South-Western Accounting for QuickBooks Pro 2009 Tutorial

South-Western Accounting for

QuickBooks Pro 2009

South-Western Accounting for QuickBooks Pro 2009 Tutorial

Table of Contents
Web Tutorial ........................................................................................................... 4
Using this Web file ................................................................................................. 4
Organizing Data Files ............................................................................................. 4
Create a Working Folder ..................................................................................... 5
Copy Data Files................................................................................................... 5
Rename Data Files .............................................................................................. 5
QuickBooks Basics .................................................................................................. 7
Start QuickBooks Pro 2009 ................................................................................ 7
Open a Company File ......................................................................................... 8
Access QuickBooks Help ................................................................................. 10
Close a Company File ....................................................................................... 11
Exit QuickBooks ............................................................................................... 11
Journalize Transactions ..................................................................................... 11
Print a Journal ................................................................................................... 12
Print a Balance Sheet ........................................................................................ 15
Prepare a Bank Reconciliation .......................................................................... 16
Journalize Service Charge Transaction ............................................................. 19
Access Previous Reconciliations ...................................................................... 19
Print a Profit & Loss Report ............................................................................. 19
Modify a Profit & Loss Report ......................................................................... 20
Print a Trial Balance Report ............................................................................. 21
Make Closing Entries in QuickBooks............................................................... 21
Print a Post-Closing Trial Balance Report ........................................................ 21
Enter Bills ......................................................................................................... 23
Pay Bills ............................................................................................................ 25
Enter Vendor Returns ....................................................................................... 27
View Unpaid Bills Report ................................................................................. 28
Receive Payments ............................................................................................. 28
Apply Credits .................................................................................................... 31
Create Invoices.................................................................................................. 32
Enter Sales Receipts .......................................................................................... 33
Create Credit Memos ........................................................................................ 35
Write Checks ..................................................................................................... 36
Apply a Credit Memo ....................................................................................... 37
Print a Customer Balance Summary Report ..................................................... 39
Print a Vendor Balance Summary Report ......................................................... 39
Print a Vendor Balance Detail Report .............................................................. 40
Make Deposits .................................................................................................. 41
Write Payroll Checks ........................................................................................ 42
Write Off Customer Invoices ............................................................................ 43
View a Customer Balance Detail Report .......................................................... 46
Fixed Asset Item List ........................................................................................ 47
Edit a Fixed Asset Item ..................................................................................... 48
Fixed Asset Listing Report ............................................................................... 49
Purchase of Inventory ....................................................................................... 50
Sale of Inventory ............................................................................................... 52

South-Western Accounting for QuickBooks Pro 2009 Tutorial

Inventory Valuation Detail Report.................................................................... 53

Record Notes Payable ....................................................................................... 53
Note Payable for Cash .................................................................................. 53
Note Payable to Extend Payment Terms ...................................................... 55
Record Notes Receivable .................................................................................. 56
Notes Receivable to Extend Payment Terms ................................................ 56
Notes Receivable for Sales on Account ........................................................ 57
Record Cash from Notes Receivable ................................................................ 58
Account Classes ................................................................................................ 59
Profit & Loss by Class Report .......................................................................... 60
Budget vs. Actual Report .................................................................................. 61
Profit & Loss Previous Year Comparison Report............................................. 63
Balance Sheet Previous Year Comparison Report............................................ 63
Statement of Cash Flows Report....................................................................... 64
Add New Accounts ........................................................................................... 65
Receive Units from Production ......................................................................... 66

South-Western Accounting for QuickBooks Pro 2009 Tutorial

Web Tutorial
Using this Web Tutorial and QuickBooks Pro 2009 software, you will complete
accounting procedures typical of many businesses. This guide can be used with
Century 21 Accounting, 9E; Fundamentals of Accounting, 9E; and Century 21
Accounting, Advanced, 9E. You must read and understand the accounting
concepts and procedures presented in your accounting textbook before completing
problems using this guide and the QuickBooks software.

Using this Web file

All students should read and follow the instructions in this Web Tutorial to
prepare for completing the accounting problems. Your instructor will tell you
which problems to complete.
Begin each problem by reading the problem objectives. These objectives state
what you will accomplish by completing the problem. Follow the instructions
provided for each problem to complete the accounting task using QuickBooks Pro
2009. Pay special attention to notes in the left margin, such as Accounting Tips
and Check Figures, that will help you with your work.
QuickBooks Pro 2009 uses four-digit account numbers by default. Some problems
in the accounting textbook use three-digit account numbers. The account numbers
in the problems have been changed to four digits where needed.
In instances where the problem numbers differ between the General Journal and
Multicolumn Journal versions of Century 21 Accounting, 9E, the difference is
noted at the beginning of the problem.
Pay special attention to using the correct date when completing problems. For
some problems, you will use the current year in the date. In other problems,
transactions have already been entered in the company data file using the year
2009. You must use 2009 as the year for your entries to complete the related
transactions correctly. Follow the directions regarding dates in each problem.
QuickBooks Pro 2009 is designed to be used by a company to keep records on a
continuing basis. As you use QuickBooks Pro 2009, the software will sometimes
display dialog boxes that ask whether you wish to change some setting to
customize the software for your company. Customizing the software would be
helpful if you were to use only one or two companies for the problems you
complete. However, because each problem uses a different company, you need
not customize the software. When one of these boxes appears, close the box
without making the suggested change.

Organizing Data Files

Data files are provided for use in completing the problems in this guide. Each file
includes the beginning data shown in the Working Papers for the problem. Before
you begin working problems, you must copy the data files to a working folder.

South-Western Accounting for QuickBooks Pro 2009 Tutorial

Create a Working Folder

You must copy the data files to a working folder on a hard disk or a network drive
so the files can be opened. Your instructor will tell you where to create your
working folder for the files.
The steps that follow provide instruction on how to create a working folder on a
hard drive or floppy disk using the Windows Explorer program. Your instructor
will need to provide additional guidance if you are directed to create a folder on a
network drive. Follow the steps below to create your working folder.
1. To start Windows Explorer, click the Start button. Point to (All) Programs
(then to Accessories if you have Windows 2000 or XP), and then click
Windows Explorer.
2. In the left pane of Windows Explorer, click the name of the folder in which
you have been directed to create your working folder. (If the folders do not
display in the left pane, click the Folders button on the toolbar.)
3. Choose New from the File menu and then choose Folder. A new folder named
New Folder will appear in the window. In the right pane, the name will be
highlighted.
4. Key a name for the folder as directed by your instructor. For example, you
might name the folder Student Name QB using your name and QB for
QuickBooks. Tap Enter.
5. Note the name and location of your working folder so you can navigate to it
easily when needed.

Copy Data Files

After you have created your working folder, copy the data files from the location
specified by your instructor. The steps that follow tell how to copy files using the
Windows Explorer program. Your instructor may need to provide additional
information if you are directed to copy files to a network drive.
1. Open the folder that contains the data files.
2. Select the files to be copied. (You can select multiple files by holding down
the Ctrl key as you click each filename.)
3. Choose Copy from the Edit menu.
4. Open your working folder. Choose Paste from the Edit menu.

Rename Data Files

After you have copied the data files to your working folder, rename each file
using a unique name. This will help identify your files and reduce the chances of

South-Western Accounting for QuickBooks Pro 2009 Tutorial

accidentally overwriting a classmates work. Instructions are given in the first

problem on how to add your name and the problem number to a footer on the
reports you print. This will further identify your work.
Your instructor will tell you what changes you should make to the filenames. You
may be asked to add your initials or a code number to the filenames. For example,
you might change OKalla Lawn and Garden.qbw to OKalla Lawn and
Garden XX.qbw where XX is your initials. Change only the filename, not the
qbw extension. (Depending on the setting selected in Microsoft Windows, the
filename extension .qbw may or may not display.)
If a company name is reused in a later problem and the problem does not reuse
your earlier file, the data file name will include the chapter number (for example:
C4 OKalla Lawn and Garden.qbw).
The steps that follow tell how to rename a file on a hard drive or floppy disk using
the Windows Explorer program. Instructions may differ slightly depending on the
version of Microsoft Windows you are using. Your instructor may need to provide
additional guidance if you are directed to rename files on a network drive.
1. In Windows Explorer, click your working folder to open it.
2. Click the filename you wish to change.
3. Choose Rename from the File menu. Key the new filename and tap Enter.

South-Western Accounting for QuickBooks Pro 2009 Tutorial

QuickBooks Basics
You will use some basic software features or procedures with most problems you
complete. Instructions for these basic software features are included here in the
Web Tutorial. Read and follow the instructions in the sections that follow to start
QuickBooks, open a company file, close a company file, use QuickBooks Help,
and exit QuickBooks. Refer to these sections later as you complete the problems,
if needed, to review the procedures. All amounts used in the examples will be
from the first problem that uses the software feature.

