A Presentation of TeachUcomp Incorporated.

Copyright © TeachUcomp, Inc. 2011

Introductory
QuickBooks

TeachUcomp, Inc.
…it’s all about you

Introductory QuickBooks
 Introductory QuickBooks

Copyright:

Copyright © 2011 by TeachUcomp, Inc. All rights reserved. This publication, or any part thereof,
may not be reproduced or stored in a retrieval system, or transmitted in any form or by any means,
electronic, mechanical, recording, photocopying, or otherwise, without the express written permission of
TeachUcomp, Inc.
For PDF manuals, TeachUcomp, Inc. allows the owner of the PDF manual to make up to 2
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infringement, including infringement without monetary gain, is investigated by the FBI and is punishable by
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Trademark Acknowledgements:

Intuit, Quicken, QuickBooks, QuickBooks Pro, QuickBooks Premier, Turbo Tax, EasyStep,
QuickReports, and QuickZoom are registered trademarks of Intuit, Inc. Windows, Windows 95, Windows 98,
Windows NT, Windows Me, Windows XP, Windows Vista, Microsoft Word 97, Microsoft Word 2000,
Microsoft Word XP, Microsoft Word 2003, Microsoft Word 2007, Microsoft Excel 97, Microsoft Excel 2000,
Microsoft Excel XP, Microsoft Excel 2003, Microsoft Excel 2007 and Outlook are registered trademarks of
Microsoft Corporation. Other brand names and product names are trademarks or registered trademarks of
their respective holders.

Disclaimer:

While every precaution has been made in the production of this book, TeachUcomp, Inc. assumes
no responsibility for errors or omissions. Nor is any liability assumed for damages resulting from the use of
the information contained herein. These training materials are provided without any warranty whatsoever,
including, but not limited to, the implied warranties of merchantability or fitness for a particular purpose. All
names of persons or companies in this manual are fictional, unless otherwise noted.

TeachUcomp, Inc.
Phone: (877) 925-8080
Web: http://www.teachucomp.com

©TeachUcomp, Inc. Introductory QuickBooks 2

 Introduction and Overview

Welcome to the introductory section of TeachUcomp, Inc.’s

Mastering QuickBooks Made Easy™ class. This class introduces
the student to Intuit’s QuickBooks accounting program, and
shows them how to effectively use the program. QuickBooks is
one of the most popular accounting and bookkeeping programs
available today. The introductory section of this class is designed
to give a basic user-level skill set to the student with little or no
knowledge of the program’s capabilities.
QuickBooks is a terrific program to learn, as the skills that
you learn in QuickBooks can save valuable time and money by
automating, organizing and structuring the bookkeeping of your
company.
QuickBooks is a multi-featured program that allows you to
create invoices, create customer statements, pay your bills, write
vendor checks, track inventory, and manage your payroll, as well
as perform many other accounting and business-management
related tasks.

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 Table Of Contents

Chapters/Lessons: Pages: Chapters/Lessons: Pages:

CHAPTER 1- Getting Around in QuickBooks 6 CHAPTER 5- Setting Up Inventory Items 91
The Home Page- 2006:2012 7 Setting Up Inventory 92
The Centers- 2006:2012 8 Creating Inventory Items 92
The Menu Bar and Keyboard Shortcuts 9 Creating a Purchase Order 93
The Navigators- 2005 10 Receiving Items with a Bill 93
The Open Window List 11 Entering Item Receipts 93
The Icon Bar 12 Matching Bills to Item Receipts 93-94
Customizing the Icon Bar 12 Adjusting Inventory 94
Using the Shortcut List- 2005 13 Setting Up Inventory Items- Actions 95-96
The Chart of Accounts 14-15 Setting Up Inventory Items- Exercise 97
Accounting Methods 16
Financial Reports 16 CHAPTER 6- Setting Up Other Items 98
Getting Around in QuickBooks- Actions 17-18 Service Items 99
Getting Around in QuickBooks- Exercise 19 Non-Inventory Items 99-100
Other Charges 100
CHAPTER 2- Creating a QuickBooks Company 20 Subtotals 100
Using Express Start- 2012 Only 21 Groups 101
Using the EasyStep Interview- 2007:2012 22-24 Discounts 101-102
Using the EasyStep Interview- 2006 25-29 Payments 102
Using the EasyStep Interview- 2003:2005 30-34 Changing Item Prices 102-103
Returning to the EasyStep Interview- 2006:2012 34 Setting Up Other Items- Actions 104-107
Returning to the EasyStep Interview- 2003:2005 34 Setting Up Other Items- Exercise 108
Creating a Backup File- 2007:2012 34-35
Creating a Backup File- 2003:2006 35-36 CHAPTER 7- Basic Sales 109
Restoring a File- 2007:2012 36 Selecting a Sales Form 110
Restoring a File- 2003:2006 37 Creating an Invoice 110
Setting Up Users 37 Creating a Sales Receipt 110-111
Single and Multiple User Modes 38 Finding Transaction Forms 111
Closing Company Files 38 Previewing Sales Forms 111
Opening a Company File- 2007:2012 38 Printing Sales Forms 111
Opening a Company File- 2003:2006 38 Basic Sales- Actions 112-113
Creating a QuickBooks Company- Actions 39-43 Basic Sales- Exercise 114
Creating a QuickBooks Company- Exercise 44-55
CHAPTER 8- Using Price Levels 115
CHAPTER 3- Using Lists 56 Using Price Levels 116
Using Lists 57 Using Price Levels- Actions 117
The Chart of Accounts- 2007:2012 57-59 Using Price Levels- Exercise 118
The Chart of Accounts- 2003:2006 59-61
The Customers and Jobs Tab- 2006:2012 61-63 CHAPTER 9- Creating Billing Statements 119
The Customer:Job List- 2003:2005 63-64 Setting Finance Charge Defaults 120
The Employees Tab- 2006:2012 64-65 Entering Statement Charges 120
The Employee List- 2003:2005 65-66 Applying Finance Charges and Creating Statements 121
The Vendors Tab- 2006:2012 66-67 Creating Billing Statements- Actions 122
The Vendor List- 2003:2005 67-68 Creating Billing Statements- Exercise 123
Using Custom Fields 68
Sorting Lists 69 CHAPTER 10- Payment Processing 124
Inactivating and Reactivating List Items 69 Recording Customer Payments 125
Printing Lists 70 Entering a Partial Payment 126
Renaming and Merging List Items 70 Applying One Payment to Multiple Jobs 126
Adding Multiple List Entries from Excel- 2010:2012 70 Entering Overpayments 126
Using Lists- Actions 71-81 Entering Down Payments or Prepayments 127
Using Lists- Exercise 82-83 Applying Customer Credits 127
Making Deposits 127-128
CHAPTER 4- Setting Up Sales Tax 84 Payment Processing- Actions 129-132
The Sales Tax Process 85 Payment Processing- Exercise 133
Setting Up Your Tax Agencies 85
Setting Up Your Tax Rates 85
Creating a Sales Tax Group 86
Setting Sales Tax Preferences 86
Indicating Who and What Gets Taxed 87
Setting Up Sales Tax- Actions 88-89
Setting Up Sales Tax- Exercise 90

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 Table Of Contents

Chapters/Lessons: Pages:
CHAPTER 11- Handling Refunds 134
Creating a Credit Memo and Refund Check 135
Refunding Customer Payments 135
Handling Refunds- Actions 136
Handling Refunds- Exercise 137

CHAPTER 12- Entering and Paying Bills 138

Setting Billing Preferences 139
Entering Bills 139-140
Paying Bills 140
Early Bill Payment Discounts 141
Entering a Vendor Credit 141
Applying a Vendor Credit 141
Entering and Paying Bills- Actions 142-144
Entering and Paying Bills- Exercise 145

CHAPTER 13- Using Bank Accounts 146

Using Registers 147
Writing Checks 147-148
Writing a Check for Inventory Items 148
Printing Checks 148-149
Transferring Funds Between Accounts 149
Reconciling Accounts 150
Voiding Checks 151
Using Bank Accounts- Actions 152-155
Using Bank Accounts- Exercise 156

CHAPTER 14- Paying Sales Tax 157

Sales Tax Reports 158
Using the Sales Tax Payable Register 158
Paying Your Tax Agencies 158-159
Paying Sales Tax- Actions 160
Paying Sales Tax- Exercise 161

QuickBooks Keyboard Shortcuts 162

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 CHAPTER 1-
Getting Around in QuickBooks
1.1- The Home Page- 2006:2012

1.2- The Centers- 2006:2012

1.3- The Menu Bar and Keyboard Shortcuts

1.4- The Navigators- 2005

1.5- The Open Window List

1.6- The Icon Bar

1.7- Customizing the Icon Bar

1.8- Using the Shortcut List- 2005

1.9- The Chart of Accounts

1.10- Accounting Methods

1.11- Financial Reports

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 Getting Around in QuickBooks

1.1- The Home Page- 2006:2012:

Versions of QuickBooks from 2006 and beyond display the “Home Page” when you open a company
file. The Home Page provides a starting point that allows you to access many of the most commonly used
features of the program. It also shows an overview of the relationships between the various screens within
the QuickBooks application. In versions of QuickBooks prior to 2006, many of the functions shown within
the Home Page were contained in separate “Navigators” within the company file.
The Home Page is displayed by default whenever you open a new company file, but you can close it
by simply clicking the small “X” in the upper right corner of the page. You can redisplay the Home Page by
clicking the “Home” button at the left end of the QuickBooks toolbar.
The Home Page pictures the flow of activities often performed when using QuickBooks. Each
activity is shown as an icon within a diagram of related activities underneath a general heading, such as
“Customers” or “Vendors,” shown at the left of each diagram. New users will want to note that the flow of
activities shown here is a really great way to begin learning how QuickBooks is commonly used in business
applications.
For example, if you open the “sample product-based business” company file that is included with
any version of QuickBooks Pro after 2006 and examine its Home Page, you can see the different ways that
the sample company can collect money from its customers illustrated within the “Customers” section of the
Home Page. Studying the relationships between the icons can assist new users in figuring out how to use
the program by showing the order in which the associated tasks should be performed.
You should also note that the icons shown within the Home Page do change, depending upon what
features of QuickBooks are enabled or disabled for the currently opened company file. These features are
often set when the user creates the company file during the “EasyStep Interview.” For example, if you
indicated that your company doesn’t use estimates when creating your company file during the EasyStep
Interview, then you will not have the “Estimates” icon in your company file’s Home Page once you have
finished creating the company file. You can, however, also manually enable or disable features of
QuickBooks after creating a company file, which can also affect the icons shown within the Home Page.
Most importantly, you can easily click the icons shown in the Home Page to open the related form.
This feature allows you to have quick access to the various screens within the QuickBooks application.
Each screen opens in its own window, which you can close when you are finished to return to the Home
Page. So, for example, clicking the “Invoices” icon in the Home Page opens the “Create Invoices” window
where the user can create customer invoices.

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 Getting Around in QuickBooks

1.2- The Centers- 2006:2012:

Starting in QuickBooks 2006, you have access to four main “Centers” within the program when a
company file is opened. These “Centers” are: the Customer Center, the Vendor Center, the
Employee/Payroll Center, and the Report Center. These centers allow you to perform many of the tasks
related to the topic of each center. For example, you can add new customers to your company file through
the Customer Center. If upgrading from QuickBooks 2005 or earlier, you will find the information that used
to be stored in the various lists, such as the “Customer:Job” list, available in the new, related center. One
advantage to using the centers versus the older lists is that the centers easily show you much more
information than the old lists did. We will examine each of the centers within their appropriate contexts of
the program in later chapters- however, you should learn how to access the centers now.
You have many options in how you can access the available centers. For example, you can enter
the centers through the Home Page in QuickBooks. At the left edge of the Home Page, click the
“Employees,” “Customers,” or “Vendors” buttons to open the respective center. Each center will appear in
its own window, which you can close by clicking the “X” in the upper right corner of the page when you are
finished using it. You can also access a center by clicking the associated button, like “Customer Center,”
located in the QuickBooks toolbar at the top of the program screen. If you prefer to use the Menu Bar, you
can access each center under the associated command category within the Menu Bar. So, for example, you
can access the Customer Center by selecting “Customers| Customer Center” from the Menu Bar.

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 Getting Around in QuickBooks

1.3- The Menu Bar and Keyboard Shortcuts:

QuickBooks comes with a handy Menu Bar at the top of the application window that can be used to
quickly access all of the commands and features of the program. To perform a command, simply click on
the Menu Bar command category (like “File,” “Edit,” or “Lists”) to display a drop-down menu that lists all of
the specific sub-commands within the selected command category. You can then click on the desired sub-
command on the menu.

Menu Bar

Current selection

You can also use keyboard shortcuts to perform different commands in QuickBooks. The keyboard
shortcuts are always listed in the Menu Bar to the right of the specific command to which they correspond.
For example, if you click the “Lists” command within the Menu Bar you can see the keyboard shortcut for
the “Chart of Accounts” command, which is “Ctrl”+“A” on the keyboard. You can then click away from the
Menu Bar drop-down menu in order to retract it. Next, hold down the “Ctrl” key on the keyboard and then
strike the “A” key on the keyboard to bring up the Chart of Accounts. If your goal is to become faster using
QuickBooks, then learning your keyboard shortcuts will assist you. Another handy shortcut is pressing the
“Esc” key in the upper left corner of your keyboard; this action closes the active window.
Also notice that not every command within the Menu Bar has a corresponding keyboard shortcut.
For example, if you click the “Lists” command in the Menu Bar to display the drop-down menu, you can see
that a command like “Item List” does not have a keyboard shortcut. However, there is a keystroke
combination that you can be perform to access the command. If you press the “Alt” key on your keyboard
and then examine the Menu Bar, you will see that each command category (like “File” or “Edit”) has a single
underlined letter- for example the “F” in “File,” and the “V” in the “View” command. If you hold down the “Alt”
key on your keyboard and strike the underlined letter for the corresponding command category, you’ll see
its drop-down menu appear. At that point if you examine the sub-commands in the drop-down menu, you’ll
notice that each one of the subcommands also has a single letter underlined. At this point, you no longer
have to hold down the “Alt” key, you can just strike the key on your keyboard that corresponds to the
underlined letter of the subcommand that you would like to execute. So, using the example of accessing the
Item List, you could simply hold down “Alt”+“L” and then strike the letter “I” on the keyboard to access the
Item List. You’ll find that every command has a keyboard shortcut if you follow this method!

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 Getting Around in QuickBooks

1.4- The Navigators- 2005:

While the “Navigators” no longer appear in versions of QuickBooks after version QuickBooks 2006,
in previous versions of QuickBooks you could access information using the available Navigators. The
Navigators are alternatives to using the Menu Bar or the Icon Bar to use the program. You’ll see them in the
list at the left side of your screen. You have a Navigator screen for the company, customers, vendors,
employees, banking, business services, reports, and help and support. If you close the Navigator pane by
clicking the “X” in the upper right corner of that pane, QuickBooks will display a warning message and also
tell you how to bring this window back. Just click “Yes” to close the Open Window and Navigators list, if you
desire. At any point in the future, you can bring the Navigators and Open Window list back by selecting
“View| Open Window List” from the Menu Bar.

Customer Navigator Screen

Navigators List

Take a moment to examine the Navigators. Roll your mouse pointer over the “Customers” Navigator
in the Navigators pane and give it a click to launch the “Customer Navigator” in the screen to the right. The
Navigators are terrific tools to help you understand the processes involved in interacting with the topic of the
Navigator, the customers in this case. So over in the “Customer Navigator,” which opens to the right, you
can see the icons and arrows illustrating the flow of transactions involved in the customer process. In this
particular Navigator, the blue arrows which flow from left to right illustrate the different activities that you
may have to perform when interacting with your customers.
So for instance, you may start by making an “Estimate” for the customer, from which you may create
an “Invoice” at a later date. Along the way you may have to issue “Finance Charges” and/or “Statements,”
perhaps issue “Refunds and Credits,” and at some point you’ll “Receive Payments” from invoices you’ve
sent, which you will then “Deposit.”
Also notice that in contrast to estimating, invoicing, and receiving payments, there is another blue
arrow which has only two icons- “Sales Receipts” and “Deposits.” The “Sales Receipt” is used when a
customer makes a purchase and pays for it on the spot. At that point, you would just have to deposit it. So
the Navigator is illustrating the different ways that you can receive payment from your customers. To
perform an activity shown in the flowchart, roll your mouse pointer over the button that corresponds to the
action you would like to execute and click it to bring up the corresponding screen.

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 Getting Around in QuickBooks

1.5- The Open Window List:

While not shown by default in QuickBooks 2006 or later, you do have access to the Open Window
List from earlier versions. For all versions, you can toggle the display of the Open Window List on and off by
selecting “View| Open Window List” from the Menu Bar. This list displays the titles of any currently open
windows in a list at the left side of the QuickBooks screen. You can click on the name of a window shown in
the Open Window List to bring that screen to the foreground of the stack of open windows in QuickBooks.
This feature allows you to easily switch among open windows without having to open and close them
repeatedly while working.

Open Window List

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 Getting Around in QuickBooks

1.6- The Icon Bar:

Another tool that you have to help you complete the most common tasks in QuickBooks is the Icon
Bar located at the top of the application just below your menu bar. It contains buttons that give convenient
access to some of the most frequently used features of QuickBooks. Hold your mouse pointer over one of
the buttons and don’t move it for a second; the name of the button will appear in a little box called a “screen
tip.” The default buttons in the Icon Bar vary, depending upon which version of QuickBooks you are using.
However, you can customize the Icon Bar to add or remove whatever buttons you would like. To use the
Icon Bar, simply click a button to open the associated window. For example, if you would like to write a
check you can just click the “Check” button on the Icon Bar to open the “Write Checks” window.

1.7- Customizing the Icon Bar:

You can customize the Icon Bar to suit your personal needs by adding and removing buttons. To do
this, select “View| Customize Icon Bar…” from the Menu Bar. That will bring up the “Customize Icon Bar”
window. In the left window pane, you’ll see all your current icon choices. To add a new one, you could just
click the “Add…” button at the right side of this window. That will bring up the “Add Icon Bar Item” window.
Click on the feature for which you would like to add a button from the list of choices shown in the box at the
left side of this window. Then, from the scroll box at the right, you would select the icon that you would like
to represent that function within the Icon Bar. Also to the right of that, there are two text boxes where you
can edit the button’s label and the description displayed in the “screen tip” for the button. When you are
finished, simply click the “OK” button to add that selected feature and icon to the Icon Bar. You can then see
the new feature appear in the scroll box at the left side of the “Customize Icon Bar” window. It will also
immediately appear in the Icon Bar at the top of the screen, as well. Then you can simply click “OK” to close
the “Customize Icon Bar” window. Then you can click on the new button to use the newly added feature.
If you would like to remove a button from the Icon Bar, the process is essentially the same. Start by
selecting “View| Customize Icon Bar…” from the Menu Bar. In the “Customize Icon Bar” window, select the
icon you would like to remove from the scroll box at the left, and simply click the “Delete” button at the right
side of the “Customize Icon Bar” window. The button should disappear, and you can simply click the “OK”
button to save your changes.
You can also add a button to the Icon Bar for any screen currently displayed in the QuickBooks
window. To do this, first open the window for which you want to add an Icon Bar button, and then select
“View| Add (Window Name) to the Icon Bar…” from the Menu Bar. In the dialog box that appears, you can
then set the label and icon you wish to use for that window’s button in the Icon Bar. This is a handy way to
add icons to the Icon Bar for frequently accessed screens as you are using them.

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 Getting Around in QuickBooks

1.8- Using the Shortcut List- 2005:

The Shortcut List is another way to access some of the most commonly used commands in
QuickBooks. The Shortcut List is not available after QuickBooks 2005. To view the Shortcut List, simply
select “View| Shortcut List” from the Menu Bar. It will then display a listing of shortcuts over on the left side
of the QuickBooks screen. To use the Shortcut List, simply roll your mouse pointer over the icon that
represents the QuickBooks screen you would like to access and give the shortcut icon for that screen a
click.

Shortcut List

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 Getting Around in QuickBooks

1.9- The Chart of Accounts:

Although you do not have to be fluent in accounting terminology to understand QuickBooks, it is

necessary to have a basic understanding of some concepts prior to entering information into the program.
The first concept that we will discuss is the Chart of Accounts. A chart of accounts is a listing of all of the
accounts used in your company file. You can bring up your Chart of Accounts by selecting “Lists| Chart of
Accounts” from the Menu Bar. Your Chart of Accounts shows the names of the different accounts used by
your company, the account type (like income, expense, or one of the many other account types), and also
the current balance of the account. In QuickBooks 2010:2012, there is a column called “Attach”, which
shows any attached documents associated with the account. The Document Management Service that
provides the ability to add attachments is a service you must purchase separately from QuickBooks.

Account Name

Account Type Account Balance

Lightening Bolt: Indicates Attach: Indicates

online transactions need to be attachments associated
processed for this account. Only with the account. Only if
if online accounts are enabled. Document Management
Service is enabled.

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 Getting Around in QuickBooks

1.9- The Chart of Accounts (cont.):

Next, let’s examine the different general types of accounts found within the Chart of Accounts and
how they are organized. The Chart of Accounts has a default sorting method: assets at the top, followed by
liabilities, then equity. These accounts are shown in the “Balance Sheet” report for your company. After that,
you’ll see income accounts, then expense accounts. These are the accounts that make up the “Profit &
Loss” report. At the bottom of the Chart of Accounts are accounts for non-posting transactions, like
Purchase Orders and Quotes. Let’s spend some time reviewing the different account types that we have.
As mentioned before, at the top of the “Chart of Accounts” window you will see the Balance Sheet
accounts, which appear on the Balance Sheet for your company file. These accounts show what you own
(assets), what you owe (liabilities), and the difference (equity). Below those accounts you find the Income
and Expense accounts, which track where money comes from, and what it is spent on, respectively. Each of
the Balance Sheet accounts has a register associated with it. Unlike the Balance Sheet accounts, the
Income and Expense accounts each have a report that lists the transactions associated with the account.
We will look at these types of accounts in more detail in later chapters, but here is a rough list of the
different types of balance sheet accounts, and whether they are classified as assets, liabilities, or equity.

