Seminar 4(a) Receiving Payments & Making ...
QUICKBOOKS 2014 STUDENT GUIDE
Seminar 4(a) Receiving Payments & Making Deposits
TABLE OF CONTENTS Lesson Objectives ............................................................................................... 2 Recording Payment in Full for a Single Job .......................................................... 3 Entering a Partial Payment ................................................................................... 4 Applying One Payment to Multiple Jobs ................................................................ 5 Entering Overpayments ....................................................................................... 6 Handling Down Payments & Prepayments ............................................................ 7 Making Deposits ................................................................................................ 10 How QuickBooks Handles the Deposit ................................................................ 13 How to handle a Customer Bounced Check ........................................................ 15 Receiving Payments & Making Deposits — Review Questions ............................ 18 Review Activities ............................................................................................... 19 Answers to Review Questions ............................................................................ 20
Seminar 4(a): Receiving Payments & Making Deposits
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LESSON OBJECTIVES •
To learn how to record customer payments in QuickBooks
•
To learn how to handle customer discounts, partial payments, overpayments, or down payments
•
To learn how to handle customer bounced checks
•
To see how to record a deposit in QuickBooks, and learn how QuickBooks treats the deposit behind the scenes
•
To learn how to enter cash back from a deposit in QuickBooks
Notes
Seminar 4(a): Receiving Payments & Making Deposits
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RECORDING PAYMENT IN FULL FOR A SINGLE JOB If you’re receiving payment at the time of a sale, and you fill out a sales receipt, QuickBooks records a customer payment. When you invoice a customer, and you receive payment later, you enter the payment in the QuickBooks Receive Payments window. To record a payment in full: 1. From the Customers menu, choose Receive Payments. 2. If the QuickBooks Payment Interview window displays, close it. 3. In the Received From field, select Violette, Mike: Workshop from the drop-down list. 4. Press Tab to move to the Amount field. 5. In the Amount field, type 4732.23 and press Tab. 6. Select Check from the payment optoions Icons and then press Tab. 7. In the Check # field, type 6745.
8. Click Save & New.
Notes
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ENTERING A PARTIAL PAYMENT To enter a partial payment: 1. In the Received From field, select Ecker Designs: Office Repairs from the dropdown list. 2. Press Tab to move to the Amount field and type 1000, then press Tab again. 3. In the Pmt. Method field, leave Check selected. 4. In the Check # field, type 5678. 5. In the Payment column, type 1000 as the amount you want to apply to the invoice, and then press Tab. 6. Leave the Leave this as an underpayment option selected. 7. Click Save & New to record the partial payment and clear the window.
Notes
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APPLYING ONE PAYMENT TO MULTIPLE JOBS To apply one payment to multiple jobs: 1. In the Receive Payments window, select Cook, Brian from the Received From drop-down list. 2. Press Tab to move to the Amount field. 3. In the Amount field, type 7,754.69 and then press Tab. 4. Select Check from the payment optins, confirm that Check is selected. 5. In the Check # field, type 375.
6. Click Save & New.
Notes
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ENTERING OVERPAYMENTS If a customer sends you an overpayment, you simply enter the amount in the Receive Payments window, and QuickBooks keeps track of the additional payment. When the customer has future invoices, you can apply the overpayment to those amounts—you can even apply the credit directly to the invoice. To enter the payment: 1. In the Received From field of the Receive Payments window, select Pretell Real Estate:155 Wilks Blvd. from the drop-down list. 2. Press Tab and type 5,100 in the Amount field. 3. Press Tab again. 4. Enter 5558 in Check # field 5. Select the Refund the amount to the customer option. 6. Click Save & New.
7. In the Issue a Refund window, click OK.
Notes
Seminar 4(a): Receiving Payments & Making Deposits
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HANDLING DOWN PAYMENTS & PREPAYMENTS If a customer makes a payment before you’ve invoiced him for services (for example, he may be making a down payment or paying a retainer fee), you can still record the payment at the Receive Payments window. However, because you don’t have any invoices to which to apply the payment, QuickBooks records the payment as an unused payment (just like an overpayment). QuickBooks holds the unapplied amount with the customer’s name. The next time you enter that customer in the Receive Payments window, QuickBooks displays the credit amount in the Unused Credits area. The customer’s balance also reflects the credit amount. To enter the down payment you’ve received: 1. In the Received From field, select Abercrombie, Kristy: Kitchen from the drop-down list and then press Tab. 2. Type 1000 in the Amount field and then press Tab. 3. Make sure the Check tab is selected. 4. In the Check # field, type 4321.
5. Leave the Leave the credit to be used later option selected. 6. Click Save & Close. 7. Click OK in the message that displays.
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To create an invoice for a customer who made a down payment: 1. From the Customers menu, choose Create Invoices. 2. In the Customer:Job field, select Abercrombie, Kristy: Kitchen from the drop-down list. 3. QuickBooks displays the Billable Time/Cost window. You don’t want to create the invoice from the Outstanding cost listed, so click Exclude, they click OK 4. From the Template drop-down list, choose Rock Castle Invoice. 5. Click in the Item column, select Removal from the Item drop-down list, and then press Tab. 6. In the Quanity column, type 40 and press Tab.
7. Notice that the $1000 payment you entered appears in the Recent Transactions list of the Customer Snapshot. 8. Click Apply Credits to apply the down payment amount made earlier toward this invoice.