Start QuickBooks Pro 2009

To start QuickBooks Pro 2009 using Microsoft Windows XP:
1. Click on the Start button on the Task Bar. Choose All Programs from the Start
menu.
2. Choose QuickBooks from the Program menu. Click on QuickBooks Pro
Edition 2009 from the menu.
Figure 1 QuickBooks Pro 2009 on the Programs Menu

3. The software will open and show the No Company Open dialog box.
Figure 2 No Company Open Dialog Box

South-Western Accounting for QuickBooks Pro 2009 Tutorial

Open a Company File

When you start QuickBooks, the No Company Open box will appear. You can
open a company file from this window. If you have already been using
QuickBooks and want to open a different company file, you can do so using the
File menu.
1. Start QuickBooks if it is not already open. Click the Open an existing company
button in the No Company Open box, or choose Open Company from the File
menu. The Open a Company dialog box will appear. Click the radio button
next to Open a company file and click Next.
2. Click the arrow for the Look in box and browse to find your working folder.
Select your working folder.
Figure 3 Open a Company Dialog Box

3. Click the name of the file you want to open such as AllSport Center09.QBW. (Depending on the setting selected in Microsoft Windows, the
filename extension .QBW may or may not display.)
4. When the filename shows in the File name box, click Open.
5. The Company Navigator screen will appear as shown in Figure 4. You can
perform many tasks from this screen. If the entire Company Navigator screen

South-Western Accounting for QuickBooks Pro 2009 Tutorial

is not displayed in the window, use the vertical and horizontal scroll bars to
view the other parts of the window.
Figure 4 QuickBooks Main Screen

6. You can also use the programs menu bar and ribbon to choose commands
you will need to work with the open company file. To give a command using
the ribbon, simply click a button. To use the menu bar, click an option on the
menu bar, such as Reports. Choose an option from the drop-down list, such as
Company & Financial. Some of the options on the drop-down lists have an
arrow on the right side as shown in Figure 5. The arrow indicates that
additional choices are available under these options. For example, several
reports are listed under the Company & Financial option. Take some time to
view the main options offered for each item on the menu bar.
Figure 5 Report Drop-Down Menu

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Access QuickBooks Help

Each time you need to use a new feature or procedure in QuickBooks to complete
a problem, instructions are provided. However, you may also want to use the
QuickBooks Help feature to learn about or review software features. Follow the
steps below to use QuickBooks Help.
1. Choose QuickBooks Help from the Help menu as shown in Figure 6.
Figure 6 QuickBooks Help Drop Down Menu

2. Click the Search tab. Enter a search word or term the in text box as shown in
Figure 7 and click the arrow button. A list of Help entries related to the search
term will appear.
Figure 7 QuickBooks Help Window

3. Choose an entry from the list and click it. Read the Help information in the
lower pane of the window. Click the Close control button for the window to
close Help.

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Close a Company File

When you start QuickBooks, the last open company file may still be open. To
prevent this, you should close each company file when you are finished working
with it. Closing your company files will keep another student from accidentally
changing or using your work.
To close a company file, choose Close Company from the File menu. You can
now exit QuickBooks or let another student use the computer.
Figure 8 File Menu

Exit QuickBooks
Your instructor may ask you to turn off your computer when you finish a problem
or at the end of the class period. You should exit QuickBooks before turning off
your computer.
Software Tip
To change the date:
1. Click the calendar
button.

To exit QuickBooks, choose Exit from the File menu. You are now ready to close
Windows and turn off your computer.

Journalize Transactions
2. Click the left or
right arrow to find
the month.

1. Choose Make General Journal Entries from the Company menu. The Make
General Journal Entries window will appear.
Figure 9 Make General Journal Entries Window

3. Click the date for

your journal entry.
2. Enter the date of the first transaction in the Date box. You can also change a
date by using the calendar button as explained in the Software Tip at the left.

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3. Key the transaction as shown in Figure 9. Click in the Account field. Click the
down arrow in the Account field. Choose the correct account from the dropdown box. Tap Tab to move to the appropriate field and enter the debit
amount. Key the appropriate information (R1) in the Memo field. Choose the
correct account and enter the amount for the credit part of the transaction. Key
the appropriate information (R1) in the Memo field.
4. Click the Save & New button to save the transaction. A blank Make General
Journal Entries screen will appear.
5. Enter the remaining transactions. Use a new blank Make General Journal
Entries window for each transaction. Be sure to enter the correct date for each
transaction. For purchases or sales on account, use the drop-down list in the
Name field to choose the proper Accounts Payable vendor or Accounts
Receivable customer.
6. Click the Save & Close button when you finish keying the transactions for
November.
Note: You can check previous transactions by clicking the Previous button
until the transaction you want shows on the screen. If no changes need to be
made, click the Next button until you find the next blank entry. If changes are
needed, key the changes, click the Save & New button, and click Yes to record
the changes. Then click the Next button until you find the next blank entry.
If you need to end your session before all of the transactions have been keyed,
click the Save & Close button and close your company as shown on page 8 of
the Web Tutorial. You can continue keying the transactions in your next
session.

Print a Journal

Software Tip
All of the reports you
need can be accessed
by clicking Reports on
the Menu bar and
choosing an option
from the drop-down
list.

One of the reports you should always review after making journal entries is the
General Journal or Journal. This report contains all of the data you keyed in the
Making General Journal Entries screen. Use the following steps to print a
Journal.
1. Choose Accountant & Taxes option from the Reports drop-down menu.
Choose Journal. The Journal window will appear.
2. Change the From date to November 1, 2009. Change the To date to November
30, 2009 (or the date used in the problem). Click the Refresh button so the
data for the date range you selected shows in the report as shown in Figure 10.
Always double check the dates used for reports. Incorrect dates or date ranges
can cause reports to show incorrect data even if all transactions were keyed
correctly.

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Figure 10 Journal Report Window

3. Review the report to make sure all transactions are shown correctly. (If
corrections are needed, open the Make General Journal Entries window and
make them. Then go back to the report.)
4. All of the data may not display in the columns of the report. To display all of
the data, widen the columns. Place the cursor on the small diamond to the
right of the column heading. When the cursor changes to a double-headed
arrow, drag the column to the right until all contents are visible.
5. Add a custom footer that includes your name and the problem number. Click
the Modify Report button found at the top left of the Journal window. Choose
the Header/Footer tab in the Modify Report: Journal dialog box.
6. Key your name and the problem number (such as 4-5 Mastery Problem) in the
Extra Footer Line text box. All three options should be checked as shown in
Figure 11. Click OK to save the footer.
Figure 11 Extra Footer Information Box

7. Click the Print button at the top of the Journal window. The Print Reports
dialog box will appear.

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Figure 12 Print Reports Dialog Box

QuickBooks Help
printer setup
page orientation

8. Select the printer you wish to use. Click the Landscape radio button in the
Orientation section. Make sure there is not a check mark in the box next to Fit
report to. This will ensure that the Journal report will preview and print at full
size.

Software Tip
You can also print the
report by clicking the
Print button on the
Print Preview screen.

9. Click the Preview button to view the report. Make sure your custom footer
shows at the bottom of the report. Click the Close button on the Print Preview
window. (If needed, close the Print Reports dialog box and make changes.
Then access the box again.)
10 Click the Print button in the Print Reports dialog box. The Journal report
should print in landscape mode. Click the Close button on the Journal
window to close the report.

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Print a Balance Sheet

1. Choose Company & Financial from the Reports drop-down menu. Choose
Balance Sheet Standard as shown in Figure 13.
Figure 13 Choose Balance Sheet Standard Report

2. Change the As of date to November 30, 2009 (or the date used in the
problem). Click the Refresh button so the data for the date range you selected
shows in the report. The top portion of the report is shown in Figure 14.
Figure 14 Balance Sheet Report

3. Review the report to make sure all balances are correct. Make corrections if
needed.
4. Click the Modify Report button and choose the Header/Footer tab in the
Modify Report: Balance Sheet dialog box.

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5. Key your name and the problem number (4-5 Mastery Problem) in the Extra
Footer Line text box. Click OK to save the footer.
6. Click the Print button. The Print Report dialog box will appear.
7. Select the printer you wish to use. Click the Portrait radio button in the
Orientation section. Make sure there is not a check mark in the box next to Fit
report to. This will ensure that the report will preview and print at full size.
8. Click the Preview button to view the report. Make sure your custom footer
shows at the bottom of the report. Click the Close button on the Print Preview
window. (If needed, close the Print Reports dialog box and make changes.
Then access the box again.)
9. Click the Print button in the Print Reports dialog box. The report should print
in portrait mode.
10. Click the Close button on the report window to close the report.

Prepare a Bank Reconciliation

QuickBooks pulls information from the General ledger to help you prepare a bank
reconciliation. The purpose of the reconciliation is to provide data to make any
journal entries needed to make the general ledger cash balance match the bank
balance. The company does not use the QuickBooks Write Checks feature.
Information about checks can only be found in the Memo field of the Journal.
1. Choose Reconcile from the Banking menu. The Begin Reconciliation dialog
box will appear similar to the one shown in Figure 15.
Accounting Tip
The Statement Date in
the Begin
Reconciliation dialog
box should be the date
you prepare the
reconciliationnot
the date on the bank
statement.

2. Make sure Cash shows in the Account field. Set the statement date to
8/31/2009.
3. Key the balance from the bank statement ($2,721.00) in the Ending Balance
box. There was no beginning general ledger balance for Cash in this problem.
Since there is a general ledger balance for Cash as of 7/31/2009, QuickBooks
pulls it into the Beginning Balance field.
4. Key 15.00 in the Service Charge box. Use the bank statement date
(8/28/2009) in the Date box. Choose Miscellaneous Expense from the dropdown menu under Account for the service charge. Leave the Interest Earned
section blank
5. Your Begin Reconciliation dialog box should look like Figure 15. After
making any needed corrections, click the Continue button.

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Figure 15 Begin Reconciliation Dialog Box

Accounting Tip
The beginning balance
on the bank statement
might not equal the
beginning balance in the
Begin Reconciliation
dialog box. If this is the
case, make sure you
made any adjustments
needed after the prior
months reconciliation.