Balance Sheet Accounts:

Name: Description of Function:
Assets Assets are what you own, and what other people owe you. More specifically, the money that
people owe you is called your Accounts Receivable. Other assets may include checking
account money, inventory, fixed assets (like computers), and undeposited funds from
customers. Also note that when you set up your company file in QuickBooks, although checking,
savings, and petty cash are all company assets, you’ll set them up as “Bank” type accounts in
QuickBooks. The available types of accounts that are assets are: “Bank,” “Accounts
Receivable,” “Fixed Asset,” “Other Current Asset,” and “Other Asset.”
Liabilities Liabilities are what you owe to others. The unpaid bills that you have are specifically referred to
as your Accounts Payable. A liability can be a loan, an unpaid bill, or taxes owed. Also note
that when you set up your company file in QuickBooks, although credit cards are company
liabilities, you’ll set them up as “Credit Card” type accounts in QuickBooks. The available types
of accounts that are liabilities are: “Credit Card,” “Accounts Payable,” “Other Current Liability,”
and “Long Term Liability.”
Equity Equity is the difference between what you have (your Assets) and what you owe (your
Liabilities). The basic formula for calculating equity is: Assets-Liabilities=Equity. Equity is
seen as representing the “health” of your business. Equity can come from three different
sources: Investor money, Current-Year Profits, or Retained Earnings (profits from past years
that haven’t been distributed to shareholders). The only available type of account for equity is
the “Equity” account type.

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 Getting Around in QuickBooks

1.10- Accounting Methods:

Once you begin your business, you need to decide which bookkeeping method to use- “Cash” or
“Accrual.” This will determine the method used to report income and expenses on your tax forms. Please
check with your accountant, tax advisor, or the IRS before choosing a bookkeeping method for tax
purposes. It is important to note that when you create reports in QuickBooks, you can switch between the
“Cash” and “Accrual” method at any time to see how it impacts the results, regardless of which
bookkeeping method you have chosen for tax purposes. Also, regardless of how you decide to set up
your reports, you always record the business transactions in the same way in QuickBooks.

Accounting Methods:
Method: Description of Method:
Cash If you record your income when you actually receive the money, and record expenses when
you pay the bills, you are using the Cash accounting method.
Accrual In Accrual accounting, you simply record income at the time of sale, NOT when you receive
payment. In the same way, you also record payments when you receive the bill or incur the
expense, NOT whenever you pay it.

1.11- Financial Reports:

You also need to know how to measure your business profitability. Two very important reports that
assist you in figuring this out are the Balance Sheet and the Profit and Loss Statement (also called an
Income Statement). These are most often the reports that will be requested by banks and CPA’s.
Another commonly requested report is the Statement of Cash Flows. Many people will use this to
determine the stability of your cash flow (money coming in and going out of your business). This report
shows your receipts and payments during a specific accounting period.

Name: Description of Function: How to View Report:

Balance Sheet A Balance Sheet shows your company’s “health” on a given Select “Reports| Company &
date. It shows what you have (Assets), what you owe Financial| Balance Sheet
(Liabilities), and the net worth of your business (Equity). Standard” from the Menu
Your total assets always equal your total liabilities and Bar.
equity. It is this balance that must be maintained by using
the principles of “double-entry” accounting.
The Profit and This report shows your income, expenses, and net profit or Select “Reports| Company &
Loss Statement loss (income-expenses). It summarizes the revenue and Financial| Profit & Loss
expenses of your business by category, first income then Standard” from the Menu
expenses. Bar.
The Statement Shows the change in your cash position for a selected time Select “Reports| Company &
of Cash Flows period. It shows the amount of cash earned from profit, Financial| Statement of Cash
where you received additional cash, and where your cash Flows” from the Menu Bar.
was spent.

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 ACTIONS-
Getting Around in QuickBooks
USING THE HOME PAGE- 2006:2012:

1. Starting in QuickBooks 2006 or later, after opening a company file, the Home Page is displayed.
2. You can close it by clicking the small “X” in the upper right corner of the Home Page.
3. You can display the Home Page by clicking the “Home” button at the left end of the QuickBooks toolbar.
4. You can click the icons shown in the Home Page to open the related form.

USING THE CENTERS- 2006:2012:

1. You can access any of the available centers by clicking either the “Employees,” “Customers,” or
“Vendors” buttons at the left edge of the Home Page to access the respective center.
2. Each center will appear within its own window, which you can close by clicking the “X” in the upper right
corner of the page, when you are finished using it.
3. You can also access each center by clicking the associated button, like “Customer Center,” located in
the QuickBooks toolbar at the top of the program screen.
4. If you prefer to use the Menu Bar, you can access each center under the respective command category
in the Menu Bar. So, for example, you can access the Customer Center by also selecting “Customers|
Customer Center” from the Menu Bar.

USING THE MENU BAR:

1. Click the command category for which you want to see the specific commands (like “File,” “Edit,” etc..).
2. Click the specific subcommand that you want to run from the drop-down list of commands available.

SHOWING/HIDING THE OPEN WINDOW LIST:

1. Select “View| Open Window List” from the Menu Bar.

USING THE ICON BAR:

1. Click the icon button that represents the action that you want to accomplish.

ADDING BUTTONS TO THE ICON BAR:

1. Select “View| Customize Icon Bar…” from the Menu Bar.

2. In the “Customize Icon Bar” window, select the “Add…” button at the right.
3. In the “Add Icon Bar Item” window, select the function that you want to add from the scroll box.
4. Select the icon that you want in the Icon Bar from the scroll box of icons in the middle of this window.
5. Type the label in the “Label” text box, and your desired description in the “Description” text box. This is
optional. You may also use the default suggestion.
6. Click the “OK” button at the right when you have finished.
7. Click the “OK” button in the “Customize Icon Bar” window to set the button in the Icon Bar.

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 ACTIONS-
Getting Around in QuickBooks
REMOVING BUTTONS FROM THE ICON BAR:

1. Select “View| Customize Icon Bar…” from the Menu Bar.

2. In the “Customize Icon Bar” window, select the button from the scroll box at the left side of this window.
3. Click the “Delete” button at the right side of this window.
4. Click the “OK” button to set your changes.

SHOWING/HIDING THE SHORTCUT LIST- 2005:

1. Select “View| Shortcut List” from the Menu Bar.

DISPLAYING THE CHART OF ACCOUNTS:

1. Select “Lists| Chart of Accounts” from the Menu Bar.

DISPLAYING THE BALANCE SHEET:

1. Select “Reports| Company & Financial” from the Menu Bar.

2. From the side menu that appears, select “Balance Sheet Standard.”

DISPLAYING THE PROFIT AND LOSS REPORT:

1. Select “Reports| Company & Financial” from the Menu Bar.

2. From the side menu that appears, select “Profit and Loss Standard.”

DISPLAYING THE CASH FLOW REPORT:

1. Select “Reports| Company & Financial” from the Menu Bar.

2. From the side menu that appears, select “Statement of Cash Flows.”

©TeachUcomp, Inc. Introductory QuickBooks 18

 EXERCISES-
Getting Around in QuickBooks
Purpose:

To be able to effectively manipulate the basic elements of the QuickBooks environment and to be
able to view the chart of accounts and the information contained within it.

Exercises:

1. Start the QuickBooks application.

2. If there is a company file open, close it by selecting “File| Close Company” from the Menu Bar.
3. In the “No Company Open” dialog box, click the button in the lower right corner that says “Open a
sample file.”
4. Click the “Sample product-based business” file from the drop-down menu of choices.
5. Click “OK” on the sample file message box.
6. If using QuickBooks 2005 or later, you can uncheck the “Show this window at startup” checkbox in
the lower left corner of the “QuickBooks Learning Center” window, if it appears. Then click the
“Begin Using QuickBooks” button in the lower right corner of this window to begin using QuickBooks.
7. Open the Chart of Accounts by selecting “Lists| Chart of Accounts” from the Menu Bar.
8. Close the Chart of Accounts by pressing the “Esc” key on your keyboard.
9. Select “View| Customize Icon Bar…” from the Menu Bar.
10. In the “Customize Icon Bar” window, click the “Add…” button.
11. In the “Add Icon Bar Item” screen, select the “Calculator” command in the scroll box to the left.
12. Click the “OK” button in the “Add Icon Bar Item” window.
13. Click “OK” in the “Customize Icon Bar” window.
14. Click the new “Calc” button in the Icon Bar to bring up the calculator feature.
15. Close the calculator by clicking the “X” in the upper right corner of the calculator.
16. Select “Reports| Company & Financial| Balance Sheet Standard” from the Menu Bar to open the
“Balance Sheet” for the sample company file.
17. Close the “Balance Sheet” by clicking the “X” in the upper right corner of the window.
18. Select “View| Customize Icon Bar…” from the Menu Bar.
19. In the “Customize Icon Bar” window, select the “Calc” entry from the list at the left of the screen.
20. Click the “Delete” button at the right of the screen to delete the “Calc” entry.
21. Click “OK” at the right of the “Customize Icon Bar” window.
22. Close the company file by selecting “File| Close Company” from the Menu Bar.

©TeachUcomp, Inc. Introductory QuickBooks 19

 CHAPTER 2-
Creating a QuickBooks Company
2.1- Using Express Start- 2012 Only

2.2- Using the EasyStep Interview- 2007:2012

2.3- Using the EasyStep Interview- 2006

2.4- Using the EasyStep Interview- 2003:2005

2.5- Returning to the EasyStep Interview- 2006:2012

2.6- Returning to the EasyStep Interview- 2003:2005

2.7- Creating a Backup File- 2007:2012

2.8- Creating a Backup File- 2003:2006

2.9- Restoring a File- 2007:2012

2.10- Restoring a File- 2003:2006

2.11- Setting Up Users

2.12- Single and Multiple User Modes

2.13- Closing Company Files

2.14- Opening a Company File- 2007:2012

2.15- Opening a Company File- 2003:2006

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 Creating a QuickBooks Company

2.1- Using Express Start- 2012 Only:

Starting in QuickBooks 2012, you can use the new Express Start feature to create a new company
file. This feature simplifies and segments the steps in the EasyStep Interview into more manageable
sections, so you can get started with QuickBooks more quickly. When you first open QuickBooks 2012, the
option to create a company file using the Express Start feature is displayed in the “QuickBooks Setup”
screen. Note that this is the same screen that opens if you select “File| New Company…” from the Menu
Bar or simply click the “Create a new company” button shown in the “No Company Open” window. If you
wish to use the Express Start feature, then click the “Express Start” button within the “QuickBooks Setup”
screen to begin.
Also note that for advanced features and setup, you can still use the EasyStep Interview to more
thoroughly customize your company file at startup. To do this, simply click the “Advanced Startup” button
that is shown within the “QuickBooks Setup” screen, instead. You can then use the EasyStep Interview,
which we will discuss in the next lesson, to create your company file.
In the first Express Start screen, enter your company’s name as you wish it to appear to customers
and vendors. Note that if you use a different name for legal and tax filings, you will actually enter that name
in the next Express Start screen.
Next click the “Help me choose” hyperlink next to the “Industry” text box to open the “Select Your
Industry” window. This window allows you to select your company file’s industry. Note that the industry
choice will impact which features of QuickBooks are enabled and disabled as well as determine the initial
chart of accounts used by your company file. You can also change these settings later, if needed. Within
this window, scroll through the “Industry” list in the lower left corner until you find the industry type that most
closely matches the type of business that you operate. Then click on the industry to select it. The chart of
accounts for the selected type of industry will appear in the window to the right for you to review, if desired.
Note that if you cannot find a specific match, you can select the “General Product-based Business” or
“General Service-based Business” choices. Note that you should only choose the “Other/None” option if you
wish to create all of the accounts used by your company file manually by yourself or with your accountant.
Once you have made your industry selection, you can then click the “OK” button to return to the Express
Start screen.
Next, use the “Company Type” drop-down to select the legal structure of your company file. This
determines the tax-related settings for your company file. You then enter your company’s FEIN (Federal
Employer Identification Number) or your social security number into the “Tax ID #” field. When finished, click
the “Continue” button to move to the second Express Start screen. In this screen, start by correcting the
“Legal Name” field, if needed. This is the name used by your company on legal and tax forms.
You then enter your company file’s address information into the fields that are provided. You can
also enter the company’s “Phone,” “Email,” and “Website” into the indicated fields of the same name.
When finished on this screen, you can click the “Preview Your Settings” button to open the “Preview
Your Company Settings” window where you can review your company file’s default settings. On the
“Features Selected” tab you can see which features will be turned on and off, by default. Note you can
change these later, if needed. You can click the “Chart of Accounts” tab to review the accounts that will be
used by your company file. You can check any accounts you wish to add, or remove the check from the
checkbox for any accounts you want to remove. You can click the “Company File Location” tab to view the
directory where QuickBooks will save your company file. If needed, you can click the “Change Location”
button to select a different file location, if desired. When finished, click the “OK” button to return to the
Express Start screen. Then click the “Create Company File” button to create your company file. Next, you
can then add the customers, products and services, and bank accounts used by your company by clicking
the “Add” button in the respective sections. We will examine doing this in later chapters.

©TeachUcomp, Inc. Introductory QuickBooks 21

 Creating a QuickBooks Company

2.2- Using the EasyStep Interview- 2007:2012:

In QuickBooks, you can use the EasyStep Interview to quickly and easily create your company file.
You complete the EasyStep Interview by entering information into the different screens shown within the
Interview. Once you have filled-in the information in a screen, you can click the “Next >” button to proceed to
the next screen. Once you have answered all of the questions, click the “Finish” button to create your
company file and start using QuickBooks. If questions arise that you must answer, and you’re unsure of the
correct answer, don’t worry! You can go usually go back and change your answers later. In most screens,
you can simply click the “< Back” button to return to a previous screen and change your answers. Also, if
necessary, you can click the “Leave…” button to exit the EasyStep Interview. However, if you leave the
EasyStep Interview prior to saving your company file, then your data entry will be lost. A message box will
inform you if this is the case before you exit, so don’t worry about remembering this.
If you are new to QuickBooks, you should seriously consider setting up a company file that is not
your company file, but is similar in nature: a “dummy” company. That way, you can practice creating
transactions that you would be likely to enter into your own company file without placing your own real
company file in jeopardy. You can create as many company files in QuickBooks as you would like. Also, if
you set up a fake company file, it can be easier to train others in your company in the basic bookkeeping
involved with the company without risking the integrity of your actual company’s data file.
Before you begin entering data in the EasyStep Interview, you will need some basic information.
First, and most importantly, you will need to select a “start date” for your QuickBooks company file. The start
date is the date for which you will enter all of the balances of the accounts used in your company file.
Because of this, you may want to pick a date that isn’t too far in the past, since you will have to record each
transaction that has occurred from the start date through the current date. This will ensure you create a
company file that is both financially accurate and also ready for the daily data entry.
Many people will choose to use the last day of the last financial period (quarter, month, etc…) as the
start date. Remember that you will have to enter in all of the transactions that have occurred from the start
date through the current date (or at least accurate journal entries representing the transaction values) to use
the company file and have accurate balances, so don’t go too far into the past if you don’t want to spend
hours performing data entry!
You will also need to know the account balances of your checking, savings, and any other accounts
as of your start date. This can often be found on a balance sheet created as of the start date. If that isn’t
available, bank statements as of the start date can also be used.
You will also need to have a Federal Employer Identification Number (FEIN) or your Social Security
Number found on your company’s tax returns. Once you have all of this information available, you can start
the EasyStep Interview.
To create a company file in QuickBooks, select “File| New Company…” from the Menu Bar or click
the “Create a new company” button in the “No Company Open” dialog box that appears in QuickBooks
when there is no company file opened. That will bring up the Easy Step Interview in QuickBooks 2007:2011.
In QuickBooks 2012, click the “Advanced Setup” button to open the EasyStep Interview.
In QuickBooks 2007:2011, you can see the options that you have for creating a company file at the
right side of the screen. At the left side of the screen is the “Interview Progress” meter. As you complete the
screens in the EasyStep Interview, your overall progress is reflected in this meter. To begin the EasyStep
Interview and create a new company file, click the “Start Interview” button at the right side of the screen.
In the first screen, labeled “Enter your company information,” you enter information about your
company. Required fields are noted by a red asterisk to the left of the field name. You begin by entering the
name of your company into the “Company name” field. You can then move to the next field by simply
pressing the “Tab” key on your keyboard or by clicking into the next field with your mouse. The next field

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 Creating a QuickBooks Company

2.2- Using the EasyStep Interview- 2007:2012 (cont.):

is the “Legal name” field. This is most often the same thing as your “Company name” field, but can be
different for DBA businesses. Note that if you have a question about this field, you can click the “Explain”
hyperlink to show an associated help file explaining this field’s purpose in a new window. You can read this
and close it when you are finished. This type of assistance is everywhere in the EasyStep Interview, and is
found generally throughout the QuickBooks application. Note that you can click the “Get answers” hyperlink
in the upper right corner of any screen within the EasyStep Interview to open an associated help file
regarding the content that is entered into the particular screen. Once again, you can read this information
and then close it when you are finished. Help like this is woven throughout the program, so it is almost
always available for any screen in QuickBooks! This is just another great aspect of using this program.
Next, you enter either your FEIN or Social Security Number, as appropriate, into the “Tax ID” field.
You then enter your complete street address into the “Street address” field set. Enter your city into the “City”
field. Then select the abbreviation for your state from the “State” drop-down menu. Next enter your zip code
into the “Zip” field. Select your country from the “Country” drop-down menu, if necessary. Enter your phone
number and fax number, if desired, into the “Phone” and “Fax” fields using the formatting which you would
like to have displayed on your forms within QuickBooks, like your invoices, for example. You can then enter
a default e-mail address for the company into the “E-mail address” field. You can also enter the website
address of your company into the “Web site” field, if you would like. Once you have finished entering your
data into this screen, you can click the “Next >” button to continue.
In the next screen, titled “Select your industry,” you select the type of company for which you are
creating a company file from the list of choices shown in the list. The choice you make here will affect what
features are enabled and what default accounts are placed into your chart of accounts. You can always
customize these features later, but selecting an industry from the list will typically reduce the amount of
customization required. If your specific industry isn’t listed, either select the closest industry listed or select
“General Product-based business” or “General Service-based business” from the list of choices. An
important point to note is that the answer that you make here will change what questions the EasyStep
Interview will pose to you as you continue. So, the questions posed to an individual who selects “Retail
Shop or Online Commerce” will be different from an individual who selects “Church or Religious
Organization.” For example, setting up sales tax would be a part of the EasyStep Interview for the “Retail
Shop or Online Commerce” selection, but not for the “Church or Religious Organization” selection. When
you have made your industry selection, click the “Next >” button to continue.
The next screen asks how your company is organized. You simply select the option button that
corresponds to the legal structure of your company. This assists QuickBooks in choosing accounts for your
company’s chart of accounts and also in assigning accounts to tax form lines. Once you have made your
selection, click the “Next >” button to continue.
In the next screen you select the first month of your fiscal year from the drop-down menu shown.
Your fiscal year is quite often the same as your tax year. A fiscal year is simply a 12-month period used for
reporting a company’s financial status. For many companies, the first month of the fiscal year is “January.”
This allows them to have the fiscal year coincide with the income tax year. Once you have selected the first
month in your fiscal year, click the “Next >” button to continue.
In the next screen, titled “Set up your administrator password,” you can create a password for the
“Administrator” account of your company file. The “Administrator” account has access to all of your
company’s financial information. This is an optional step, and you can create users and assign access
privileges at any time. However, if you wish to create a password for the “Administrator” account, you can
enter it into both the “Administrator password” and “Retype password” fields. If you do this, make sure that

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 Creating a QuickBooks Company

2.2- Using the EasyStep Interview- 2007:2012 (cont.):

you know what this password is. Also, note that passwords you create are case-sensitive. When you are
ready, click the “Next >” button to continue.
In the next screen, called “Create your company file,” you create the actual QuickBooks company
file that you will use. This is when you decide what to name the company file, and where you will save it.
Note this information, as you will most likely need it later. When you are ready to save the company file, you
can click the “Next >” button to continue. This will launch the “Filename for New Company” dialog box. This
is a standard Windows “Save As” dialog box. So, you use it to select the folder into which you want to save
the company file. Once you have selected where you want to save the company file, you can then enter the
name that you want to give to the company file into the “File name:” field. This defaults to the name of the
company, but you can change it if you need to. Once you know where you will save the file and what you
will name it, click the “Save” button to save the company file and return to the EasyStep Interview.
The next screen you will see in the EasyStep Interview is the “Customizing QuickBooks for your
business” screen. This screen informs you that the next several screens will customize your QuickBooks
company file by asking you questions about your company, your customers, and how you pay your bills. At
this point and hereafter, you can click the “Leave…” button in the lower left corner of the EasyStep Interview
screen to save your progress and return later to complete the EasyStep Interview, if needed. Once you are
ready to continue, click the “Next >” button.
Next, for your industry selection, the EasyStep Interview shows a series of screens that allow you to
customize your company file for your industry type. Answer any questions posed in each screen and then
click the “Next >>” button to continue until you have finished customizing your company file.
When you have finished answering all of the questions in the EasyStep Interview, you will see the
final congratulations screen. In QuickBooks 2007:2010, when you are finished, just click the “Finish” button
to finish customizing and creating your company file. This will open the “QuickBooks Learning Center,”
where you can watch some sample lessons on using QuickBooks and setting up basic items. When you are
finished, click the “Begin Using QuickBooks” button to close the “QuickBooks Learning Center” and return to
your company file. In QuickBooks 2011:2012, you click the “Go To Setup” button to open a window that
instructs you to create your customers, inventory, and vendors. You can close this window when you are
finished reviewing the next steps that you should take to complete setting up your company file.

