1. QuickBooks - Jyoti Chandra Introduction
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QuickBooks 2002
Introduction
Introduction

2. What Is QuickBooks?
Full featured Small business accounting software, powerful and easy to use:
Double entry accounting
Invoicing and Accounts Receivable
Bill paying, check writing and Accounts Payable
Purchase order and inventory management
Estimating, job-costing and payroll
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3. Accounting for QuickBooks
Asset is what company owns
Liability is what company owes
Equity is the networth of a company and is defined as the difference between the assets and the liabilities
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4. Accounts
Different activities involving funds in a business are tracked using different accounts or ledgers
Equipment, rent salaries, merchandise etc.
Each account has a type
Asset, liability, equity, income or expense
Summary of all the ledgers or accounts is called the General Ledger or the Chart of Accounts
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5. Accounting Equation Accounting Equation Asset = Liabilities + Equity
Everything a company owns was purchased either by funds from creditors or by the owners stake in the company
Net income/loss (total revenues – total expenses) increases/decreases Equity account Retained Earnings, which shows owners stake in the business
At the end of the year, balance of each income and expense account is reset to zero
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6. What Changes Equity E Q U I T Y ASSETS LIABILITIES INVENTORY LOAN CASH
RENT
INVESTMENTS
WAGES
EQUIPMENT
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7. Equity Accounts Common Stock (Owner’s investment in business)
Retained Earnings (cumulative net income earned minus cumulative net loss and dividend)
Revenues (funds received by selling products or services which increase equity )
Expenses (cost of operating a business which decreases equity)
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8. Double-Entry Accounting
Method of accounting which makes accounting equation work
Each account is considered to have two sides, debit (left) and credit (right), one side increases the account and other side decreases the account
A debit or credit might increase or decrease the account but total debits must always equal total credits
Every transaction in QuickBooks automatically creates a debit in one or more accounts and a credit in one or more accounts such that the difference between them is zero
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9. Increases and Decreases in Accounts
Asset = Liabilities Equity
Debit Credit Debit Credit Debit Credit
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10. Example Add $5000 to business. Asset = Liabilities + Equity
Debit Credit Debit Credit Debit Credit
$ $5000
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11. Example of Double Entry
When you Write a check for Rent, two accounts are effected:
Bank Account used: Checking (credit)
where the money is coming from
Expense Account: Rent (debit)
what it is used for
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12. Cash or Accrual Method
In cash method transactions are not entered in the system till money changes hands
Does not represent complete financial picture
In accrual method, transactions are entered in the system as soon as they occur and are updated when funds are received
Represents more realistic financial picture
QuickBooks provides reports using either method
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13. Example of Cash Method Scenario:
You sold merchandise to a customer
send them invoice
receive payment for the invoice
In cash method, you enter the transaction after you have received payment
No transactions are entered for sale or invoice
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14. Example of Accrual Method
Scenario:
You sold merchandise to a customer
send them invoice
receive payment for the invoice
In Accrual method, you enter the first transaction when invoice is generated and then second transaction when payment is received
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15. Chart of Accounts For a business the chart of accounts track
Where the income comes from
Where it is put
What expenses are
Chart of accounts in QuickBooks include
Asset accounts
liability accounts
equity accounts
income accounts
expense accounts
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16. Example of Chart of Accounts
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17. QuickBooks Navigation Features
Menus
Icon Bar
Navigation Center
Navigators List
Open Window List
Shortcut List
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19. QuickBooks Files Company Files (.qbw) Backup Files (.qbb)
Expanded file where You can enter data and create reports
File / Open Company
Company and Filename may be different
Backup Files (.qbb)
Condensed file which can not be used directly
File / Restore
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20. How to Start QuickBooks
Two ways:
Double click the QuickBooks Icon on your desktop
Click Start/ Program/ QuickBooks Pro and select QuickBooks Pro
To use an existing file
File/ Open Company and select the file in the dialog box
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21. How to Exit QuickBooks
Before you exit, you must save your work as a backup file (condensed)
File/ Backup (use floppy or zip)
Close the company file
File/ Close Company
File/ Exit or click Close button on the window
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22. Screen after Closing File
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23. QuickBooks Main Features
Transactions
Lists
Forms
Registers
Reports and graphs
Items
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24. Transactions
These are the records of financial activities in a business
In QuickBooks, transactions are created by filling out forms, such as invoice, bill etc.