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9. Click Yes at the message that displays to save changes.
10. This is the credit that you want to apply to the invoice, so click Done.
11. Click Save & Close to record the transaction.
Notes Seminar 4(a): Receiving Payments & Making Deposits
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MAKING DEPOSITS When you use the Enter Sales Receipt window (for a sales receipt where you receive payment on the spot), the Receive Payments window (for payments on invoices), or a payment item on an invoice, QuickBooks keeps track of the money you’ve received until you deposit it in the bank. When you receive payments from customers, you can either deposit each payment directly into a QuickBooks bank account or you can group payments together into an account called Undeposited Funds to be moved to that bank account at a later time. QuickBooks allows you to choose the method you prefer for depositing payments. To select payments to deposit: 1. From the Banking menu, choose Make Deposits.
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2. Click to select the payments you want to bring to the bank.
3. Click OK. QuickBooks displays the Make Deposits window, which shows the payments you just selected. 4. In the Deposit To field, make sure that 10100 Master Checking Account is selected.
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If you have money to deposit that is not the result of a payment you received for a sale, you can enter it in the detail area of the window. For example, if you received a premium refund from your insurance vendor, you would enter it here. 5. Click Save & Close to record the deposit.
Notes
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HOW QUICKBOOKS HANDLES THE DEPOSIT To view the Undeposited Funds account: 1. From the Lists menu, choose Chart of Accounts. 2. In the Chart of Accounts, double-click the Undeposited Funds account.
3. Close the account register window. 4. In the Chart of Accounts, double-click the 10100 Master Checking account. (Note the amounts in the balance column may be different than what is shown in the image below).
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5. Close the checking account register and the Chart of Accounts.
Notes
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HOW TO HANDLE A CUSTOMER BOUNCED CHECK When a Customer Payment check is returned by the bank: 1. Locate the Customer Payment, in this example: select Receive Payment Icon from the Home Page, click on the previous transaction arrow 4 times, till you reach Ecker Design check 5678 2. Select the Record Bounced Check Icon .
3. Enter a bank amount of $10., this represents th fee charged by the bank 4. If you have a fee you charge your customer you can enter that as well.
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5. Click Next 6. In the Bounced Check Summary, select Finish
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7. Notice the Customer Payment Screen indicates this Check Bounced
8. Save & Close 9. To see the affect of the Bounced Check, Select the 10100 Master Checking Account on your chart of accounts.
Notes
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RECEIVING PAYMENTS & MAKING DEPOSITS — REVIEW QUESTIONS 1. A company has set up three different jobs for a single customer. The customer writes one check to make a partial payment on open balances for all three jobs. In QuickBooks, that payment... a. Must be applied to the first invoice for the first job for the customer b. Must be applied to the most recent invoice for the customer c. Can be applied to any combination of invoices and jobs for the customer d. Cannot be applied to any invoices or jobs for the customer until full payment
is
received 2. QuickBooks supports which of the following types of payment scenarios? a. Down payments for products or services b. Overpayments from customers c. Partial payments from customers d. All of the above
3. True or false: You can enter a customer payment directly in the customer register. a. True b. False
4. The ____________________ ___________________ account acts like a “cash drawer” and is used to hold funds until you deposit them into a bank account. 5. True or false: QuickBooks allows you to print deposit slips that you can take to the bank. a. True b. False
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REVIEW ACTIVITIES 1. Create an invoice for Bryan Ruff’s utility shed job. Add items to Rock Castle Construction’s Item list as needed. 2. After you invoice Bryan, record a payment from him in the Receive Payments window. 3. Record Rock Castle Construction’s deposit of the payment.
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ANSWERS TO REVIEW QUESTIONS 1. A company has set up three different jobs for a single customer. The customer writes one check to make a partial payment on open balances for all three jobs. In QuickBooks, that payment... a. Must b. Must
be applied to the first invoice for the first job for the customer be applied to the most recent invoice for the customer c. Can be applied to any combination of invoices and jobs for the customer d. Cannot be applied to any invoices or jobs for the customer until full payment is received 2. QuickBooks supports which of the following types of payment scenarios? a. Down payments for products or services b. Overpayments from customers c. Partial payments from customers d.
All of the above
3. True or false: You can enter a customer payment directly in the customer register. a. True b.
False You must enter payments in the Receive Payments window.
4. The Undeposited Funds account acts like a “cash drawer” and is used to hold funds until you deposit them into a bank account. 5. True or false: QuickBooks allows you to print deposit slips that you can take to the bank.
a. True b. False
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QUICKBOOKS 2014 STUDENT GUIDE
Seminar 4(b) Using Other Accounts in QuickBooks
TABLE OF CONTENTS Lesson Objectives ............................................................................................... 2 Other Account Types in QuickBooks..................................................................... 3 Entering Credit Card Charges .............................................................................. 4 Reconciling a Credit Card Statement .................................................................... 6 Marking Cleared Transactions .............................................................................. 7 Paying a Credit Card Bill ...................................................................................... 9 Working with Asset Accounts ............................................................................. 10 Setting Up Asset Accounts to Track Depreciation ............................................... 12 Tracking a Loan with a Long-Term Liability Account ............................................ 13 Recording a Payment on a Loan ........................................................................ 18 Using Other Accounts in QuickBooks — Review Questions ................................. 20 Review Activities ............................................................................................... 21 Answers to Review Questions ............................................................................ 22
Seminar 4(b): Using Other Accounts in QuickBooks
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LESSON OBJECTIVES •
To introduce the other account types available in QuickBooks
•
To learn how to track credit card transactions in QuickBooks
•
To reconcile a credit card account
•
To see how to make a credit card payment
•
To discuss the different types of asset and liability accounts you can create and see how to track assets and liabilities in QuickBooks.
