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QuickBooks bookkeeping basics

From: QuickBooks Pro 2010 Essential Training

Video: QuickBooks bookkeeping basics

QuickBooks makes it easy to get started because it has a lot in common with other programs you use, like dialog boxes, windows, and choosing from dropdown lists. However, to make bookkeeping in QuickBooks or any other accounting program as painless as possible, it helps to understand a few basic accounting concepts. Everything starts with what's called double-entry accounting. In every transaction, money comes from somewhere and goes somewhere. Think about when you pay your credit card bill. The check you write takes money from your checking account to pay the balance on your credit card account.

QuickBooks bookkeeping basics

QuickBooks makes it easy to get started because it has a lot in common with other programs you use, like dialog boxes, windows, and choosing from dropdown lists. However, to make bookkeeping in QuickBooks or any other accounting program as painless as possible, it helps to understand a few basic accounting concepts. Everything starts with what's called double-entry accounting. In every transaction, money comes from somewhere and goes somewhere. Think about when you pay your credit card bill. The check you write takes money from your checking account to pay the balance on your credit card account.

In QuickBooks, accounts are how you keep track of your company finances. These accounts all live in what's known as a Chart of Accounts, but not just bank accounts. Accounts come in different flavors: income for the money you make, expense for the money you spend and several other types, which you'll learn about later. Then there is cash accounting and accrual accounting. Here is a typical business scenario. You hire a vendor to do billable work from January 2nd to January 15th.

The vendor sends you a bill, which you record in QuickBooks on January 31st. You also invoice your customer on January 31st. That's your big paperwork day. You pay the vendor for this work here on February 28th and finally your customer pays you on April 6th. Your books reflect income from the customer and the vendor's expense differently in cash and accrual accounting. Cash accounting is easy. Expense show up when you pay for products or services here on February 28th when you pay the vendor.

Income shows up when you receive payment from a customer, in this example on April 6th. Notice that the expanse occurs in the first fiscal quarter, but the income doesn't show up until second fiscal quarter. Accrual accounting puts income and corresponding expenses in the same period, no matter when cash goes in or out. That way it's easier to see profitability. Expense occurs as soon as you enter a bill, here January 31st, and that's no matter when you pay the bill.

Income occurs when you record a customer invoice, and that's January 31st. It doesn't matter that your customer pays in the next fiscal quarter. In this example, the income and expense appear during the same fiscal period. Now that you understand how QuickBooks uses accounts in cash or accrual accounting, you can start keeping your books in QuickBooks.

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This video is part of

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QuickBooks Pro 2010 Essential Training

69 video lessons · 21743 viewers

Bonnie Biafore
Author

 
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  1. 8m 19s
    1. Welcome
      52s
    2. Editions of QuickBooks
      3m 24s
    3. QuickBooks bookkeeping basics
      2m 46s
    4. Using the exercise files
      41s
    5. Disclaimer
      36s
  2. 9m 12s
    1. Opening a company file
      2m 4s
    2. Using the QuickBooks menus and home page
      2m 49s
    3. Touring the Customer, Vendor, and Employee Centers
      2m 32s
    4. Navigating between QuickBooks windows
      1m 47s
  3. 10m 50s
    1. Gathering the information you need
      2m 4s
    2. Creating a company file
      5m 33s
    3. Converting from another program
      3m 13s
  4. 8m 19s
    1. Naming and numbering accounts
      3m 36s
    2. Creating an account
      2m 26s
    3. Making an account inactive
      2m 17s
  5. 14m 50s
    1. Creating a customer profile
      3m 40s
    2. Adding customer information
      4m 33s
    3. Creating a job
      2m 18s
    4. Making customers inactive
      1m 39s
    5. Creating a vendor
      2m 40s
  6. 43m 35s
    1. Why use QuickBooks items?
      2m 59s
    2. Creating a service item
      4m 26s
    3. Setting up time tracking
      2m 53s
    4. Entering time
      4m 19s
    5. Tracking mileage
      4m 34s
    6. Creating an inventory item
      6m 7s
    7. Creating a non-inventory item
      3m 34s
    8. Setting up sales tax
      6m 59s
    9. Setting up discounts and charges
      3m 46s
    10. Creating a group of items
      2m 16s
    11. Making items inactive
      1m 42s
  7. 30m 46s
    1. Creating a purchase order
      3m 8s
    2. Entering a bill
      4m 37s
    3. Recording inventory you receive
      3m 47s
    4. Paying bills
      4m 5s
    5. Handling a credit from a vendor
      5m 2s
    6. Writing a check for expenses
      3m 17s
    7. Paying with a credit card
      1m 40s
    8. Paying with cash
      2m 53s
    9. Paying sales tax
      2m 17s
  8. 35m 5s
    1. Understanding invoices, statements, and sales receipts
      2m 23s
    2. Creating an invoice and filling in header fields
      2m 55s
    3. Adding items to an invoice
      5m 7s
    4. Adding billable time and cost to an invoice
      5m 57s
    5. Using subtotals, discounts, and other charges
      3m 6s
    6. Creating an estimate
      2m 49s
    7. Handling a customer credit
      4m 57s
    8. Creating a statement charge
      3m 7s
    9. Producing a statement
      4m 44s
  9. 14m 44s
    1. Setting up print options
      4m 13s
    2. Aligning forms with printer paper
      3m 0s
    3. Printing one or more forms
      4m 29s
    4. Emailing a sales form
      3m 2s
  10. 14m 8s
    1. Receiving a payment
      3m 49s
    2. Assessing finance charges
      4m 9s
    3. Creating a sales receipt for a cash sale
      2m 39s
    4. Depositing payments
      3m 31s
  11. 10m 37s
    1. Preparing to reconcile a bank account
      1m 50s
    2. Reconciling transactions to your bank statement
      3m 14s
    3. Correcting discrepancies
      5m 33s
  12. 9m 51s
    1. Using the Report Center to find reports
      3m 0s
    2. Running a report
      3m 45s
    3. Printing or saving a report
      3m 6s
  13. 6m 8s
    1. Why use journal entries?
      3m 3s
    2. Creating a general journal entry
      3m 5s
  14. 13m 39s
    1. Creating a new user
      4m 58s
    2. Backing up your company file
      6m 10s
    3. Restoring a company file
      2m 31s
  15. 27s
    1. Goodbye
      27s

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