Each transaction has a form view and a register view
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25. Example of Transactions
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26. Lists Lists have information about Created and edited
customers
vendors
employees
items
Created and edited
from a list window
while completing a form such as invoice
Can create in advance or add new list entries as needed on the fly
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27. Example of List
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28. Print a List Lists/ choose the list
Click Reports button / select report option
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29. Forms
Electronic representation of documents used to record business activities such as
invoice
purchase order
check
Forms contain fields
filled by the user using drop down list
Certain fields automatically filled by QuickBooks based on saved information
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30. Example of Form
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31. Print a Form Open the form Click Print button on the form 5/5/2019
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32. Registers Look like checkbooks registers
Transactions are recorded in account registers which shows chronological listing of all transactions
Assets, liabilities and equity accounts (except retained earnings) have registers:
Checking, Accounts receivable, Inventory etc.
Income/expense accounts don’t have registers
To view information in these, reports must be used
To open a valid register, double click the account in the Chart of Accounts window
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33. Example of Register
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34. Print a Register Open Chart of Accounts
Double click the register to open
File/ Print Register and select options:
Date range
Print Split detail option
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35. Account with register will Show entry in balance Account with
No register
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36. QuickBooks - Jyoti Chandra
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QuickBooks Items
Special list identifying the products and services provided or purchased by the business
Each item name is associated with an account allowing QuickBooks to track the accounting details behind the transaction
Items are used in forms
Several types: Service, Inventory etc.
Detailed information about what is happening in business
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37. Example of Items Every Line uses An item Tax Is an item 5/5/2019
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38. Reports and Graphs Four style of reports List Register Summary
Chart of Accounts, Customer, Vendor etc.
Register
Checking account, Credit Card account etc.
Summary
Profit & Loss, Balance Sheet etc.
Transaction
Open Invoices, Unpaid bills detail etc.
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39. Powerful Accounting Reports
Balance sheet
Reports/ Company & Financial/ Balance Sheet Standard
Profit and loss statement
Reports/ Company & Financial/ Profit & Loss Standard
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40. Balance Sheet
Financial snapshot of the company on a specific date using Asset, liability and equity accounts
This report is used by banks before approving loans
Banks also use Current Ratio (current asset/ current liabilities) which describes your ability to satisfy your debts
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41. Profit & Loss
Most valuable resource to assess business success (or failure) also known as income statement
Shows income and expenses over a period of time
First section shows each of income accounts/ subaccounts
Second section shows Cost of Goods Sold accounts after which Gross Profit is shown (revenue – cost of goods sold)
Expenses are shown after that
Finally, Net Income is shown (revenue – cost of goods sold – expenses)
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42. Example of Balance Sheet
Specific Date
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43. Example of Profit and Loss Report
Date Range
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44. Cash Versus Accrual Report
QuickBooks can automatically convert reports from accrual basis to cash basis by referring to Accounts Receivable and Accounts Payable transactions
Click Modify Reports, Select Cash or Accrual option
In cash basis, income or expense occur at the time funds are received or paid, not when initial transaction occurs
In Accrual basis, income or expense are occurring at the time of transaction
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45. Modify/Save Reports Click Modify Report button on any report
You can select Cash or Accrual Basis
You can add or delete columns and change other formats of report
Use Filters tab to modify the content of the report
Use Header/Footer tab to change layout, report title
Use Fonts & Numbers tab to change font
Use Memorize button to save report format, dates and filtering (data is not saved)
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46. Print Reports
When you print reports, QuickBooks allow you to Preview the report and change the orientation and page size characteristics
Click Print button on the report and select from the following options
Portrait or Landscape orientation
Fit Report to X page wide option
Page Breaks
Page range
Number of copies
Click Preview to see the report before printing or Click Print to print the report
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