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in this presentation we will write checks for normal expenses and business purchases within QuickBooks Pro 2019 for more accounting information and accounting courses visit our website at accounting instruction dot info here we are in the home page we currently have the open windows open you can open the open windows by going to the View tab drop-down and the open windows list we're going to enter some checks into our system there's a couple different ways that we can do this one way and the fastest way if you're not printing the checks or even if you're printing the checks would be just to go through the check register and that would be the typical way I would enter data if we're just entering the checks into the system especially if we're writing the checks outside of the system or pulling this information from a bank statement because that'll be the fastest way to go the other way to do it is to go to the write checks item so we've seen the register before I'm going to show the register and then we're actually going to use the forms so we can see see what the write checks forms would look like and so we're gonna go up top first and just look at the register go to the banking we're gonna go to it use register now remember that the default will usually be the checking account but if you're in some other area like accounts receivable or something that might default to the accounts receivable so we want to make sure of course we're on the check register all the balance sheet accounts will have a register QuickBooks attempt to make things a little bit easier by having a register so we don't have it so it'll it'll lessen the amount of times we need to know debits and credits and no journal entries for us to have kind of a register up and down kind of system it doesn't really eliminate it but there it is so we've got to check in accounting to say ok and you can see this is going to be where we can just enter our data nice and easily nice and quickly so we'll have our date here we'll have who we're paying it's gonna be a payment versus our deposit if we're talking about a check and then the other account typically an expense account but it could be other accounts such as an asset type account and then a memo screen also note that if you wanted to you can have the split screen here and what do is it allow you if you're recorded in an entry that has multiple expense accounts to go to such as if you're recording a payment for a loan and you have interest and you have the principal going down then you can hit this and you can have more than one expensive note that default is just to have one expense account because that's usually the norm QuickBooks doesn't want to confuse this and so it'll just have the norm of one account there so we'll take a look at a transaction that has more than one account affected more than twelve two accounts or more than one account other than the checking account affected and in future presentations also note that if this is selected here this one line item it'll condense to one line item here and so that's just an attempt to make it a little bit more straightforward easy to see it's easier to go through and see what is happening in this format I tend to like to see it in in the two line format so this is going to be this will jump back and forth from the check register as we go through and again we could enter it directly here but we're gonna go back to the home page keep that check register open in the open windows and we're gonna write these checks using the right two checks icon here so we're gonna go to the right checks this is actually the form that QuickBooks will use whether we enter it into the register or not this looks like a check of course and we're just going to be writing the checks in this format notice how all this information is basically in the check register and can be input directly into the register if we so choose so we've first got the check in account that's what we want that's gonna be the checking account that's usually the default our only bank account right now if we had more than one bank account we would have more than one account there as an option the number should pop up automatically now if we print these checks we would probably have this item selective as print later and Whitin when you do that watch what happens with this check number it's going to go to to print and what that means is if you want to buy checks from the bank that will be QuickBooks compatible then they'll still have the check number on them you'll have to buy the pre-printed checks then you put them in the computer into the printer and then when you print it it'll print and and we will assign the check number in QuickBooks that should be the same as the checks on the cheque number that's gonna be one of the major internal controls that even small companies can have over a cash so then we've got to have a date here so we're just going to assign the check number here and obviously if we're writing the checks then we want to make sure that if we're handwriting the checks and then putting this into the system to get the information into the system either from the bank statement or while we write the checks which would be preferred then the check number here should match it should line up automatically from QuickBooks and line up to the check that we are writing okay and then we're gonna have a date 1:28 we'll keep that and we're gonna put this in we're gonna pay the insurance and we're just gonna make up an insurance company name so we're gonna say safe insurance company and so notice this hasn't been set up yet so we're gonna go ahead and say set it up we could have add new but this is a new vendor and this is because it's the first month of operations after it's the first month of operations then of course