•
To introduce the subject of equity and QuickBooks equity accounts
Notes
Seminar 4(b): Using Other Accounts in QuickBooks
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OTHER ACCOUNT TYPES IN QUICKBOOKS In this lesson, you’ll learn about these types of QuickBooks Accounts: •
Credit card accounts—Used to track transactions you pay for with a credit card
•
Asset accounts—Used to track both current assets (those assets you’re likely to convert to cash or use up within one year, such as inventory on hand) and fixed assets (such as long-term notes receivable and depreciable assets your business owns that aren’t liquid, such as equipment, furniture, or a building)
•
Liability accounts—Used to track both current liabilities (those liabilities scheduled to be paid within one year, such as sales tax, payroll taxes, and short-term loans) and long-term liabilities (such as loans or mortgages scheduled to be paid over terms longer than one year)
•
Equity accounts—Used to track owner’s equity, including capital investment, draws, and retained earnings
Notes
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ENTERING CREDIT CARD CHARGES QuickBooks lets you choose when you enter your credit card charges. You can enter credit card charges when you charge an item or when you receive the bill. Your choice depends on whether you like to enter information into QuickBooks incrementally or all at once. The advantage to entering charges when you charge an item is that you can keep close track of how much you owe. In addition, if the charge is for a particular job, you can keep track of how much you’re spending on that job. To enter a credit card charge: 1. From the Banking menu, choose Enter Credit Card Charges.
2. In the Credit Card field, select CalOil Card from the drop-down list. 3. In the Purchased From field, select Bayshore CalOil Service from the drop-down list. 4. Click in the Amount field, and then type 30 and then press Tab. 5. Click the Expenses tab.
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6. In the detail area, click the Account column and assign the charge to the Automobile: Fuel expense account.
7. Click Save & Close to record the transaction and close the window.
Notes
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RECONCILING A CREDIT CARD STATEMENT To reconcile a credit card statement: 1. From the Company menu, choose Chart of Accounts. 2. Click CalOil Card in the list once to select it. 3. Click the Activities menu button, and then choose Reconcile Credit Card.
4. In the Statement Date field, enter 12/15/2018. 5. In the Ending Balance field, type 412.62 6. Click Continue.
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MARKING CLEARED TRANSACTIONS To mark the transactions as cleared: 1. In the Charges and Cash Advances section of the window, select all four charges. 2. In the Payments and Credits section of the window, select the 12/02/18 payment for $135.80
3. Click Reconcile Now.
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4. For this exercise, you want to write a check for payment now, so leave that option selected and click OK.
5. In the Select Reconciliation Report window, select Detail and then click Display. 6. Click OK at the message QuickBooks displays. 7. Review the report and then close it.
Notes
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PAYING A CREDIT CARD BILL To write a check for the bill now (continued from the reconciliation above): 1. After reconciling, when you select ‘Write a Check for Payment now’, the Write Checks window will open. Make sure Checking is listed as the bank account. 2. Click in the Pay to the Order of field and select CalOil Company as the name of the credit card company. 3. Click the Print Later checkbox to select it. Notice the account is prefilled with the CalOil Card account (a credit card account).
4. Click Save & Close to record the transaction. 5. Close the Chart of Accounts.
Notes
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WORKING WITH ASSET ACCOUNTS Note: The remaining sections are somewhat advanced. It may be advisable to consult with your accountant or tax professional for assistance dealing with these topics. An Other Current Asset account tracks assets that are likely to be converted to cash or used up within one year. If you buy and sell inventory, the value of all of your inventory on hand is usually shown in an Other Current Asset account called something like “Inventory Asset.” Other current assets might include treasury bills, certificates of deposit, prepaid expenses, prepaid deposits, reimbursable expenses, and notes receivable (if due within one year). A Fixed Asset account tracks assets your business owns that are not likely to be converted into cash within a year. A fixed asset is usually something necessary for the operation of your business, like a truck, cash register, computer, or photocopier. To set up an Other Current Asset account: 1. On the Home page, click Chart of Accounts. 2. Click the Account menu button, and then choose New. 3. Click Other Account Types and choose Other Current Asset from the drop-down list.
4. Click Continue.
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5. In the Number field, type 13200, in the Account Name field, type Prepaid rent.
6. Click Save & Close.
Notes
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SETTING UP ASSET ACCOUNTS TO TRACK DEPRECIATION Fixed assets are equipment or property your business owns that are not for sale. Since they last a long time, you don’t completely charge their cost to the year in which you buy them. Instead, you spread their cost over several years. But because fixed assets wear out or become obsolete, their value declines constantly from the day you purchase them. The amount of this decline in value is called depreciation. To set up asset accounts to track a new trailer purchased by Rock Castle Construction: 1. In the Chart of Accounts window, click the Account menu button, and then choose New. 2. Select Fixed Asset and click Continue. 3. In the Number Field, type 15150, in the Account Name field, type Trailer. 4. Click Save & Close.