©TeachUcomp, Inc. Introductory QuickBooks 24

 Creating a QuickBooks Company

2.3- Using the EasyStep Interview- 2006:

In QuickBooks, you can use the EasyStep Interview to quickly and easily create your company file.
You complete the EasyStep Interview by entering information into the different screens shown within the
Interview. Once you have filled-in the information in a screen, you can click the “Next >” button to proceed to
the next screen. Once you have answered all of the questions, you can click the “Finish” button to create
your company file and start using QuickBooks. If questions are posed that you must answer, and you’re
unsure as to how to correctly enter your answer, don’t worry! You can go usually go back and change your
answers later. In most screens, you can simply click the “< Back” button to return to a previous screen and
change your answers. Also, if necessary, you can click the “Leave…” button to exit the EasyStep Interview.
However, if you leave the EasyStep Interview prior to saving your company file, then your data entry will be
lost. A message box will inform you if this is the case before you exit, so don’t worry.
If you are new to QuickBooks, it is recommended that you set up a company file that is not your
company file, but is similar in nature: a “dummy” company. That way, you can practice creating transactions
that you would be likely to enter into your own company file without placing your own real company file in
jeopardy. It is possible to create as many company files in QuickBooks as you would like. Also, if you set up
a dummy company file, it can be easier to train others in your company in the basic bookkeeping involved
with the company without risking the integrity of your actual company data.
Before you begin entering data in the EasyStep Interview, you will need some basic information.
First, and most importantly, you will need to select a “start date” for your QuickBooks company file. The start
date is the date as of which you will enter all of the balances of the accounts used in your company file.
Because of this, you may want to pick a date that isn’t too far in the past, since you will have to record each
transaction that has occurred from the start date through the current date. This will ensure you create a
company file that is both financially accurate and also ready for the daily data entry.
Many people will choose to use the last day of the last financial period (quarter, month, etc…) as the
start date. Remember that you will have to enter in all of the transactions that have occurred from the start
date through the current date (or at least accurate journal entries representing the transaction values) to use
the company file and have accurate balances, so don’t go too far into the past if you don’t want to spend
hours performing data entry!
You will also need to know the account balances of your checking, savings, and any other accounts
as of your start date. This can often be found on a balance sheet created as of the start date. If that isn’t
available, bank statements as of the start date can also be used.
You will also need to have a Federal Employer Identification Number (FEIN) or your Social Security
Number found on your company’s tax returns. Once you have all of this information available, you can start
the EasyStep Interview.
To create a company file in QuickBooks, you can begin by selecting “File| New Company…” from
the Menu Bar or by clicking the “Create a new company” button in the “No Company Open” dialog box that
appears in QuickBooks when there is no company file opened. That will bring up the Easy Step Interview.
In the first screen of the EasyStep Interview, you can see the options that you have for creating a
company file at the right side of the screen. At the left side of the screen is the “Interview Progress” meter.
As you complete the screens in the EasyStep Interview, your overall progress is reflected in this meter. To
begin the EasyStep Interview, click the “Start Interview” button at the right side of the screen.
In the first screen, labeled “Enter your company information,” you enter information about your
company. Required fields are noted by a red asterisk to the left of the field name. You begin by entering the
name of your company into the “Company name” field. You can then move to the next field by simply
pressing the “Tab” key on your keyboard or by clicking into the next field with your mouse. The next field

©TeachUcomp, Inc. Introductory QuickBooks 25

 Creating a QuickBooks Company

2.3- Using the EasyStep Interview- 2006 (cont.):

is the “Legal name” field. This is most often the same thing as your “Company name” field, but can be
different for DBA businesses. Note that if you have a question about this field, you can click the “Explain”
hyperlink to show an associated help file explaining this field’s purpose in a new window. You can read this
and close it when you are finished. This type of assistance is everywhere in the EasyStep Interview, and is
throughout the QuickBooks application, generally. Note that you can click the “Get answers” hyperlink in the
upper right corner of any screen within the EasyStep Interview to open an associated help file regarding the
content that is entered into the particular screen. Once again, you can read this information and then close it
when you are finished. It is important to note that help like this is almost always available for any screen in
QuickBooks and interweaved throughout the program! This is just another great aspect of using this
program.
Next, you enter either your FEIN or Social Security Number, as appropriate, into the “Tax ID” field.
You then enter your complete street address into the “Street address” field set. Enter your city into the “City”
field. Then select the abbreviation for your state from the “State” drop-down menu. Then enter your zip code
into the “Zip” field. You can then select your country from the “Country” drop-down menu, if necessary.
Enter your phone number and fax number, if desired, into the “Phone” and “Fax” fields using the formatting
which you would like to have displayed on your forms within QuickBooks, like your invoices, for example.
You can then enter a default e-mail address for the company into the “E-mail address” field. You can also
enter the website address of your company into the “Web site” field, if desired. Once you have finished
entering your data into this screen, you can click the “Next >” button to continue.
In the next screen, titled “Set up your administrator password,” you can create a password for the
“Administrator” account of your company file. The “Administrator” account has access to all of your
company’s financial information. This is an optional step, and you can create users and assign access
privileges at any time. However, if you wish to create a password for the “Administrator” account, you can
enter it into both the “Administrator password” and “Retype password” fields. If you do this, make sure that
you know what this password is. Also, note that passwords you create are case-sensitive. When you are
ready, click the “Next >” button to continue.
In the next screen, called “Create your company file,” you create the actual QuickBooks company
file that you will use. This is when you decide what to name the company file, and where you will save it.
Note this information, as you will most likely need it later. When you are ready to save the company file, you
can click the “Next >” button to continue. This will launch the “Filename for New Company” dialog box. This
is a standard Windows “Save As…” dialog box. So, you use the “Save in:” drop-down to select the folder
into which you want to save the company file. QuickBooks Pro will default to saving its company files to “C:\
Program Files\Intuit\QuickBooks Pro,” but you can select a different folder, if desired. Once you have
selected where you want to save the company file, you can then enter the name which you want to give to
the company file into the “File name:” field. This defaults to the name of the company, but you can change it
if you need to. Once you know where you will save the file and what you will name it, click the “Save” button
to save the company file and return to the EasyStep Interview.
The next screen you will see in the EasyStep Interview is the “Customizing QuickBooks for your
business” screen. This screen informs you that the next several screens will customize your QuickBooks
company file by asking you questions about your company, your customers, and how you pay your bills.
Note that, at this point or after, you can click the “Leave…” button in the lower left corner of the EasyStep
Interview screen to save your progress and return later to complete the EasyStep Interview. Once you are
ready to continue, click the “Next >” button.
In the next screen, titled “Select your industry,” you select the type of company for which you are
creating a company file from the list of choices shown in the list. The choice you make here will affect what

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 Creating a QuickBooks Company

2.3- Using the EasyStep Interview- 2006 (cont.):

features are enabled and what accounts are placed into your chart of accounts, by default. You can always
customize these features later, but selecting an industry from the list will typically reduce the amount of
customization required. If your specific industry isn’t listed, then you can either select the closest industry
listed or select “Other/None” from the list of choices. An important point to note is that the answer that you
make here will change what questions the EasyStep Interview will pose to you as you continue. So, the
questions posed to an individual who selects “Retail” will be different from an individual who selects
“Church.” For example, setting up sales tax would be a part of the EasyStep Interview for the “Retail”
selection, but not for the “Church” selection.
Once you have made your selection, then click the “Next >” button to continue. For the purpose of
showing the EasyStep Interview, we have made the “Retail” selection. Just remember that the screens
shown here may no longer reflect the questions that will specifically be asked of you when creating your
company file if you made a different industry selection.
Next, for the “Retail” selection, the EasyStep Interview shows a screen called “What do you sell?” In
this screen, you can select either “Services only,” “Products only,” or “Both services and products.” The
answer made here determines whether or not you need to set up inventory during the EasyStep Interview.
For this example, let’s say that we sell both services and products. In that case, you would select that option
button and then click the “Next >” button to continue.
The next screen then asks “How will you enter your sales in QuickBooks?” The choices available
here are to “Record each sale individually,” “Record only a summary of your daily or weekly sales,” or “Use
QuickBooks Point of Sale.” Note that QuickBooks Point of Sale is a package used to scan and track
inventory for retail stores, but that it is sold separately. The option to record daily or weekly transactions is
often useful for stores which only want to enter a summary of sales made from a separate cash register into
QuickBooks. The option to record each sale individually is useful for companies which wish to keep detailed
transaction information in QuickBooks. This also allows you to print invoices and sale receipts for
customers, if needed. For the purpose of this example, we will select to “Record each sale individually.”
Once again, when finished with a screen, you can click the “Next >” button to continue.
The next screen asks “Do you sell products online?” The answer made here will decide whether or
not QuickBooks will show additional information to you regarding additional online sales services that are
available. For the purpose of this example, we will select the “I currently sell online” option and then click
the “Next >” button to continue.
The next screen asks “Do you charge sales tax?” The options are “Yes” or “No.” Most retail
businesses collect at least one sales tax, so we will answer “Yes” for this example. This will allow us to set
up sales tax during the EasyStep Interview. Once again, click the “Next >” button once you have completed
a screen and wish to continue.
The next screen asks “Do you want to create estimates in QuickBooks?” Often, these items are
referred to as bids, proposals or quotes in various industries. These are all called “estimates” in
QuickBooks. For our example, we will select to answer “Yes.” This enables the estimates feature in
QuickBooks. Then we will click “Next” to continue.
The next screen is titled “Using sales receipts in QuickBooks.” This screen asks if we will need the
ability to print sales receipts for customers who pay in full at the time of sale. To enable printing of sales
receipts, we will select “Yes” in this example. Then we will click the “Next >” button to continue.
The next screen, titled “Using statements in QuickBooks,” asks if we wish to use billing statements
to list charges accumulated over a period of time. This allows you to enter charges to a customer’s accounts
receivable without creating an invoice. You can then bill them for these charges in a billing statement. To
enable this feature for the example, we will select “Yes” and then click the “Next >” button to continue.

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2.3- Using the EasyStep Interview- 2006 (cont.):

The next screen, titled “Using progress invoicing,” asks if we will be using partial billing for larger
projects. Once again, you can answer “Yes” or “No,” depending on your type of business. For this example,
we will select “Yes” and then click “Next >” to continue.
The next screen, titled “Managing bills you owe,” asks if you want to enable an accounts payable
account to keep track of the bills that you owe. Most companies wish to track this information, and would
answer “Yes.” We will select “Yes” for this example and then we will click the “Next >” button to continue.
The next screen, titled “Tracking inventory in QuickBooks,” asks if we would need to create items in
QuickBooks to account for items which are purchased from a vendor and resold to customers. If it is not an
item which is bought from a vendor and resold to a customer, then it may be easier to set it up as a non-
inventory item in QuickBooks, instead. When enabling inventory, QuickBooks will calculate the value of the
inventory using the average costing method. You cannot use FIFO or LIFO costing methods in QuickBooks.
However, for any items created as inventory item in QuickBooks, QuickBooks will calculate the average
cost of inventory and keep count of how many are available. For this example, lets answer “Yes” and then
click the “Next >” button to continue.
The next screen asks “Do you accept credit cards?” For this example, we will answer “I accept credit
cards and debit cards,” and then click the “Next >” button to continue.
The next screen, titled “Tracking time in QuickBooks,” asks if you wish to record the time worked by
employees, owners, or subcontractors (vendors). The recorded time can then be used in various ways
shown in this screen, such as paying employees. For this example, we will answer “Yes” and then click the
“Next >” button to continue.
The next screen asks “Do you have employees?” You can select either the “Yes” or “No” option, as
appropriate. If you select “Yes,” then check the correct checkbox or checkboxes to indicate what type of
employees you have. For this example, we will select “Yes” and also check the “We have W-2 employees”
and the “We have 1099 contractors” checkboxes. Then we will click the “Next >” button to continue.
The next screen, titled “Using accounts in QuickBooks,” allows you to read about the process of
creating the chart of accounts used by your company file. This is when you will need your start date for your
company file and the balances in your company’s accounts as of the start date. When you have finished
reading this information, click the “Next >” button to continue.
The next screen, titled “Enter your start date,” allows you to enter the start date of your company file
into the “Start date” field. You can either type it into the box, or select the desired date from the calendar
drop-down at the right end of the field. Once you have entered your start date, you can click the “Next >”
button to continue.
The next screen, titled “Add your bank account,” wants you to add your bank accounts to
QuickBooks. These would include any accounts, opened as of your start date, that had a balance in them
as of your start date. Typically this includes checking, savings, and money market accounts. For example,
let’s assume that we wanted to create a checking account. First, we would have to answer “Yes” to the
question posed in this screen, and then click the “Next >” button to continue. That would open the “Tell us
about your account” screen. In this screen, you would enter a name for the account into the “Bank account
name” field. You can then optionally enter the bank account number into the “Bank account number” field.
You then select whether or not the account was opened as of your start date. To enter an opening balance
for the account, you would select the “Before” option, and then click the “Next >” button to continue. The
next screen, titled “Enter your bank statement information,” will then let you enter the ending date of the
most immediate bank statement that was issued before the start date in the “Statement ending date” field.
You can then enter the ending balance shown on the bank statement into the “Statement ending balance”
field. You can then click the “Next >” button to continue.

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2.3- Using the EasyStep Interview- 2006 (cont.):

The next screen, titled “Review bank accounts,” lets you review the bank accounts which you have
created in QuickBooks. You can then select whether or not you want to add more accounts. If you select
“Yes” and then click the “Next >” button to continue, QuickBooks will repeat the screens that ask you about
the next account. Eventually, when you have finished adding all of the necessary bank accounts, you can
answer “No” to the “Do you want to add another bank account?” question. So, for this example, let’s
assume that we have set up all of the bank accounts needed. In that case, you can select “No” and then
click the “Next >” button to continue.
The next screen, titled “Review expense accounts,” will allow you to view the default expense
accounts created for your company, based on your industry selection. The question shown asks, “Do you
want to use these expense accounts?” Unless you want to create each and every expense account used by
your company, you may find it is easier to select “Yes,” and then edit the names of the accounts later. If you
select “No,” you will need to create all of the expense accounts used in your company later. For this
example, we will select “Yes” and then click the “Next >” button to continue.
The next screen, titled “Review income accounts,” will allow you to view the default income accounts
created for your company, based on your industry selection. The question shown asks, “Do you want to use
these income accounts?” Unless you want to create each and every income account used by your
company, you may find it is easier to select “Yes,” and then edit the names of the accounts later. If you
select “No,” you will need to create all of the income accounts used in your company later. For this example,
we will select “Yes” and then click the “Next >” button to continue.
When you have finished answering all of the questions in the EasyStep Interview, you will see the
final congratulations screen. When you are finished, just click the “Finish” button to finish customizing and
creating your company file. This will open the “QuickBooks Learning Center,” where you can watch some
sample lessons on using QuickBooks and setting up basic items. When you are finished, click the “Begin
Using QuickBooks” button to close the “QuickBooks Learning Center” and return to your company file.

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 Creating a QuickBooks Company

2.4- Using the EasyStep Interview- 2003:2005:

In QuickBooks, you use the EasyStep Interview to quickly and easily create your company file. You
complete the EasyStep Interview by entering information into the different sections of the Interview. You
must complete the required “General” section first, though. In most of the sections of the Interview if
questions are posed that you must answer and you’re unsure as to how to correctly enter your answer,
don’t worry! You can go usually go back and change your answers later. A few questions, however, will ask
you to make a decision that is not easily reversed. When this is the case, you will see an exclamation mark
in a bright yellow triangle next to those questions.
Each section of the EasyStep Interview (listed at the right side of the Interview screen) is divided into
multiple tabs that display at the top of the EasyStep Interview screen. As you complete each tab,
QuickBooks will put a blue checkmark at the top of the tab to indicate that you have completed that section.
When you have completed an entire section, QuickBooks will place a blue checkmark on the section tab
(like “General”) at the right of the EasyStep Interview.
If you are new to QuickBooks, it is recommended that you set up a company file that is not your
company file, but is similar in nature: a “dummy” company. That way, you can practice the transactions that
you will be likely to enter into your own company file without placing your own real company file in jeopardy.
It is possible to create as many company files in QuickBooks as you would like. Also, if you set up a dummy
company file, it can be easier to train others in your company in the basic bookkeeping involved with the
company without risking the integrity of your actual company data.
To create any company file in QuickBooks, you begin by selecting “File| New Company…” from the
Menu Bar. That will bring up the Easy Step Interview. Below is a description of the main sections of the
EasyStep Interview, and what you will need to accomplish in each section.

The EasyStep Interview:

Section: Description of Function:
General Lets you enter company information, choose a preliminary chart of accounts, set default
preferences, and specify a business start date. You must complete this section before you
can leave the EasyStep Interview.
Income & Lets you review the income and expense accounts on your business’s chart of accounts, and
Expenses also allows you to enter in new accounts. You cannot rename or remove accounts at this
point.
Income Details Lets you decide whether business income is from services and/or products you sell. Based
on your responses, QuickBooks determines which parts of the income and accounts
receivable features you will be using. You will also set up your Accounts Receivable here.
Opening Allows you to enter information about the customers who owe you money as of your start
Balances date, vendors to whom you owe money as of the start date, and all the balances in your
balance sheet accounts as of your start date.
What’s Next This section describes some common tasks in QuickBooks that you may want to complete
after you’ve gone through the other sections of the Interview.

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2.4- Using the EasyStep Interview- 2003:2005 (cont.):

Let’s look at stepping through the EasyStep interview. First, we will need to complete the “Welcome”
section. You start by clicking the “Next” button at the bottom of the EasyStep Interview screen to continue to
the next screen. This first screen simply informs us that we can find a QuickBooks Pro Advisor to assist us
in setting up our company file, if needed. Click the “Next” button to continue.
In QuickBooks 2005 and 2004, the next screen will ask you if you want to create your company file
by converting Quicken data. If you aren’t, then just click “Next” to continue setting up a QuickBooks
company file. If you do want to do this, however, you can click the “Convert Quicken Data…” button. This
will launch the “Important Documentation” window. Click “Convert” to launch the “Convert a Quicken” file
dialog box, where you can select your Quicken data file to convert.
In QuickBooks 2003, or if you clicked “Next” in 2005 or 2004 instead of converting Quicken data,
then the next screen mentions that you can skip the EasyStep Interview if you’re comfortable setting up
company files. This is not recommended for new users. So let’s click the “Next” button to continue using the
EasyStep Interview.
The next screen tells us the ways we have of getting around in the EasyStep Interview. You click the
“Next” button to continue to the next screen or click the “Prev” button to go back to the previous screen in
the EasyStep Interview. It also mentions that you can click the “Leave” button in the lower right corner of the
EasyStep Interview to leave and come back at a later point. However, you must complete the required
“General” section first or you will not save your company file. Click the “Next” button to continue.
Next, it mentions that the EasyStep interview is broken into sections and topics. Click the “Next”
button to continue to the next screen, which tells you that you can feel free to change your answers at any
point. However, questions that are difficult or impossible to reverse will be indicated by putting this symbol
next to them: a yellow triangle with a thick black exclamation point inside it. Click the “Next” button to
continue. That’s it for the “Welcome” section. Notice that QuickBooks has placed a big blue checkmark on
that tab at the top of the EasyStep Interview to indicate that you have completed it. Click the “Next” button to
continue to the “Company Info” tab of the “General” section.

Completed Current
tab section

“Prev” button “Next” button “Leave” button

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2.4- Using the EasyStep Interview- 2003:2005 (cont.):

When you click “Next” you will begin the “Company Info” section. Click “Next” again to open a
screen where you will enter your company’s name. Then click “Next” again to enter your company’s
address and contact information. Fill out the screens by typing the information into the appropriate boxes
and pressing “Tab” on your keyboard to move from box to box in the form. As with all the screens in the
Interview, you will press “Next” when you are finished entering information into each screen to continue on.
After filling out the address screen and clicking “Next,” you will need to fill out your company’s tax ID
number (or Social Security Number) and select its starting months for its fiscal and income tax years from
the drop-downs available. Click “Next” to move to a screen where you will then pick the type of tax forms
your company will file based on its legal structure.
When you click “Next” to continue, QuickBooks asks you to select the company type from an
“Industry” list that most closely resembles your own business. From this response, QuickBooks will create a
default chart of accounts for your company. It will also set up other types of lists that would be appropriate
for your company, such as payment methods, customer and vendor types, and payment terms. If your
company type isn’t listed, select the one that most closely matches it just to get a head start on creating
your chart of accounts. Later on you can modify it however you wish. When you click “Next” to continue,
QuickBooks informs you that you can look for setup tips with small green arrows next to them through the
rest of the Interview. Click “Next” to continue. The next screen informs you that QuickBooks is ready to
create your company file now. Click “Next” to continue. QuickBooks will launch a “Filename for New
Company” dialog box. Use the “Save in:” drop-down to select where to save the company file, if you wish to
change it from the default folder location. The company’s “File name:” will default to the name of the
company that you entered. You can change it if necessary by typing in a new name. When you are ready to
create the company file, click “Save” to continue.
After creating the company file and saving it to your computer, the next screen displays your Income
and Expense accounts. Review them and note what accounts you want to add or remove. Unless you want
to create every account in your chart of accounts by hand, click the “Yes” option to accept the accounts
given and then click “Next” to continue. QuickBooks will then want to know how many people will need to
access your company’s files. In QuickBooks 2003, answer that question to finish the “Company Info”
section and to move to the “Preferences” section. In QuickBooks 2005 and 2004, when you click “Next” you
will have to create the “Admin” user account. This is the name of the master user of your QuickBooks file. If
you type a password, never lose it or forget it. If you click “Next” without specifying a password, QuickBooks
will urge you to set a password. You can click “No” to continue without setting up a password, or you can
then click “Yes” to create one and then click “Next” to continue to the “Preferences” section.
In the “Preferences” section, you will need to answer questions about your business that will indicate
to QuickBooks which features will need to be turned on or off. Many of these features can be enabled or
disabled in the future in the “Preferences” dialog box that you can select from “Edit” in the Menu Bar of the
company file. The different features that can be set on or off in this section are: sales tax, your default
invoice format, payroll, estimates, progress invoicing (partial billing), time tracking, using classes, bill
payment method (accounts payable), reminders, and finally whether you want to use cash or accrual
accounting as the basis for your reports. Once again, throughout each screen in this section, answer the
questions posed to you in each window as is appropriate for the company file that you are creating. When
done with each screen, click “Next” to continue to the next screen until you reach the “Start Date” tab.
In QuickBooks 2003, to complete the “General” section, you will simply need to enter in a start date
for your company. In QuickBooks 2005 and 2004, you will need to decide what date to use as well.
However, the option of using the beginning of the year is offered, as well as the ability to set a different date.

