QuickBooks Fundamentals 2018 For QuickBooks Pro, Premier and Accountant 2018 Copyright 2018
Product Name QuickBooks Fundamentals - Version 2018 ISBN: 978-1-942417-22-4 Trademarks Intuit, the Intuit logo, QuickBooks, QuickBooks Pro, QuickBase, Quicken, TurboTax, ProSeries, Lacerte, EasyStep, and QuickZoom, among others, are registered trademarks and/or registered service marks of Intuit Inc. in the United States and other countries. QuickBooks ProAdvisor is a trademark and/or service mark of Intuit Inc. in the United States and other countries. Other parties trademarks or service marks are the property of their respective owners and should be treated as such. Copyright 2018 Questiva Consultants All rights reserved Published by Questiva Consultants Disclaimer This material is intended as a learning aid for QuickBooks software users. Under no circumstances shall the author or publisher be liable for any damages, including any lost profits, lost data or other indirect damages arising out of anything written in this document or expressed directly or indirectly by the author or publisher. Developed and Written By Douglas Sleeter Deborah Pembrook Contributing Authors, Testers, and Reviewers Pat Carson Tricia Lippincott Ellen Orr Questiva Consultants 1501 Dry Creek Road, San Jose, CA 95125 Phone: 408 440 4182 Fax : 408 351 0473 www.questivaconsultants.com Questiva Consultants is the publisher and supplier of QuickBooks Accounting Textbooks to students, community colleges and business/trade schools. These textbooks were originally developed by the Sleeter Group.
Preface... ix QuickBooks 2018 Versions... ix Using QuickBooks 2018 Student Trial... ix Using This Book... ix Integrating QuickBooks with other products... x About the exercise files... x Installing the exercise files... x Certification... xi Acknowledgements... xi Chapter 1 Introducing QuickBooks... 1 Topics... 1 The QuickBooks Product Line... 1 QuickBooks Desktop vs. QuickBooks Online... 1 QuickBooks Editions... 1 QuickBooks Releases... 2 Accounting 101... 2 Accounting s Focus... 2 Accounts, Accounts, Everywhere Accounts... 2 Account Types and Financial Reports... 3 Double-Entry Accounting... 3 Accounting Behind the Scenes... 4 Accounting for the Future: Cash or Accrual?... 4 Academy Photography... 5 QuickBooks Files... 5 Creating a New File... 6 Opening a QuickBooks Sample File... 6 Opening Other QuickBooks Data Files... 7 Closing QuickBooks Files... 9 Opening Multiple Files... 9 Closing the QuickBooks Program... 9 Opening Portable Company Files... 9 Restoring Backup Files... 12 Backing up Your Data File... 12 Restoring a Backup File... 16 QuickBooks User Interface Features... 16 Home Page... 16 Centers... 17 Snapshots... 18 Income Tracker... 18 Icon Bar... 19 Calendar... 19 Entering Transactions in QuickBooks... 20 Forms... 20 Lists... 21 Accounts... 21 Registers... 22 Items... 23 QuickBooks Help... 25 Support Resources... 25 Certified QuickBooks ProAdvisors... 25 Review Questions... 25 Introduction Problem 1... 26 Introduction Problem 2 (Advanced)... 27 Chapter 2 The Sales Process... 29 Topics... 29 Tracking Company Sales... 29 Setting Up Customers... 32
Job Costing... 38 Recording Sales... 39 Entering Sales Receipts... 39 Undeposited Funds... 43 Creating Invoices... 45 Open Invoices Report... 50 Receiving Payments from Customers... 52 Receiving Payments by Check... 52 Handling Partial Payments... 54 Receiving Payments by Credit Card... 54 Where Do the Payments Go?... 55 Preferences for Applying Payments... 55 Recording Customer Discounts... 57 Making Bank Deposits... 60 Depositing Checks and Cash... 60 Holding Cash Back from Deposits... 63 Printing Deposit Slips... 63 Depositing Credit Card Payments... 65 Income Tracker... 68 Review Questions... 70 Sales Problem 1... 71 Sales Problem 2 (Advanced)... 72 Chapter 3 Additional Customer Transactions... 75 Topics... 75 Recording Customer Returns and Credits... 75 Refunding Customers... 76 Writing Off a Bad Debt... 79 Applying the Bad Debt Credit Memo to an Open Invoice... 81 Creating Customer Statements... 82 Assessing Finance Charges... 83 Collecting Sales Tax... 85 Setting up Sales Tax... 86 Sales Tax Codes... 89 Calculating Sales Tax on Sales Forms... 91 Creating Sales Reports... 91 Customer Open Balance Report... 91 Sales by Customer Summary Report... 92 Sales by Item Report... 93 Review Questions... 94 Customers Problem 1... 95 Customers Problem 2 (Advanced)... 95 Chapter 4 Managing Expenses... 97 Topics... 97 Entering Expenses in QuickBooks... 97 The Process of Entering Expenses in QuickBooks... 97 Setting Up Vendors...100 Activating Class Tracking...105 Tracking Job Costs...107 Paying Vendors...107 Using Registers...108 Using Write Checks Without Using Accounts Payable...111 Managing Accounts Payable...112 Printing Checks...121 Voiding Checks...124 Applying Vendor Credits...127 Tracking Company Credit Cards...130 Entering Credit Card Charges...130 Paying the Credit Card Bill...131 Paying Sales Tax...133