6. The Reconcile - Cash window will appear similar to Figure 16. All debits and
credits to Cash will show in the appropriate columns.
7. Review the transactions in the Checks, Payments and Service Charges section.
Click in the blank field next to the Date field to place a check mark next to all
transactions except 7 and 8. Transactions 7 and 8 are for check numbers 114
and 115 respectively. According to the problem detail above, these checks are
outstanding.
8. Review the transactions in the Deposits and Other Credits section. Click in
the blank field next to the Date field to place a check mark next to all
transactions except 9. Transaction 9 is for the 8/31 sales tape. According to
the problem detail above, this deposit did not show on the bank statement.
9. Your Reconcile - Cash dialog box should look like Figure 16. Make sure that
the amount next to Difference (lower right) is 0.00. After making any needed
corrections, click the Reconcile Now button.

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Figure 16 Reconcile - Cash Dialog Box

Software Tip
If you do not use the
QuickBooks Write
Checks feature, the
Entry No. will show in
the Chk # field.
Review the Journal
report to find the check
number for each
transaction.

Accounting Tip
If you find a
discrepancy, do not
assume that the bank
statement is correct.
Checks can be processed
for an incorrect amount.
Deposits can be put in
an incorrect account.

10. The Select Reconciliation Report dialog box will appear as shown in Figure
17. Choose the Both option to create the Summary and Detail reports. Click
the Display button to open the reports window.
Figure 17 Select Reconciliation Report Dialog Box

11. The Reconciliation Summary report will show first. Add an extra line footer
to include your name and the problem number. Print the report in portrait
orientation.
12. Close the Reconciliation Summary report window. The Reconciliation Detail
report will appear. Add an extra line footer to include your name and the
problem number. Print the report in portrait orientation. Close the report
window.

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Journalize Service Charge Transaction

You do not need to enter a journal transaction for the $15.00 bank service charge.
QuickBooks automatically makes this journal entry. The entry is based on the
information you enter for Service Charges in the Begin Reconciliation dialog box.
If you enter data for interest in the Begin Reconciliation dialog box, QuickBooks
will automatically make the related journal entry for this account also.

Access Previous Reconciliations

If you close one of the reconciliation reports in error or simply need to access it at
a later date, you can reopen the report.
1. Choose Banking from the Reports menu. Choose Previous Reconciliation.
The Select Previous Reconciliation Report dialog box will appear as in Figure
18.
Figure 18 Select Previous Reconciliation Report Dialog Box

Software Tip
You can choose to
display your report as a
PDF file. You must
have Adobe Acrobat or
Acrobat Reader loaded
on your computer to
view the report in PDF
format.

2. Make sure Cash shows in the Account box. Click the appropriate radio button
under Type of Report to open one or both reports.
3. Choose the second option under In this report, include. Click the Display
button. The report(s) you selected will display in the window.

Print a Profit & Loss Report

1. From the Reports menu, choose Company & Financial. Choose Profit & Loss
Standard as shown in Figure 19.
Figure 19 Choose Profit & Loss Standard Report

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2. Select April 1 and April 30, 2009, for the From and To dates. Click the
Refresh button.
3. Click the Modify Report button and choose the Header/Footer tab. Key your
name and the problem number in the Extra Footer Line text box. Click OK to
save the footer.
4. Click the Print button in the Profit & Loss window. Select the printer you
wish to use in the Print Reports dialog box. Select portrait orientation and
click the Print button.
5. Click the Close button in the Profit & Loss window to close the report.

Modify a Profit & Loss Report

The company data file for Rolstad Repair Service contains all activity for the
month ended September 30, 2009. Use the data to prepare a Profit & Loss report
that includes component percentages for expenses and net loss.
1. From the Reports menu, choose Company & Financial. Choose Profit & Loss
Standard. Select September 1 and September 30, 2009, for the From and To
dates. Click the Refresh button.
2

To add component percentages, click the Modify Report button. The Modify
Report: Profit & Loss dialog box will appear. In the Columns section on the
Display tab, click the box next to % of Income. A check should appear in the
box as shown in Figure 20.

Figure 20 Modify Report Display Tab

Software Tip
QuickBooks allows
you to create reports
on both the cash and
accrual basis. For the
problems in this book,
you will report on the
accrual basis. Make
sure that Accrual is
selected under Report
Basis as shown in
Figure 20

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3. Click the Header/Footer tab. Enter an extra line footer that includes your
name and the problem number. Click OK to close the dialog box.
4. Print the Profit & Loss report in portrait orientation.

Print a Trial Balance Report

1. Choose Accountant & Taxes from the Reports menu. Choose Trial Balance.
2. Enter October 31, 2009, for the From and To dates. Click the Refresh button.
3. Click the Modify Report button. Click the Display tab. Click the Advanced
button. The Advanced Options dialog box should appear. Under Display
Rows, click the Non-zero radio button. Active should be selected under
Display Columns. Fiscal Year should be selected under Reporting Calendar.
Click OK to close the box.
4. Click the Header/Footer tab. Enter your name and the problem number in the
Extra Footer Line box. Click OK to close the dialog box.
5. Click the Print button. Select the printer you wish to use in the Print Reports
dialog box. Select Portrait orientation and click the Print button.
6. Click the Close button to close the report.

Make Closing Entries in QuickBooks

QuickBooks, like many PC-based accounting packages, automatically zeros out
all income and expense accounts at the end of each fiscal period. The default
fiscal year in QuickBooks is the calendar year. For companies that use a fiscal
year other than the calendar year, the system administrator will typically make the
needed changes to QuickBooks.
In QuickBooks, it is necessary to make some closing entries. You need to close
Income Summary to the owners capital account for the amount of the net income
or loss. For a net income, debit Income Summary and credit the owners capital
account. For a net loss, debit the owners capital account and credit Income
Summary. You also must close the owners drawing account to the owners
capital account. To do so, debit the owners capital account and credit the owners
drawing account.

Print a Post-Closing Trial Balance Report

QuickBooks Help
trial balance report

A Post-Closing Trial Balance is created to check the beginning balances after all
closing entries for the prior fiscal period have been made. In QuickBooks, the
report should use the first day of the new fiscal period for both the From and To
dates.

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1. Choose Accountant & Taxes from the Reports menu. Choose Trial Balance.
Use November 1, 2009, for the From and To dates. Click the Refresh button.
2. Click the Modify Report button. Choose the Header/Footer tab. Change the
report title in the Show Header Information section to be Post-Closing Trial
Balance as shown in Figure 21.
Figure 21 Modify Report, Show Header Information Section

3. Choose the Display tab. Click the Advanced button. The Advanced Options
box will appear. Click the Non-zero radio button in the Display Rows section
as shown in Figure 22. The report will now display only rows with non-zero
balances. Click OK to close the Advanced Options box.
Figure 22 Modify Report, Advanced Options Box
Accounting Tip
Eliminating non-zero
rows makes reports
easier to read.

4. Click the Header/Footer tab. Enter an extra footer line that includes your
name and the problem number. Click OK.
5. Click the Print button in the Trial Balance window. Choose portrait
orientation and click the Print button. Close the Close button to close the
window.

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Enter Bills
In previous problems, you have entered transactions using the Make General
Journal Entries window. For many transactions, you will continue to use the same
process. For other transactions that involve purchases and payments on account,
you will use the Enter Bills and Pay Bills features of QuickBooks to enter the
transactions. By using these features, you can track purchases and payments on
account. For example, you can easily see a list of bills that are due on a certain
date.
QuickBooks Help
bills from vendors
entering

Use the Enter Bills option from the Vendors menu to enter all purchases on
account. When you use this feature, the vendors Accounts Payable account is
credited. You select the account to be debited in the Account field in the window.
To learn to use this feature, review the steps below to enter a July 2, 2009,
transaction. (Purchased merchandise on account from Woodland Computers,
$2,600.00, P354)
1. From the Vendors menu, choose Enter Bills.
Figure 23 Vendors Menu

Software Tip
Use the Enter Bills
feature to record all
purchases on account
not just purchases of
merchandise inventory.

2. The Enter Bills window will appear as shown in Figure 24. Make sure the Bill
and the Bill Received options are selected.

South-Western Accounting for QuickBooks Pro 2009 Tutorial

24

Figure 24 Enter Bills Window

3. Click the down arrow for Vendor. Choose Woodland Computers from the
Vendor drop-down list.
4. Enter or select July 2, 2009, in the Date field. The Bill Due date is calculated
by QuickBooks.
5. Key 2,600.00 in the Amount Due field and P354 in the Ref. No. field.
6. Leave the Terms field blank. The terms (payment terms) are set in the
QuickBooks Preferences. (When needed, you can override the standard terms
by choosing from the drop-down list for Terms. You will learn more about
payment terms in later problems.)
Software Tip
You can leave the Make
General Journal Entries,
Enter Bills, and Pay
Bills windows open
while working this
problem. To move
between windows, click
the name of the desired
window in the Open
Windows box on the left
side of the QuickBooks
main window.

7. Click in the Account field. Click the down arrow for the Account field. Select
Purchases from the drop-down list in the Account field. The Amount is filled
in by QuickBooks from the Amount Due field in the Bill section of the
window. Key P354 (the purchase invoice number) in the Memo field.
8

Review the transaction. When everything is correct, click the Save & New
button (lower right corner of the Enter Bills window) to save the transaction.

9. Repeat the process for all remaining purchases on account. When you have
keyed all of the purchases on account transactions, close the window by
clicking the Save and Close button (lower right corner of the Enter Bills
window).

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25

Pay Bills
Use the Pay Bills option from the Vendors menu to make all payments on
account. When you use this feature, the vendors Accounts Payable account is
debited. Cash is credited.

QuickBooks Help
bills from vendors
paying

To learn to use this feature, review the steps below to enter a transaction. (July 4
Paid cash on account to Pacific Industries, $1,400.00, covering P351, less 2%
discount. C242)
1. From the Vendors menu, choose Pay Bills. The Pay Bills window will appear
as shown in Figure 25.
Figure 25 Pay Bills Window

Software Tip
The list may show more
than one bill to be paid
on the date you selected.
You must put a check
mark next to each bill to
be paid.