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2.4- Using the EasyStep Interview- 2003:2005 (cont.):

So what is the start date? This critical piece of information is probably the most important aspect of
creating a company file that has accurate beginning balances. The start date is the starting point for all of
your QuickBooks accounts. The start date is the date for which you will provide QuickBooks all of the
necessary information on the balances in your accounts. Because of this, you may want to pick a date that
isn’t too far in the past since you will have to record every one of your company’s transactions that have
occurred since that date through today to create a company file that is accurate financially and also able to
be used for the daily data entry!
Many people will choose to use the last day of the last financial period (quarter, month, etc…) as the
start date. Remember that you will have to enter in all of the transactions that have occurred since the start
date through today (or at least accurate journal entries representing the transaction values) to use the
company file and have accurate balances, so don’t go too far into the past if you don’t want to spend hours
performing data entry! Enter the starting date in this window of the EasyStep Interview, and then click “Next”
to continue. That ends the “General” section. Click “Next” to start the “Income & Expenses” section.
When you chose an industry model for your business accounts, QuickBooks made some default
accounts that many businesses in that industry would use. The “Income and Expenses” section of the
EasyStep Interview allows you to add accounts to your “Income” accounts and your “Expense” accounts. In
this section, you can just select “No” for all of the three questions that will be asked as you click your way
through this section. While it is possible to add accounts here, you can’t delete or rename accounts here, so
you may as well save all of the adding, deleting, and renaming of the Income and Expense accounts until
later. These accounts can be easily changed immediately after completing the EasyStep Interview.
However, you can and should add any accounts for which you need enter opening balances in order to
create an accurate balance sheet. If you need to add accounts, click “Yes” to adding accounts and type the
account’s name and opening balance. Repeat as needed until you arrive at the “Income Details” section.
The next section is the “Income Details” section of the EasyStep Interview. You should at least
complete the “Introduction” tab of this section. This will tell QuickBooks whether you need an Accounts
Receivable account and whether you want to be able to record statement charges. Statement charges
allow you to assess a charge to a customer’s accounts receivable account. These charges can then appear
in a billing statement for companies that do that type of billing.
You can also set up any item on the “Items” and “Inventory” tabs. You can set up “Service,” “Non-
inventory parts,” and “Other Charge” items. If you want to set these items up at a later time, you can skip
this section and do that after completing the EasyStep Interview. You also can set up items that you would
like to track as “Inventory items” in QuickBooks. QuickBooks will track the quantity and value of these items
as you purchase and sell them. If you had an initial inventory as of the start date that you want to add, you
can input the items here. You can also set these up after you complete the EasyStep Interview, if desired.
The “Opening Balances” section of the EasyStep Interview is where you enter in the amounts owed
to you from customers, amounts you owe to vendors, and the balances in your balance sheet accounts as
of your start date. It is recommended that you enter in the opening balances from within the EasyStep
Interview. If you enter your beginning balances in the EasyStep Interview, it will make it easier when you’re
ready to use QuickBooks for daily business transactions.
The opening balances are important to your Balance Sheet. Without accurate opening balances as
of your start date QuickBooks cannot create an accurate initial balance sheet. In addition, if you start with
accurate balances as of your start date, you can reconcile your QuickBooks bank accounts with your actual
bank statements, and your QuickBooks checking accounts will show the actual amount of money that you
have in the bank.

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2.4- Using the EasyStep Interview- 2003:2005 (cont.):

The opening balance for a QuickBooks bank account is the amount of money in the account on your
start date. You could determine this amount in one of two ways: you can use the ending balance on the last
bank statement that was on or immediately prior to your start date, or you can use an actual balance sheet
prepared by your accountant. The latter option would, of course, be the most preferable.
In QuickBooks 2005 and 2004, you also have an additional screen that asks if you wish to print your
checks and deposit slips in QuickBooks in this section.
The “What’s Next?” section shows you the tasks that you may want to set-up after you finish the
EasyStep Interview. You simply click through this section, reading the information on each screen. When
you are completely finished, you can click the “Leave” button in the lower right corner to return to your
company file. At that point, you can enter in any additional information that you need to create for the
company file, and enter in any remaining beginning balances. Then you have to input all of the transactions
that have occurred since the start date through the current date to bring QuickBooks up to date. This will
then allow you to enter the daily transactions for your company file as they occur.

2.5- Returning to the EasyStep Interview- 2006:2012:

In QuickBooks 2006 through 2012, you can leave the EasyStep Interview at any point after you have
saved the company file by clicking the “Leave…” button in the lower left corner of the EasyStep Interview.
When you return at a later point to continue filling out the EasyStep Interview (which can be a lengthy
process), just opening the company file will automatically return you to the point at which you left off in the
EasyStep Interview. Unlike previous versions of QuickBooks, once you have completed the EasyStep
Interview in QuickBooks 2006 through 2012, you cannot return to the EasyStep Interview again. From that
point on, you can only change the default preferences of the program be selecting “Edit| Preferences…”
from the Menu Bar and then changing the settings shown in the “Preferences” dialog box.

2.6- Returning to the EasyStep Interview- 2003:2005:

In QuickBooks 2003 through 2005, you can leave the EasyStep Interview at any point after you have
completed the “General” section by clicking the “Leave” button in the lower right corner of the EasyStep
Interview. If you want to return at a later point to change answers or to continue filling out the EasyStep
Interview (which can be a lengthy process), just select “File| EasyStep Interview” to bring it back at a later
point.

2.7- Creating a Backup File- 2007:2012:

You should always backup your data to prevent against data loss. You must be in single-user mode
to do this. QuickBooks recommends that you backup your files daily. That way, if the data in your company
file becomes corrupted or lost, you can restore a copy of the file from a backup. After restoring the file,
however, you will need to re-enter all of the transactions that you entered since you created the backup file,
but that is far less work than having to re-create the entire company file.
To create a backup copy of the current company file in QuickBooks 2011:2012, select “File| Create
Backup…” from the Menu Bar. If using QuickBooks 2007 through 2010, select “File| Save Copy or
Backup…” from the Menu Bar, select the “Backup copy” option button, and then click the “Next” button.

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2.7- Creating a Backup File- 2007:2012 (cont.):

Next you select whether you wish to save the backup file locally or online. If you want to store the
backup copy on removable media, such as a CD, DVD, or network drive that is backed up routinely, then
select the “Local backup” option button. You can select the “Online backup” option to try the “QuickBooks
Online Backup” feature, if desired. This is an additional fee-based service that you will have to pay for once
any free trial offer expires. For the purpose of this example, we will demonstrate creating a local backup. To
do this, select the “Local backup” option and then click the “Options” button at the bottom of the screen to
open the “Backup Options” window. This window allows you to specify the settings of your local backup
copy.
In the “Local backup only” section, enter the pathway or folder directory where you want to store the
backup copy. If desired, you can click the “Browse…” button to open a “Browse for Folder” dialog box. This
will allow you to visually select the folder into which you want to save the backup copy. Once you have
selected the folder where you want to save the copy, click the “OK” button to close the dialog box. Your
selection will then appear in the “Folder” text box in the “Backup Options” window. You can then check or
uncheck either of the two options shown in the “Local backup only” section of the window, as desired.
In the “Online and local backup” section, you can set QuickBooks to remind you to create a backup
after you close the company file a specified number of times, if desired. You can also select the option
button that shows what type of inspection to perform on the backup copy that you create. This ensures that
your backup copy is free from data corruption, as well. Once you have made your choices in this window,
click the “OK” button to apply them and close the window. You can then click the “Next” button to continue.
In the next screen, you can schedule when you want the backup to occur. To create a backup
immediately, select the “Save it now” option. To save right now and also set future backup times, choose
the second option. To only schedule future backups, choose the third option. For the purpose of this
example, we will select the “Save it now” choice. Once you have made your selection, click the “Next”
button to continue. If you do this, QuickBooks will then open the “Save Backup to…” dialog box. Here you
can change the file name, if desired. Otherwise, just click the “Save” button to save the backup copy. Once
QuickBooks has finished creating the backup copy, it will display a small message box informing you of its
success.

2.8- Creating a Backup File- 2003:2006:

You should always backup your data to prevent against data loss. You must be in single-user mode
to do this. QuickBooks recommends that you backup your files daily. That way, if you lose your data, you
can retrieve a copy from a backup. You will have to re-enter all of the transactions that you entered since
you created the backup file, but that is far less work than having to re-create the entire company file.
To create a backup copy of the current company file, select “File| Back Up…” from the Menu Bar. If
you are using QuickBooks 2006, you may see a message box informing you of the new portable company
file feature. Read this message and then click “OK” to continue. Next you will see the “QuickBooks Backup”
dialog box.
On the “Back Up Company File” tab, you will see the filename and location of the current company
file shown in the “Current Company:” section at the top of this tab. In the “Back Up Current Company:”
section, you can select where you want to place the backup copy. If you will be placing the backup copy on
a network drive or removable media of some type, you can select the “Disk:” option. This is the most
common option. QuickBooks also will allow you to select the “Online:” option, which allows you to create an
online backup copy of your company file. This is a free trial offer, and you will need to pay for the service

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2.8- Creating a Backup File- 2003:2006 (cont.):

should you wish to continue it beyond the free trial.

Assuming that you select the “Disk:” option, you can then click the “Browse” button to open the
“Back Up Company to…” dialog box. You use the “Save in:” drop-down to select the location to which you
want to save the backup copy. You can also edit the name of the file shown in the “File name:” box to
include the date of the backup, if desired. When you are ready to continue, click the “Save” button to return
to the “QuickBooks Backup” dialog box. Here you can select any additional options shown in the “Back Up
Options:” section of the dialog box. Checking the “Verify data integrity (highly recommended)” option will
ensure that the backup copy that you are about to create will be verified to ensure that the data was copied
successfully and doesn’t contain any data corruption errors. When you are ready to create the backup copy,
click the “OK” button.

2.9- Restoring a File- 2007:2012:

If you corrupt your company’s data file and need to restore the data from a backup copy, you can- as
long as you created backup copies. You must, however, be in single-user mode to do this. When you
restore your company file, you overwrite your corrupted company data with the data that you saved when
you created the backup copy. You will then have to re-enter all of the transactions that occurred since the
date that you created the backup copy up through the current day to bring your company file up to date.
To restore a corrupted company file from a backup copy, select “File| Open or Restore Company…”
from the Menu Bar. In this situation, you will want to restore your data from a backup copy. So you would
select the “Restore a backup copy” option button. Then click the “Next” button to continue.
The next window asks you where the backup copy that you want to use is saved. You can select
either “Local backup,” if you are selecting a backup file to use from your network or from removable media.
If you saved the backup online using that feature, then select the “Online backup” option button. For this
example, we will select the “Local backup” option. Once you have made your choice, click the “Next” button
to continue. QuickBooks will next open the “Open Backup Copy” dialog box. Use this dialog box to navigate
to and then select the backup copy that you want to use for the restore process. Once you have selected
the file to use, click the “Open” button. You will next need to select the file that you wish to overwrite with the
selected backup copy. Just click the “Next” button to continue. In the “Save Company File As” dialog box
that appears, you can navigate to and then select the company file that you want to overwrite with data from
your selected backup copy. Once you have made your selection, click the “Save” button to continue. If you
are overwriting a corrupted company file, QuickBooks may ask you if you wish to overwrite the file. You can
click “Yes” in the message box that appears to overwrite the selected file.
Next, QuickBooks cautions you to be absolutely sure that you want to do this by making you type the
word “YES” into the text box in the “Delete Entire File” window since you will likely be deleting the most
current copy of your company file. You can type the word “yes” into the box and then click “OK” to begin
overwriting the corrupted company file with the data from your selected backup file. Once QuickBooks has
successfully restored the company file, it will inform you of that fact in a message box. Just click the “OK”
button to finish. You will then need to re-enter any transactions that were entered into the company file from
the time that the backup copy was created until today to make the company file “current” once again.

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 Creating a QuickBooks Company

2.10- Restoring a File- 2003:2006:

If you corrupt your data file and need to restore the data from a backup copy, you can- as long as
you created backup copies. You must, however, be in single-user mode to do this. When you restore your
company file, you overwrite your corrupted company data with the data that you saved to the backup copy.
You will then have to re-enter all of the transactions that occurred since the date that you created the
backup copy up through the current day to bring your company file up to date.
To restore a company file, select “File| Restore…” from the Menu Bar. Then click the “Browse”
button in the “Get Company Backup From:” section to use the “Restore From” dialog box to select the folder
that contains the backup file. Click on the backup copy file to select it, and then click “Open” to return to the
“Restore Company Backup” dialog box.
Next, click the “Browse” button in the “Restore Company Backup To:” to select the location of the
QuickBooks company file that you want to overwrite with the data from the backup copy that you just
selected. Use the “Restore To” dialog box to navigate to the folder that contains the company file you wish
to overwrite. Select it and then click “Save” to return to the “Restore Company Backup” dialog box.
Next, click “Restore” to begin the restoration of the company file. You will need to click “Yes” at the
“Backup” dialog box to continue to overwrite the company file. Then you must type the word “Yes” to delete
the entire file and replace it with the data from the backup copy. The file will then open up and you can enter
in all of the transactions that occurred from the date of the backup copy through the current date to bring the
QuickBooks company file back up to date.

2.11- Setting Up Users:

QuickBooks allows you to set up users and passwords for the individuals that will access your
company file. You can also decide which types of activities users can perform and what areas of the
application they can access. You can set up the users by selecting “Company| Set Up Users and
Passwords| Set Up Users…” in QuickBooks 2010 through 2012, or by selecting “Company| Set Up
Users…” from the Menu Bar in QuickBooks 2003:2009. That will open the “User List” dialog box.
In QuickBooks 2003, you will first need to create a master user, usually called “Admin,” that can
access all of the areas of QuickBooks. That user account can then create the other user accounts. In
QuickBooks 2004 through 2012, you typically create the “Admin” user account during the EasyStep
Interview. That is then the default user account for all activities until you create more user accounts.
After you are logged in as the “Admin” user, you can click the “Add User…” button in the “User List”
dialog box that appears to create additional profiles and decide which areas of the application the other
users that you create will have access to by using the wizard provided.
Within the wizard provided, you specify the user name and password. You then click the “Next”
button in each screen, answering questions posed. The screens allow you to decide what areas of the
company file the user will have access to, and what editing changes they can perform in each area to which
access is granted. When you are finished, click the “Finish” button in the wizard to add the user account into
the “User List” dialog box.
You can also select a user account from the “User List,” and then click the “Edit User…” button to
change the security settings for the selected user through the wizard provided. You can also select a user in
the “User List,” and click “Delete User” to delete the user. You will need to click “Yes” to delete the selected
user permanently. When you are finished with this dialog box, you can click the “Close” button to close it.

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 Creating a QuickBooks Company

2.12- Single and Multiple User Modes:

Some activities, like doing a backup or restoring a company file, require that you open QuickBooks
in single-user mode. You must make sure that all of the other users of the application are logged off before
you switch user modes.
If you need to have multiple people accessing the same QuickBooks data file, then you can switch
to multiple-user mode. However, QuickBooks must be set up to allow multi-user access before you can
switch modes. If you try to switch to multi-user when you are not set up for that, QuickBooks will helpfully
prompt you to set up QuickBooks for multi-user access. Once you have configured QuickBooks to allow
multi-user access, you then have the ability to switch between single-user and multi-user access.
When you are in multiple user mode, you will have to enter your username and password in order to
open and access the company data file on the shared computer. To switch user modes once you have
multiple users enabled, just select “File| Switch to Multi-user Mode” or “File| Switch to Single-user Mode”
from the Menu Bar. This is a “toggle” command and will always switch to the opposite command from the
user mode in which you are currently running.

2.13- Closing Company Files:

If you want to close your company file, you can simply select “File| Close Company” from the Menu
Bar. That will leave the QuickBooks application open so that you may open up another company file if you
would like.

2.14- Opening a Company File- 2007:2012:

If you would like to open a company file in QuickBooks 2007:2012, you can select “File| Open or
Restore Company…” from the Menu Bar. Alternately, if the “No Company Open” dialog box is showing
onscreen, you can click the “Open or restore an existing company” button to launch the same dialog box.
Either way, the “Open or Restore Company” dialog box appears. Here you can select the “Open a
company file” option button, and then click the “Next” button to continue. That will then launch the “Open a
Company” dialog box. Use this dialog box to navigate to the folder in your computer that contains the
company file that you would like to open. The company files within the selected folder will appear in the
white box below. Just double-click on the one you want to open, or click it once to select it and then click the
“Open” button in the lower right corner of the dialog box to open the selected company file.

2.15- Opening a Company File- 2003:2006:

If you would like to open a company file, you can select “File| Open Company…” from the Menu Bar.
If the “No Company Open” dialog box is showing, you can also click the “Open an existing company” button
to launch the same dialog box.
Either way, it will bring up the “Open a Company” dialog box. Here you can use the “Look in:” drop-
down at the top of the dialog box to navigate to the folder in your system that contains the company file that
you would like to open. The files will appear in the white box below that. Just double-click on the one you
want to open, or click it once to select it and then click the “Open” button in the lower right corner of the
dialog box to open it up.

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 ACTIONS-
Creating a QuickBooks Company
CREATING A NEW COMPANY:

1. Start QuickBooks.
2. Select “File| New Company…” from the Menu Bar or click the “Create a new company” button in the “No
Company Open” dialog box that appears in QuickBooks when there is no company file opened.

NAVIGATING THROUGH THE EASYSTEP INTERVIEW:

1. You complete the EasyStep Interview by entering information into the different screens shown within the
Interview. Once you have filled-in the information in a screen, you can click the “Next >” button to
proceed to the next screen.
2. Once you have answered all of the questions, you can click the “Finish” or “Go to Setup” button to
create your company file and start using QuickBooks.
3. If necessary, you can click the “Leave…” button to exit the EasyStep Interview.

RETURNING TO THE EASYSTEP INTERVIEW- 2006:2012:

1. In QuickBooks 2006 through 2012, you can leave the EasyStep Interview by clicking the “Leave…”
button in the lower left corner of the EasyStep Interview. When you return at a later point, just opening
the company file will automatically return you to the point at which you left off in the EasyStep Interview.
2. However once you have completed the EasyStep Interview, you cannot return to the EasyStep Interview
again. After that, you can only change the default preferences of the program be selecting “Edit|
Preferences…” from the Menu Bar and changing the settings shown in the “Preferences” dialog box.

RETURNING TO THE EASYSTEP INTERVIEW- 2003:2005:

1. To return to the EasyStep Interview, select “File| EasyStep Interview” from the Menu Bar.

CREATING A BACKUP FILE- 2007:2012:

1. To create a backup copy of the current company file in QuickBooks 2011:2012, select “File| Create
Backup…” from the Menu Bar.
OR
1. If using QuickBooks 2007 through 2010, select “File| Save Copy or Backup…” from the Menu Bar,
select the “Backup copy” option button, and then click the “Next” button.
2. Next you select whether you wish to save the backup file locally or online. If you want to store the
backup copy on removable media, such as a CD, DVD, or network drive that is backed up routinely,
then select the “Local backup” option button. You can select the “Online backup” option to try the
“QuickBooks Online Backup” feature, if desired. This is an additional fee-based service, however.
3. If you select the “Local backup” option, then click the “Options” button at the bottom of the screen to
open the “Backup Options” window. This window allows you to specify the settings of your local backup
copy.

(cont.)

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 ACTIONS-
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CREATING A BACKUP FILE- 2007:2012 (CONT.):

4. In the “Local backup only” section, enter the pathway or folder directory where you want to store the
backup copy. If desired, you can click the “Browse…” button to open a “Browse for Folder” dialog box.
This will allow you to visually select the folder into which you want to save the backup copy.
5. Once you have selected the folder where you want to save the copy, click the “OK” button to close the
dialog box. Your selection will then appear in the “Folder” text box in the “Backup Options” window. You
can then check or uncheck either of the two options shown in the “Local backup only” section of the
window, as desired.
6. In the “Online and local backup” section, you can set QuickBooks to remind you to create a backup after
you close the company file a specified number of times, if desired. You can also select the option button
that shows what type of inspection to perform on the backup copy that you create. This ensures that
your backup copy is free from data corruption, as well.
7. Once you have made you desired choices in this window, click the “OK” button to apply them and close
the window. You can then click the “Next” button to continue.
8. In the next screen, you can schedule when you want the backup to occur. To create a backup
immediately, select the “Save it now” option. To save right now and also set future backup times,
choose the second option. To only schedule future backups, choose the third option.
9. Once you have made your selection, click the “Next” button to continue. QuickBooks will then open the
“Save Backup to…” dialog box. Here you can change the file name, if desired. Otherwise, just click the
“Save” button to save the backup copy.
10. Once QuickBooks has finished creating the backup copy, it will display a small message box informing
you of its success.