Paying Sales Tax... 133 Accounts Payable Reports... 134 Vendor Balance Detail... 134 Transaction List by Vendor... 135 Sales Tax Liability... 136 Bill Tracker... 136 Review Questions... 139 Expenses Problem 1... 139 Expenses Problem 2 (Advanced)... 140 Chapter 5 Bank Reconciliation and Bank Transactions... 143 Topics... 143 Reconciling Bank Accounts... 143 Bank Reconciliation Reports... 149 Finding Errors During Bank Reconciliation... 150 Step 1: Review the Beginning Balance Field... 151 Step 2: Locate and Edit Incorrectly Recorded Transactions... 152 When QuickBooks Automatically Adjusts your Balance... 152 Handling Bounced Checks... 152 When Your Customer s Check Bounces... 152 Receiving and Depositing the Replacement Check... 154 If Your Check Bounces... 155 Reconciling Credit Card Accounts and Paying the Bill... 155 Bank Feeds... 158 Bank Feed Setup... 159 Processing Online Transactions... 159 Review Questions... 160 Bank Reconciliation Problem 1... 161 Bank Reconciliation Problem 2 (Advanced)... 162 Chapter 6 Reports... 163 Topics... 163 Types of Reports... 163 Cash Versus Accrual Reports... 164 Accounting Reports... 166 Profit & Loss... 166 Profit & Loss by Class Report... 169 Profit & Loss by Job Report... 172 Balance Sheet... 173 Statement of Cash Flows... 173 General Ledger... 174 Trial Balance... 175 Voided/Deleted Transactions Reports... 176 Business Management Reports... 176 Customer Phone List... 177 Vendor Contact List... 177 Item Price List... 178 Check Detail Report... 178 Accounts Receivable and Accounts Payable Reports... 179 QuickBooks Graphs... 181 Building Custom Reports... 183 Memorizing Reports... 190 Viewing Memorized Reports... 191 Contributed Reports... 192 Processing Multiple Reports... 193 Printing Reports... 194 Finding Transactions... 196 Using the Find Button... 196 Using the Search Command... 196 QuickReports... 197 Using QuickZoom... 200
Exporting Reports to Spreadsheets...201 Exporting a Report to Microsoft Excel...201 Review Questions...202 Reports Problem 1...203 Reports Problem 2 (Advanced)...203 Chapter 7 Customizing QuickBooks... 205 Topics...205 QuickBooks Preferences...205 Setting User Preferences...205 Customizing QuickBooks Menus and Windows...208 Favorites Menu...208 QuickBooks Icon Bar...209 Customizing the Icon Bar...210 QuickBooks Items and Other Lists...211 QuickBooks Items...211 Printing the Item List...216 The Terms List...217 Price Levels...219 Custom Fields...220 Adding Custom Field Data to Customer Records...221 Modifying Sales Form Templates...222 Review Questions...225 Customizing Problem 1...226 Customizing Problem 2 (Advanced)...227 Chapter 8 Inventory... 229 Topics...229 QuickBooks Tools for Tracking Inventory...229 Tracking Inventory with QuickBooks...230 Activating the Inventory Function...231 Setting up Inventory Parts Items...233 Calculating Average Cost of Inventory...237 Invoicing for Inventory Items...237 Selling Inventory Items Using an Invoice Form...237 Creating a Transaction Journal Report...238 Using Reminders for Inventory...239 Purchasing Inventory...239 Purchasing Inventory at a Retail Store with Check or Credit Card...240 Purchase Orders...241 Creating a Purchase Order...241 Receiving Shipments Against Purchase Orders...242 Creating Open Purchase Orders Reports...244 Checking Purchase Order Status...245 Entering the Final Shipment...246 Entering Bills for Received Inventory...247 Converting an Item Receipt into a Bill...247 Handling Overshipments...248 Handling Vendor Overcharges...249 Adjusting Inventory...250 Adjusting the Quantity of Inventory on Hand...251 Adjusting the Value of Inventory...252 Setting up Group Items...253 Inventory Assemblies...254 Inventory Reports...254 Inventory Item QuickReport...255 Inventory Stock Status by Item Report...255 Inventory Stock Status by Vendor Report...256 Inventory Valuation Summary...256 Review Questions...257 Inventory Problem 1...258
