Practice Set

Your Name
1 Accounting

In Practice Set 1, you complete the computer accounting cycle for Your
Name Accounting. Your accounting practice started on December 1,
20XX (use current year) in Peoria, Arizona. You employ two accounting
technicians and one administrative assistant. The employees are
independent contractors.

In this practice set, you complete the accounting cycle for the month of
December 20XX. The balance sheet, transaction register, and bank
statement are provided as source documents.

At the end of Practice Set 1, a checklist is shown listing the printed

reports you should have. The step-by-step instructions remind you to
print reports at certain intervals. Your instructor may require these
printouts for grading purposes. Remember to make backups at periodic
intervals.

Follow these steps to complete Practice Set 1:

Step 1: Start QuickBooks. Select File; Close Company to go to the No

Company Open window. Select Create a new company ―

.
Step 2: From the Let’s get your business set up quickly! window, select

Step 3: Complete the following company information:

Company Name: Your Name Accounting (substitute

your first and last name)
Industry: Accounting or Bookkeeping
Company Type: Sole Proprietor
Do you have Employees? No
Address: 1811 Cactus Blvd.

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2 Practice Set 1

City, State, Zip Peoria, AZ 85345

Country: USA
Telephone: 623-555-7221

Step 4: When the You’ve got a company file! Now add your info.
window appears, select Add your bank accounts by clicking
on .

Step 5: On the Add your bank accounts window, type Peoria Bank.
Click .

Step 6: Select No thanks to ordering checks from Intuit. Click

Step 7: The You’ve got a company file! Now add your info. window
appears. Click .

Step 8: Close the Ready to Start working? window. Your Name

Accounting - QuickBooks Accountant 2014 appears on the
title bar.

Step 9: Set the following Preferences.

Accounting: Use account numbers

Uncheck Date warnings.
Checking: Select Peoria Bank for Open Write Checks,
Open Pay Bills, and Open Make Deposits.
Send Forms: Uncheck Auto-check; select Web Mail

Step 10: Make the following changes to the Chart of Accounts:

Add/Change accounts:
10000 Peoria Bank
11000 Accounts Receivable, Other Current Asset
14000 Prepaid Rent, Other Current Asset
14500 Supplies, Other Current Asset
15500 Computer Equipment, Fixed Assets

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 Practice Set 1 3

15600 Automobile, Fixed Assets

17000 Accum Depr-Furn&Eq
17500 Accum Depr-Computer Equip
17600 Accum Depr-Automobile
20000 Accounts Payable, Other Current Liability
25000 Notes Payable, Other Current Liability
30000 Your Name, Capital
30800 Your Name, Draw
60000 Advertising Expense
61700 Internet Expense
62400 Depr Exp-Furn&Eq
62450 Depr Exp-Computer Equip, Expense
62460 Depr Exp-Automobile, Expense
64900 Supplies Expense
61500 Wages Expense-Adm Asst, Expense
61600 Wages Expense-Acctg Tech, Expense
62500 Subscriptions Expense
66500 Postage Expense
68600 Utilities Expense

Delete accounts:

63310 General Liability Insurance

63330 Life and Disability Insurance
63350 Professional Liability
63360 Worker’s Compensation
66700 Professional Fees
70000 Finance Charge Income

Step 11: Print the Chart of Accounts.

Step 12: Back up the chart of accounts. The suggested file name is
Your Name Accounting Chart of Accounts
(Portable).QBM.

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Step 13: Use the Balance Sheet to enter the beginning balances.

Your Name Accounting

Balance Sheet
November 30, 20XX (current year)
ASSETS
Current Assets
Peoria Bank $32,500.00
Accounts Receivable 17,400.00
Prepaid Rent 4,000.00
Supplies 3,300.00
Total Current Assets $57,200.00
Property and Equipment
Furniture and Fixtures 15,000.00
Computer Equipment 12,600.00
Automobile 21,500.00
Total Property and Equipment 49,100.00
Total Assets $106,300.00
LIABILITIES AND CAPITAL
Current Liabilities
Accounts Payable $11,200.00
Notes Payable 8,400.00
Total Current Liabilities 19,600.00
Capital
Your Name, Capital 86,700.00
Total Liabilities and Capital $ 106,300.00

Step 14: To check your beginning balances, display or print the

November 30, 20XX balance sheet.

Step 15: Back up beginning data. The suggested file name is Your
Name Accounting Beginning Balances (Portable) .QBM.

Step 16: The transaction register on the next page provides the
information necessary for December's journal entries. Use your
current year. (Hint: When adding payees, select Other.)

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 Practice Set 1 5

Transaction Register
Your Name Accounting
Ck. No. Date Description of Transaction Payment Deposit Balance
11/30 Starting balance 32,500.00
12/1 Deposit (accounting services 3,500.00 36,000.00
income)
9001 12/1 Peoria Bank (Notes Payable) 2,700.00 33,300.00
9002 12/1 Southwest Office Equipment - 625.87 32,674.13
laser printer (computer equipment)
9003 12/6 Administrative Asst. 1,250.00 31,424.13
9004 12/6 Acctg. Technician 690.00 30,734.13
9005 12/12 Thunderbird Avenue Office
Supplies (letterhead - supplies) 105.65 30,628.48

