 Returned 1 printer cartridge purchased from Super Office paid by Visa Click Plus icon,

28 Record Credit Card Credit 28 When Credit Card purchase is returned, complete Credit Card Credit Example: 2/19/16 Returned 1 printer cartridge purchased from Super Office paid by Visa Click Plus icon, click Credit Card Credit in Vendors column Payee: Super Office Payment date: 02/19/16 Complete Account details Line 1 Account: Office Supplies Amount: Memo: Returned 1 Printer Cartridge Click Save and new

29 View Credit Card Balance 29 On new Expense screen view Balance for Visa account Note Balance of $ Do the Math: Original Purchase $ Cost of 1 printer cartridge $43.20 = Balance owed $172.80

30 Purchase Inventory with Credit Card 30 Inventory may be purchased without preparing PO May pay for inventory with credit card at time of purchase Record as an Expense Example: 02/19/16 Purchase 50 cans of Dog Food from Pet Supplies $2.50 each. Pay for purchase with Visa

31 Record Inventory Purchase by Credit Card Record the purchase Click the Plus icon, click Expense in the Vendors column Payee: Pet Supplies Unlimited Account: Visa Payment

31 31 Record Inventory Purchase by Credit Card Record the purchase Click the Plus icon, click Expense in the Vendors column Payee: Pet Supplies Unlimited Account: Visa Payment Date: 02/19/16 Payment Method: Visa Enter Item details Line 1 Purchasing Inventory Items Product/Service: Dog Food Canned Qty: 50 No tax on inventory items Click Save and close

32 Discounts 32 Three type of early payment discounts Sales Discount early payment discount to customer Chapter 6 Merchandise Discount early payment discount on inventory items purchased for resale Chapter 7 Purchase Discount early payment discount on purchases made to run the business (example: Office Supplies) Chapter 7

33 Discount Accounts 33 Discount Account needs to be modified and added Open Chart of Accounts View Cost of Goods Sold subaccount Purchase Discounts Merchandise Discounts should be used for Inventory items Cost of Goods Sold calculates cost of inventory items sold Change account name

34 Modify Account Name 34 Click Edit at the end of the subaccount Purchases Discounts Change the Name: Merchandise Discounts Click Save and Close View name change

35 Add New Discount Account 35 Purchase Discounts used for purchases to run the business not for inventory Add account: Click New in Chart of Accounts Category: Other Expense Detail Type: Other Miscellaneous Expense Name: Purchase Discounts Click Save and Close

36 Pay Bills with Credit Card 36 Same Pay Bills procedure as Chapter 4 Select Credit Card for Payment Account View Example:

37 Pay Bill for Inventory with Discount 37 Access Bill to be paid Example: Pay bill to Pawsitively Elegant for Dog Beds, take 2% discount, and pay with company Visa Click Plus icon, click Bill in Vendors column Click Recent Transactions icon on Bills screen Click the bill to be paid Click in Account details Line 1 Account: Cost of Goods Sold subaccount: Merchandise Discounts Bill is for Inventory Items Amount: enter Discount Amount with a minus, press Tab Calculate: Bill $500 * Discount of.02 = -$10 Discount

38 View Bill with Discount 38 View Bill with Discount of $10.00 Note Total is now $490.00

39 Record Payment 39 Click Make Payment button at top of bill Alternate method Could Save and close, open Pay Bills, record as in Chapter 4 Complete Bill Payment form Enter Payment Method: Visa Payment Date: 02/20/16 Note Bill has Check mark Click Save and close

40 View Payment Status 40 Return to Bill for Pawsitively Elegant Marked Paid Shows Payment date

41 Pay Bill with Discount and Credit 41 May take early payment discount even if return is made Example: Recorded Bill for purchase of 5 Poop Scoops to use in Kennel. Returned 2 Poop Scoops. Pay Bill within 10 days. Use Visa for payment Open Bill for Kennel Equipment for $270 Enter Account Details Line 2: Account: Purchase Discounts Discount on purchase used in operation of business Calculate Discount $270 Bill Vendor Credit $108 = $162 due $162 *.02 = $3.24 Discount Amount: -3.24

42 View Bill and Purchase Discount 42 View the bill and the Purchase Discount Note Balance Due: $ Click Save Click Make Payment button at top of screen

43 43 Make Payment with Discount and Credit View Bill Payment screen Select Payment Method: Visa Enter Payment Date Note Payment Details Original Amount $ $ discount Vendor Credit $ Amount Paid $158.76

44 Sales Tax 44 Use Sales Tax Center to track and pay sales tax Record sales transactions for merchandise, sales tax is added Sales tax collected from customers is a liability Must be paid periodically Use Sales Tax Center to make sales tax payments Sales Tax Center contains information for Sales Tax Agencies Tax Rates Settings

45 Sales Tax Liability Report 45 Sales Tax Liability Report information includes: Taxing Agency Taxable amount of Sales Amount of Sales Tax collected Amount of Sales Tax owed Prepared in the Sales Tax Center Click Sales Tax on the Navigation bar Right side of Sales Tax Center is a blue box with Related Tasks Click View sales tax liability report Enter dates Tax Agency: State Board of Equalization

46 Pay Sales Taxes 46 Note Amount of Sales Tax owed In example, $ Click Record Tax Payment button Bank Account should be Checking Enter Payment Date 02/20/16 Click the checkbox for Print a check to select Click Record Payment and Print Check button

47 Bill Payment List Report 47 Report shows bill payments made by check and credit card Access Report category Manage Accounts Payable Click Bill Payment List to select report Enter Dates Click Run Report

48 Vendor Balance Summary 48 Vendor Balance Summary shows total amount owed to each vendor Prepared in Manage Accounts Payable report category

49 Check Detail Report 49 Shows all Checks prepared and Petty Cash expenditures Use Review Expenses and Purchases report category

50 50 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

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