Notes
Seminar 4(b): Using Other Accounts in QuickBooks
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TRACKING A LOAN WITH A LONG-TERM LIABILITY ACCOUNT A Long-term Liability account tracks debts that your business is not likely to pay off within a year. The most common long-term liabilities are loans that you expect to pay off in more than one year. Tracking a loan with a long-term liability account: 1. In the Chart of Accounts, click the Account menu button, and then choose New. 2. In the Add New Account window, select Other Accounts Types and then choose Long Term Liability from the drop-down list. 3. Click Continue. 4. In the Number field, type 23150, In the Account Name field, type Trailer Loan.
5. Do not enter an Opening Balance. 6. Click Save & Close.
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Because this is a new loan, you are either receiving money to deposit in your bank account or receiving a new asset. In this example, you received an asset (the new trailer), so you need to show an increase in the asset’s Cost account. To record an increase in the asset’s Cost account: 1. In the Chart of Accounts, double-click the 15150 Trailer. 2. In the Increase field, type 30,000. 3. In the Account field, select the 23150 Trailer Loan liability account.
4. Click Record.
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5. Close the register window. 6. Close the Chart of Accounts. You can enter the Trailer on the Fixed Asset Item list. Tracking fixed assets using the Fixed Asset Item list enables you to record such information about an asset as purchase date and price, whether the asset was new or used when purchased, and the asset's sale price if you decide to sell it. You can also generate customizable reports listing all your fixed assets. To create a fixed asset item: 1. From the Lists menu, choose Fixed Asset Item List.
2. Click the Item menu button, and select New.
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3. In the Asset Name/Number field, type Trailer. 4. Enter the following information to complete the Purchase Information section: o o o o o
Item is: New Purchase Description: Trailer Date: 12/15/2018 Cost: 30,000 Vendor/Payee: East Bayshore Auto Mall
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5. Enter the following information to complete the Asset Information section: o o o
Asset Description: White trailer with company logo Serial Number: 123456789 Warranty Expires: 12/15/2022
6. From the Asset Account drop-down list, choose 15150 Trailer. 7. Click OK. 8. Close the Fixed Asset Item list.
Notes
Seminar 4(b): Using Other Accounts in QuickBooks
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RECORDING A PAYMENT ON A LOAN When it's time to make a payment on a loan, use the Write Checks window to record a check to your lender. Assign part of the payment to a loan interest expense and the remainder to loan principal. To record a payment on a loan: 1. From the Banking menu, choose Write Checks. 2. In the Pay to the Order of field, type Great and then press Tab. 3. For the dollar amount of the check, type 500.00. 4. Click in the Account column on the Expenses tab and choose the 62420 Interest Expense: Loan Interest expense account from the drop-down list. 5. In the Amount column highlight the amount that QuickBooks prefilled and then type 225.00. 6. Assign the remainder of the expense ($275.00) to the 23150 Trailer Loan liability account.
7. Click Save & Close to record the payment.
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When you record the transaction, QuickBooks automatically updates the accounts affected by this transaction: •
In your checking account, QuickBooks subtracts the amount of the check from your balance
•
In the expense account that tracks interest, QuickBooks enters the interest amount as an increase to your company's interest expense
•
In the Trailer Loan liability account, QuickBooks subtracts the principal amount from the current value of the liability (reducing the amount of your debt)
Notes
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USING OTHER ACCOUNTS IN QUICKBOOKS — REVIEW QUESTIONS 1. Accumulated depreciation is typically set up as what type of account in QuickBooks? a. b. c. d.
A subaccount of a fixed asset account A subaccount of a current asset account A subaccount of a liability account An expense account
2. Equity type accounts would be used to track which of the following? a. b. c. d.
Capital investments Draws Retained Earnings All of the above
3. Which of the following would likely be considered a long-term liability? a. b. c. d.
Vehicle loan Accounts payable Rent Credit card account
4. Retained Earnings is defined as which of the following? a. b. c. d.
The amount of money that a business retains for paying its employees The earnings from non-essential business services The amount of interest saved from paying off a loan early The accumulation of a company’s net income or loss from its start date
5. Which of the following would not decrease the value of a company’s equity? a. b. c. d.
The company paying corporate dividends The company incurring a net loss for the fiscal year An owner drawing money out of the company The company taking a loan out to purchase a new asset
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REVIEW ACTIVITIES Assume that the owner of Rock Castle Construction has taken out a loan and purchased a computer system for $15,000. He wants to track the accumulated depreciation and cost of the system in two separate fixed asset accounts. 1. Create a fixed asset account called Computer System 2. Create a long-term liability account to track the loan. 3. Enter the amount of the loan as an increase in the asset’s account. Assign the transaction to the loan liability account.
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ANSWERS TO REVIEW QUESTIONS 1. Accumulated depreciation is typically set up as what type of account in QuickBooks? a. b. c. d.
A subaccount of a fixed asset account A subaccount of a current asset account A subaccount of a liability account An expense account
2. Equity type accounts would be used to track which of the following? Capital investments Draws Retained Earnings d. All of the above a. b. c.
3. Which of the following would likely be considered a long-term liability? a. b. c. d.
Vehicle loan
Accounts payable Rent Credit card account
4. Retained Earnings is defined as which of the following? The amount of money that a business retains for paying its employees The earnings from non-essential business services The amount of interest saved from paying off a loan early d. The accumulation of a company’s net income or loss from its start date a. b. c.