this vendor will be set up in the first month of operation so we're gonna have to set up a lot more vendors the second month third month will be a lot easier to enter data because this information will already be in the system so I'm gonna say tab it's gonna say you want to set this up yes we do do we want to have the total set up no just a quick setup why because really how all I want is the name cuz I don't really want to store all the other stuff for most vendors in our system I don't really care I just want the name in there if it's a special vendor such as our insurance company maybe it may be worth us going in here and set it up the full vendor information address phone number of contact information if we're paying like the utility bill we probably don't need too much for our purposes here we're gonna say we would just want a quick add now it is going to be a vendor that's who we're paying we're paying someone so we're gonna say vendor and there we have it the amount we're gonna put here is gonna be 11,000 that we're gonna put in the insurance and that's going to be for a year's policy so we're gonna say that's a year's policy that we're paying for 11,000 it'll populate for us here and then again it has the name here no address because we didn't put that into the advance sale but we don't need that to write a check and we might put some kind of memo 12-month liability ensure the memo is always good more information is good on the on the memo they're not required of course but any information that helps an audit trail is good and when I say an audit trail I don't mean an IRS audit trail I mean our r2 trail if we want to go back and see what happened then it's nice for us to have the memos there so we can go back and see what we did okay so then we got the account right here now there's probably a default from QuickBooks as we set up as insurance expense we could put it to insurance expense but that would be a bit distorting because it would expense this entire 11,000 in the first month of operations and if we paid for an entire year that wouldn't make January look good it would be kind of unfair to January because it would probably make us have a loss in January although we don't really have a loss because we paid twelve months of insurance in January so what your approach so if you're in other words if you're paying month to month on insurance or it's not a significant amount in relation to your other numbers it's in material then you could just expense it but if it is material and and you're paying at year's worth insurance in one month it's proper you're supposed to put it into under into an asset account and then we will go through and expense it as we consume the insurance rather than when we pay for it so that's what we'll do here and if we go up and I'm gonna look for an asset account called prepaid insurance and there is no prepaid insurance account so I'm gonna set that up I'm gonna set up prepaid insurance if you're working with a CPA firm or something like that we're doing bookkeeping and we're working with a CPA firm or an accounting firm they might prefer putting it into something like prepaid insurance and then at the end of the year maybe make an adjustment on a periodic basis to do the tax returns or something like that so we're gonna say prepaid insurance so prepaid insurance hopefully that spills correctly and I'm gonna select a tab and we're going to set this up and it's gonna it's not going to be an expense account that's the default so we actually have to go down here to others and it's gonna be an other current asset account so it's an other current asset account we're gonna have because we're gonna put on the books as an asset because we haven't yet consumed it and then as we consume it we'll put it into the expenses on a periodic basis so I'm gonna say save and continue so prepaid expense or prepaid insurance which we call a prepaid expense so it looks good here that's all we need we don't need a subcategory we don't need any additive group description we're not gonna put an account number - it's tax code we're going to keep here as well no opening balance save and close so that's gonna be what we have there I'm just gonna go ahead and save and close that amount now I'll just go and give a quick check as we enter these if we go to the balance sheet and we go and we go to reports we go to the company and financial we're gonna go down to the balance sheet so balance sheet we're gonna change the dates by going to the customized report and then we'll change the dates from oh one oh one one nine to twelve thirty one one nine and then we'll say okay and then there's our information so the checking accounts should have gone down because we wrote a check double clicking that there's a checking account going down the other side is gonna go to the prepaid insurance if we double click on it there's our check the check is the form of course driving these transactions closing this closing this the other side isn't going to the expense but to prepaid insurance another asset here not affecting net income even though we pay for insurance because we haven't consumed it yet we're gonna determine how much we consume periodically monthly most likely so if we double click on that here's our transaction on the other side so I'm gonna close this back out also note if we go to the checking account over here then that's gonna appear in our checking account as well kind of like our register balance as we fill out our checkbook so it's kind of like if we filled out it if we'd wrote a check the checkbooks filled out automatically for us which is nice so then we're going to go back to the home page another check will go back to the write checks icons in the homepage your icon in the homepage it's gonna be from the checking account again the number should populate automatically it's