2. Select the Show all bills option. To refresh the screen, click anywhere in the
section of the screen that shows the bills to be selected.
3. To select a bill for payment, click in the field to the left of the Date Due field.
A check mark will appear in the field showing that you have selected the bill
for payment. Select for payment the bill with the Disc. Date of July 4.
4. Click the Set Discount button. The Discounts and Credits box should appear
as shown in Figure 26.

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26

Figure 26 Discounts and Credits Box

If the Amount of Discount field is correct, click Done to accept the discount.

Software Tip
Always check the
Payment Date field. The
date in this field is what
shows on the Journal
report.

5. Click the down arrow for Payment Account. Choose Cash from the Payment
Account drop-down list.
6. Click the down arrow for Payment Method. Choose Check from the Payment
Method drop-down list. Use July 4, 2009, in the Payment Date field.
7. Select the Assign check no. option. (The Assign Check No. option is used
when checks will be written by hand. The To be printed option is used when
checks will be printed later using QuickBooks.)
8. Review the transaction. When everything is correct, click the Pay & New
button (lower right corner of the Pay Bills window). The Assign Check
Numbers window will appear as shown in Figure 27.
Figure 27 Assign Check Numbers Window

Software Tip
The list may show more
than one bill. You must
assign a check number
to each item. You can
assign the same check
number to multiple
items from the same
vendor.

South-Western Accounting for QuickBooks Pro 2009 Tutorial

Accounting Tip
A major goal of
businesses is to
control cash (prevent
theft). One
procedure used to
control cash is to
have one person
enter the bills and a
different person
create the checks.

27

8. Select the option Assign the appropriate check number next to each bill
payment check if it is not already selected. Key 242 in the Check No. field.
Click OK to close the window and save the transaction. The bill will no longer
show in the Pay Bills window.
9. Repeat the process for all remaining payments on account. When you have
entered all of the payment on account transactions, close the window by
clicking the Pay and Close button (lower right corner of the Pay Bills
window).

Enter Vendor Returns

Vendor returns can be processed easily in QuickBooks. To process a return to a
vendor for an invoice that has not yet been paid, use the Enter Bills window as
shown in Figure 28. When entering vendor returns, the vendors Accounts
Payable account is debited for the amount of the return. You choose the account
to be credited in the Account field (such as Purchases Returns and Allowances).
To learn this process, review the steps below for completing a transaction.
Figure 28 Vendor Return

Software Tip
Choose the Credit
option to enter a credit
for an invoice that has
already been paid. Do
not use the Credit option
for an unpaid invoice.
This will cause
QuickBooks to calculate
the vendor discount
incorrectly.

1. Choose Enter Bills from the Vendors menu. Click the Previous button until
you find the purchase invoice you want to credit (July 6 transaction).
2. Click on the second line of the Expenses field. Click the down arrow and
choose Purchases Returns and Allow. from the Account drop-down list, as
shown in Figure 29.

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28

Figure 29 Account Drop-Down List

3.

Enter the return amount (-1,640.00) in the Amount field. Enter the source
document number (DM25) in the Memo field. Change the Amount Due to the
revised amount ($920.00).

4. Click the Save & New button to save the transaction.

View Unpaid Bills Report

QuickBooks Help
bills from vendors
reports about
Unpaid Bills
Detail report

1. Choose Vendors & Payables from the Reports menu. Choose Unpaid Bills
Detail as shown in Figure 30.
Figure 30 Unpaid Bills Detail Option

2. Select or enter the date, July 31, 2009. Click the Refresh button. The report
will show all unpaid bills that have been entered as of that date. Change
column widths as needed to display all of the data. Add a custom footer to the
Unpaid Bills Detail report that includes your name and the problem number.
Print the report in portrait orientation.
3. Click the Close button to close the report window.

Receive Payments
QuickBooks Help
receiving payments
on invoices

Use the Receive Payments option from the Customers menu to record payments
on account. When you use this feature to record payments, Cash is debited for the
amount of the payment. The customers receivable account is credited for the full
amount of the invoice. If there is a sales discount, Sales Discount is debited for
the discount amount.

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29

To learn to use this feature, review the steps below to enter a transaction. (October
26 Received cash on account from Slumber Inns, covering S435 $1,356.00, less a
2% discount. R293.).
1. From the Customers menu, choose Receive Payments. The Receive Payments
window will appear as shown in Figure 31. A Merchant Account Service
Message box may appear. If so, click the Close button in the upper right
corner to close the window and continue.
Figure 31 Receive Payments Window

Software Tip
QuickBooks
automatically applies
customer payments. If
more than one invoice
shows for the company,
QuickBooks applies the
payment to the oldest
invoice first.

2. In the Customer Payment section, choose Slumber Inns from the Received
From drop-down list. Enter a date (October 26, 2009) in the Date field. The
Customer Balance will be 1,356.00. Cash, the QuickBooks customer default,
shows in the Pmt. Method field.
3. Key 1,328.88 in the Amount field ($1,356.00 less the 2% discount). A check
mark will appear to the left of the invoice. An underpayment warning will
appear in the lower left corner of the Receive Payment window as shown in
Figure 32.
Software Tip
The underpayment
warning box alerts you
when the customer
payment does not equal
customer balance. You
must decide to apply a
discount, leave the
amount as an
underpayment, or write
off the amount.

Figure 32 Underpayment Warning Box

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30

4. Click the Leave as an underpayment radio button. Click the Discount &
Credits button. The Discount and Credits dialog box should appear as in
Figure 33.
Figure 33 Discount and Credits Dialog Box

Make sure that the Amount of Discount is correct. Choose Sales Discount
from the drop-down list in the Discount Account field. Click Done to apply
the discount. The underpayment warning box should be gone.
4. Key S435 in the Memo field. Key R293 in the Reference # field. Select Cash
from the drop-down list in the Deposit to field.
5

Review the transaction. When everything is correct, click the Save & New
button (lower right corner of the Receive Payments window) to save the
transaction.

6. Repeat the process for all remaining customer receipts on account. When you
have entered all of the receipt on account transactions, close the window by
clicking the Save and Close button (lower right corner of the Receive
Payments window).

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31

Apply Credits
QuickBooks Help
invoices
applying credit
amounts

When a customer is paying an invoice for which partial credit was received, use
the Discount & Credits option on the Receive Payments window to process the
transaction. Review the steps below to record a transaction.
(June 9 Received cash on account from Joe Ricardo for eight chairs and a table
purchased on S152 for $892.50 ($420.00 for the chairs and $472.50 for the table)
less CM42 for two chairs ($100.00 plus $5.00 sales tax), less discount. R116.)
1. Choose Receive Payments from the Customers menu. The Receive Payments
window will appear.
2. Select the customer Joe Ricardo from the Received From drop-down list.
Enter June 9, 2009 for the transaction date.
3. Enter 771.75 in the Amount field ($892.50 minus CM42 minus the 2%
discount). Enter R116 in the Reference # field. Enter S152 in the Memo field.
4. Place a check mark in the first column of the row for the invoice being paid
(number 152). An underpayment warning box will appear in the lower left
corner of the window. Disregard the warning. Click the Discounts & Credits
button. Click the Credits tab. The Discount and Credits window will appear as
shown in Figure 34.
5. Place a check mark by the credit you wish to apply (number 42). If this were
the end of the transaction, you would click the Done button. Because you still
need to apply the 2 percent discount, click the Discount tab.
6. QuickBooks will only allow one sales discount account for each customer
receipt. Because you can only use one discount account for this transaction,
Choose Sales Discount--Tables in the Discount Account field. You will need
to use the Make General Journal Entries Window to transfer the amount of
Sales DiscountChairs to the correct account.
7. In the Amount of Discount box, QuickBooks suggests $17.85 for the discount.
However, this discount amount is not correct because it is based on the total
amount of the original invoice $892.50. You must manually calculate the
amount of the discount for S152 minus CM42 ($892.50-$105.00=$787.50).
Key 15.75 in the Amount of Discount field. Click Done.

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32

Figure 34 Discount and Credits Window, Credits Tab

8. Select the Deposit To option and choose Cash from the list. Click the Save &
New button to record the transaction.

Create Invoices
QuickBooks Help
creating invoices

Use the Create Invoices option from the Customers menu to record sales on
account. When you use this feature, the customers accounts receivable account is
debited for the total amount of the invoice. Sales is credited for the merchandise
amounts. Sales Tax Payable is credited for the sales tax amount.
To learn to use this feature, review a transaction. (October 27 Sold merchandise on
account to County Hospital, $489.50, plus sales tax, $19.58; total, $509.08. S443.)
1. From the Customers menu, choose Create Invoices. The Create Invoices
window will appear as shown in Figure 35.

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33

Figure 35 Create Invoices Window

Software Tip
The Bill To, Ship To,
and Terms data are
entered in the Customer:
Job List. The Via
(shipment method) and
F.O.B. (Free On Board)
data is part of the
QuickBooks Preferences.

2. Choose County Hospital from the Customer Job drop-down list. Choose Intuit
Product Invoice from the Template drop-down list. Use October 27, 2009 in
the Date field. Key 443 in the Invoice # field. The Bill To, Ship to, Terms,
Ship, Via, and F.O.B. fields are filled in by QuickBooks.
3. Click in the Item Code field. Choose Merchandise from the drop-down list.
Key the amount (489.50) in the Price Each field. QuickBooks automatically
calculates the sales tax (4% on the bottom of the invoice. This happens
because of the sales tax preferences that have been set in this company data
file. (In a typical company, these preferences are set by the system
administrator.)
4

Review the transaction. When everything is correct, click the Save & New
button (lower right corner of the Create Invoices window) to save the
transaction.