5. Which of the following would not decrease the value of a company’s equity? The company paying corporate dividends The company incurring a net loss for the fiscal year An owner drawing money out of the company d. The company taking a loan out to purchase a new asset a. b. c.
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Seminar 4(a) Receiving Payments & Making Deposits
TABLE OF CONTENTS Lesson Objectives ............................................................................................... 2 Recording Payment in Full for a Single Job .......................................................... 3 Entering a Partial Payment ................................................................................... 4 Applying One Payment to Multiple Jobs ................................................................ 5 Entering Overpayments ....................................................................................... 6 Handling Down Payments & Prepayments ............................................................ 7 Making Deposits ................................................................................................ 10 How QuickBooks Handles the Deposit ................................................................ 13 How to handle a Customer Bounced Check ........................................................ 15 Receiving Payments & Making Deposits — Review Questions ............................ 18 Review Activities ............................................................................................... 19 Answers to Review Questions ............................................................................ 20
Seminar 4(a): Receiving Payments & Making Deposits
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LESSON OBJECTIVES •
To learn how to record customer payments in QuickBooks
•
To learn how to handle customer discounts, partial payments, overpayments, or down payments
•
To learn how to handle customer bounced checks
•
To see how to record a deposit in QuickBooks, and learn how QuickBooks treats the deposit behind the scenes
•
To learn how to enter cash back from a deposit in QuickBooks
Notes
Seminar 4(a): Receiving Payments & Making Deposits
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RECORDING PAYMENT IN FULL FOR A SINGLE JOB If you’re receiving payment at the time of a sale, and you fill out a sales receipt, QuickBooks records a customer payment. When you invoice a customer, and you receive payment later, you enter the payment in the QuickBooks Receive Payments window. To record a payment in full: 1. From the Customers menu, choose Receive Payments. 2. If the QuickBooks Payment Interview window displays, close it. 3. In the Received From field, select Violette, Mike: Workshop from the drop-down list. 4. Press Tab to move to the Amount field. 5. In the Amount field, type 4732.23 and press Tab. 6. Select Check from the payment optoions Icons and then press Tab. 7. In the Check # field, type 6745.
8. Click Save & New.
Notes
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ENTERING A PARTIAL PAYMENT To enter a partial payment: 1. In the Received From field, select Ecker Designs: Office Repairs from the dropdown list. 2. Press Tab to move to the Amount field and type 1000, then press Tab again. 3. In the Pmt. Method field, leave Check selected. 4. In the Check # field, type 5678. 5. In the Payment column, type 1000 as the amount you want to apply to the invoice, and then press Tab. 6. Leave the Leave this as an underpayment option selected. 7. Click Save & New to record the partial payment and clear the window.
Notes
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APPLYING ONE PAYMENT TO MULTIPLE JOBS To apply one payment to multiple jobs: 1. In the Receive Payments window, select Cook, Brian from the Received From drop-down list. 2. Press Tab to move to the Amount field. 3. In the Amount field, type 7,754.69 and then press Tab. 4. Select Check from the payment optins, confirm that Check is selected. 5. In the Check # field, type 375.
6. Click Save & New.
Notes
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ENTERING OVERPAYMENTS If a customer sends you an overpayment, you simply enter the amount in the Receive Payments window, and QuickBooks keeps track of the additional payment. When the customer has future invoices, you can apply the overpayment to those amounts—you can even apply the credit directly to the invoice. To enter the payment: 1. In the Received From field of the Receive Payments window, select Pretell Real Estate:155 Wilks Blvd. from the drop-down list. 2. Press Tab and type 5,100 in the Amount field. 3. Press Tab again. 4. Enter 5558 in Check # field 5. Select the Refund the amount to the customer option. 6. Click Save & New.
7. In the Issue a Refund window, click OK.
Notes
Seminar 4(a): Receiving Payments & Making Deposits
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HANDLING DOWN PAYMENTS & PREPAYMENTS If a customer makes a payment before you’ve invoiced him for services (for example, he may be making a down payment or paying a retainer fee), you can still record the payment at the Receive Payments window. However, because you don’t have any invoices to which to apply the payment, QuickBooks records the payment as an unused payment (just like an overpayment). QuickBooks holds the unapplied amount with the customer’s name. The next time you enter that customer in the Receive Payments window, QuickBooks displays the credit amount in the Unused Credits area. The customer’s balance also reflects the credit amount. To enter the down payment you’ve received: 1. In the Received From field, select Abercrombie, Kristy: Kitchen from the drop-down list and then press Tab. 2. Type 1000 in the Amount field and then press Tab. 3. Make sure the Check tab is selected. 4. In the Check # field, type 4321.
5. Leave the Leave the credit to be used later option selected. 6. Click Save & Close. 7. Click OK in the message that displays.
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To create an invoice for a customer who made a down payment: 1. From the Customers menu, choose Create Invoices. 2. In the Customer:Job field, select Abercrombie, Kristy: Kitchen from the drop-down list. 3. QuickBooks displays the Billable Time/Cost window. You don’t want to create the invoice from the Outstanding cost listed, so click Exclude, they click OK 4. From the Template drop-down list, choose Rock Castle Invoice. 5. Click in the Item column, select Removal from the Item drop-down list, and then press Tab. 6. In the Quanity column, type 40 and press Tab.
7. Notice that the $1000 payment you entered appears in the Recent Transactions list of the Customer Snapshot. 8. Click Apply Credits to apply the down payment amount made earlier toward this invoice.