gonna be January 28th we're writing all these checks has at the same time period and this is gonna be written to staples which is a store supply store and we don't have that in here so what I could have I could select I had new but I'd like to type it in here and just say staples because that helps me to kind of verify to that it's not here if I start typing it in there and if it was there I didn't see it then it'll start to autofill and then it say okay tab do you want to set it up we're gonna say yes do I need any detail like the address and the staples phone number or anything no probably not I mean I don't think so so I'm gonna say quick add it's gonna be a vendor we're buying stuff from them so we're gonna say okay 500 is the amount and there's the address we don't have it because we didn't put that in there and we just bought an office supplies and again the memo you might want to be more specific we might want to say we bought ink or we bought something you know within the office supplies more specific than just office supplies now again when considering office supplies if I select the drop-down there's probably there's probably an office supplies expense here and this is another area where we could put it into an expense that we may put it into a an asset and then expense a lot of book problems we'll put it into an asset first as kind of an introduction to inventory so if we're buying something significant like if we use a lot of ink you know for a bookkeeping company and we use a lot of ink our or if for a medical company we buy a lot of supplies for medical supplies or something like that then we kind of want to track the supplies as we would with inventory meaning we're not just going to expense it when we buy it but put it on the books as an asset and then count it at the end of each period and determine how much we have used and then expense the amount that has been used we're going to go through that model because it's kind of an introduction to inventory and it's often the way it's the more proper way to do it on the other hand if you're buying supplies like small supplies like staples or something like that even if you buy a year's worth of staples or a year's worth of paper clip then it's not likely that that amounts that dollar amount is going to affect the decision-making of the company and therefore you're probably just going to expense it so in other words smaller companies that have just kind of office supplies type expenses are probably just going to expense it because that's the easier thing to do larger companies or companies that have larger supplies that they want to track and and see if it's been stolen or track shrinkage more closely and what things like that are gonna want to put it on the books as an asset in a similar fashion as we would with inventory counts that inventory periodically possibly monthly and then expense the amount that has been consumed based on that count on a monthly basis so that's what we're gonna do here because that's more proper that's you know the more a proper accrual method so we're gonna say office supplies but it's going to be an asset account so so I'm gonna say a space I'm going to put a space next to it and that'll separate it from office supplies the expense so that I can set up a new account now the way I'm gonna know the difference between the tiers because this is an expense type account and the one we're gonna set up it's gonna be an other current asset type account so I'm gonna say tab oh hold on a second it didn't ask us to create a new account so let's try a different method here I'm gonna select the drop-down we're gonna go all the way up top and let's try the add new so again we want to call it basically office supplies but I don't want to make it an expense account so we're gonna go here to the drop-down and make it an other current asset account and say continue and then we'll call it office supplies and it's not gonna have any subcategory description everything looks good there so we're just gonna say save and close and this name already in use and so it wants another name so let's say office supplies space I'm gonna put just a period next to it so I'm gonna put in office supplies in a period next to it so I could call it off supplies current current assets we could call it the other office supplies which may be more appropriate to call the other office supplies to change the names office supplies expense but I'm just gonna differentiate the two with a period for now so we're gonna have an office supplies the assets what we're gonna we're gonna accumulate the office supplie
didn't have an adjusting entry to record the assets being expensed on a periodic basis so let's try that save and close and so it will accept that all right so that's 500 here that's what we want we're gonna say save and close and check this out let's go back to the balance sheet and checking account should go down so I'm going to double click on the checking account and there's the 500 decreasing here so if we double click on that there's our check closing this back out closing this back out the other side not going to an expense but to this office supplies again if that period is annoying us we could rename the name as current asset or we could change the office supplies on the extinct um statement to office supplies expense so but in any case we see it here as an asset we're gonna double click on it this is what we want so we're gonna double click on that and there it is double clicking on the office supplies there's the check closing this back out closing this back out notice there's no effect on the income statement or profit and loss there will be once we expense the office supplies and we'll do that at the end of the time period with an adjusting entry next one we're gonna go back to the checking account our lumps are if we go to