5. Repeat the process for all remaining sales on account. When you have keyed
all of the sales on account transactions, close the window by clicking the Save
and Close button (lower right corner of the Create Invoices window).

Enter Sales Receipts

QuickBooks Help
sales receipts
entering

When you use the Enter Sales Receipts window to record cash and credit card
sales, Sales is credited for the amount of the cash and credit card sales. Sales Tax
Payable is credited for the amount of the sales tax. Cash is debited for the total of
the sales receipt.

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34

To learn to use the Enter Sales Receipts feature, 27.12review the steps below to
enter a transaction. (October 28 Recorded cash and credit card sales, $3,165.00
taxable, $1,150.00 nontaxable, plus sales tax, of $126.60; total $4,441.60. TS44.).
1. From the Customer menu, choose Enter Sales Receipts. The Enter Sales
Receipts window will appear as shown in Figure 36. Select No when asked if
you would like help in choosing the right sales form.
Figure 36 Enter Sales Receipts Window

2. Enter October 28, 2009 in the Date field. Enter the terminal summary number,
TS44, in the Sale No. field.

Software Tip
For QuickBooks to
calculate sales tax
correctly, the
nontaxable portion
of sales receipts
should be entered on
a separate line in the
Enter Sales Receipts
window.

3. Click in the Item field on the first line. Select Taxable Sale from the dropdown list. Enter 3,165.00 on the first line in the Rate field. The number
appears automatically in the Amount field. QuickBooks automatically
calculates the sales tax.
4. Click in the Item field on the second line. Select Nontaxable Sale from the
drop-down list. Enter 1,150.00 on the first line in the Rate field. The number
appears automatically in the Amount field. QuickBooks does not calculate
sales tax for this amount.
5. Select Cash from the Deposit To list.
6. Leave the Customer: Job, Sold To, Check No, Payment Method, and Customer
Tax Code fields blank.

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35

7. Review the transaction. Make changes if needed. Click the Save & New button
(lower right corner of the Enter Sales Receipts window) to save the
transaction.
8. Repeat the process for all remaining cash and credit card sales transactions.
When you have entered the last cash sales receipt transaction, close the
window by clicking the Save & Close button (in the lower right corner of the
Enter Sales Receipts window).

Create Credit Memos

Businesses create credit memos for customer returns. The Create Credit
Memos/Refunds feature of QuickBooks can be used to credit sales invoices. When
the Create Credit Memos/Refunds feature is used to journalize a customer return,
Return should be used in the Item field so Sales Returns and Allowances is
debited. The customers Accounts Receivable account is credited.

Software Tip
The Create Credit
Memos/Refunds window
can also used to correct
billing errors. You will
learn about this in a later
problem.

To learn to record customer returns, review the steps below to record a

transaction. (October 29 Granted credit to Slumber Inns for merchandise returned,
$124.00, plus sales tax, $4.96, from S435; total, $128.96. CM54.)
1. Choose Create Credit Memos/Refunds from the Customers menu. The Create
Credit Memos/Refunds window will appear as in Figure 37.
Figure 37 Create Credit Memos/Refunds Window

2. Choose Slumber Inns from the Customer Job drop-down list. Choose October
29, 2009 for the date. Enter the memo number (54) in the Credit No. field.
Enter the original invoice number (435) in the P.O. No. field.

South-Western Accounting for QuickBooks Pro 2009 Tutorial

36

3. Click in the Item field. Click the arrow and choose Return from the drop-down
list. Key the amount (124.00) in the Rate field. Click in the Amount field. The
sales tax amount will be calculated automatically.
4. Review the transaction. Click the Save & New button to save the transaction.
5. The Available Credit dialog box should appear as shown in Figure 38 below.
Figure 38 Available Credit Dialog Box
Software Tip
If the invoice to which
the credit applies is
unpaid, choose the Apply
to an invoice radio
button. If the customer
requests a refund,
choose the Give a refund
radio button. Click OK
to close the dialog box.

When the sales invoice (S435) to which the credit applies has been paid, select
the radio button next to Retain as an available credit. Click OK to close the
dialog box. QuickBooks will record the transaction.
To apply the credit to an invoice, choose the Apply to an invoice option and
click OK. The Apply Credit to Invoices window will appear. Place a check
mark in the first column in the field to the left of the date for invoice number.
Click Done to record the transaction.

Write Checks
QuickBooks Help
checks
editing

When you use the Write Checks feature to record transactions, the Cash account is
credited for the amount of the check. You select the account to be debited in the
Account field in the window. To learn to use the Write Checks feature, review the
steps below to enter a transaction. (May 1 Paid cash to Retail Properties for rent,
$1,400.00. C344.)
1. From the Banking menu, choose Write Checks. The Write Checks Cash
window will appear as shown in Figure 39.

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37

Figure 39 Write Checks Cash Window

Software Tip
You will use the Write
Checks window only to
enter transactions. If you
had the proper forms,
you could also print the
checks from this
window using the Print
button.

2. If Cash does not show in the Bank Account field, select it from the drop-down
list. Make sure Online Payment and To be printed are not selected (there is not
a check mark in either box). Both of these boxes must be unchecked so you
can enter the check numbers used in the transactions. If the To be printed
option is selected, QuickBooks will automatically assign a check number.
3. Enter the check number in the No. field. Enter the date in the Date field. Enter
the check amount in the $ field. Choose the name of the payee from the Pay to
the order of drop-down list. QuickBooks enters the amount of the check on the
Dollars line and the name and address in the Address box.
4. Click in the Account field. Select an account (such as Rent Expense) from the
Account drop-down list. Key the check number (C344) in the Memo field.
Review the transaction. Make changes if needed. Click the Save & New button
(lower right corner of the Cash window) to save the transaction.
5. For transactions involving more than one account, such as the reimbursement
of petty cash, enter each amount on a separate line. Use the same check
number in the Memo field for all amounts in the transaction.
6. Repeat the process for all remaining cash payments. When you finish the last
cash transaction, close the window by clicking the Save & Close button.

Apply a Credit Memo

When you create a credit memo in QuickBooks, the software asks you what you
would like to do with the credit memo. When you click Save & New in the Create

South-Western Accounting for QuickBooks Pro 2009 Tutorial

38

Credit Memos/Refunds window for the May 3 transaction (Granted credit to

Slippery Rock Inn for merchandise returned, $235.00, plus sales tax, $18.80, from
S493; total, $253.80. CM67.), the Available Credit dialog box appears as in figure
40.
Figure 40 Available Credit Box

1. Click the radio button next to Apply to an invoice as shown in Figure 41. S493
($2,406.89 of merchandise, plus sales tax of $192.55, total $2,599.44.) has not
yet been paid by Slippery Rock Inn. Click OK.
2. The Apply Credit to Invoices window should appear as in Figure 41 below.
Click in the column to the left of Date next to the invoice to which you wish
to apply the credit (493 in this case). A check mark should appear next to the
invoice.
Figure 41 Apply Credit to Invoices Window

3. Click Done to apply the credit.

South-Western Accounting for QuickBooks Pro 2009 Tutorial

39

Print a Customer Balance Summary Report

1. Select Customers &Receivables from the Reports menu. Select Customer
Balance Summary.
2. Enter or select May 1, 2009 and May 31, 2009 for the From and To dates.
Click the Refresh button. The report data will appear as shown in Figure 42.
Figure 42 Customer Balance Summary Report

3. Click the Modify Report button. The Modify Report dialog box will appear.
Choose the Header/Footer tab. Key your name and the problem number in the
Extra Footer Line text box. Click OK to save the footer.
4. Click the Print button. The Print Reports dialog box will appear. Select the
printer you wish to use. Select Portrait in the Orientation section. Click the
Print button.
5. Click the Close button on the report window to close the report.

Print a Vendor Balance Summary Report

1. Select Vendors & Payables from the Reports menu. Choose Vendor Balance
Summary.
2. Enter or select May 1, 2009 and May 31, 2009 for the From and To dates.
Click the Refresh button. The report data will appear as shown in Figure 43.

South-Western Accounting for QuickBooks Pro 2009 Tutorial

40

Figure 43 Vendor Balance Summary Report

3. Click the Modify Report button. The Modify Report dialog box will appear.
Choose the Header/Footer tab. Key your name and the problem number in the
Extra Footer Line text box. Click OK to save the footer.
4. Click the Print button. The Print Reports dialog box will appear. Select the
printer you wish to use. Select Portrait in the Orientation section. Click the
Print button.
5. Click the Close button on the report window to close the report.

Print a Vendor Balance Detail Report

1. Choose Vendors and Payables from the Reports menu. Choose Vendor
Balance Detail. A partial Vendor Balance Detail report is shown in Figure 44.
2. Select the dates. Click the Refresh button.
3. Change the column widths to display all of the data. Add a custom footer that
includes your name and the problem number. (See Step 5 under Journal
Report.)
4. Print the report in portrait orientation. (See Steps 6 through 9 under Journal
Report.)

