Chapter 1 Chapter 1 Page ref 1 Company File Setup and Maintenance Chapter 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Objectives Using the EasyStep Interview Adjusting Customer and Vendor Balances after using the EasyStep Interview Performing a Complete Company File Setup The 12 step process Choosing a Start Date Creating the QuickBooks Company File Setting up QuickBooks Lists Gathering Your Information for Setting up Opening Balances Entering Opening Balances Entering Year to Date Income and Expenses Adjusting the Opening Balance for Sales Tax Payable Adjusting Inventory for Physical Quantities on Hand Verifying your Opening Balances Closing Opening Balance Equity into Retained Earnings Backing up the File and Setting the Closing Date Setting up Users and Passwords Page ref 1 2 Chapter 1 Objective Using the EasyStep Interview 3 Chapter 1 1 2 3 4 Launching the EasyStep Interview Select the File menu and then select New Company The EasyStep Interview window appears To navigate click Next or Prev To exit the Interview and retain all changes click Leave Page ref 1 4 Chapter 1 1 2 During the EasyStep Interview QuickBooks asks you to enter the opening balances for your customers called Accounts Receivable A R and vendors called Accounts Payable A P as of your start date The following problems result from entering opening balances during the EasyStep Interview 3 Entering Opening Balances in the EasyStep Interview QuickBooks posts the opening balances to accounts called Uncategorized Income and Uncategorized Expenses It is best not to enter Opening Balances for customers using the EasyStep Interview Page ref 12 5 Chapter 1 Objective Adjusting Customer and Vendor Balances after using the EasyStep Interview 6 Chapter 1 1 Each customer for whom you entered an opening balance will have an Invoice that you must either edit or replace 2 Adjusting Customer and Vendor Opening Balances after the EasyStep Interview Edit the Item column to indicate the Items that you sold on the Invoice Also change the date to the original Invoice date and enter the Invoice number of the original Invoice Similarly each vendor for whom you entered an opening balance will have a Bill that you must either edit or replace Page ref 13 7 Chapter 1 Objective Performing a Complete Company File Setup The 12 step process 8 Chapter 1 1 2 3 4 5 6 7 8 9 10 11 12 Complete Company File Setup A 12 Step Process Choose a QuickBooks start date Create a new QuickBooks company file and configure your preferences Set up your Chart of Accounts company lists Enter opening balances for Balance Sheet accounts except Accounts Receivable Accounts Payable Inventory Sales Tax Payable and Retained Earnings Enter outstanding transactions including Checks Deposits open Invoices and unpaid Bills as of the start date If you are setting up mid year enter your year to date income and expenses Adjust Sales Tax Payable Adjust Inventory to match your physical counts page 5 and set up Fixed Assets Set up payroll lists and year to date payroll information Verify that your Trial Balance report matches your accountant s Trial Balance on your start date Close the Opening Balance Equity account into Retained Earnings Back up your company file and set the Closing Date and the Closing Date Password to lock the file as of your start date Page ref 15 9 Chapter 1 Objective Choosing a Start Date 10 Chapter 1 1 2 3 Choosing a Start Date Step 1 Your start date is the day before you start using QuickBooks to track your daily transactions It is also the date for which you have complete information for your opening balances Best start dates Calendar Year Basis December 31 Fiscal Year basis Last day of fiscal year For a new company First day of the business Page ref 16 11 Chapter 1 Objective Creating the QuickBooks Company File 12 Chapter 1 1 2 3 4 5 6 7 8 Creating the Company File Step 2 Launch QuickBooks Select the File menu and then select New Company Click Next on the first three windows of the EasyStep Interview On the fourth window of the EasyStep Interview click Skip Interview Enter your company information and click Next Select the Company type and then click Next Enter the file name and location where you want to save your company file click Save It will create your company file with extension QBW Page ref 17 13 Chapter 1 Objective Setting up QuickBooks Lists 14 Chapter 1 1 Setting Up the Chart of Accounts Step 3 To set up the Chart of Accounts you will use the following Account Types Activating Account Numbers Adding Accounts Adding Subaccounts Removing Accounts from the Chart of Accounts Turning Off Account Numbers Reordering the Account List Page ref 20 15 Chapter 1 1 Account Types Assets 2 Bank Accounts Recievable Other Current Asset Fixed Asset Other Asset Liabilities Accounts Payable Credit Card Other Current Liability Long Term Liability 3 4 Equity Income 5 Income Other Income Expenses Expense Other Expense Cost of Goods Sold Page ref 20 16 Chapter 1 1 2 Activating Account Numbers QuickBooks does not require account numbers If you prefer to have numbers you can activate them in the Accounting Company Preferences Select the Edit menu and then select Preferences Page ref 21 17 Chapter 1 1 2 3 Adding Accounts Select the Lists menu and then select Chart of Accounts Select the Account menu at the bottom of the Chart of Accounts window and then select New Select account type and enter the name etc Page ref 22 18 Chapter 1 1 2 Adding Subaccounts If you want more detail in your Chart of Accounts you can add Subaccounts In the New Account window check the Subaccount of field and select the main account from the drop down list Page ref 23 19 Chapter 1 1 Removing Accounts from the Chart of Accounts Following options are available in QuickBooks to delete accounts Deleting Accounts Option 1 Deactivating Accounts Option 2 Merging Accounts Option 3 QuickBooks will not allow you to delete an account if you have used the account in an Item record or transaction 3 If this is the case use either Option 2 or Option 3 to remove the account from view in the Chart of Accounts 2 Page ref 24 20 Chapter 1 1 2 Deleting Accounts Option 1 Select the account in the Chart of Accounts list Select the Account menu at the bottom of the Chart of Accounts window and select Delete or press CTRL D Page ref 24 21 Chapter 1 1 If you cannot delete an account you can deactivate it which will cause it to disappear from the Chart of Accounts and reduce the clutter 2 3 Deactivating Accounts Option 2