the checking account we'll see the office supplies here so again it shows up in the checking account let's go back to the home page which is where I was thinking before and let's go to the right to check so now we're gonna write another one it's gonna be a check check never notice it's it's populating automatically which should line up with the checks on our printed checks and then we're gonna type out Edinson now this is gonna be the the utilities bill we're paying the electric bill so we're gonna say that we pay Edison the electric bill so utilities and I'm gonna say this is this is going to be a new customer or a new vendor so I'm going to say tab and we're gonna do a quick setup again I don't need to know Edison's address or anything typically so I'm going to say quick add and we're gonna say vendor and also note that it would be nice to have all that information you have all that information you want to add all the vendor information every time more detail is better typically but what we need to write the check of course is just the name so I'm going to say it's a vendor and we're going to say it's for 620 and Edison here now memo and again you could write a memo you don't need a minute it's pretty self-explanatory buddy yeah you know more detail is often good you may want to put the month of the utility and you know possibly although it should be pretty apparent by the date we're making the payment okay so then we're going to type in utilities which should be here probably because it's in there as a default by the system when we set up the chart of accounts given the type of industry we are in so it's going to be in most most chart of accounts that will be set up by QuickBooks and most entries will have our utilities so if I type it in there it'll pop up as well it is an expense this time because we pay the utilities expense closely too when we actually consume utilities and then therefore expense them at the same point in time now note if you wanted more detail on things like utilities you could like some companies might group things together or possibly break out utilities in the in terms of the electric utilities versus something like gas maybe most companies would group together something like possibly gas and electric even if you wanted a group like the phone company and utilities you could most companies at this time I bet would break out the phone company into a separate account so just note we could have more details but this is kind of a standard given by and we know that because these are the accounts given within QuickBooks so if it's within that setting we probably want to think about and say hmm if that's what QuickBooks thinks you know she'd go into utilities and and and not be a separate electric account then maybe I should follow that default unless I think in my particular industry I have a specific need for more detail possibly I have a lot of gas you know usage versus electric usage and I want to track those two separately and two separate accounts then you might want to break these out and that would be a justifiable thing to do setting up an electric utilities versus a gas utility is possible okay so we're gonna save and close we're gonna go to the balance sheet once again checking account double clicking the checking account we can see that there's utilities going down by the 620 here's the check closing this back out closing this back out the other side this time is on the income statement finally we're selecting something to the profit and loss so we're gonna say reports up top company and financial profit & loss and we're gonna go to oh let's say Oh 101 1 9 2 12 12 31 1 9 and so utilities there it is so utilities went up bringing net income down if we double click on it there's our utilities double clicking on that there's our check so I'm gonna close this back out close this back out and if we go to the checking account there too is our utilities within that format as well if you want to go to the check from here you can double click on this item here to check and there's the actual form driving the checking account okay so let's do this one more time we're gonna close this back out we're gonna close we're gonna keep that open I'll keep that open well kind of go to the home page and write one more check here hopefully one more and it's gonna be the check numbers the same same date this is gonna be the telephone company which we're gonna say is Verizon so I'm gonna type in four eyes and again it's not there it would be if it was the second month of operations because we would have already written a check to them so note that the second month of operations is typically going to be a lot easier because a lot of the data will populate for us automatically and I'll so that'll be easy we don't have to set up new vendors all the time typically so I'm going to say tab and this is also the case if you're working at a company that's already established so if you're picking up the books from a bookkeeping system that's already set up then you have the advantage of being able to copy the prior bookkeeping system which is nice although it's also a disadvantage if you disagree with some of the methods of the prior bookkeeping system but once things are set up then the next month it's gonna be a lot easier than the first month of operations if it's set up well so once again we're gonna set up with a quick ad and it's gonna be a vendor that's the default it's correct this time and we're gonna say that it's 360 is the amount and we're gonna say it's going to the telephone now again this should be there because it's going to be the default for pretty much any kind of industry if we pre-selected a trial balance with with the system so I'm just gonna type it in there and and QuickBooks is gonna generate in other words QuickBooks generated this account when we set up the