South-Western Accounting for QuickBooks Pro 2009 Tutorial

41

Figure 44 Vendor Balance Detail Report

5. Click the Close button to close the report window.

Make Deposits
When you use the Make Deposits feature, you choose the account to be debited in
the Deposit To field in the window. You choose the account to be credited in the
From Account field of the window.
To learn to use the Make Deposits feature, follow the steps below to deposit
Check 623 for $1,426.65 into the Payroll Account.
1. From the Banking menu, choose Make Deposits. The Make Deposits window
will appear as shown in Figure 45. (Close the QuickBooks Setting Default
Accounts box if it appears.)
Figure 45 Make Payroll Deposit

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42

2. In the Deposit To field, choose Payroll Account from the drop-down list.
Enter May 15, 2009 in the Date field and Deposit in the Memo field.
3. Click in the Received From field. Click the down arrow and choose Regular
Account from the drop-down list.
4. Click in the From Account field. Click the down arrow and choose 1100 Cash
from the drop-down list. Enter Deposit in the Memo field. Key the check
number (623) in the Chk. No. field.
5. Click in the Pmt. Meth. field. Click the down arrow and choose Check from
the drop-down list. In the Amount field, key the amount of the check
(1426.65). This amount is the total net pay for the pay period ending May 15,
2009.
6. Review the transaction. Make changes if needed. Click the Save & New button
(lower right corner of the Make Deposits window) to save the transaction.

Write Payroll Checks

When you use the Write Checks feature, you choose the account to be credited in
the Bank Account field in the window. You choose the account(s) to be debited
and credited in the Account field in the window.
To learn to use the Write Checks feature to create payroll checks, follow the steps
below to create a check for Wanda M. Curtis for the pay period ending May 15,
2009.

Software Tip
Make sure there is not a
check mark in either the
Online Payment or To be
printed box. Both of
these boxes must be
unchecked so you can
enter the check numbers
used in the transactions.

1. From the Banking menu choose Write Checks. Select Payroll Account in the
Bank Account field. (Close the QuickBooks Setting Default Accounts box if it
appears.)
2. Enter 823 in the No. field and enter May 15, 2009 in the Date field.
3. From the Pay to the order of drop-down list choose Wanda M. Curtis. Enter
652.33 in the $ field. Click in the Address field to refresh the check
4. Click in the Account field on the Expenses tab. Click the down arrow and
select Hourly Payroll Expense from the drop-down list. Enter 740.00 in the
Amount field and C823 in the Memo field.

South-Western Accounting for QuickBooks Pro 2009 Tutorial

43

Figure 46 Wanda M. Curtis Payroll Check

5. Repeat the process on the next lines until you have entered all of the earnings
and deduction information for Wanda M. Curtis. Be sure to enter the
deduction amounts as negative numbers (-33.00 for Federal Income Tax
Payable). Do not enter the Net Pay amount. You have entered that amount on
the check.
6. Make corrections if needed. Click Save & New to record the check.
7.

Use the same steps to prepare Check 824 for Kevin R. Hayes. Remember to
enter the Savings Bonds Payable deduction on his check. Click Save & Close
when you are finished.

Write Off Customer Invoices

In your accounting textbook, you are taught that uncollectible customer invoices
should be written off to an account called Allowance for Uncollectible Accounts.
The Allowance for Uncollectible Accounts is adjusted at the end of each fiscal
period by making an adjusting entry to credit Allowance for Uncollectible
Accounts and debit Uncollectible Accounts Expense.

Accounting Tip
GAAP stands for
generally accepted
accounting principles.

QuickBooks users are expected to write off customer invoices directly to

Uncollectible Accounts Expense. It is important to use the features in QuickBooks
because they provide a customer history and an audit trail for transactions. Use
the Create Credit Memos/Refunds window to charge customer invoices to

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44

Uncollectible Accounts Expense. Then use the Make General Journal Entries
window to move the amount to the Allowance for Uncollectible Accounts.
To learn to record customer returns, review the steps below. (September 5 Wrote
off Jackson Companys past-due account as uncollectible, $124.00. M234.)
1. Choose Create Credit Memos/Refunds from the Customers menu. The Create
Credit Memos/Refunds window will appear as in Figure 47.
Figure 47 Create Credit Memos/Refunds Window

2. Choose Jackson Company from the Customer Job drop-down list. Choose
September 7, 2009 for the date. Enter 1 in the Credit No. field. Enter the
memorandum number M234 in the P.O. No. field.
Software Tip
If a warning box
appears, click OK to
close the box.

3. Click in the Item field. Click the arrow and choose Write-off from the drop
down list. Key 124.00 in the Rate field. Click in the Amount field. No sales
tax amount should be calculated.
4. Click the Save & New button to save the transaction.
5. The Available Credit dialog box should appear as shown in Figure 48.

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45

Figure 48 Available Credit Dialog Box

6. Select the radio button next to Apply to an invoice. Click OK to close the
dialog box. The Apply Credit to Invoices dialog box should appear as in
Figure 49 below.
Figure 49 Apply Credit to Invoices Dialog Box

Software Tip
Remember to choose
Uncollectible from the
Name drop down list
when you make a
journal entry to
Allowance for
Uncollectible Accounts.

7. Make sure there is a check mark in the field to the left of the date for invoice.
Click Done. QuickBooks will record the transaction.
8. Each time you process a credit memo to write off a customer invoice, make a
journal entry (use the Make General Journal Entries window) to credit
Uncollectible Accounts Expense and debit Allowance for Uncollectible
Accounts for the amount of the write-off. Key the document number in the
Memo field.

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46

9. Repeat the process for all remaining customer write-offs. When you have
entered all of the write-off transactions, close the window by clicking the Save
and Close button (lower right corner of the Create Credit Memos/Refunds
window).

View a Customer Balance Detail Report

The Customer Balance Detail report shows all transactions for each customer
account for the time period requested. The report can be run to include any period
of time for which QuickBooks has data.
1. To view a Customer Balance Detail report, click Reports on the menu bar.
Choose the Customers & Receivables option. Select Customer Balance Detail.
The Customer Balance Detail window should appear as shown in Figure 50.
Figure 50 Customer Balance Detail Window

2. Choose January 1, 2009 and September 30, 2009 as the From and To dates.
Click the Refresh button. Change column widths as needed to display all of
the data.
3. Add a footer that includes your name and the problem number. Print the report
in portrait orientation.

South-Western Accounting for QuickBooks Pro 2009 Tutorial

QuickBooks Help
fixed asset
creating items to
track

47

Fixed Asset Item List

The Fixed Asset Item feature can be used to track the cost of fixed assets and their
depreciation from year to year. Complete the following steps to create an Item for
each fixed asset in purchase transactions.
1. Select Fixed Asset Item List from the Lists menu. Click the Item button near
the bottom of the window and select New from the menu. The New Item
window will appear as shown in Figure 51.
Figure 51 New Item Window

2. Enter a name (Office Desk) for the asset in the Asset Name/Number field.
3. Select an asset account (Office Equipment) from the Asset Account list.
4. Under Purchase Description, indicate whether the item is new or used (new).
Enter a brief description of the item (Work Master desk).
5. Select or enter the purchase date (January 4, 2009). Enter the cost of the item
(700.00). Enter the vendor name (Jones Office Equipment).
6. Enter an asset description (Work Master desk). Enter a serial number
(WMD2009126). Click OK to save the item.

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7. The item will appear in the Fixed Asset Item List as shown in Figure 52. When
all new items are recorded, click the Close button to close the window.
Figure 52 Fixed Asset Item List

Edit a Fixed Asset Item

Whenever a fixed asset is discarded, sold, or traded, the fixed asset item should be
updated. One reason to make sure that the records are updated is to avoid paying
property tax on assets that have been disposed. Taxing authorities generally use
the fixed asset records of a company as a basis for determining the assessed value
of taxable property.
Follow the steps learn how to edit a fixed asset item. (January 2, 2009 Discarded
desk, serial no. D3481, plant asset no. 167, M47. The item is fully depreciated).
1. Select Fixed Asset Item List from the Lists menu. Click the Item button near
the bottom of the window and select Edit from the menu. The Edit Item
window will appear as shown in Figure 53.
2. Click the Item is sold box. Use this option for any fixed asset that is discarded,
sold, or traded.

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Figure 53 Edit Item Window

3. Click the Item is inactive box. This will remove the asset from any reports that
are printed.
4. Enter DeskDiscarded in the Sales Description field. If the asset is sold,
enter --Sold. If the asset is traded, enter --Traded.
5. Select or enter the Sales date (January 2, 2009). Enter 0.00 in the Sales Price
and Sales Expense fields. If the asset is sold or traded, enter the sales price or
the trade in value in the Sales Price field.
6. Click OK to save the item.

Fixed Asset Listing Report

QuickBooks Help
report types
list
creating a report
from a list

You can create a report showing the fixed assets items you have entered. Follow
the steps below to create the report:
1. Select Fixed Asset Item List from the Lists menu to open the list.
2. Click the Reports button near the bottom of the Fixed Asset Items List
window. Select Fixed Asset Listing from the menu.
3. Adjust column widths to display all of the data.

South-Western Accounting for QuickBooks Pro 2009 Tutorial

Software Tip
Using the Fixed Asset
Manager in QuickBooks
Accountant software, an
accountant can
determine depreciation
for an asset. A journal
entry is posted to the
company file to record
the depreciation.

50

4. Click the Modify Report button. On the Header/Footer tab, change the text in
the Report Subtitle field to the appropriate date. Add a custom footer that
includes your name and the problem number in the Extra Footer Line text
box.
5. Your report should look similar to Figure 54. No data will be displayed in the
FAM Number column. FAM stands for Fixed Asset Manager. Fixed Asset
Manager is a feature available in the QuickBooks Accountant edition
software. When a company file is used with QuickBooks Accountant edition, a
FAM number will be assigned to each item.
Figure 54 Fixed Asset Listing Report

6. Print the report in landscape orientation. Click the Close button to close the
report.

Purchase of Inventory
In previous problems, material purchases were journalized to the Purchases
account. The purchases were for total dollar amounts of material. No names or
numbers were used to identify specific parts or products.
Software Tip
Be sure to use the
correct date and
document number when
entering transactions.