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9. Click Yes at the message that displays to save changes.
10. This is the credit that you want to apply to the invoice, so click Done.
11. Click Save & Close to record the transaction.
Notes Seminar 4(a): Receiving Payments & Making Deposits
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MAKING DEPOSITS When you use the Enter Sales Receipt window (for a sales receipt where you receive payment on the spot), the Receive Payments window (for payments on invoices), or a payment item on an invoice, QuickBooks keeps track of the money you’ve received until you deposit it in the bank. When you receive payments from customers, you can either deposit each payment directly into a QuickBooks bank account or you can group payments together into an account called Undeposited Funds to be moved to that bank account at a later time. QuickBooks allows you to choose the method you prefer for depositing payments. To select payments to deposit: 1. From the Banking menu, choose Make Deposits.
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2. Click to select the payments you want to bring to the bank.
3. Click OK. QuickBooks displays the Make Deposits window, which shows the payments you just selected. 4. In the Deposit To field, make sure that 10100 Master Checking Account is selected.
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If you have money to deposit that is not the result of a payment you received for a sale, you can enter it in the detail area of the window. For example, if you received a premium refund from your insurance vendor, you would enter it here. 5. Click Save & Close to record the deposit.
Notes
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HOW QUICKBOOKS HANDLES THE DEPOSIT To view the Undeposited Funds account: 1. From the Lists menu, choose Chart of Accounts. 2. In the Chart of Accounts, double-click the Undeposited Funds account.
3. Close the account register window. 4. In the Chart of Accounts, double-click the 10100 Master Checking account. (Note the amounts in the balance column may be different than what is shown in the image below).
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5. Close the checking account register and the Chart of Accounts.
Notes
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HOW TO HANDLE A CUSTOMER BOUNCED CHECK When a Customer Payment check is returned by the bank: 1. Locate the Customer Payment, in this example: select Receive Payment Icon from the Home Page, click on the previous transaction arrow 4 times, till you reach Ecker Design check 5678 2. Select the Record Bounced Check Icon .
3. Enter a bank amount of $10., this represents th fee charged by the bank 4. If you have a fee you charge your customer you can enter that as well.
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5. Click Next 6. In the Bounced Check Summary, select Finish
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7. Notice the Customer Payment Screen indicates this Check Bounced
8. Save & Close 9. To see the affect of the Bounced Check, Select the 10100 Master Checking Account on your chart of accounts.
Notes
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RECEIVING PAYMENTS & MAKING DEPOSITS — REVIEW QUESTIONS 1. A company has set up three different jobs for a single customer. The customer writes one check to make a partial payment on open balances for all three jobs. In QuickBooks, that payment... a. Must be applied to the first invoice for the first job for the customer b. Must be applied to the most recent invoice for the customer c. Can be applied to any combination of invoices and jobs for the customer d. Cannot be applied to any invoices or jobs for the customer until full payment
is
received 2. QuickBooks supports which of the following types of payment scenarios? a. Down payments for products or services b. Overpayments from customers c. Partial payments from customers d. All of the above
3. True or false: You can enter a customer payment directly in the customer register. a. True b. False
4. The ____________________ ___________________ account acts like a “cash drawer” and is used to hold funds until you deposit them into a bank account. 5. True or false: QuickBooks allows you to print deposit slips that you can take to the bank. a. True b. False
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REVIEW ACTIVITIES 1. Create an invoice for Bryan Ruff’s utility shed job. Add items to Rock Castle Construction’s Item list as needed. 2. After you invoice Bryan, record a payment from him in the Receive Payments window. 3. Record Rock Castle Construction’s deposit of the payment.
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ANSWERS TO REVIEW QUESTIONS 1. A company has set up three different jobs for a single customer. The customer writes one check to make a partial payment on open balances for all three jobs. In QuickBooks, that payment... a. Must b. Must
be applied to the first invoice for the first job for the customer be applied to the most recent invoice for the customer c. Can be applied to any combination of invoices and jobs for the customer d. Cannot be applied to any invoices or jobs for the customer until full payment is received 2. QuickBooks supports which of the following types of payment scenarios? a. Down payments for products or services b. Overpayments from customers c. Partial payments from customers d.
All of the above
3. True or false: You can enter a customer payment directly in the customer register. a. True b.
False You must enter payments in the Receive Payments window.
4. The Undeposited Funds account acts like a “cash drawer” and is used to hold funds until you deposit them into a bank account. 5. True or false: QuickBooks allows you to print deposit slips that you can take to the bank.
a. True b. False
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QUICKBOOKS 2014 STUDENT GUIDE
Seminar 4(b) Using Other Accounts in QuickBooks
TABLE OF CONTENTS Lesson Objectives ............................................................................................... 2 Other Account Types in QuickBooks..................................................................... 3 Entering Credit Card Charges .............................................................................. 4 Reconciling a Credit Card Statement .................................................................... 6 Marking Cleared Transactions .............................................................................. 7 Paying a Credit Card Bill ...................................................................................... 9 Working with Asset Accounts ............................................................................. 10 Setting Up Asset Accounts to Track Depreciation ............................................... 12 Tracking a Loan with a Long-Term Liability Account ............................................ 13 Recording a Payment on a Loan ........................................................................ 18 Using Other Accounts in QuickBooks — Review Questions ................................. 20 Review Activities ............................................................................................... 21 Answers to Review Questions ............................................................................ 22
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LESSON OBJECTIVES •
To introduce the other account types available in QuickBooks
•
To learn how to track credit card transactions in QuickBooks
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To reconcile a credit card account
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To see how to make a credit card payment
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To discuss the different types of asset and liability accounts you can create and see how to track assets and liabilities in QuickBooks.