company by us selecting the type of industry so I'm gonna save and close' we'll check out those financials we'll go up to the balance sheet check an account double click the checking account there is the telephone Verizon the other side go into an expense telephone expense double clicking on that we see our check closing this back out close in this back out this is going to the profit and loss as we would think for most checks we would write which would be expenses the other side there we see our telephone expense appeared and it's also an expense which brings down net income we currently have a loss and so we're gonna say telephone expense and there it is double clicking on that there's our check closing this back out closing this back out go into the checking account in the open windows just to check one last time there's the telephone expense that has been recorded in that format as well if you want to see the form once again double click on the check and that'll show you this item now if it's gonna be one last thing we want to do here and I'm that's going to be I'm going to go to the balance sheet up top and we're going to say that we put the office supplies into the supplies as a current asset so if we scroll up to the current assets where there's the office supplies now if we go to the to our bookkeeper or supervisor or or we later decide after we enter this transaction we say hey you know what our supplies are fairly small compared to everything else maybe I do not want to put this on the books as an asset but expense it at the point in time we purchase in other words we don't want to track the supplies because it's not material to do so we want to expense them at the time of purchase this being what typically will be done for many small companies so if we decide that like kind of after the fact then how can we adjust the check could we adjust the check and of course the easiest way to do that is just to drill back down on it we can go to them you check here we're gonna now say I don't want to go to the asset account we want to go to the expense account so I'm gonna do that by double clicking on this item we're gonna double click on this item and we could just change this expense account here to supplies the asset to supplies the expense now again this is something that you can do within QuickBooks you cannot do and a lot of accounting software because the software will prohibit most data input from doing so why because it would be best to have an audit trail to say hey here's the mistake I made or here's what we did first and here's why and here's our adjustment to basically adjust this by voiding it and making another check or by doing some type of journal entry to make this adjustment but in QuickBooks it again if it's if you're in the within the same month of time period then you know you may want it the easiest thing to do of course is to go in there and just change the account so I'll show you how to basically do that here we're going to go in and change this account and that of course will adjust the financial statements be very very careful if you do this kind of thing in a prior time period because note what we're gonna do is it just the income statement that temporary accounts and if we did that for a prior month which had already been closed and reported then we're gonna we're gonna change those prior numbers which are gonna change retained earnings so so this is going to be adjustment that you can have in QuickBooks I'm gonna show you how to do it be very careful be very careful of doing this in a prior month and if you if you don't want to do this and you want to leave that audit trail then of course you would you could have the option of avoiding a check or entering a journal entry in order to reverse the transaction so we're going to go through here and say ok I don't want it in office supplies the asset account we're going to go down here and put it into the office supplies expense here's office supplies expense that's the one we want so then I'm gonna say save and close yet do you want to record this we're gonna say yes now the other thing we might want to clean up here is if we go to the the lists then and go to the chart of accounts we then have this supplies that has a zero in it which we don't plan on using anytime soon so we could get rid of that account and we we could do so either deleting it or making it inactive so if I don't if I don't want this in our chart of accounts we could go and right-click and say that we want to go to edit this account and we could make it inactive and that'll basically should make it so it's not going to show up there but it's still around so we could uh nun activate it right and so if we did that so I'm gonna cancel that that's one option and then if we wanted to view the inactive items here we could then do sell it and see if we wanted to make that item active in the future again you want to be very careful to do anything to an account that has something in it because that could make that could cause problems this account has no adjustments to it the other thing you could do is of course delete it right click and delete the account so QuickBooks may not even let you do this if there's prior transactions to it so even if this is a zero balance you want to be very sure if there's no activity in it then you could delete it and shouldn't have any problems if there are any activity even if that activity is in the past you probably don't want to delete it but if you don't want to see it anymore make inactive I'm gonna go ahead and delete here and say yeah we want to delete that and then that account should not be something that will confuse us as we enter data into the future for more accounting information and accounting courses visit our website at accounting instruction 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