CREATING A BACKUP FILE- 2003:2006:

1. Select “File| Back Up…” from the Menu Bar. If you are using QuickBooks 2006, you may see a message
box informing you of the new portable company file feature. Read this message and then click “OK” to
continue. Next you will see the “QuickBooks Backup” dialog box.
2. On the “Back Up Company File” tab, you will see the filename and location of the current company file
shown in the “Current Company:” section at the top of this tab. In the “Back Up Current Company:”
section, you can select where you want to place the backup copy.
3. If you will be placing the backup copy on a network drive or removable media of some type, you can
select the “Disk:” option. This is the most common option. QuickBooks also will allow you to select the
“Online:” option, which allows you to create an online backup copy of your company file. This is a free
trial offer, and you will need to pay for the service should you wish to continue it beyond the free trial.
4. Assuming that you select the “Disk:” option, you can then click the “Browse” button to open the “Back
Up Company to…” dialog box. You use the “Save in:” drop-down to select the location to which you
want to save the backup copy.
5. You can also edit the name of the file shown in the “File name:” box to include the date of the backup, if
desired. When you are ready to continue, click the “Save” button to return to the “QuickBooks Backup”
dialog box. Here you can select any additional options shown in the “Back Up Options:” section of the
dialog box. Checking the “Verify data integrity (highly recommended)” option will ensure that the backup
copy that you are about to create will be verified to ensure that the data was copied successfully and
doesn’t contain any data corruption errors.
6. When you are ready to create the backup copy, click the “OK” button.

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RESTORING A COMPANY FILE- 2007:2012:

1. To restore a corrupted company file from a backup copy, select “File| Open or Restore Company…”
from the Menu Bar. In this situation, you will want to restore your data from a backup copy. So you
would select the “Restore a backup copy” option button. Then click the “Next” button to continue.
2. The next window asks you where the backup copy that you want to use is saved. You can select either
“Local backup,” if you are selecting a backup file to use from your network or from removable media. If
you saved the backup online using that feature, then select the “Online backup” option button.
3. For this example, we will select the “Local backup” option. Once you have made your choice, click the
“Next” button to continue. That will then cause QuickBooks to open the “Open Backup Copy” dialog box.
You use this dialog box to navigate to and then select the backup copy that you want to use for the
restore process. Once you have selected the backup copy to use, click the “Open” button.
4. Next, you will next need to select the file that you wish to overwrite with the selected backup copy. Just
click the “Next” button to continue.
5. In the “Save Company File As” dialog box that appears, you can navigate to and then select the
company file that you want to overwrite with data from your selected backup copy. Once you have made
your selection, click the “Save” button to continue.
6. If you are overwriting a corrupted company file, QuickBooks may ask you if you wish to overwrite the
file. You can click “Yes” in the message box that appears to overwrite the selected file.
7. Next, QuickBooks cautions you to be absolutely sure that you want to do this by making you type the
word “YES” into the text box in the “Delete Entire File” window. You can type the word “yes” into the box
and then click “OK” to begin overwriting the corrupted company file with the data from your selected
backup file.
8. Once QuickBooks has successfully restored the company file, it will inform you of that fact in a message
box. Just click the “OK” button to finish.
9. You will then need to re-enter any transactions that were entered into the company file from the time
that the backup copy was created until today to make the company file “current” once again.

RESTORING A COMPANY FILE- 2003:2006:

1. Select “File| Restore…” from the Menu Bar. You must be in single-user mode to do this.
2. Click the “Browse” button in the “Get Company Backup From:” section to use the “Restore From” dialog
box to select the folder that contains the backup file you want to use.
3. Click on the backup copy file to select it, and then click “Open” to return to the “Restore Company
Backup” dialog box.
4. Click the “Browse” button in the “Restore Company Backup To:” to select the location of the QuickBooks
company file that you want to overwrite with the data from the backup copy that you just selected.
5. Use the “Restore To” dialog box to navigate to the folder that contains the company file you wish to
overwrite. Select it and then click “Save” to return to the “Restore Company Backup” dialog box.
6. Click “Restore” to begin the restoration of the company file.
7. You will need to click “Yes” at the “Backup” dialog box to continue to overwrite the company file. Then
you must type the word “Yes” to delete the entire file and replace it with the data from the backup copy.
8. The file will then open up and you can enter in all of the transactions that occurred from the date of the
backup copy through the current date to bring the QuickBooks company file back up to date.

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 ACTIONS-
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SETTING UP USERS:

1. In QuickBooks 2003, you will first need to create a master user, usually called “Admin,” that can access
all of the areas of QuickBooks. That user account can then create the other user accounts.
2. In QuickBooks 2004 through 2012, you typically create the “Admin” user account during the EasyStep
Interview. That is then the default user account for all activities until you create more user accounts.
3. After you are logged in as the “Admin” user, select “Company| Set Up Users and Password| Set Up
Users…” in QuickBooks 2010:2012, or select “Company| Set Up Users…” from the Menu Bar in
QuickBooks 2003:2009.
4. Next, click the “Add User…” button in the “User List” dialog box that appears.
5. Click the “Add User…” button to bring up the “Set up user access and password” wizard.
6. Start by typing the user name into the “User Name:” text box.
7. Type a password for the user into the “Password:” text box.
8. Reconfirm the password you just typed by typing it again in the “Confirm Password:” dialog box.
9. Click the “Next” button to continue.
10. On the next screen, you can set the user to have access to only “Selected areas of QuickBooks” or “All
areas of QuickBooks.” If you select “All areas of QuickBooks,” when you click the “Next” button to
proceed, you will be finished setting up the user.
11. Click “Next” to continue.
12. If you selected “Selected areas of QuickBooks” in the last screen, then you will see the “Sales and
Accounts Receivable” screen. Here you select the option that corresponds to the type of access you
want to give the user to sales and accounts receivable, and then click “Next” to continue.
13. Next you will see the “Purchases and Accounts Payable” screen. Here you select the option that
corresponds to the type of access you want to give the user to purchases and accounts payable, and
then click “Next” to continue.
14. In the “Checking and Credit Cards” screen, select the option that corresponds to the type of access you
want to give the user to checking and credit cards in the company file, and then click “Next” to continue.
15. Next you will see the “Inventory” screen. Here you select the option that corresponds to the type of
access you want to give the user to inventory, and then click “Next” to continue.
16. Next you will see the “Time Tracking” screen. Here you select the option that corresponds to the type of
access you want to give the user to time tracking, and then click “Next” to continue.
17. Next you will see the “Payroll and Employees” screen. Here you select the option that corresponds to
the type of access you want to give the user to payroll and employees, and then click “Next” to continue.
18. In the “Sensitive Accounting Activities” screen, select the option that corresponds to the type of access
you want to give the user to sensitive accounting activities, and then click “Next” to continue.
19. In the “Sensitive Financial Reporting Activities” screen, select the option that corresponds to the type of
access you want to give the user to sensitive financial reporting, and then click “Next” to continue.
20. In the “Changing or Deleting Transactions” screen, select whether to allow the user the ability to change
or delete transactions by setting the options and then clicking “Next” to continue.
21. Review the permissions that you set for the user, and click “Finish” to add the user to the “User List.”
22. Click the “Close” button when you are finished creating all of the necessary users.

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EDITING AND DELETING USERS:

1. After you are logged in as the “Admin” user, select “Company| Set Up Users and Password| Set Up
Users…” in QuickBooks 2010 through 2012, or select “Company| Set Up Users…” from the Menu Bar in
QuickBooks 2003:2009. You will be presented with the “User List” dialog box where you can add, edit,
and delete user accounts.
2. To edit the a user, select the name of the user to edit from the user list and then click the “Edit User…”
button to edit which areas of QuickBooks they can access.
3. You can also select a user in the list and click the “Delete User” button to delete the user. You will need
to click “Yes” to delete the selected user permanently.
4. When you are finished with this dialog box, you can click the “Close” button to close it.

SWITCHING BETWEEN SINGLE-USER AND MULTI-USER MODES:

1. To switch to multi-user mode when operating in single-user mode, select “File| Switch to Multi-user
Mode” from the Menu Bar. You may be prompted to enter a user name and a password to use the file.
2. To switch to single-user mode when operating in multi-user mode, ensure that all other users have
exited the company file, and then select “File| Switch to Single-user Mode” from the Menu Bar.

CLOSING A COMPANY FILE:

1. Select “File| Close Company” from the Menu Bar.

OPENING A COMPANY FILE- 2007:2012:

1. To open a company file in QuickBooks 2007 through 2012, select “File| Open or Restore Company…”
from the Menu Bar. Alternately, if the “No Company Open” dialog box is showing onscreen, click the
“Open or restore an existing company” button to launch the same dialog box.
2. Either way, the “Open or Restore Company” dialog box appears. Here select the “Open a company file”
option button, and then click the “Next” button to continue.
3. That will then launch the “Open a Company” dialog box. Use this dialog box to navigate to the folder in
your computer that contains the company file that you would like to open. The company files within the
selected folder will appear in the white box below.
4. Just double-click on the one you want to open, or click it once to select it and then click the “Open”
button in the lower right corner of the dialog box to open the selected company file.

OPENING A COMPANY FILE- 2003:2006:

1. Select “File| Open Company…” from the Menu Bar. Alternately, if the “No Company Open” dialog box is
showing, you can also click the “Open an existing company” button to launch the same dialog box.
2. Use the “Look in:” drop-down at the top of the “Open a Company File” dialog box to navigate to the
folder that contains the file you wish to open.
3. Double-click on the company file that you wish to open from the list of files available.

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 EXERCISES-
Creating a QuickBooks Company
Purpose:

To be able to set up a basic company file; to learn how to create a backup of your company file data;
to learn how to restore your company data in case of data corruption; to learn how to close company files.

Exercise for QuickBooks 2007:2012:

1. Start the QuickBooks application, if necessary.

2. Select “File| New Company…” from the Menu Bar.
3. If using QuickBooks 2012, click the “Advanced Setup” button in the “QuickBooks Setup” window that
appears.
4. If using QuickBooks 2007:2011, in the “EasyStep Interview” window, click the “Start Interview”
button.
5. In the “Enter your company information” screen, type the information as shown in the screenshot
below, and then click the “Next >” button to continue.

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 EXERCISES-
Creating a QuickBooks Company
Exercises (cont.):

6. Select “Construction General Contractor” from the list shown in the “Select your industry” window,
and then click the “Next >” button to continue.
7. In the “How is your company organized?” screen, select the “Sole Proprietorship” option button and
then click the “Next >” button to continue.
8. Select “January” as the first month of the company’s fiscal year from the “Select the first month of
your fiscal year:” drop-down, and then click the “Next >” button to continue.
9. In the “Set up your administrator password” window, skip creating the administrator password and
just click the “Next >” button to continue.
10. In the “Create your company file” window, click the “Next >” button to continue.
11. In the “Filename for New Company” dialog box, use the “Save in:” drop-down at the top of the dialog
box to navigate to the folder into which you want to save the practice company file (like “C:\My
Documents\” or “C:\Users\Public\Public Documents\Intuit\QuickBooks\Company Files\”).
12. The name of the company file will appear in the “File name:” text box. It is usually the name of your
company file. If you want to rename the file, simply type a new name into the “File name:” text box.
As long as the “Save as type:” drop-down text box displays the text “QuickBooks Files
(*.QBW,*.QBA)," then you won’t need to type the optional “.QBW” extension in the “File name:” text
box.
13. Click the “Save” button in the lower right corner of the “Filename for New Company” dialog box to
save the practice file.
14. In the “Customizing QuickBooks for your business” window, click the “Next >” button to continue.
15. In the “What do you sell?” window, select the “Both services and products” option, and then click the
“Next >” button to continue.
16. In QuickBooks 2007:2010, in the “Do you sell products online?” window, select the “I don’t sell
online and I am not interested in doing so” option, and then click the “Next >” button to continue.
17. In the “Do you charge sales tax?” screen, select the “Yes” option, and then click the “Next >” button
to continue.
18. In the “Do you want to create estimates in QuickBooks?” window, click the “Yes” option, and then
click the “Next >” button to continue.
19. In QuickBooks 2007:2010, in the “Using sales receipts in QuickBooks” window, select the “Yes”
option, and then click the “Next >” button to continue.
20. In the “Using statements in QuickBooks” window, select the “Yes” option, and then click the “Next >”
button to continue.
21. In the “Using progress invoicing” window, select the “Yes” option, and then click the “Next >” button
to continue.
22. In the “Managing bills you owe” window, select the “Yes” option, and then click the “Next >” button to
continue.
23. In QuickBooks 2007:2010, in the “Do you print checks>” screen, select the “I print checks” option,
and then click the “Next >” button to continue.
24. In the “Tracking inventory in QuickBooks” window, select the “Yes” option, and then click the “Next
>” button to continue.
25. In QuickBooks 2007:2010, in the “Do you accept credit cards?” window, select the “I accept credit
cards and debit cards” option, and then click the “Next >” button to continue.
26. In the “Tracking Time in QuickBooks” window, select the “Yes” option, and then click the “Next >”
button to continue.
27. In the “Do you have employees?” window, select the “Yes” option.

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 EXERCISES-
Creating a QuickBooks Company
Exercises (cont.):

28. Check both the “We have W-2 employees” and “We have 1099 contractors” checkboxes.
29. Click the “Next >” button to continue.
30. In the “Using accounts in QuickBooks” window, click the “Next >” button to continue.
31. In the “Select a date to start tracking your finances” window, select the “Beginning of this fiscal year:
01/01/2011” option, or select the “Use today’s date or the first day of a quarter or month” option and
then enter “01/01/2011” into the adjacent text box.
32. When finished selecting the start date, click the “Next >” button to continue.
33. In QuickBooks 2007:2010, in the “Add your bank account” window, select the “No” option, and then
click the “Next >” button to continue.
34. In the “Review income and expense accounts” window, click the “Next >” button to continue.
35. In the “Congratulations!” window in QuickBooks 2007:2010, click the “Finish” button. In the
“Congratulations!” window in QuickBooks 2011:2012, click the “Go to Setup” button.
36. In QuickBooks 2007:2010, when the “QuickBooks Learning Center” window appears, click the
“Begin Using QuickBooks” button in the lower right corner to close the window.
37. In QuickBooks 2011:2012, when the “QuickBooks Setup” window appears, click the “X” button in the
upper right corner to close the window.
38. If using QuickBooks 2011:2012, select “File| Create Backup…” from the Menu Bar.
39. If using QuickBooks 2007 through 2010, select “File| Save Copy or Backup…” from the Menu Bar,
select the “Backup copy” option, and then click the “Next” button to continue.
40. Select the “Local backup” option button, and then click the “Options” button at the bottom of the
screen to open the “Save Backup Copy: Options” window.
41. Click the “Browse…” button in the “Local backup only” section of the window.
42. Select the same folder into which you saved the original company file to save the backup copy of the
company file using the “Browse for Folder” window.
43. Click “OK” when the folder is selected. In the message box that appears, click the “Use this location”
button. Then click the “Next” button to continue in the “Save Backup: Method” screen.
44. Select the “Save right now” option button and then click the “Next” button to continue.
45. Leave the “Filename:” the same. When you are ready, click the “Save” button to return to the
“QuickBooks Backup” dialog box.
46. Click the “OK” button at the bottom of the “QuickBooks Backup” dialog box to create the backup file.
47. Click “OK” in the message box that appears.
48. Select “File| Open or Restore Company…” from the Menu Bar.
49. Select the “Restore a backup copy (.QBB)” option, and then click the “Next” button to continue.
50. Select the “Local backup” option, and then click the “Next” button to continue.
51. Use the “Restore From” dialog box to select the backup file that you just created.
52. Once the backup file has been selected, click the “Open” button.
53. Click the “Next” button to continue.
54. In the “Restore To” dialog box, select the company file that you just created.
55. When you are ready, click the “Save” button to begin to overwrite the file.
56. Click “Yes” to the overwrite question prompt.
57. Type “yes,” and click the “OK” button to overwrite the file.
58. Click “OK” in the message box that appears.
59. If the “QuickBooks Learning Center” window appears, click the “Begin Using QuickBooks” button in
the lower right corner to close the window.
60. Select “File| Close Company” from the Menu Bar to close the company file.

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 EXERCISES-
Creating a QuickBooks Company
Purpose:

To be able to set up a basic company file; to learn how to create a backup of your company file data;
to learn how to restore your company data in case of data corruption; to learn how to set up multiple users
and switch between single-user and multi-user modes; to learn how to open and close company files.

Exercise for QuickBooks 2006:

1. Start the QuickBooks application, if necessary.

2. Select “File| New Company…” from the Menu Bar.
3. In the “EasyStep Interview” window, click the “Start Interview” button.
4. In the “Enter your company information” screen, type the information as shown in the screenshot
below, and then click the “Next >” button to continue.

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 EXERCISES-
Creating a QuickBooks Company
Exercises (cont.):

5. In the “Set up your administrator password” window, skip creating the administrator password and
just click the “Next >” button to continue.
6. In the “Create your company file” window, click the “Next >” button.
7. In the “Filename for New Company” dialog box, use the “Save in:” drop-down at the top of the dialog
box to navigate to the folder into which you want to save the practice company file (like “C:\My
Documents\” or “C:\Program Files\Intuit\QuickBooks Pro\”).
8. The name of the company file will appear in the “File name:” text box. It is usually the name of your
company file. If you want to rename the file, simply type a new name into the “File name:” text box.
As long as the “Save as type:” drop-down text box displays the text “QuickBooks Files
(*.QBW,*.QBA)," then you won’t need to type the optional “.QBW” extension in the “File name:” text
box.
9. Click the “Save” button in the lower right corner of the “Filename for New Company” dialog box to
save the practice file.
10. In the “Customizing QuickBooks for your business” window, click the “Next >” button to continue.
11. Select “Construction” from the list shown in the “Select your industry” window, and then click the
“Next >” button to continue.
12. In the “What do you sell?” window, select the “Both services and products” option, and then click the
“Next >” button to continue.
13. In the “Do you sell products online?” window, select the “I don’t sell online and I am not interested in
doing so” option, and then click the “Next >” button to continue.
14. In the “Do you charge sales tax?” screen, select the “Yes” option, and then click the “Next >” button
to continue.
15. In the “Do you want to create estimates in QuickBooks?” window, click the “Yes” option, and then
click the “Next >” button to continue.
16. In the “Using sales receipts in QuickBooks” window, select the “Yes” option, and then click the “Next
>” button to continue.
17. In the “Using statements in QuickBooks” window, select the “Yes” option, and then click the “Next >”
button to continue.
18. In the “Using progress invoicing” window, select the “Yes” option, and then click the “Next >” button
to continue.
19. In the “Managing bills you owe” window, select the “Yes” option, and then click the “Next >” button to
continue.
20. In the “Tracking inventory in QuickBooks” window, select the “Yes” option, and then click the “Next
>” button to continue.
21. In the “Do you accept credit cards?” window, select the “I accept credit cards and debit cards”
option, and then click the “Next >” button to continue.
22. In the “Tracking Time in QuickBooks” window, select the “Yes” option, and then click the “Next >”
button to continue.
23. In the “Do you have employees?” window, select the “Yes” option.
24. Check both the “We have W-2 employees” and “We have 1099 contractors” checkboxes.
25. Click the “Next >” button to continue.
26. In the “Using accounts in QuickBooks” window, click the “Next >” button to continue.
27. In the “Enter your start date” window, enter (or select) “01/01/2006,” and then click the “Next >”
button to continue.

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 EXERCISES-
Creating a QuickBooks Company
Exercises (cont.):

28. In the “Add your bank account” window, select the “Yes” option, and then click the “Next >” button to
continue.
29. In the “Tell us about your bank account” window, type “Checking” into the “Bank account name” text
box.
30. Type “0123456” into the “Bank account number” text box.
31. Select the “Before” option, and then click the “Next >” button to continue.
32. In the “Enter your bank statement information” window, enter (or select) “12/31/2005” in the
“Statement ending date” text box.
33. Enter “15000” into the “Statement ending balance” text box, and then click the “Next >” button to
continue.
34. In the “Review bank accounts” window, select the “No” option, and then click the “Next >” button to
continue.
35. In the “Review expense accounts” window, select the “Yes” option, and then click the “Next >” button
to continue.
36. In the “Review income accounts” window, select the “Yes” option, and then click the “Next >” button
to continue.
37. In the “Congratulations” window, click the “Finish” button.
38. When the “QuickBooks Learning Center” window appears, click the “Begin Using QuickBooks”
button in the lower right corner to close the window.
39. Select “File| Back Up…” from the Menu Bar, and click the “OK” button in the message box that
appears to continue.
40. Click the “Browse…” button in the “Back Up Current Company” section of the “Back Up Company
File” tab in the “QuickBooks Backup” dialog box.
41. Select “C:\Program Files\Intuit\QuickBooks Pro\” as the folder into which you will save the backup
copy of the company file in the “Back Up Company to…” dialog box. Leave the “Filename:” the
same. When you are ready, click the “Save” button to return to the “QuickBooks Backup” dialog box.
42. Click the “OK” button at the bottom of the “QuickBooks Backup” dialog box to begin creating the
backup file.
43. Click “Yes” in the message box that appears to back it up on your hard drive.
44. Click “OK” in the message box that appears.
45. Select “File| Restore…” from the Menu Bar.
46. Click the “Browse” button in the “Get Company Backup From:” section at the top of this window to
select the backup file that you just created.
47. Click the “Browse” button in the “Restore Company Backup To:” section at the bottom of the window,
and select the name of the sample file that you just created (California Construction Company).
48. When you are ready, click the “Restore” button to overwrite the file.
49. Click “Yes” to the overwrite question prompt.
50. Type “yes,” and click the “OK” button to overwrite the file.
51. Click “OK” in the message box that appears.
52. If the “QuickBooks Learning Center” window appears, click the “Begin Using QuickBooks” button in
the lower right corner to close the window.
53. Select “Company| Set Up Users…” from the Menu Bar.
54. Click the “Close” button to close the “User List” dialog box.

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 EXERCISES-
Creating a QuickBooks Company
Exercises (cont.):

55. Select “File| Switch to Multi-User Mode” from the Menu Bar.
56. Click “Yes” at the message prompt to allow multi-user access, if necessary. Then click the “OK”
button in the “Multi-user setup information” message box that appears, if necessary.
57. Click “No” in the “Create New Users” message box that appears.
58. Select “File| Switch to Single-User Mode” form the Menu Bar.
59. Click “OK” at the message prompt.
60. Select “File| Close Company” from the Menu Bar to close the company file.

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 EXERCISES-
Creating a QuickBooks Company
Purpose:

To be able to set up a basic company file; to learn how to create a backup of your company file data;
to learn how to restore your company data in case of data corruption; to learn how to set up multiple users
and switch between single-user and multi-user modes; to learn how to open and close company files.