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To introduce the subject of equity and QuickBooks equity accounts
Notes
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OTHER ACCOUNT TYPES IN QUICKBOOKS In this lesson, you’ll learn about these types of QuickBooks Accounts: •
Credit card accounts—Used to track transactions you pay for with a credit card
•
Asset accounts—Used to track both current assets (those assets you’re likely to convert to cash or use up within one year, such as inventory on hand) and fixed assets (such as long-term notes receivable and depreciable assets your business owns that aren’t liquid, such as equipment, furniture, or a building)
•
Liability accounts—Used to track both current liabilities (those liabilities scheduled to be paid within one year, such as sales tax, payroll taxes, and short-term loans) and long-term liabilities (such as loans or mortgages scheduled to be paid over terms longer than one year)
•
Equity accounts—Used to track owner’s equity, including capital investment, draws, and retained earnings
Notes
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ENTERING CREDIT CARD CHARGES QuickBooks lets you choose when you enter your credit card charges. You can enter credit card charges when you charge an item or when you receive the bill. Your choice depends on whether you like to enter information into QuickBooks incrementally or all at once. The advantage to entering charges when you charge an item is that you can keep close track of how much you owe. In addition, if the charge is for a particular job, you can keep track of how much you’re spending on that job. To enter a credit card charge: 1. From the Banking menu, choose Enter Credit Card Charges.
2. In the Credit Card field, select CalOil Card from the drop-down list. 3. In the Purchased From field, select Bayshore CalOil Service from the drop-down list. 4. Click in the Amount field, and then type 30 and then press Tab. 5. Click the Expenses tab.
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6. In the detail area, click the Account column and assign the charge to the Automobile: Fuel expense account.
7. Click Save & Close to record the transaction and close the window.
Notes
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RECONCILING A CREDIT CARD STATEMENT To reconcile a credit card statement: 1. From the Company menu, choose Chart of Accounts. 2. Click CalOil Card in the list once to select it. 3. Click the Activities menu button, and then choose Reconcile Credit Card.
4. In the Statement Date field, enter 12/15/2018. 5. In the Ending Balance field, type 412.62 6. Click Continue.
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MARKING CLEARED TRANSACTIONS To mark the transactions as cleared: 1. In the Charges and Cash Advances section of the window, select all four charges. 2. In the Payments and Credits section of the window, select the 12/02/18 payment for $135.80
3. Click Reconcile Now.
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4. For this exercise, you want to write a check for payment now, so leave that option selected and click OK.
5. In the Select Reconciliation Report window, select Detail and then click Display. 6. Click OK at the message QuickBooks displays. 7. Review the report and then close it.
Notes
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PAYING A CREDIT CARD BILL To write a check for the bill now (continued from the reconciliation above): 1. After reconciling, when you select ‘Write a Check for Payment now’, the Write Checks window will open. Make sure Checking is listed as the bank account. 2. Click in the Pay to the Order of field and select CalOil Company as the name of the credit card company. 3. Click the Print Later checkbox to select it. Notice the account is prefilled with the CalOil Card account (a credit card account).
4. Click Save & Close to record the transaction. 5. Close the Chart of Accounts.
Notes
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WORKING WITH ASSET ACCOUNTS Note: The remaining sections are somewhat advanced. It may be advisable to consult with your accountant or tax professional for assistance dealing with these topics. An Other Current Asset account tracks assets that are likely to be converted to cash or used up within one year. If you buy and sell inventory, the value of all of your inventory on hand is usually shown in an Other Current Asset account called something like “Inventory Asset.” Other current assets might include treasury bills, certificates of deposit, prepaid expenses, prepaid deposits, reimbursable expenses, and notes receivable (if due within one year). A Fixed Asset account tracks assets your business owns that are not likely to be converted into cash within a year. A fixed asset is usually something necessary for the operation of your business, like a truck, cash register, computer, or photocopier. To set up an Other Current Asset account: 1. On the Home page, click Chart of Accounts. 2. Click the Account menu button, and then choose New. 3. Click Other Account Types and choose Other Current Asset from the drop-down list.
4. Click Continue.
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5. In the Number field, type 13200, in the Account Name field, type Prepaid rent.
6. Click Save & Close.
Notes
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SETTING UP ASSET ACCOUNTS TO TRACK DEPRECIATION Fixed assets are equipment or property your business owns that are not for sale. Since they last a long time, you don’t completely charge their cost to the year in which you buy them. Instead, you spread their cost over several years. But because fixed assets wear out or become obsolete, their value declines constantly from the day you purchase them. The amount of this decline in value is called depreciation. To set up asset accounts to track a new trailer purchased by Rock Castle Construction: 1. In the Chart of Accounts window, click the Account menu button, and then choose New. 2. Select Fixed Asset and click Continue. 3. In the Number Field, type 15150, in the Account Name field, type Trailer. 4. Click Save & Close.