You can create individual inventory items (part numbers) in QuickBooks. When
inventory items are used, an item is usually created for each part or product
purchased into inventory.
When inventory items are used, QuickBooks records purchases as an increase in
the Inventory account. (The Purchases account is not debited as it is when
inventory items are not used.) Purchases of parts or products are recorded as a
debit to Inventory.
Review the steps below to learn to record an inventory purchase. (January 6
Purchased 20 units of P-234 from Master Electronics for $5.12 each; total
$102.40. P154.)
1. Choose the Enter Bills option from the Vendors menu. The Enter Bills
window will appear. The Bill and Bill Received options near the top of the
window should be checked. If they are not, check these options.

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51

2. Choose January 6, 2009 for the date. Choose Master Electronics from the
Vendor drop-down list. Leave 0.00 in the Amount Due field. Enter the
document number P154 in the Ref. No. field.
Figure 55 Enter Bills Window

3. Click the Items tab. Click in the Item field and choose P-234 from the dropdown list. Electronic Switch will appear in the Description field and $4.98 will
appear in the Cost field. The amount that appears in the Cost field is the
weighted average cost of inventory on hand as of January 1, 2009.
4. Enter 20 (the quantity purchased) in the Qty field. Enter 5.12 (the cost per
unit) in the Cost field. Click in the Amount field. The amount should change to
$102.40 (20 units times $5.12). If the Items Cost Changed dialog box
appears, as in Figure 56, click Yes.
Figure 56 Items Cost Changed Dialog Box

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5. Click the Save & New button to record the transaction. Repeat the process for
all remaining purchases on account.

Sale of Inventory
The Create Invoices feature is used to record merchandise sales on account. The
customers Accounts Receivable account is debited. The Sales account is credited
for the selling price of the merchandise. The inventory value (cost) of parts or
products that are sold is credited to Inventory and debited to Purchases (a Cost of
Goods Sold account). Use of inventory items allows QuickBooks to track changes
in inventory and provide on-hand balance information. Accurate on-hand balance
information can prevent a shortage or excess of specific parts.
The use of inventory items on sales invoices provides the customer with more
detailed information about each purchase. The detailed information also makes it
possible to track which customers buy particular inventory items.
Review the steps below to learn to record a sales transaction. (April 5 Sold 22 of
P-234 to Evans Construction on account; S1998, $218.90, no tax.)
1. Select Create Invoices from the Customers menu. The Create Invoices
window will appear as shown in Figure 57.
Software Tip
QuickBooks pulls
the price each
from the Item List
and calculates the
amount by
multiplying the
quantity sold by
the price each.

2. Choose the Intuit Product Invoice template from the drop down list. Choose
Evans Construction from the Customer Job drop-down list. Enter April 5,
2009 in the Date field. Enter 1998 in the Invoice # field.
3. Enter 22 (the quantity Sold) in the Quantity field. Click in the Item Code field
and choose P-234 from the drop-down list. Electronic Switch will appear in
the Description field, 9.95 will appear in the Price Each field, and 218.90 will
appear in the Amount field.

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53

Figure 57 Create Invoices Window

4. Click the Save & New button to record the transaction. Repeat the process for
all remaining sales on account transactions.

Inventory Valuation Detail Report

Review the steps below to learn to create an Inventory Valuation Detail report.
1. Choose Inventory from the Reports menu. Select Inventory Valuation Detail.
2. Select January 1, 2009 and December 31, 2009 for the dates. Adjust the
column widths to display all of the data. Add a custom footer that includes
your name and the problem number. Print the report in landscape orientation.
3. Click the Close button to close the report.

Record Notes Payable

In general, a note payable may be signed for one of two reasons. The first reason
to sign a note payable is in exchange for a specific asset, such as cash. The second
reason to sign a note payable is to extend the time required for payment of
purchases on account.

Note Payable for Cash

Use the Make Deposits option to record a debit to Cash for the principal value of
the note payable and a credit to Notes Payable. Review the steps below to learn to
record a transaction. (April 6, 2009 Signed a 180-day, 12% note for $10,000.00
with First American Bank. R127).

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54

1. Select Make Deposits from the Banking menu. The Make Deposits window
will appear as shown in Figure 58.
Figure 58 Make Deposits Window

2. Choose Cash from the Deposit To drop-down list. Select a date (April 6,
2009). Deposit will appear automatically in the Memo field.
3. Click in the first line of the Received From field. Click the down arrow and
choose First American Bank from the drop-down list.
4. Click in the first line of the From Account field. Click the down arrow and
choose Notes Payable from the drop-down list. Enter Deposit in the Memo
column.
5. Enter the source document number (R127) in the Chk. No. field. Click in the
first line of the Pmt. Meth. field. Click the down arrow and choose Cash from
the drop-down list. Enter the principal amount of the note (10,000.00) in the
Amount field.
6. Click the Save and New button to save the transaction. Repeat the process for
all similar transactions.
7. Click Save & Close to close the Make Deposits window when you are finished
recording transactions.

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55

Note Payable to Extend Payment Terms

A company may sign a note payable to extend the time required for payment for
purchases on account. In this case, use the Enter Bills option from the Vendors
menu to debit Accounts Payable and credit Notes Payable for the amount owed
(principal value of the note).
Follow the steps below to record the April 12 transaction. (Signed a 60-day, 9%
note with Milligan Company for an extension of time on this account payable,
$600.00. M32.).
1. Choose the Enter Bills option from the Vendors menu. The Enter Bills
window will appear as shown in Figure 59.
Figure 59 Enter Bills Window

2. Select the Credit option. Select Milligan Company from the Vendor dropdown list. Select April 12, 2009 for the date.
3. Enter 600.00 in the Credit Amount field. Enter the source document number
(M32) in the Ref. No. field.
4. Click in the first line of the Account field. Click the down arrow and choose
Notes Payable from the drop-down list. Key M32 in the Memo field.
5. Cick the Save and New button to save the transaction. Repeat the process for
all similar transactions.

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56

6. Click Save & Close to close the Enter Bills window when you are finished
recording transactions.

Record Notes Receivable

In general, a note receivable may be accepted for one of two reasons. The first
reason to accept a note receivable is to extend the time required for payment of
purchases on account by customers. The second reason to accept a note receivable
is in exchange for specific assets, such as in a sale of merchandise.

Notes Receivable to Extend Payment Terms

Notes receivable are signed by customers to extend the payment terms for a
previous purchase on account. When a note receivable is signed by a customer,
use the Receive Payments option from the Customers menu to record a debit to
Notes Receivable and a credit to the customers Accounts Receivable account.
Review the steps below to learn to record a transaction. (July 7 Accepted a 90day, 10% note from Nan Albert for an extension of time on her account,
$1,500.00. NR9.).
1. Choose the Receive Payments option from the Customers menu. The Received
Payments window will appear as shown in Figure 60.
Figure 60 Receive Payments Window

2. Choose Nan Albert from the Received From drop-down list. Select July 7,
2009 for the date.

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57

3. Enter 1,500.00 in the Amount field. Choose Cash from the Pmt. Method dropdown list. Enter NR9 in the Reference No. field. Enter Converted to Note
Receivable in the Memo field.
4. Click in the field to the left of the date to place a checkmark next to the
invoice. Select the Deposit To option and choose Notes Receivable from the
drop-down list.
5. Click the Save & New button to record the transaction. Repeat the process for
all similar transactions.

Notes Receivable for Sales on Account

Most sales on account assume that the customer will pay within 30 days. To
promote sales, a company may allow a customer to sign a note receivable
extending the payment over a longer period. The following transaction is an
example of this situation. (August 1 Accepted a 60-day, 12% note from Frank
Otto for a sale on account, $300.00. NR2.)
Use the Make General Journal Entries window to record this type of transaction
as described in the steps below.
1. Choose Make General Journal Entries from the Company menu.
2. Debit Notes Receivable for the principal value of the note. Enter the document
number in the Memo field. Select the customers name from the Name field as
shown in Figure 61.
Figure 61 Note Receivable for Sale on Account

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58

3. Credit Sales for the principal value of the note. Enter the document number in
the Memo field.
4. Click the Save & New button to save the transaction.

Record Cash from Notes Receivable

Use the Make Deposits option to record the cash received from customer payment
of the maturity value of a note receivable. Cash will be debited. Notes Receivable
and Interest Income will be credited. Review the steps below to learn to record a
transaction. (July 9 Received cash for the maturity value of NR4, a 60-day, 9%
note for $1,600.00. R62.)
1. Select Make Deposits from the Banking menu. The Make Deposits window
will appear as shown in Figure 62.
Figure 62 Make Deposit for Cash from Note Receivable

2. Choose Cash from the Deposit To drop-down list. Select July 9, 2009 for the
date. Deposit will appear automatically in the Memo field.
3. Leave the Received From field blank. Click in the first line of the From
Account field. Click the down arrow and choose Notes Receivable from the
drop-down list. Enter Deposit in the Memo column.
5. Enter the source document number (R62) in the Chk. No. field. Click in the
first line of the Pmt. Meth. field. Click the down arrow and choose Cash from

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59

the drop-down list. Enter the principal amount of the note (1,600.00) in the
Amount field.
6. In the second line of the From Account field, select Interest Income from the
drop-down list. Enter Deposit in the Memo column. Enter the source
document number (R62) in the Chk. No. field. In the Pmt. Meth. field, choose
Cash from the drop-down list.
7. The amount stated in the transaction is the principal amount of the note
(1,600.00). You must manually calculate the interest amount for the note.
After calculating the interest amount, enter the interest amount (24.00) in the
Amount field.
8. Click the Save and New button to save the transaction. Repeat the process for
all similar transactions.