Exercise for QuickBooks 2003:2005:

1. Start the QuickBooks application, if necessary.

2. Select “File| New Company…” from the Menu Bar.
3. Click the “Next” button to begin the “General” section.
4. Click “Next” after reading about using a QuickBooks Pro Advisor to set up your company file. If using
QuickBooks 2003, skip to step #6.
5. If using QuickBooks 2005 or 2004, click “Next” to continue and do not set up the company from
Quicken data.
6. Do not skip the Easy Step Interview. Click “Next” to continue, instead.
7. Read about how to navigate through the EasyStep Interview, and then click “Next” to continue.
8. Read about how the EasyStep is divided into sections and topics, and then click “Next” to continue.
9. Read about how you can change your answers, and notice the icon that indicates when a question
cannot be easily reversed (if it is possible to reverse at all). Click the “Next” button to continue.
10. After completing the “Welcome” section, click the “Next” button to continue.
11. On the next screen, it informs you of what you will be setting up in the “Company Info” section of the
EasyStep Interview. Click the “Next” button to continue.
12. Type “California Construction Company” in the “Company Name” text box.
13. Press the “Tab” key on your keyboard.
14. Notice that the “Legal Name” has filled in with the same name you just typed.
15. Click “Next” to continue.
16. In the “Your company information” screen, type the information as shown in the screenshot below,
and then click the “Next” button to continue.

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 EXERCISES-
Creating a QuickBooks Company
Exercises (cont.):

17. In the “Other company information” screen, type the company’s FEIN number in the top text box.
Use the value of “94-1234567” as the FEIN for our company.
18. Select “January” as the first month in the company’s income tax year from the “Enter the first month
of your income tax year:” drop-down.
19. Select “January” as the first month of the company’s fiscal year from the “Enter the first month in
your fiscal year:” drop-down.
20. Click the “Next” button to continue.
21. In the “Your company income tax form” screen, click the drop-down arrow at the right end of the
drop-down text box and select “Form 1040 (Sole Proprietor)” by clicking it in the drop-down list of
income tax forms that appears.
22. Click the “Next” button to continue.
23. Click the “Construction/Contracting” choice from the scrolling text box in the “Select Your Type of
Business” screen to select it (it should appear highlighted in black).
24. Click the “Next” button to continue.
25. The next screen informs us that for the remainder of the EasyStep Interview, you can look for little
green arrows that will give you industry-specific set-up tips.
26. Click the “Next” button to continue.
27. The next screen informs you that when you click the “Next” button, you will be prompted to set up
the company file.
28. Click the “Next” button to continue.
29. That will cause the “Filename for New Company” dialog box to appear. Use the “Save in:” drop-
down text box at the top of the dialog box to navigate to the folder that you want to store the practice
company file to (like “C:\My Documents\” or “C:\Program Files\Intuit\QuickBooks Pro\”).
30. The name of the company file will appear in the “File name:” text box. It is usually the name of your
company file plus the “.QBW” file extension (which is how Windows recognizes that file type). If you
want to rename the file, simply type a new name into the “File name:” text box. As long as the “Save
as type:” drop-down text box displays the text “QuickBooks Files (*.QBW,*.QBA)," then you won’t
need to type the optional “.QBW” extension in the “File name:” text box.
31. Click the “Save” button in the lower right corner of the “Filename for New Company” dialog box to
save the practice file.
32. In the “Income and Expense” accounts screen, click the “Yes” option button. Then click the “Next”
button to continue.
33. In the “Accessing your company file” screen, type a zero (0) into the text box.
34. Click “Next” to continue. If you are using QuickBooks 2005 or 2004, the next screen will allow you to
set the “Admin” login. Do not supply a password for the sample file. Just click “Next” to continue, and
click “No” to not set a password.
35. You have completed the “Company Info” section. Click the “Next” button to continue.
36. Read the blurb about the “Preferences” section, and then click the “Next” button to continue.
37. Click the “Yes” option to indicate that we have inventory. Click the “Next” button to continue.
38. Click the “Yes” option so that we can set up inventory for the company file later, and then click “Next”
to continue.
39. In the “Sales Tax” screen, click the “Yes” option to turn on sales tax for our company. Then click
“Next” to continue.
40. In the next screen, click the “I collect a single tax rate paid to a single tax agency” option. Then click
the “Next” button to continue.

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 EXERCISES-
Creating a QuickBooks Company
Exercises (cont.):

41. Set up the following sales tax item by typing the information into the appropriate text boxes.

It asks for: You type:

Sales Tax Name: San Tomas
Sales Tax Description: Sales Tax
Tax Percentage: 7.5
Government Agency: State Board of Equalization

42. Click “Next” to continue.

43. In the “Your invoice format” screen, click the “Service” option and then click “Next” to continue.
44. In the “Using QuickBooks for Payroll” screen, click “Yes” and then click “Next” to continue.
45. In the “Estimates” screen, click the “Yes” option and then click “Next” to continue.
46. In the “Progress Invoicing” screen, click the “Yes” option, and then click “Next” to continue.
47. In the “Time tracking” screen, click the “Yes” option, and then click “Next” to continue.
48. In the “Tracking segments of your business with ‘classes’” screen, click the “Yes” option, and then
click “Next” to continue.
49. In the “Two ways to handle bills and payments” screen, click the “Enter the bills first and then enter
payments later” option, and then click “Next” to continue.
50. In the “Reminders” screen, click the “At start up” option and then click “Next” to continue.
51. At that point, you are finished with the preferences. Click “Next” to continue.
52. In QuickBooks 2003 click “Next” twice to enter the start date. Enter the date “01/01/04” into the “Start
Date” text box, and then click “Next” to continue. In QuickBooks 2005 or 2004, select the “I want to
start entering detailed transactions as of:” option, and then type “01/01/04.” Then click “Next” to
continue.
53. The “General” section is completed now, so click “Next” to continue.
54. Click “Next” to start the “Income and Expenses” section. Read the information and then click “Next.”
55. Click “Yes” to set up an additional income account, and then click the “Next” button.
56. In the “Adding an income account” screen, type “Sales-Service” into the “Account Name:” text box.
Do not assign the account to a tax line.
57. Click “Next” to continue.
58. Click the “No” option, and click “Next” to continue.
59. Click the “Next” button to move to the “Expense Accts” section.
60. Read the information, click “No Thank You,” and then click the “Next” button to continue.
61. In the “Here are your expense accounts” screen, click the “No” option and then click “Next” to
continue.
62. Click the “Next” button to move to the “Income Details” section and then click “Next” to continue.
63. Read the “Income Details: Introduction” screen and then click “Next” to continue.
64. In the “Receipt of payment” screen, click the “Sometimes” button and then click “Next” to continue.
65. In the “Statement Charges” screen, click “Yes” and then click the “Next” button to continue.
66. The “Introduction” tab is completed, so click the “Next” button to continue.
67. Read the “Income Details: Items” screen and click the “Next” button to continue.

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 EXERCISES-
Creating a QuickBooks Company
Exercises (cont.):

71. Click “No” to setting up “Service” items and click the “Next” button to continue.
72. Click “No” to setting up “Non-inventory parts” and click the “Next” button to continue.
73. Click “No” to setting up “Other charges” and click “Next” to continue.
74. Click the “Next” button to leave the “Items” section.
75. Read about inventory in QuickBooks, and then click the “Next” button to continue.
76. Click “Yes” to setting up inventory items, and click the “Next” button to continue.
77. In the “Inventory Item: Sales Information” screen, type “Wood Door” as the “Item Name,” a “Sales
Description” of “Wood Door- Pine,” and set the “Sales Price” at “200.00.” Click the “Taxable Item”
checkbox. Then click “Next” to continue.
78. Select the “Construction” income account from the drop-down and then click the “Next” button to
continue.
79. For the “Inventory Item: Purchase Information” screen, type “Wood Door- Pine #2345-P” into the
“Purchase Description” field. Then type “140” in the “Cost” field and click “Next” to continue.
80. Set the “Reorder point” to “10,” and the “Qty on hand” to “15.” The “Total value as of 01/01/04” field
should show “2100” as the value. Click the “Next” button to continue.
81. Click “No” and click “Next” to finish setting up inventory items.
82. Click the “Next” button to begin the “Opening Balances” section. Click “Next” to continue.
83. Read the blurb on this page, and then click “Next” to continue.
84. Read about the information that you should have on-hand for this section, and then click “Next” to
continue.
85. Read about “Customers” and then click “Next” to continue.
86. Click “No” to the “Enter customers” screen and then click the “Next” button to continue.
87. Read about “Vendors” and then click “Next” to continue.
88. Click “No” to the “Adding vendors with opening balances” screen and then click the “Next” button to
continue.
89. Click “Next” to continue.
90. Read about “Accounts” and then click “Next” to continue.
91. Click “No” to “Credit card accounts” and click “Next” to continue.
92. Click “No” to “Adding lines of credit” and click “Next” to continue.
93. Click “No” to “Loans and Notes Payable” and click “Next” to continue.
94. Click “Yes” to “Bank Accounts” and click the “Next” button to continue.
95. Type “Checking” as the “Name” of the account, and click “Next” to continue.
96. For the “Statement Ending Date” type “01/01/04,” and type “15000” as the “Statement Ending
Balance.” If using QuickBooks 2005 or 2004, leave any other fields blank.
97. Click “Next” to continue.
98. Click “No” to adding another account and then click the “Next” button to continue. In QuickBooks
2005 or 2004, you will be prompted to print checks and deposit slips from QuickBooks. Click “Yes,”
and then click “Next” to continue.
99. Click “Next” to continue.
100. Click “No” to setting up asset accounts and then click the “Next” button to continue.
101. Click “Next” to continue, until you reach the end of the EasyStep Interview.
102. Click the “Leave” button to leave the EasyStep Interview.
103. Select “File| EasyStep Interview” from the Menu Bar to bring back the EasyStep Interview.
104. Click the “Leave” button to leave the EasyStep Interview again.

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 EXERCISES-
Creating a QuickBooks Company
Exercises (cont.):

105. Select “File| Back Up…” from the Menu Bar.

106. Select the “C:\Program Files\Intuit\QuickBooks Pro\” location using the “Browse…” button to save
the company file to that “Location:.” Leave the “Filename:” the same.
107. Click “OK” to back up the file.
108. Click “Yes” to back it up on your hard drive.
109. Click “OK” on the message that appears.
110. Select “File| Restore…” from the Menu Bar.
111. Click the “Browse” button at the top of this window to select the backup file that you just created.
112. Click the “Browse” button at the bottom of the file, and select your sample file (California
Construction Company).
113. Click “Restore” to overwrite the file.
114. Click “Yes” to the overwrite question prompt.
115. Type “yes,” and click “OK” to overwrite the file.
116. Click “OK” to the message.
117. Select “Company| Set Up Users…” from the Menu Bar. If using QuickBooks 2004, skip to step 119.
118. If using QuickBooks 2003, then in the “Set Up QuickBooks Administrator” dialog box, click “OK.”
119. That will bring up the “User List.” Click the “Close” button to close the user list.
120. Select “File| Switch to Multi-User Mode” from the Menu Bar.
121. Click “OK” at the message prompt.
122. Select “File| Switch to Single-User Mode” form the Menu Bar.
123. Click “OK” at the message prompt.
124. Select “File| Close Company” to close the company file.

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 CHAPTER 3-
Using Lists
3.1- Using Lists

3.2- The Chart of Accounts- 2007:2012

3.3- The Chart of Accounts- 2003:2006

3.4- The Customers & Jobs Tab- 2006:2012

3.5- The Customer:Job List- 2003:2005

3.6- The Employees Tab- 2006:2012

3.7- The Employee List- 2003:2005

3.8- The Vendors Tab- 2006:2012

3.9- The Vendor List- 2003:2005

3.10- Using Custom Fields

3.11- Sorting Lists

3.12- Inactivating and Reactivating List Items

3.13- Printing Lists

3.14- Renaming and Merging List Items

3.15- Adding Multiple List Entries from Excel- 2010:2012

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 Using Lists

3.1- Using Lists:

In QuickBooks, you store much of the information for your company file in lists. In QuickBooks you
keep lists for all of your vendors, customers, inventory items, and accounts. They are there so that you
won’t have to type the information every time you want to place it into a form. You also don’t need to enter
all of your information into the lists at startup. You can add additional information into all of your lists as you
use QuickBooks. In this chapter, we will cover manipulating the main lists that you will need in order to run
QuickBooks efficiently.
QuickBooks 2003 through 2005 kept all of the various lists that you needed to access under the
“Lists” command in the Menu Bar. Starting in QuickBooks 2006, many lists have been moved to the various
centers within the program.
Also, in QuickBooks 2003 through 2005, you could reliably click the button in the lower left corner of
any list to view the commands available to perform on the list entries. Starting with QuickBooks 2006, the
lists that have been moved into the new centers (the Customer:Job list, the Vendors list, and the Employees
list) use a different way of accomplishing these same tasks. In QuickBooks 2006 through 2012, the list
within the centers now share a similar layout and structure. So, once you have learned how to perform list-
related tasks in one of the centers, you will be able to quickly master using the lists in the other centers, as
well.

3.2- The Chart of Accounts- 2007:2012:

One of the most important lists in QuickBooks is the chart of accounts. Access this list by selecting
“Lists| Chart of Accounts” from the Menu Bar. The chart of accounts lists all of the accounts available to use
in your company file. These accounts track all incoming and outgoing money, and tell you how much you
currently own and owe. When you set up your business in QuickBooks using the EasyStep Interview, you
get a default list of accounts. Once that has been done, you will probably need to make some changes.
You can add, edit, inactivate, delete, and rename accounts in the list. Generally, you can perform
any of these tasks by first selecting the account within the chart of accounts that you would like to change.
Then click the “Account” button in the “Chart of Accounts” window. From the pop-up menu that appears, you
then select the desired command to perform.
Conveniently, in any list from the “Lists” command in the Menu Bar, you can rely on being able to
click the button in the lower left corner to be able to perform the basic list management tasks. The button is
always named the same thing as the list in which it appears. So for example, the “Account” button is the one
you click to perform list management in the “Chart of Accounts” window; the “Item” button is the one you
click when using the “Items List,” and so on.
To illustrate, assume you wanted to add a new savings account into your chart of accounts. First,
select “Lists| Chart of Accounts” from the Menu Bar, or press “Ctrl”+“A” on your keyboard, to open the list.
Next, click the “Account” button in the lower left corner of the “Chart of Accounts” window, and choose the
“New” command from the pop-up menu that appears. This opens the “Add New Account: Choose Account
Type” window, where you will begin entering the new account information.
You must first select the account type from account options shown in the window. Technically, a
savings account is an asset. However, in QuickBooks, when working with asset accounts that have a cash
basis (like checking, savings, petty cash, and others) you will want to assign the account as a “Bank”
account type to note its cash nature and be able to use it in transaction windows.

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 Using Lists

3.2- The Chart of Accounts- 2007:2012 (cont.):

After you have selected the desired account type from the choices shown, then click the “Continue”
button to move to the next screen. You will see the “Add New Account” window. This is the traditional view
of the new account window. Note that when you selected the account type on the previous screen and then
clicked the “Continue” button, all it really did was select an account type from the “Account Type” drop-down
shown at the top of the window.
Next, you would need to enter a name for the account into the “Account Name” text box. For now,
let’s skip the “Subaccount of” checkbox and drop-down, as we will discuss creating subaccounts separately,
and we shall assume that the account that we are creating is not a subaccount of any other main account.
The account “Description” is an optional text box as is the bank account number. When you are
finished click the “Save & Close” button to create the new account and close the “New Account” window.
You may continue creating new accounts without having to close and reopen the “New Account” window;
just click the “Save & New” button to create the account and clear the “New Account” window. Then enter
the next account that you want to create. Note that this time, you will need to select the account type from
the “Account Type” drop-down to start creating the new account. Also note that you could click the “Cancel”
button if you want to close the “New Account” window and not create an account.
If you need to create an account that had a balance as of the start date of the company file, you can
enter the opening balance of the account, as of the start date, by clicking the “Enter Opening Balance…”
button. This will open the “Enter Opening Balance” window where you can enter the amount as of the start
date of your company file into the “Statement Ending Balance” text box. Then you select the statement date,
which must be before or on the “start date” from the “Statement Ending Date” calendar selector. Then you
can either click “OK” to save the account’s opening balance. The amounts entered here are attributed to the
“Opening Bal Equity” account in the chart of accounts. Note that for accounts created after the start date,
you simply create the account, and then enter transactions that show where the new account received its
funds from. In most cases, you will not need to use the “Opening Balance.”
You can also create subaccounts of accounts within the chart of accounts. This allows you to
attribute transaction amounts to specific subaccounts of a main account for reporting purposes. For
example, if you had an “Automobile” expense account, you could create subaccounts of “Gas” and
“Maintenance/Repairs” to easily show the different amounts spent on gas versus repairs and maintenance
for company vehicles, along with the total amount spent on automobile expenses within a report. The
balance of any account that also has subaccounts is the total of all the transactions attributed to that
account, including all balances of its subaccounts.
You create a subaccount in the exact same way in which you would create any other type of account
within the chart of accounts. Just ensure that you have the primary account for which you want the
subaccount created, first! The only difference in creating a subaccount versus a primary account is that you
must check the “Subaccount of” box and choose the primary account. Note that subaccounts must be of the
exact same account type as their parent accounts.
If you wish to edit the information associated with an account in the future, you may certainly do so.
In this case, you would first need to select the account that you want to edit within the chart of accounts.
Next, click the “Account” button in the lower left corner of the list and then choose the “Edit Account”
command from the pop-up menu that appears. If you like to right-click, then you can also just right-click on
the account you want to edit, and then select the “Edit Account” command.
Next, you will see the “Edit Account” window appear. Here you can edit the account information and
then click the “Save & Close” button to close the window and save your changes.

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You may have accounts that you never use listed in your chart of accounts. If you have an account
that you would like to delete in the chart of accounts, you may do so only if there are no transactions
associated with the account. Once there are transactions assigned to an account, you can no longer delete
it, as that would compromise your company’s financial information. In that case, you would first need to
remove the transactions from the account- either by reassigning each transaction in the account to other
accounts, or by deleting them entirely if incorrect. This may not be feasible for your situation. After there are
no transactions in the account, you can go ahead and delete it.
To delete an empty account shown in the chart of accounts, first select the account. Then click the
“Account” button in the lower left corner and choose “Delete Account” from the pop-up menu that appears.
After selecting the delete command, you will need to click “OK” in the message box in order to permanently
delete the account.
If you have an account that you used at one time in the past, but no longer actively use, you can
inactivate it to hide it, rather than deleting it and compromising your company’s financial information. When
an account is inactivated, it will not appear by default in your chart of accounts. However, the information is
retained for reporting in QuickBooks. You can actually make items in almost all of your lists inactive to hide
items you no longer use. In the chart of accounts, you can inactivate an account by simply selecting the
name of the account, clicking the “Account” button in the lower left corner of the list window, and then
selecting the “Make Account Inactive” command from the pop-up menu. This will be covered in depth in
Lesson 3.12.

3.3- The Chart of Accounts- 2003:2006:

One of the most important lists in QuickBooks is the chart of accounts. You can access this list by
selecting “Lists| Chart of Accounts” from the Menu Bar. The chart of accounts is a listing of all of the
accounts available to use in your company file. These accounts track all incoming and outgoing money, and
tell you how much you currently own and owe. When you set up your business in QuickBooks using the
EasyStep Interview, you get a default list of accounts. Once that has been done, you will probably need to
make some changes.
You can add, edit, inactivate, delete, and rename accounts to change list information. Generally, you
can perform any of these tasks by first selecting the account that you would like to change. Then click the
“Account” button in the “Chart of Accounts” window. From the pop-up menu that appears select the desired
command to perform.
Conveniently, in any list that you can access from the “Lists” command in the Menu Bar, you can
always rely on being able to click the button in the lower left corner to be able to perform the basic list
management tasks. The button is always named the same thing as the list in which it appears, so for
example, the “Account” button is the one you click to perform list management in the “Chart of Accounts”
window, the “Item” button is the one you click when using the “Items List,” and so on.
For example, assume that you wanted to add a new savings account into your chart of accounts.
First, select “Chart| Chart of Accounts” from the Menu Bar, or press “Ctrl”+“A” on your keyboard, in order to
open the list. Next, click the “Account” button in the lower left corner of the “Chart of Accounts” window, and
choose the “New” command from the pop-up menu that appears. This opens the “New Account” window
where you will enter the new account’s information.
First, you must select what type of account is needed from the “Type” drop-down at the top of the
“New Account” window. Technically, a savings account is an asset. However, in QuickBooks, when

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working with asset accounts that have a cash basis (like checking, savings, petty cash, and others) you will
want to assign the account as a “Bank” account type to note its cash nature and also be able to use it in the
various transaction windows.
Next, you would need to enter a name for the account into the “Name” text box. For now, let’s skip
the “Subaccount of” checkbox and drop-down, as we will discuss creating subaccounts separately, and the
account that we are creating is not a subaccount of any other main account. Next, you can enter an optional
description of the account into the “Description” text box. If desired, you can also type the bank account
number of the account into the “Bank Acct. No.” text box. You can then click the “OK” button to create the
new account and close the “New Account” window. To continue creating new accounts without having to
close and reopen the “New Account” window, click the “Next” button within the “New Account” window to
create the account and clear the “New Account” window. Next, enter the next account that you want to
create. This button is available in most of the lists where you may have to create multiple items in a single
session. Also note that you could click the “Cancel” button if you want to close the “New Account” window
and not create an account. This button is also available in most list entry screens, as well.
Another question that is often raised at this point is “What should I enter for the ‘Opening Balance’
when creating the new account?” Actually, you only use this section of the “New Account” window when
creating accounts in your chart of accounts that had a balance as of the “start date” of your company,
entered when you created the company file during the EasyStep Interview. If you are creating an account
that did not have a balance as of your company file’s start date, then you will simply skip this section.
However, if you need to create an account that had a balance as of the start date of your company
file, you can enter the opening balance of the account, as of the start date, into the “Opening Balance” text
box. Then you select the start date from the “as of” calendar selector. Then you can either click “OK” or
“Next” to save the account. The amounts entered here are attributed to the “Opening Bal Equity” account in
the chart of accounts.
You can also create subaccounts of accounts within the chart of accounts. You can then attribute
transaction amounts to specific subaccounts of a main account for reporting purposes. For example, if you
had an “Automobile” expense account, you could create subaccounts of “Gas” and “Maintenance/Repairs”
to easily show the different amounts spent on gas versus repairs and maintenance for company vehicles,
along with the total amount spent on automobile expenses within a report. The balance of any account that
also has subaccounts is the total of all the transactions attributed to that account, including all balances of
its subaccounts.
You create a subaccount in the exact same way in which you would create any other type of account
within the chart of accounts. Just ensure that you have the primary account for which you want the
subaccount created, first! The only difference when you are creating a subaccount versus a primary account
is that you must check the “Subaccount of” box and choose the associated primary account. Note that
subaccounts must be of the exact same account type as their parent accounts.
If you wish to edit the information associated with an account in the future, you may certainly do so.
In this case, you would first need to select the account that you want to edit within the chart of accounts.
Next, you click the “Account” button in the lower left corner of the list and then choose either the “Edit…”
command, if using a version previous to 2005, or the “Edit Account” command, if using 2005 or later, from
the pop-up menu. If you like to right-click, then you can also just right-click on the account you want to edit,
and then select either the “Edit…” or “Edit Account” command, depending upon which version of the
software you are using.

