Quick Books 2002 Introduction What Is Quick Books
Quick. Books 2002 Introduction
What Is Quick. Books? • 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 12/25/2021 Introduction 2
Accounting for Quick. Books • 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 12/25/2021 Introduction 3
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 12/25/2021 Introduction 4
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 12/25/2021 Introduction 5
What Changes Equity ASSETS INVENTORY CASH INVESTMENTS EQUIPMENT 12/25/2021 LIABILITIES E Q U I T Y Introduction LOAN RENT WAGES 6
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) 12/25/2021 Introduction 7
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 Quick. Books 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 12/25/2021 Introduction 8
Increases and Decreases in Accounts Asset Debit Credit + - 12/25/2021 = Liabilities Debit Credit + Introduction + Equity Debit - Credit + 9
Example Add $5000 to business. Asset = Liabilities Debit Credit + $5000 12/25/2021 Debit Credit + Introduction + Equity Debit - Credit + $5000 10
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 12/25/2021 Introduction 11
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 • Quick. Books provides reports using either method 12/25/2021 Introduction 12
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 12/25/2021 Introduction 13
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 12/25/2021 Introduction 14
Chart of Accounts • For a business the chart of accounts track – Where the incomes from – Where it is put – What expenses are • Chart of accounts in Quick. Books include – – – 12/25/2021 Asset accounts liability accounts equity accounts income accounts expense accounts Introduction 15
Example of Chart of Accounts 12/25/2021 Introduction 16
Quick. Books Navigation Features • • • Menus Icon Bar Navigation Center Navigators List Open Window List Shortcut List 12/25/2021 Introduction 17
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Quick. Books Files • Company Files (. qbw) – 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 12/25/2021 Introduction 19
How to Start Quick. Books • Two ways: – Double click the Quick. Books Icon on your desktop – Click Start/ Program/ Quick. Books Pro and select Quick. Books Pro • To use an existing file – File/ Open Company and select the file in the dialog box 12/25/2021 Introduction 20
How to Exit Quick. Books • 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 12/25/2021 Introduction 21
Screen after Closing File 12/25/2021 Introduction 22
Quick. Books Main Features • • • Transactions Lists Forms Registers Reports and graphs Items 12/25/2021 Introduction 23
Transactions • These are the records of financial activities in a business • In Quick. Books, transactions are created by filling out forms, such as invoice, bill etc. • Each transaction has a form view and a register view 12/25/2021 Introduction 24
Example of Transactions 12/25/2021 Introduction 25
Lists • Lists have information about – – 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 12/25/2021 Introduction 26
Example of List 12/25/2021 Introduction 27
Print a List • Lists/ choose the list • Click Reports button / select report option 12/25/2021 Introduction 28
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 Quick. Books based on saved information 12/25/2021 Introduction 29
Example of Form 12/25/2021 Introduction 30
Print a Form • Open the form • Click Print button on the form 12/25/2021 Introduction 31
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 12/25/2021 Introduction 32
Example of Register 12/25/2021 Introduction 33
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 12/25/2021 Introduction 34
Account with register will Show entry in balance Account with No register 12/25/2021 Introduction 35
Quick. Books Items • Special list identifying the products and services provided or purchased by the business • Each item name is associated with an account allowing Quick. Books 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 12/25/2021 Introduction 36
Example of Items Every Line uses An item 12/25/2021 Introduction Tax Is an item 37
Reports and Graphs • Four style of reports – List • 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. 12/25/2021 Introduction 38
Powerful Accounting Reports • Balance sheet – Reports/ Company & Financial/ Balance Sheet Standard • Profit and loss statement – Reports/ Company & Financial/ Profit & Loss Standard 12/25/2021 Introduction 39
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 12/25/2021 Introduction 40
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) 12/25/2021 Introduction 41
Example of Balance Sheet Specific Date 12/25/2021 Introduction 42
Example of Profit and Loss Report Date Range 12/25/2021 Introduction 43
Cash Versus Accrual Report • Quick. Books 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 12/25/2021 Introduction 44
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) 12/25/2021 Introduction 45
Print Reports • When you print reports, Quick. Books 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 12/25/2021 Introduction 46
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