Notes
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TRACKING A LOAN WITH A LONG-TERM LIABILITY ACCOUNT A Long-term Liability account tracks debts that your business is not likely to pay off within a year. The most common long-term liabilities are loans that you expect to pay off in more than one year. Tracking a loan with a long-term liability account: 1. In the Chart of Accounts, click the Account menu button, and then choose New. 2. In the Add New Account window, select Other Accounts Types and then choose Long Term Liability from the drop-down list. 3. Click Continue. 4. In the Number field, type 23150, In the Account Name field, type Trailer Loan.
5. Do not enter an Opening Balance. 6. Click Save & Close.
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Because this is a new loan, you are either receiving money to deposit in your bank account or receiving a new asset. In this example, you received an asset (the new trailer), so you need to show an increase in the asset’s Cost account. To record an increase in the asset’s Cost account: 1. In the Chart of Accounts, double-click the 15150 Trailer. 2. In the Increase field, type 30,000. 3. In the Account field, select the 23150 Trailer Loan liability account.
4. Click Record.
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5. Close the register window. 6. Close the Chart of Accounts. You can enter the Trailer on the Fixed Asset Item list. Tracking fixed assets using the Fixed Asset Item list enables you to record such information about an asset as purchase date and price, whether the asset was new or used when purchased, and the asset's sale price if you decide to sell it. You can also generate customizable reports listing all your fixed assets. To create a fixed asset item: 1. From the Lists menu, choose Fixed Asset Item List.
2. Click the Item menu button, and select New.
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3. In the Asset Name/Number field, type Trailer. 4. Enter the following information to complete the Purchase Information section: o o o o o
Item is: New Purchase Description: Trailer Date: 12/15/2018 Cost: 30,000 Vendor/Payee: East Bayshore Auto Mall
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5. Enter the following information to complete the Asset Information section: o o o
Asset Description: White trailer with company logo Serial Number: 123456789 Warranty Expires: 12/15/2022
6. From the Asset Account drop-down list, choose 15150 Trailer. 7. Click OK. 8. Close the Fixed Asset Item list.
Notes
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RECORDING A PAYMENT ON A LOAN When it's time to make a payment on a loan, use the Write Checks window to record a check to your lender. Assign part of the payment to a loan interest expense and the remainder to loan principal. To record a payment on a loan: 1. From the Banking menu, choose Write Checks. 2. In the Pay to the Order of field, type Great and then press Tab. 3. For the dollar amount of the check, type 500.00. 4. Click in the Account column on the Expenses tab and choose the 62420 Interest Expense: Loan Interest expense account from the drop-down list. 5. In the Amount column highlight the amount that QuickBooks prefilled and then type 225.00. 6. Assign the remainder of the expense ($275.00) to the 23150 Trailer Loan liability account.
7. Click Save & Close to record the payment.
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When you record the transaction, QuickBooks automatically updates the accounts affected by this transaction: •
In your checking account, QuickBooks subtracts the amount of the check from your balance
•
In the expense account that tracks interest, QuickBooks enters the interest amount as an increase to your company's interest expense
•
In the Trailer Loan liability account, QuickBooks subtracts the principal amount from the current value of the liability (reducing the amount of your debt)
Notes
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USING OTHER ACCOUNTS IN QUICKBOOKS — REVIEW QUESTIONS 1. Accumulated depreciation is typically set up as what type of account in QuickBooks? a. b. c. d.
A subaccount of a fixed asset account A subaccount of a current asset account A subaccount of a liability account An expense account
2. Equity type accounts would be used to track which of the following? a. b. c. d.
Capital investments Draws Retained Earnings All of the above
3. Which of the following would likely be considered a long-term liability? a. b. c. d.
Vehicle loan Accounts payable Rent Credit card account
4. Retained Earnings is defined as which of the following? a. b. c. d.
The amount of money that a business retains for paying its employees The earnings from non-essential business services The amount of interest saved from paying off a loan early The accumulation of a company’s net income or loss from its start date
5. Which of the following would not decrease the value of a company’s equity? a. b. c. d.
The company paying corporate dividends The company incurring a net loss for the fiscal year An owner drawing money out of the company The company taking a loan out to purchase a new asset
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REVIEW ACTIVITIES Assume that the owner of Rock Castle Construction has taken out a loan and purchased a computer system for $15,000. He wants to track the accumulated depreciation and cost of the system in two separate fixed asset accounts. 1. Create a fixed asset account called Computer System 2. Create a long-term liability account to track the loan. 3. Enter the amount of the loan as an increase in the asset’s account. Assign the transaction to the loan liability account.
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ANSWERS TO REVIEW QUESTIONS 1. Accumulated depreciation is typically set up as what type of account in QuickBooks? a. b. c. d.
A subaccount of a fixed asset account A subaccount of a current asset account A subaccount of a liability account An expense account
2. Equity type accounts would be used to track which of the following? Capital investments Draws Retained Earnings d. All of the above a. b. c.
3. Which of the following would likely be considered a long-term liability? a. b. c. d.
Vehicle loan
Accounts payable Rent Credit card account
4. Retained Earnings is defined as which of the following? The amount of money that a business retains for paying its employees The earnings from non-essential business services The amount of interest saved from paying off a loan early d. The accumulation of a company’s net income or loss from its start date a. b. c.
5. Which of the following would not decrease the value of a company’s equity? The company paying corporate dividends The company incurring a net loss for the fiscal year An owner drawing money out of the company d. The company taking a loan out to purchase a new asset a. b. c.
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