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Next, you will see the “Edit Account” window appear. In this window, you can edit the account
information and then click the “OK” button to close the window and save your changes.
If you accepted the default income and expense accounts when creating your company file, you may
also have accounts that you would never use listed in your chart of accounts. If you have an account that
you would like to delete shown in the chart of accounts, you can delete it- but only if there are no
transactions associated with the account. Once there are transactions assigned to an account, you can no
longer delete the account- as that would compromise your company’s financial information. You would first
need to remove the transactions from the account- either by reassigning each transaction in the account to
other accounts or by deleting them entirely, if incorrect. After there were no transactions in the account, it
could then be deleted.
To delete an empty account shown in the chart of accounts, first select the account. Then click the
“Account” button in the lower left corner and choose “Delete Account” from the pop-up menu that appears.
In versions of QuickBooks previous to 2005, the command was simply “Delete” versus “Delete Account” in
the pop-up menu- but it functions the same way. After selecting the delete command, you will need to click
“OK” in the message box that appears in order to permanently delete the account.
If you have an account that you used at one time in the past, but no longer actively use, you can
inactivate it to hide it- rather than deleting it and changing financial information. When an account is
inactivated, it will not appear by default in your chart of accounts. However, the information is retained for
reporting in QuickBooks. You can actually make items in almost all of your lists inactive to hide items you no
longer use. In the chart of accounts, you can inactivate an account by simply selecting the name of the
account, clicking the “Account” button in the lower left corner of the list window, and then selecting the
“Make Account Inactive” command from the pop-up menu that appears. The information will then be hidden
from view. We will examine making list items inactive, and reactivating them, in more detail in Lesson 3.12.

3.4- The Customers & Jobs Tab- 2006:2012:

Starting in QuickBooks 2006, you can perform all activities associated with your customers through
the Customer Center. For users upgrading from QuickBooks 2005, you’ll find that this is where the
information that used to be stored in your old “Customer:Job” list has moved. While there are a great many
features in the Customer Center, one of the most important parts of it is the Customers & Jobs tab. This tab
is where you can add, edit, and display all of your customer’s information, and information for any jobs that
you create for each customer, if used. You may notice that this list is called the Customers & Jobs tab in the
Customer Center, and called the Customer:Job list in forms. Sometimes it is simply called the “Customers”
list. It really doesn’t matter what you call it- as long as you realize that it’s all the same list.
If you have created a new company file in QuickBooks 2006:2012, and you have customers who
owed you money as of your company’s start date, then you should add those people to the Customers &
Jobs list after you have finished the EasyStep Interview. After that has been accomplished, you can then
add customers and jobs to your list as the need arises through the daily use of the program.
To add a new customer to the Customers & Jobs tab, you first need to open the Customer Center.
You can do this by clicking the “Customer Center” button in the QuickBooks toolbar, by clicking the
“Customers” button in the Home Page, or by selecting “Customers| Customer Center” from the Menu Bar.
Also, if you memorized the old keyboard shortcut for the “Customer:Job” list- which is “Ctrl”+“J”- you can
now use that shortcut to open the Customer Center.
At the left side of the Customer Center window is a tab called “Customers & Jobs.” Click this tab to

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view customers and jobs that have been entered into the QuickBooks program. To add a new customer to
this list, click the “New Customer & Job” button that appears above the “Customers & Jobs” tab at the top of
the Customer Center window. From the small drop-down menu that appears, click the “New Customer”
choice. This will invoke the “New Customer” window where you enter the new customer’s information.
In the “New Customer” window, begin by typing a name for the customer as you would like it to
appear within the “Customers & Jobs” tab into the “Customer Name” text box. Note that each customer
must have a unique “Customer Name” value.
If you are adding a customer who owed you money as of the “Start date” of your company file, then
enter the amount owed by the customer as of the start date into the “Opening Balance” field. You then
select the start date of your company file from the “as of” calendar drop-down. These fields are only used
when adding customers who owed you money as of your start date. For any future customers that you add,
you will skip these fields.
Next, click the “Address Info” tab. Here you will enter the customer address information, as you
would like it to appear on invoices and other customer-related documentation. Start by typing the name of
the company, which can be different from the “Customer Name” value, into the “Company Name” field. If the
customer is an individual, you can then enter the name of the person into the “Mr./Ms./…,” “First Name,”
“M.I.,” and “Last Name” fields that are available. You can then enter any contact information that you wish
into the “Contact,” “Phone,” Fax,” “Alt. Phone,” “Alt. Contact,” “E-mail,” and “Cc” fields, as desired.
In the “Addresses” section, you can enter billing and shipping information for the customer. You can
type the customer’s billing address into the “Bill To” text box, or click the “Edit” button below the “Bill To” box
and then enter the billing address into the “Edit Address Information” window. Then click “OK” to display the
address you entered in the “Bill To” text box. If the shipping address is the same as the billing address that
you entered, then just click the “Copy >>” button to copy the billing information to the “Ship To” text box.
In QuickBooks 2006:2012, you can create and save multiple shipping addresses for each customer.
Add a shipping address by clicking the “Add New” button that appears below the “Ship To” text box. In the
“Add Ship To Address Information” dialog box enter a name for the shipping address into the “Address
Name” text box. Next type the address into the “Address,” “City,” “State/Province,” “Zip/Postal Code,” and
“Country/Region” text boxes. If creating multiple addresses, check the “Default shipping address” box of the
address that you want to be the default shipping address. When you are ready to save the address, click
the “OK” button. You can then add more shipping addresses by repeating the process until you have
entered all of the necessary shipping addresses of the customer.
Once you have entered the customer’s address information, click the “Additional Info” tab to
continue. Here you can use the “Type” drop-down to select a customer type from the drop-down available,
or you can simply enter a new customer type into the “Type” drop-down. This allows you to classify and
categorize your customers, as desired, for reporting purposes.
Next, use the “Terms” drop-down to select the default purchasing terms that you want to assign to
the customer. You can then use the “Rep” drop-down to assign one of your sales rep to the customer. You
can then select a default send method for customer forms from the “Preferred Send Method” drop-down.
Next, in the “Sales Tax Information” section, you can set sales tax information for the customer. Use
the “Tax Code” drop-down to choose whether the selected customer is taxable or non-taxable. If the
customer is a taxable customer, then choose the sales tax to apply to purchases from the “Tax Item” drop-
down. We will look at collecting sales tax in a separate chapter, which you should review if you will be
collecting sales tax. If the customer has a resale number for use, then you can enter it into the “Resale
Number” text box.
If the customer has a special pricing level that is assigned to purchases by default, select it from the

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“Price Level” drop-down. If you think that you will need to use pricing levels, please review the separate
chapter on price levels. After the pricing levels, you can enter any information into the customer’s custom
fields that you have created. We will examine creating custom fields for customers, vendors, and employees
in Lesson 3.10.
You can click the “Payment Info” tab to enter default payment information for the new customer. You
can enter a customer ID number, or customer account number, into the “Account No.” field. You also have
the option to enter a credit limit on the customer’s accounts receivable by entering the dollar limit into the
“Credit Limit” text box.
You use the “Preferred Payment Method” section of this tab to set a default payment method that
will appear when you receive payments from this customer in the future. If you want to set a default
payment method, then you can choose one from the drop-down at the top of this section. If you select a
credit card type from the drop-down, then you can enter the customer’s cardholder information into the
“Credit Card No.,” “Exp. Date,” “Name on card,” “Address,” and “Zip Code.”
If you are creating a new customer, then you are finished at this point. You won’t use the “Job Info”
tab, as that is only used when creating a new job for an existing customer. We will examine creating jobs in
the chapter on estimates. For now, to add the customer to the list, just click the “OK” button.
You can edit an existing customer’s information in the future if the information changes or if you
need to return to add customer data. To edit a customer in the “Customers & Jobs” tab, first select the name
of the customer in the list whose information you wish to edit. You can either double-click on the name of
the customer in the “Customers & Jobs” tab, click the “Edit Customer…” button towards the upper-right
corner of the Customer Center, or right-click on the customer name in the “Customers & Jobs” tab and then
select “Edit Customer:Job” from the pop-up menu that appears to open the “Edit Customer” window. You
can then edit any of the information shown in the three tabs of the window. Just click the “OK” button to
save your changes and close the window when you are finished.
Like accounts, once you have used a customer in a transaction you cannot delete them from the
“Customers & Jobs” tab. Instead, you can inactivate customers that you will no longer need to view to hide
them in the list. Please review Lesson 3.12 to learn how to activate and inactivate customers. If you did,
however, create a customer entry that you did not use and no longer need- you can delete it. You would do
this by selecting the entry to delete from the list and then choosing “Edit| Delete Customer:Job” from the
Menu Bar. You then need to click the “OK” button in the confirmation message box that appears to
permanently delete the selected customer entry.
In QuickBooks 2011:2012, you can click the “Collections Center” button within the “Customer
Center” to open the “Collections Center” window where you can see almost due and overdue customer
invoices. If you click the “Overdue” tab, you can click the “Select and Send Email” button to select
customers to whom you wish to e-mail a payment reminder.

3.5- The Customer:Job List- 2003:2005:

The Customer:Job list stores all of your customer’s information and any projects you may want to
track for each customer. You can add customers, edit information, delete customers, inactivate customers,
and receive reports about your customers from this window. If you would like to perform one of these tasks,
simply click the “Customer:Job” button in the lower left corner of this screen and click on the command that
you want to perform from the pop-up list of information that appears.
To view the Customer:Job list, you can select “Lists| Customer:Job List” from the Menu Bar. To add
a new customer, you can click the “Customer:Job” button in the lower left corner of the list and then select
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“New” from the pop-up menu that appears. This will open the “New Customer” window, where you can enter
the customer information into the tabs shown. When you are creating a new customer, you skip the “Job
Info” tab, as that is only used when creating jobs for a customer. We use this when creating job estimates,
and you should review the lessons on creating estimates for jobs if you will be using that feature.
You can edit the information in a customer entry by selecting the name of the customer to edit from
the Customer:Job list, first. You can then click the “Customer:Job” button and select either the “Edit” or “Edit
Customer:Job” command, depending on which version of the software you are using to open the “Edit
Customer (Customer:Job in 2005)” window. You could also simply double-click on the name of the
customer shown in the Customer:Job list to open the same window. In this window, make any changes to
the customer data, as needed, and then click the “OK” button to save your changes and close the window.
Like accounts, you also cannot delete customer entries from the Customer:Job list after they have
been used in a transaction. You can, however, inactivate them to hide them from view within the
Customer:Job list. If you do create a customer entry that you don’t use, however, you can delete that by first
selecting it in the Customer:Job list and then clicking the “Customer:Job” button. Select Delete (Delete
Customer:Job in 2005)” from the pop-up menu that appears. You will then need to click the “OK” button in
the confirmation dialog box to permanently delete the customer entry.

3.6- The Employees Tab- 2006:2012:

If you are using QuickBooks to handle payroll and indicated that you have employees during the
EasyStep Interview, you can later setup payroll for your company file and then enter employees into the
Employees tab in the Employee Center. The Employee Center allows you to handle all transactions that
involve your employees and payroll. To view the Employees tab within the center, click the tab at the left
side of the window that says “Employees.” You can add, edit, and delete or inactivate employees in the list.
To add a new employee to the list, click the “New Employee…” button in the upper-left corner of the
Employee Center. This will open the “New Employee” window. In this window, you change which set of tabs
of information are displayed by using the “Change tabs:” drop-down to select a set of employee tabs into
which you will enter data. First, select the “Personal Info” set of tabs from the “Change tabs:” drop-down.
The tabs in this set are “Personal,” “Address and Contact,” and “Additional Info.”
Click the “Personal” tab to begin entering data. In this tab, you enter the employee’s name into the
“Mr./Ms./…,” “First Name,” “M.I.,” and “Last Name” fields. You can then enter his/her name as it should
appear on checks into the “Print on Checks as” text box. Then enter the social security number into the “SS
No.” field. You can then enter gender and date of birth into the “Gender” and “Date of Birth” fields available.
When you have finished data entry, click the “Address and Contact” tab to continue.
In the “Address and Contact” tab, you can enter the employee’s home address information into the
“Address,” “City,” “State,” and “Zip” fields available. You can also enter “Phone,” “Cellular,” “Alt. Phone,”
“Fax,” “E-mail,” “Pager,” and “PIN (Pager)” information into the fields available. Click the “Additional Info” tab
to continue data entry.
In the “Additional Info” tab, you can enter an employee ID number into the “Account No. (Employee
ID)” field, if needed. You can also enter any information into whatever custom fields you create for your
employees into the “Custom Fields” section of this tab. If you want to add custom fields to your customer,
vendor, or employee lists to record information of your choosing, please review the section of creating
customized fields in a later lesson of this chapter.
Once you have completed entering information in the “Personal Info” tab set, use the “Change tabs:”

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drop-down to select “Employment Info.” This will then show the “Employment” tab. Here you can enter the
hire date into the “Hire Date” field. When the employee leaves, you can enter the last payroll date into the
“Release Date (Last Date on Payroll)” field. In the “Employment Details” section, you can classify the type of
employee as a “Regular” (W-2) employee, a “Statutory” (1099) employee, or an “Officer” or “Owner” of the
company.
When you are ready to enter payroll and workers compensation information, then you can choose
those options from the “Change tabs:” drop-down to enter the data into the tabs available. We will discuss
entering information in these tabs in a later chapter on payroll. If you will be performing payroll activities in
QuickBooks, you should review the entire section on payroll before entering employee payroll data. Also
note that if you start to create a new employee, but don’t enter payroll information, then you will be
prompted by QuickBooks to enter that information when you click “OK” to save the record and close the
window. If you want to save the record as is, then just click the “Leave As Is” button. If you want to return to
enter payroll information, then click the “Set Up Now” button and enter the payroll data.
If you need to edit an employee record in the future to change employee or payroll information, then
you can start by selecting the name of the employee to edit from the “Employees” tab in the Employee
Center. You can then either click the “Edit Employee…” button towards the upper-right corner of the
Employee Center window or simply double-click on the name of the employee shown in the “Employees”
tab to open the “Edit Employee” window. Change or add whatever employee or payroll information is
necessary through the tabs within this window, and be sure to click the “OK” button when you are finished to
save the data entry.
Like all the other QuickBooks lists, you cannot delete an entry made in the list once it has been used
in a transaction. Once a record is associated with a transaction, you can only inactivate the record to hide it
from view. You should review Lesson 3.12 on inactivating and reactivating list items to learn how to perform
this task in your QuickBooks lists. However, if you created a record but did not use it in any transactions,
then you can delete the record from the “Employee” tab. To do this, just select the record to delete from the
list and then choose “Edit| Delete Employee” from the Menu Bar. You will then need to click “OK” in the
confirmation message box that appears in order to permanently delete the selected employee record.

3.7- The Employee List- 2003:2005:

If you will be using QuickBooks for your company’s payroll, then you can store information about
your employees in the “Employee List.” To display the “Employee List,” select “Lists| Employee List” from
the Menu Bar. From here, you can add, edit, or delete, or inactivate employees in the list. To do any of
these actions, just click the “Employee” button, and select the appropriate action from the pop-up menu that
appears.
For example, to add a new employee, you would click the “Employee” button and then select the
“New” command from the pop-up menu that appears. In the “New Employee” window, use the “Change
tabs:” drop-down to select a set of tabs to show within the “New Employee” window. You then enter the
appropriate information into the fields in each tab, as needed. When you are finished, just click the “OK”
button to save the employee data and close the “New Employee” window.
You can edit an existing employee’s data by first selecting the record to edit from the “Employee
List.” Then you can either click the “Employee” button and select “Edit” or “Edit Employee” (depending on
what version of QuickBooks you own) from the pop-up menu that appears, or you can simply double-click
on the name of the employee shown in the “Employee List” to open the “Edit Employee” window. Here, you

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can edit the employee record, and then click the “OK” button to save the changes that you have made.
Like the other lists, you cannot delete an employee record after you have used it in a transaction.
Your only choice at that point is to inactivate the employee record to hide it from view within the “Employee
List.” However, if you haven’t used an employee record, you can delete it by first selecting the record to
delete from the “Employee List.” Then you can click the “Employee” button, and select “Delete (Delete
Employee in 2005)” from the pop-up menu that appears. Then click “OK” in the confirmation dialog box that
appears to permanently delete the employee record.

3.8- The Vendors Tab- 2006:2012:

You keep information about the companies and people from whom you purchase goods or services
in the Vendors tab within the Vendor Center. In QuickBooks, you keep parts supply vendors, utility
companies, subcontractors and more within this list. The list of vendors tends to be one of the larger lists
that you maintain. QuickBooks uses the information you enter to fill out purchase orders, bills, and checks
as you make purchases for your company.
To access the Vendors tab from within the Vendor Center, click the “Vendors” tab located at the left
side of the Vendor Center. You can add vendors, edit vendor information, and inactivate or delete vendors
that appear within this tab. To add a new vendor to this tab, click the “New Vendor…” button that appears in
the upper-left corner of the Vendor Center. In QuickBooks 2010:2012, then select “New Vendor” from the
drop-down menu that appears. That will open the “New Vendor” window.
Start by typing a unique name for this vendor into the “Vendor Name” text box. If you are adding a
vendor to whom you owed money as of the start date of your company, then you can enter the total amount
outstanding into the “Opening Balance” field and select your company file’s start date from the “as of”
calendar selector field. You only perform this task when initially adding vendors to whom you owed money
as of your start date. If you are creating a vendor that did not owe you money as of your company file’s start
date, then you will skip the “Opening Balance” and the “as of” fields.
Next, click the “Address Info” tab in the “New Vendor” window. You can enter the company name of
the vendor into the “Company Name” field. If the vendor is an individual, you can enter the person’s
information into the “Mr./Ms./…,” “First Name,” “M.I.,” and “Last Name” fields.
You can enter the billing address of the vendor into the “Name and Address” text box. You can edit
the details of this text box by clicking the “Address Details” button to open the “Edit Address Information”
dialog box. In this dialog box, you can edit the specific vendor address information, and then click the “OK”
button to add the information into the “Name and Address” text box.
If the vendor has a primary contact, enter that name into the “Contact” field. You can then enter
additional contact information into the “Phone,” “FAX,” “Alt. Phone,” “Alt. Contact,” “E-mail,” and “Cc” fields.
You can enter the name of the vendor, as you would like it to appear on checks, into the “Print on Checks
as” field. When you are ready to continue data entry, click the “Additional Info” tab.
In the “Additional Info” tab, you can enter your account number with the vendor into the “Account
No.” field. This will print in the “Memo” field of the vendor check. In the “Categorizing and Defaults” section,
you can select a vendor type from the “Type” drop-down, or enter your own type into the text box. This
allows you to categorize the vendor for reporting purposes. Then you can select the terms that you have
been assigned by the vendor from the “Terms” drop-down. If you have a credit limit with the vendor, you can
enter your credit limit into the “Credit Limit” text box. If the vendor is a subcontractor, then you can enter the
tax ID of the subcontractor into the “Tax ID” text box. If the vendor is eligible for a 1099 form, then you can
check the “Vendor eligible for 1099” check box to include them when printing 1099 forms and reports.

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3.8- The Vendors Tab- 2006:2012 (cont.):

At the right side of the “Additional Info” tab, you will be able to enter any custom field values for any
custom fields that you have created for your vendors. We will cover creating custom fields for your
QuickBooks lists in a separate lesson of this chapter. Once you have finished, you can either click the “OK”
button to save the new vendor record and close the window, click the “Next” button to save the record but
leave the “New Vendor” window open, or click the “Cancel” button to cancel your changes and close the
window.
You can edit existing vendor records to add missing information or to otherwise change the vendor
records. To edit a vendor record, first select the name of the vendor whose information you wish to change
from the “Vendors” tab in the Vendor Center. You can then either double-click on the name shown in the
list, or click the “Edit Vendor…” button in the upper-right corner of the Vendor Center to open the “Edit
Vendor” window. You can then make whatever changes are needed in the tabs displayed in this window,
and click the “OK” button to save the record.
Like all of your QuickBooks lists, you cannot delete a list record once you have used it in a
transaction. Once a record is associated with a transaction, you can only inactivate the record to hide it from
view. You should review Lesson 3.12 on inactivating and reactivating list items to learn how to perform this
task in your QuickBooks lists. However, if you created a vendor record but did not use it in any transactions,
then you can delete the record from the “Vendors” tab. To do this, just select the record to delete from the
list and then choose “Edit| Delete Vendor” from the Menu Bar. You will then need to click “OK” in the
confirmation message box that appears in order to permanently delete the selected record.