Account Classes
When account classes are used in QuickBooks, reports can created that show
items by class. An account class can be used to separate accounting data by
department, territory, product, or any other item that can be traced to a general
ledger account or accounts. Only one account class can be assigned to each
general ledger account. The same account class can be used for several general
ledger accounts.
To learn to use account classes, review an adjusting entry for Allowance for
Uncollectible Accounts.
1. Open the Make General Journal Entries window from the Company menu as
shown in Figure 63.
Figure 63 Make General Journal Entries Window

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60

2. Select December 31, 2009 in the Date field. Key 1 in the Entry No. field.
Software Tip
Journal entries to
Accounts Receivable,
Allowance for
Uncollectible
Accounts, and
Accounts Payable
require a customer or
vendor name in the
Name field.

3. For the first line of the entry, choose Uncollectible Accounts Expense from the
drop-down list in the Account field. Key the amount (1,457.00) in the Debit
field. Key Adjusting in the Memo field and choose General from the dropdown list in the Class field.
4. Repeat the process for the credit to Allowance for Uncollectible Accounts.
Remember to choose Uncollectible from the drop-down list in the Name field.
Click Save & New to record the adjusting entry.
5. Repeat the process for all remaining adjusting entries. Remember to choose
the correct class for all accounts. When you have finished making general
journal entries, click Save & Close to close the window.

Profit & Loss by Class Report

Review the steps below to learn to prepare a Profit & Loss by Class report that
includes component percentages for expenses and net loss.
QuickBooks Help
reports
dates in

1. From the Reports menu, choose Company & Financial. Choose Profit & Loss
by Class. Select January 1, 2009 and December 31, 2009 for the From and To
dates. Click the Refresh button.
2. To add component percentages, click the Modify Report button. The Modify
Report: Profit & Loss dialog box will appear. In the Columns section on the
Display tab, click the box next to % of Income. A check should appear in the
box as shown in Figure 64.
Figure 64 Modify Report Display Tab

Software Tip
QuickBooks allows you
to create reports on both
the cash and accrual
basis. For the problems
in this book, you will
report on the accrual
basis. Make sure that
Accrual is selected
under Report Basis as
shown in Figure 62.

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61

3. Click the Header/Footer tab. Enter your name and the problem number in the
Extra Footer Line box. Click OK to close the dialog box.
4. Click the Print button in the Profit & Loss window. Select the printer you
wish to use in the Print Reports dialog box. Select portrait orientation and
click the Print button.
5. Click the Close button to close the report.

Budget vs. Actual Report

QuickBooks Help
report types
budget

Follow the steps below to prepare a Budget vs. Actual report that includes
component percentages for income, expenses, and net loss or income.
1. From the Reports menu, choose Budgets. Select Budget vs. Actual. The
Budget Report wizard will appear as shown in Figure 65.
Figure 65 Select a Budget

2. Select FY2009 Profit & Loss by Account from the list if it does not already
appear. Click Next.
3. Select Account by Month from the list as shown in Figure 66. Click Next.
Click Finish.
Figure 66 Select a Budget Layout

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62

4. The report will appear on screen. Select January 1, 2009 and March 31, 2009
for the dates. Select Quarter from the Columns list (at the top of the screen
near the dates). Click the Refresh button. The top portion of a sample report is
shown in Figure 67.
Figure 67 Profit & Loss Budget vs. Actual Report

Check Figure
The Net Income % of
Budget total on the
Profit & Loss Budget vs.
Actual report should be
103.5%.

5. Review the report. The heading contains the company name, the type of
report, and the report dates. The report columns contain the budget and actual
data.
The first column contains account categories and account names.
The second column shows the actual amounts for January through March,
2009.
The third column contains the budgeted amounts for the same time.
The fourth column shows amounts over or under budget. The column is
titled $ Over Budget; therefore, positive numbers in this columns are
amounts over budget. Negative numbers in this column are amounts under
budget.
The fifth column shows the percentage each actual amount is of the
budgeted amount. For example, the actual Sales amount is 103% of the
budgeted amount, an unfavorable difference of 3%.
6. Click the Modify Report button. Click the Header/Footer tab. Enter your
name and the problem number in the Extra Footer Line box. Click OK to
close the dialog box.
7. Print the report in portrait orientation.
8. Click the Close button to close the report.

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Profit & Loss Previous Year Comparison Report

Follow the steps below to prepare a Profit & Loss Previous Year Comparison
report.
QuickBooks Help
report types
profit and loss
profit & loss prev
year comparison
report

1. From the Reports menu, choose Company & Financial. Choose Profit & Loss
Prev Year Comparison. Select January 1, 2009 and December 31, 2009 for
the From and To dates. Click the Refresh button. The top portion of a sample
report is shown in Figure 68.
Figure 68 Profit & Loss Previous Year Comparison Report

2. Review the report. Note that Column 4 shows the dollar amount of change
from the previous year. Column 5 shows the percent of change from the
previous year.
3. Click the Modify Report button. Click the Header/Footer tab. Enter your
name and the problem number in the Extra Footer Line box. Click OK to
close the dialog box.
4. Print the report in portrait orientation. Click the Close button to close the
report.

Balance Sheet Previous Year Comparison Report

QuickBooks Help
report types
balance sheet
balance sheet prev
year comparison
report

Follow the steps below to prepare a Balance Sheet Previous Year Comparison
report.
1. From the Reports menu, choose Company & Financial. Choose Balance Sheet
Prev Year Comparison. Select December 31, 2009 for the date. Click the
Refresh button. The top portion of a sample report is shown in Figure 69.

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64

Figure 69 Balance Sheet Previous Year Comparison Report

2. Review the report. Note that Column 4 shows the dollar amount of change
from the previous year. Column 5 shows the percent of change from the
previous year.
3. Click the Modify Report button. Click the Header/Footer tab. Enter your
name and the problem number in the Extra Footer Line box. Click OK to
close the dialog box.
4. Print the report in portrait orientation. Click the Close button to close the
report.

Statement of Cash Flows Report

QuickBooks automatically sets up the Statement of Cash Flows report format from
the balance sheet accounts in the chart of accounts. Individual accounts are
assigned to Adjustments to Net Income, Investing Activities, or Financing
Activities based on QuickBooks defaults. Account assignments can be changed in
the QuickBooks Preferences window.
Follow the steps below to prepare a Statement of Cash Flows report.
QuickBooks Help
cash flow report
(actuals)
statement of cash
flows report

1. From the Reports menu, choose Company & Financial. Choose Statement of
Cash Flows.
2. Select January 1, 2009 and December 31, 2009 for the dates. Click the
Refresh button. The top portion of a sample report appears in Figure 70.
3. Click the Modify Report button. Click the Header/Footer tab. Enter your
name and the problem number in the Extra Footer Line box. Click OK to
close the dialog box.

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65

Figure 70 Statement of Cash Flows Report for 2009

4. Adjust column widths to display all of the data. Print the report in portrait
orientation.
5. Click the Close button to close the report.

Add New Accounts

As new situations arise, accounting employees add new accounts to the chart of
accounts to accumulate accounting data. Review the steps below to learn to add
new equity accounts to the chart of accounts.
QuickBooks Help
accounts (managing)
adding

1. Choose Chart of Accounts from the Lists menu. Click the Account button at
the bottom of the Chart of Accounts window and choose New from the menu.
The New Account window will appear as shown in Figure 71.
2. In the New Account window, choose Equity from the Type drop-down list.
Figure 71 New Account Dialog Box

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66

3. Key Frank Boyd, Capital in the Name box. Key the account number (3135) in
the Number box. Click OK to add the account.
4. Repeat the process to add the other accounts.
5. View the Chart of Accounts window to make sure your data is correct. If you
need to make a correction, click the Account button. Choose Edit Account
from the menu, key the changes, and click OK. The changes will show on the
Chart of Accounts window.

Receive Units from Production

QuickBooks does not have the capability to track manufacturing costs for
inventory costing purposes. However, inventory items can be tracked by using the
Inventory Activities feature. Changes to both the value and on-hand quantity can
be journalized using the Adjust Quantity/Value on Hand window. QuickBooks
records a journal entry debiting Finished Goods and crediting Work in Process for
the amount of the adjustment.
Follow the steps below to record a transaction. (April 2, 2009 Production
completed 210 C45 bats and sent them to finished goods inventory. The unit cost
was $8.80; total $1,848.00. Job No. 315).
1. From the Vendors menu choose Inventory Activities. Select Adjust
Quantity/Value on Hand. The Adjust Quantity/Value on Hand window will
appear. If there were additional inventory items, they would appear in the
window.
2. Select April 2, 2009 in the Adjustment Date field. Enter the job number (Job
315) in the Ref. No. field.
3. Choose 1130 Work in Process from the Adjustment Account drop-down list. If
the Income or Expense Expected message box appears, click the Close button.
Leave the Customer: Job field blank.
4. Select (check) the Value Adjustment option near the bottom of the window.
The New Value field will appear on the right side of the window as shown in
Figure 72.

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67

Figure 72 Adjust Quantity/Value on Hand Window

5. Enter 490 in the New Qty column. (This amount is the beginning on-hand
balance of 280 units plus the 210 units received from production).
6. Delete the amount (4,263.00) shown in the New Value field. Enter 4,284.00 in
the New Value field. (This amount is 280 units @ $8.70 plus 210 units @
$8.80).
7. Click Save & New to save the transaction. QuickBooks will record a journal
entry debiting Finished Goods and crediting Work in Process for the amount
of the adjustment ($1,848.00).
8. When all receipt transactions have been recorded, click Save & Close to close
the window.