9006 12/13 Administrative Asst. 1,250.00 29,378.48

9007 12/13 Acctg. Technician 690.00 28,688.48
12/16 Deposit (accounting services 3,500.00 32,188.48
income)
9008 12/17 Bell Telephone (telephone bill) 70.47 32,118.01
9009 12/17 U.S. Post Office 44.00 32,074.01
9010 12/17 Journal of Accounting
(subscription) 545.00 31,529.01

9011 12/20 Administrative Asst. 1,250.00 30,279.01

9012 12/20 Acctg. Technician 620.00 29,659.01
12/23 Deposit (accounting services 4,000.00 33,659.01
income)
9013 12/24 SPR Electric (utilities bill) 105.20 33,553.81
12/24 Deposit (accounting services 4,000.00 37,553.81
income)
9014 12/27 Administrative Asst. 1,250.00 36,303.81
9015 12/27 Acctg. Technician 750.00 35,553.81
12/27 Deposit (payment received from
client on account) 1,500.00 37,053.81

9016 12/27 Internet Service 29.99 37,023.82

Step 17: Backup. The suggested file name is Your Name Accounting
December (Portable).QBM.

Step 18: The December 20XX bank statement is shown on the next
page. (Hint: Remember to record the bank service charge.)

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Statement of Account Your Name Accounting

Peoria Bank 1811 Cactus Blvd.
December 1 to December 31 Account No. 8935-721103 Peoria, AZ 85345
REGULAR CHECKING
Previous Balance 11/30 32,500.00
4 Deposits(+) 15,000.00
12 Checks (-) 10,607.19
Service Charges (-) 12/31 25.00
Ending Balance 12/31 36,867.81
DEPOSITS
12/3 3,500.00 12/27 4,000.00
12/17 3,500.00 12/30 4,000.00
CHECKS (Asterisk * indicates break in check number sequence)
12/10 9001 2,700.00
12/11 9002 625.87
12/13 9003 1,250.00
12/13 9004 690.00
12/17 9005 105.65
12/17 9006 1,250.00
12/17 9007 690.00
12/24 9008 70.47
12/24 9011* 1,250.00
12/24 9012 620.00
12/27 9013 105.20
12/31 9014 1,250.00

Step 19: Print the Reconciliation Summary and Reconciliation Detail

reports.

Step 20: Print a Trial Balance (unadjusted).

Step 21: Back up the unadjusted trial balance. The suggested file name
is Your Name Accounting UTB (Portable).QBM. (UTB is an
abbreviation for unadjusted trial balance.)
Step 22: Complete these adjusting entries:
a. Supplies on hand: $3,250.00.
b. Depreciation for Computer Equipment: $353.50.
c. Depreciation for Furniture and Equipment: $166.67.

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d. Depreciation for the Automobile: $358.33.

e. Rent was paid for two months on November 30, 20XX.
Adjust one month's rent.1
Step 23: Print the Adjusting Journal Entries.

Step 24: Print the Adjusted Trial Balance.

Step 25: Print the financial statements: profit and loss, balance sheet,
profit and loss, and statement of cash flows.

Step 26: Print the December journal entries.

Step 27: Print the December general ledger.

Step 28: Save the financial statements as PDF files. Use Practice Set 1,
then the financial statement's title for the file name; for
example, Practice Set 1 Balance Sheet.pdf.

Step 29: Backup. The suggested file name is Your Name Accounting
Financial Statements (Portable).QBM.

Step 30: To transfer net income to the capital account, record this
closing entry.

Account # Account Name Debit Credit

32000 Owners Equity 3,396.19
30000 Your Name, Capital 3,396.19

Step 31: Close the fiscal year.

Step 32: Print the Journal from 09/30/20XX to 12/31/20XX.

Step 33: Print the General Ledger from 12/1/20XX to 12/31/20XX.

Step 34: Print the 01/01/20YY Postclosing Trial Balance.

1
Refer to November 30, 20XX Balance Sheet for the account balance in the Prepaid
Rent account.

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Step 35: Back up year-end data. The suggested file name is Your
Name Accounting EOY (Portable).QBM.

Step 36: Save the postclosing trial balance as a PDF file. Use Practice
Set 1_Postclosing Trial Balance.pdf as the file name.

Your instructor may want to collect this project. A Checklist of Printouts is

shown below.

Checklist of Printouts, Practice Set 1: Your Name Accounting

Chart of Accounts
Balance Sheet (November 30, 20XX)
Trial Balance (unadjusted)
Adjusting Journal Entries
Adjusted Trial Balance
Profit & Loss
Balance Sheet
Statement of Cash Flows
Journal
General Ledger
Postclosing Trial Balance

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Student Name______________________________ Date____________

CHECK YOUR PROGRESS: PRACTICE SET 1, Your Name

Accounting

1. What are the total debit and credit balances on your

unadjusted trial balance? _________

2. What are the total debit and credit balances on your

adjusted trial balance? _________

3. According to your account reconciliation report,

what is the ending balance? _________

4. What is the depreciation expense for furniture

and equipment on December 31? _________

5. What is the depreciation expense for computer

equipment on December 31? _________

6. What is the amount of total income as of

December 31? _________

7. How much net income <or net loss> is reported

on December 31? _________

8. What is the account balance in the Supplies

account on December 31? _________

9. What is the account balance in the Accounts Payable

account on December 31? _________

10. What is the total liabilities and equity balance on

December 31? _________

11. Is there an Increase or Decrease in cash for the

the month of December? _________

12. Were any Accounts Payable incurred during the

month of December? (Circle your answer). YES NO

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