Inventory Problem 2 (Advanced)... 259 Chapter 9 Time and Billing... 261 Topics... 261 Reimbursable (Billable) Expenses... 261 Using Two-Sided Items... 268 Tracking Custom Orders... 269 Using Service Items to Track Subcontracted Labor... 274 Unbilled Costs by Job Report... 276 Billable Time... 277 Activating Time Tracking in QuickBooks... 277 Entering Time on Timesheets... 277 Printing Timesheets... 278 Invoicing Customers for Time... 279 Tracking an Owner s or Partner s Time... 282 Time Reports... 284 Time by Name Report... 284 Review Questions... 286 Time and Billing Problem 1... 287 Time and Billing Problem 2 (Advanced)... 288 Chapter 10 Payroll Setup... 291 Topics... 291 Checklist for Setting Up Payroll... 291 Payroll Accounts... 292 Payroll Items... 293 The Payroll Setup Interview... 293 Setting Up Compensation and Benefits Payroll Items... 294 Medical Insurance Deduction... 296 401(k) Employee Deduction and Company Match Items... 298 Paid Time Off Payroll Items... 302 Setting Up Employees... 303 Payroll Tax Item Setup... 307 Scheduling Your Tax Payments... 308 Setting Up Year-to-Date Payroll Amounts... 310 Finishing Up the Payroll Setup Interview... 310 Setting Up Employee Defaults... 311 Default settings for taxes... 313 Default Settings for Sick/Vacation Time... 314 Changing Employee Payroll Information... 315 The Employee Contact List report... 315 Review Questions... 316 Payroll Setup Problem 1... 316 Payroll Setup Problem 2 (Advanced)... 318 Chapter 11 Payroll Processing... 321 Topics... 321 Payroll Processing Checklists... 322 Every Payday... 322 Every Tax Deposit Due Date (monthly or semi-weekly)... 322 Every Quarter (after the end of the quarter)... 322 Every January... 322 Using the Employee Center... 322 Payroll Center... 323 Payroll Tax Tables... 323 Paying Employees... 323 Selecting the Employees to Pay... 324 Printing Paychecks... 328 Printing Pay Stubs... 330 Editing Paychecks... 331 Paying Payroll Liabilities... 333 Creating Payroll Reports... 336
Payroll Summary Report...336 Sales Rep Commissions...338 Payroll Liability Balance Report...339 Preparing Payroll Taxes...341 Review Questions...342 Payroll Processing Problem 1...343 Payroll Processing Problem 2 (Advanced)...344 Chapter 12 Company File Setup... 345 Topics...345 Choosing a Start Date Step 1...345 Creating the Company File Step 2...346 Express Start...346 Detailed Start...348 Setting Up the Chart of Accounts and Other Lists Step 3...355 Setting Up the Chart of Accounts...355 Setting Up Other Lists...365 Add/Edit Multiple List Entries...365 Setting Up Opening Balances Step 4...367 Gathering Your Information...367 Opening Balances for Accounts...370 Understanding Opening Bal Equity...373 Entering Open Items Step 5...373 Entering Outstanding Checks and Deposits...373 Entering Open Bills (Accounts Payable)...374 Entering Open Invoices (Accounts Receivable)...375 Entering Open Purchase Orders...376 Entering Open Estimates and Sales Orders...376 Entering Year-to-Date Income and Expenses Step 6...376 Adjusting Opening Balance for Sales Tax Payable Step 7...377 Adjusting Inventory and Setting up Fixed Assets Step 8...378 Adjusting Inventory for Actual Counts...378 Setting up Fixed Assets...379 Setting up Loans...379 Setup Payroll and YTD Payroll Information Step 9...379 Verifying your Trial Balance Step 10...379 Closing Opening Bal Equity Step 11...381 Setting the Closing Date - Backing up the File Step 12...382 Setting the Closing Date to Protect your Setup Balances...382 Users and Passwords...382 Setting Up Users in the Company File...382 Multi-User and Single-User Modes...387 Review Questions...388 Setup Problem 1...388 Setup Problem 2 (Advanced)...389 Chapter 13 Adjustments and Year-End Procedures... 395 Topics...395 General Journal Entries...395 Creating a General Journal Entry...396 Adjusting Expense Accounts Associated with Items (Zero-Dollar Checks)...397 Editing, Voiding, and Deleting Transactions...398 Editing Transactions...399 Voiding and Deleting Transactions...400 Deleting All Transactions...401 Memorized Transactions...402 Memorizing a Transaction...402 Deleting, Rescheduling, and Editing Memorized Transactions...404 Closing the Year...407 Closing the Accounting Period...407 Recording Closing Entries for Sole Proprietorships and Partnerships...408
Distributing Net Income to Partners... 411 Setting the Closing Date to Lock Transactions... 411 Review Questions... 413 Adjustments Problem 1... 414 Adjustments Problem 2 (Advanced)... 414 Chapter 14 Horizon Financial Planning Business Scenario... 415 Description of Company... 415 Company Set Up... 415 Instructions... 415 Business Transactions... 416 October 2019... 416 Analysis Questions... 423 Appendix... 425 Keyboard Shortcuts... 425 Answer Key for End of Chapter Questions... 426 Introducing QuickBooks... 426 The Sales Process... 426 Additional Customer Transactions... 426 Managing Expenses... 426 Bank Reconciliation... 426 Reports and Graphs... 427 Customizing QuickBooks... 427 Inventory... 427 Time and Billing... 427 Payroll Setup... 427 Payroll Processing... 428 Company File Setup and Maintenance... 428 Adjustments and Year-End Procedures... 428 Horizon Business Scenarios... 428 Index... 429