3.9- The Vendor List- 2003:2005:

You keep information about the companies and people from which you purchase goods or services
in the “Vendor List.” To open the Vendor List, select “Lists| Vendor List” from the Menu Bar. You keep
supply vendors, utility companies, subcontractors and more in this list, so it tends to be one of the larger
lists. QuickBooks uses the information to fill out purchase orders, bills, and checks as you make purchases.
You can add vendors, edit vendor information, delete vendors, inactivate vendors, and receive reports
about your vendors from this window. To begin, simply click the “Vendor” button in the lower left corner of
this screen and click on the command that you want to perform from the pop-up menu that appears.
For example, to add a new vendor to the list, you click the “Vendor” button in the lower left corner
and then select “New” from the pop-up menu that appears. In the “New Vendor” window that opens, enter
the information for the vendor into each tab shown and then click “OK” to save the new vendor record and
close the window when you are finished.
You can also edit an existing vendor record in the Vendor List. To do this, click on the name of the
vendor in the Vendor List whose information you wish to edit. Then click the “Vendor” button in the lower left
corner and select “Edit (“Edit Vendor” in 2005)” from the pop-up menu that appears. In the “Edit Vendor”
window that opens, change the information for the vendor and click “OK” when you are done to save it.
Like all of your QuickBooks lists, you cannot delete a list record once you have used it in a
transaction; you can only inactivate the record to hide it from view. You should review Lesson 3.12 on
activating and inactivating list items in your QuickBooks lists. However, if you created a vendor record but
did not use it in any transactions, then you can delete the record from the Vendor List. To do this, click on
the name of the vendor in the Vendor List to select it. Next, click the “Vendor” button in the lower left corner
and select “Delete (“Delete Vendor” in 2005)” from the pop-up menu that appears. Then click “OK” in the
confirmation dialog box that appears if you are sure that you want to permanently delete this vendor.

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3.10- Using Custom Fields:

You have the ability to add your own customized fields to the “Customers & Jobs,” “Vendors,”
“Employees,” and “Item” lists in QuickBooks. This feature allows you to create fields that you want to have
appear for each record in a list. This lets you track information that is specific to your particular business.
For example, you could add fields for “Color,” “Size,” and “Style” to your “Item” list that would allow you to
create items with the same general description in your inventory, and then differentiate between them by
color, size and style.
If you add custom fields to your sales forms or purchase orders, it will automatically fill in the values
specified for the employee, customer, vendor, or item that you selected (assuming that you specified a
value). This doesn’t necessarily imply that you have to use customized fields in your forms, however. You
could simply add a custom field as a way to record information strictly for your own use (recording your
opinion of a customer’s credit rating, for instance). However you use it, QuickBooks will remember the
information that you entered in the customized fields when you import and export the data and also when
you memorize transactions.
You can add up to seven customized fields to each of the following lists: “Customers & Jobs,”
“Vendors,” and “Employees.” You can only create up to five customized fields within the “Item” list. Custom
fields that you add to a list are available to each entry within the list. Create custom field that can appear in
the “Customers & Jobs,” “Vendors,” and “Employees” lists by opening any one of the three lists, and then
opening either the “New [list item]” or “Edit [list item]” windows from the selected list. Within the window,
click the “Additional Info” tab for the record and then click the “Define Fields” button that appears at the right
side of the tab in the “Custom Fields” section. This will open a dialog box, where you can create your
custom fields for all three lists.
You can add a new custom field to a list by clicking into the first blank field in the “Label” column at
the left side of the window and typing the label that you would like to apply to the new field. To the right of
that, you then check the checkbox for each list (shown as a column of checkboxes) within which you would
like this field to appear. A field can be used by one or more lists.
Repeat these steps until you have created all of the necessary custom fields for your three lists
shown in this window. Once you are finished, click the “OK” button to save your changes and return to the
list item window. You can then input custom field data for new list entries, or edit existing list items to add
the new data to the custom fields. Custom fields are always shown on the “Additional Info” tab of the “New”
and “Edit” windows for the “Customers & Jobs,” “Vendors,” and “Employees” lists.
Adding custom fields to the “Item” list is a bit different from adding custom fields to the other lists.
While we haven’t examined working with the “Item” list in much detail yet, it is an important list in
QuickBooks. You place any item that appears in a QuickBooks sales receipt or invoice in the “Item” list. You
can access the “Item” list by selecting “Lists| Item List” from the Menu Bar. In the “Item” list, you can add
custom fields through the “New Item” or “Edit Item” windows.
You can select either the “New” or “Edit Item” commands from the “Item” button in the lower left
corner of the list to access either window. Once there, add custom fields to this list by clicking the “Custom
Fields” button at the right side of the window. This will open a window where you can enter the values for
any custom fields that you create for your Item list.
You can add custom fields by clicking the “Define Fields” button within this window to open another
dialog box where you can add a new custom field by checking the first available, blank “Use” checkbox and
then typing a label for the new custom field into the adjacent “Label” text box. When you are finished, you
can then click the “OK” button to create the new fields. Now you can enter a custom field value for the
current item. Click the “OK” button in this window to return to the main item window when finished, and then
click “OK” again to save the record with your changes.

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3.11- Sorting Lists:

You can sort information in your QuickBooks lists manually or automatically. If you want to manually
sort the items within a list, you can simply click and drag on the small diamond at the left side of any list
entry and drop it in a new location within the list. However, it is important to note that you cannot manually
arrange items in a list when you have automatic sorting applied to the list. Also, be careful when manually
arranging items, as you may accidentally place subentries in a list (like subaccounts in the Chart of
Accounts, or Jobs within the “Customers & Jobs” list) under an incorrect main account. The only way to fix
this is to manually place it back from where it came- you cannot automatically re-sort the list to fix that type
of mistake. Also, when manually arranging list items in the Chart of Accounts, you can only arrange
accounts adjacent to accounts of the same “account type.” For example, you cannot place an “income”
account into the “expense” accounts within the list.
In addition to manually arranging list entries you can also automatically sort list items, in ascending
or descending order, by the values shown in any column within the list. You can do this by simply clicking
on the gray column header at the top of the column by whose values you wish to sort the list. You will see a
small arrow appear next to the title of the column, pointing up or down. An “up” arrow indicates an
ascending sorting order, and the “down” arrow indicates a descending sorting order. Clicking the name of
the column shown in the column heading will toggle the arrow between the “up” and “down” positions.
Note that when you automatically sort a list, a large black diamond appears at the far left side of the
row of gray column headings. This lets you know that the list is being sorted. You won’t be able to perform
some actions, like manually arranging list items, while the sorting is being applied. To remove the automatic
sorting and return the list to its default sorting order, just click the large black diamond to remove the applied
sorting.
You can also re-sort a list to return it to its original sorting order. To do this, click the button with the
name of the list in the lower left corner of the list and then select “Re-sort List” from the pop-up menu that
appears. Starting in QuickBooks 2006, however, this button is no longer shown in many of the lists- like the
“Customers & Jobs” list in the Customer Center, for example. In these lists, you can simply right-click on an
entry within the list that and then select the “Resort List” command from the pop-up menu that appears, or
select “View| Re-sort List” from the Menu Bar to return the list to its original sort order.

3.12- Inactivating and Reactivating List Items:

In QuickBooks lists, you can only delete list items if you haven’t used them in any transactions. If
you try to delete a list item that has been used in a transaction, QuickBooks will warn you that the item
cannot be deleted. If you don’t want to use a list item but you can’t delete it, you can make it inactive
instead.
To inactivate an item in any QuickBooks list, you can simply right-click on the list item that you want
to make inactive within the desired list. From the pop-up menu that appears, you select “Make Inactive
(“Make [list item] Inactive” in QuickBooks 2005 through 2012)” to inactive the item and hide its display.
To see inactive list items within a list, you can click the “Show All” or “Include Inactive” checkbox at
the bottom of the list window. If you are using QuickBooks 2006:2012, then you will be able to use this
method of viewing inactive list entries in any list except the “Customers & Jobs,” “Vendors,” and
“Employees” lists. In these lists in QuickBooks 2006:2012, you can instead view all items by using the
“View” drop-down that appears above the list to select “All [item type].”
When you do this, you will see a new column at the left side of the list showing the inactive items,
which will appear with an “X” next to their names. You can then click on any of these “X” symbols to make
that particular list item active again.

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3.13- Printing Lists:

To print a list, open the list that you want to print and click the button in the lower left corner of the
list. From the pop-up menu that appears, select “Print List.” If, however, you are using QuickBooks 2006
through 2012, and trying to print either the “Customers & Jobs,” “Vendors,” or “Employees” lists, then you
will instead need to click the “Print” button at the top of the respective Center, and then choose the name of
the list from the drop-down that appears.
Next, click the “OK” button to bypass the “List Reports” message and then set your printing settings
as necessary in the dialog box that appears. Finally, click the “Print” button to print the list.

3.14- Renaming and Merging List Items:

Although there is no specific “Rename” command available for use in your QuickBooks lists, to
rename an item you simply open up the “Edit [list item]” window for the selected item from the desired list.
Then just type in a new name for the entry into the “Name” field (at the top of the window), and the entry will
adopt the new name after you click the “OK” button to save your changes and close the window. When
renaming list items, if you name an entry the exact same thing as another existing entry, QuickBooks will
ask you if you wish to merge the two items into one item. If you do, click “Yes” at the merge prompt window
and QuickBooks will make a single entry from the two entries. This can be handy if you have two different
entries in a list, often created by multiple people performing data entry, that should be a single entry.

3.15- Adding Multiple List Entries from Excel- 2010:2012:

A new feature that can really improve the speed of company file creation is the new ability to copy
and paste data into lists within QuickBooks 2010 through 2012 from Microsoft Excel. You can now easily
copy and paste data from an Excel worksheet into the “Customers,” “Vendors,” “Service Items,” “Inventory
Part,” and “Non-inventory Part” lists within your company file.
In order to perform this task, first select “Lists| Add/Edit Multiple List Entries” from the Menu Bar.
Doing this will open the “Add/Edit Multiple List Entries” window. As you can see from the information shown
at the top of this window, copying and pasting data into this window from Excel is a three-step process.
First, use the “List” drop-down at the top of this window to select the list into which you would like to copy
data from your Excel worksheet. When you select a list, you will see the appropriate columns of information
displayed at the bottom of the window. All lists must contain the “Name” column shown, as that is the
column used to identify the items within the list.
Next, you can customize the columns shown in this window to match the columns within your Excel
worksheet. In order to do this, you can click the “Customize Columns” button that appears in the upper-right
corner of the window. In the “Customize Columns” window that appears, you can select column names from
the “Available Columns” and “Chosen Columns” lists, and then click either the “Add >” or “< Remove”
buttons to add or remove desired columns. If you wish to reorganize their display, you can select the name
of a column shown in the “Chosen Columns” list and then click the “Move Up” or “Move Down” buttons in
order to move the selected fields up or down within the list. The order that they are displayed from top to
bottom within the “Chosen Columns” list is the order in which they will be displayed from left to right in the
window once you click the “OK” button to approve your changes.
After you have the desired columns shown in the correct order within the “Add/Edit Multiple List
Entries” window, you can then copy the data from your Microsoft Excel worksheet and paste it into the
columns shown within the “Add/Edit Multiple List Entries” window. Once you have finished copying and
pasting the data, you can then click the “Save Changes” button to save your new list entries.

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VIEWING THE CHART OF ACCOUNTS:

1. Select “Lists| Chart of Accounts” from the Menu Bar.

ADDING NEW ACCOUNTS TO THE CHART OF ACCOUNTS- 2007:2012:

1. Select “Lists| Chart of Accounts” from the Menu Bar, or press “Ctrl”+“A” on your keyboard.
2. Click “Account” in the lower left corner of the “Chart of Accounts” window.
3. Choose the “New” command.
4. Select the type of account needed. Click the “Continue” button to move to “Add New Account” window.
5. Enter a name for the account into the “Account Name” text box.
6. If you are creating a subaccount, check the “Subaccount of” box and choose the associated primary
account. Note that subaccounts must be of the exact same account type as their parent accounts.
7. Enter a description of the account into the “Description” text box. This is optional.
8. Type the bank account number of the account into the “Bank Acct. No.” text box. This is optional.
9. If you need to create an account that had a balance as of the start date of the company file,
a. Click the “Enter Opening Balance…” button.
b. Enter the opening balance amount in the “Statement Ending Balance” text box.
c. Select the statement date, which must be on or before the “start date” from the calendar selector.
d. Click “OK” to save the account’s opening balance. The amounts entered here are attributed to
the “Opening Bal Equity” account in the chart of accounts.
10. Click the “Save & Close” button to create the new account and close the “New Account” window.
11. If you want to continue creating new accounts,
a. Click the “Save & New” button in the “New Account” window to save and clear the window.
b. Enter information for the next account. Note that this time, you will need to select the account
type from the “Account Type” drop-down to start creating the new account.
12. To cancel the account creation, if necessary, click the “Cancel” button

ADDING NEW ACCOUNTS TO THE CHART OF ACCOUNTS- 2003:2006:

1. Select “Lists| Chart of Accounts” from the Menu Bar.

2. Click the “Account” button in the lower left corner of the “Chart of Accounts” window.
3. Select the “New” command from the pop-up menu that appears.
4. In the “New Account” window, enter the account information.
5. Click “OK” when you are done.

ADDING SUBACCOUNTS TO THE CHART OF ACCOUNTS- 2003:2006:

1. Select “Lists| Chart of Accounts” from the Menu Bar.

2. Click the “Account” button in the lower left corner of the “Chart of Accounts” window.
3. Select “New” from the pop-up menu that appears.
4. In the “New Account” window, enter in the subaccount information.
5. In the “New Account” window, click the “Subaccount of” check box.
6. Choose the main account for which you want the current account to act as a subaccount from the drop-
down to the right of the “Subaccount of” check box.
7. Click “OK” when you are done.

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EDITING ACCOUNTS IN THE CHART OF ACCOUNTS:

1. Select “Lists| Chart of Accounts” from the Menu Bar.

2. Click on the name of the account that you want to edit within the chart of accounts in order to select it.
3. Click the “Account” button in the lower left corner of the “Chart of Accounts” window.
4. Select the “Edit (“Edit Account,” in 2005 through 2008)” command from the pop-up menu that appears.
5. In the “Edit Account” window, change the information for the account.
6. Click “OK” when you are done to save your changes.

DELETING ACCOUNTS IN THE CHART OF ACCOUNTS:

1. Select “Lists| Chart of Accounts” from the Menu Bar.

2. Click on the name of the unused account that you want to delete from the chart of accounts in order to
select it.
3. Click the “Account” button in the lower left corner of the “Chart of Accounts” window.
4. Select the “Delete (“Delete Account,” in 2005 through 2008)” command from the pop-up menu that
appears.
5. Click “OK” if you are sure that you want to permanently delete this account.

VIEWING THE “CUSTOMERS & JOBS” TAB- 2006:2012:

1. Open the Customer Center by clicking the “Customer Center” button in the QuickBooks toolbar.
2. Click the “Customers & Jobs” tab at the left side of the Customer Center window.

ADDING NEW CUSTOMERS TO THE “CUSTOMERS & JOBS” TAB- 2006:2012:

1. Click the “New Customer & Job” button.

2. Click the “New Customer” choice.
3. Type a name for the into the “Customer Name” text box.
4. If you are adding a customer who owed you money as of the “Start date” of your company file,
a. Enter the amount owed by the customer into the “Opening Balance” field.
b. Select the start date of your company file from the “as of” calendar drop-down. These fields are
only used when adding customers who owed you money as of your start date. For any future
customers that you add, you will skip these fields.
5. Next, click the “Address Info” tab.
6. Type the company name (which may differ from the “Customer Name” value) into “Company Name”.
7. Enter the name of the person into the “Mr./Ms./…,” “First Name,” “M.I.,” and “Last Name” fields that are
available, if the customer is an individual.
8. Input contact data into the “Contact,” “Phone,” Fax,” “Alt. Phone,” “Alt. Contact,” “E-mail,” and “Cc” fields.
9. Type the billing address into the “Bill To” text box, or click the “Edit” button below the “Bill To” box and
enter the billing address into the “Edit Address Information” window.
10. Click “OK” to display the address in the “Bill To” text box.
11. If the shipping address is the same as the billing address, click the “Copy >>” button to fill out the “Ship
To” box.

(cont.)

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 ACTIONS-
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ADDING NEW CUSTOMERS TO THE “CUSTOMERS & JOBS” TAB- 2006:2012 (CONT.):

12. Add a shipping address by clicking the “Add New” button.

a. Enter a name for the shipping address into the “Address Name” text box.
b. Type the necessary information into the “Address,” “City,” “State/Province,” “Zip/Postal Code,”
and “Country/Region” text boxes.
c. Select a “Default shipping address” if you are creating multiple shipping addresses.
d. Click the “OK” button to save.
13. Add more shipping addresses by repeating the steps above until you are finished.
14. Click the “Additional Info” tab to continue.
15. Select a customer “Type” from the drop-down, or enter a new customer type into the “Type” drop-down.
16. Select the default purchasing “Terms” from the drop down.
17. Use the “Rep” drop-down to assign a sales rep to the customer.
18. Select a default send method for customer forms from the “Preferred Send Method” drop-down.
19. Use the “Tax Code” drop-down to label the selected customer as taxable or non-taxable.
20. Choose the sales tax to apply to purchases from the “Tax Item” drop-down, if the customer is taxable.
21. Enter the customer resale number into the “Resale Number” text box, if one the customer has one.
22. Select the “Price Level” from the drop-down.
23. Enter any information into the customer’s custom fields that you have created.
24. Click the “Payment Info” tab to enter default payment information for the new customer.
25. Enter a customer ID number, or customer account number, into the “Account No.” field.
26. Enter the “Credit Limit”.
27. Choose the default payment method from the drop-down. If you select a credit card type from the drop-
down, enter the cardholder information into the “Credit Card No.,” “Exp. Date,” “Name on card,”
“Address,” and “Zip Code.”
28. To add the customer to the list, just click the “OK” button.
29. If you are creating a new customer, then you are finished at this point. You won’t use the “Job Info” tab,
as that is only used when creating a new job for an existing customer.
30. In QuickBooks 2011:2012, you can click the “Collections Center” button within the “Customer Center” to
open the “Collections Center” window where you can see almost due and overdue customer invoices. If
you click the “Overdue” tab, you can click the “Select and Send Email” button to select customers to
whom you wish to e-mail a payment reminder.

EDITING CUSTOMERS IN THE “CUSTOMERS & JOBS” TAB- 2006:2012:

1. Double-click on the name of the customer in the “Customers & Jobs” tab,
OR
1. Click the “Edit Customer…” button towards the upper-right corner of the Customer Center.
OR
1. Right-click on the customer name in the “Customers & Jobs” tab and then select “Edit Customer:Job”
from the pop-up menu that appears.

2. In the “Edit Customer” window, edit any of the information shown in the three tabs of the window.
3. Click the “OK” button to save your changes and close the window when you are finished.

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 ACTIONS-
Using Lists
DELETING CUSTOMERS FROM THE “CUSTOMERS & JOBS” TAB- 2006:2012:

1. Select the unused customer entry to delete from the “Customers & Jobs” tab.
2. Choose “Edit| Delete Customer:Job” from the Menu Bar.
3. Click “OK”.

VIEWING THE CUSTOMER:JOB LIST- 2003:2005:

1. Select “Lists| Customer:Job List” from the Menu Bar.

ADDING NEW CUSTOMERS TO THE CUSTOMER:JOB LIST- 2003:2005:

1. Select “Lists| Customer:Job List” from the Menu Bar.

2. Click the “Customer:Job” button in the lower left corner.
3. Select “New” from the pop-up menu that appears.
4. In the “New Customer” window, enter in the information for the customer in each tab.
5. Click “OK” when you are done.

EDITING CUSTOMER INFORMATION IN THE CUSTOMER:JOB LIST- 2003:2005:

1. Select “Lists| Customer:Job List” from the Menu Bar.

2. Click on the name of the customer whose information you want to edit in the Customer:Job List.
3. Click the “Customer:Job” button in the lower left corner.
4. Select “Edit (“Edit Customer:Job” in 2005)” from the pop-up menu that appears.
5. In the “Edit Customer” window, change the information for the customer.
6. Click “OK” when you are done.

DELETING CUSTOMERS IN THE CUSTOMER:JOB LIST- 2003:2005:

1. Select “Lists| Customer:Job List” from the Menu Bar.

2. Click on the name of the customer that you want to delete in the Customer:Job List to select it.
3. Click the “Customer:Job” button in the lower left corner.
4. Select “Delete (“Delete Customer:Job” in 2005)” from the pop-up menu that appears.
5. Click “OK” if you are sure that you want to permanently delete this customer.

VIEWING THE “EMPLOYEES” TAB- 2006:2012:

1. Open the Employee Center by clicking the “Employee Center” button in the QuickBooks toolbar.
2. Click the “Employees” tab at the left side of the Employee Center window.

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Using Lists
ADDING NEW EMPLOYEES TO THE “EMPLOYEES” TAB- 2006:2012:

1. Click the “New Employee…” button in the upper-left corner of the Employee Center.
2. Select the “Personal Info” set of tabs from the “Change tabs:” drop-down.
3. Click the “Personal” tab and enter the employee’s name into the “Mr./Ms./…,” “First Name,” “M.I.,” and
“Last Name” fields.
4. Enter the name as it should appear on checks into the “Print on Checks as” text box.
5. Enter the social security number into the “SS No.” field.
6. Input gender and date of birth into the “Gender” and “Date of Birth” fields available. This is optional.
7. Click the “Address and Contact” tab to continue.
8. Enter the employee’s home address into the “Address,” “City,” “State,” and “Zip” fields available.
9. Enter “Phone,” “Cellular,” “Alt. Phone,” “Fax,” “E-mail,” “Pager,” and “PIN (Pager)” information.
10. Click the “Additional Info” tab to continue data entry.
12. Enter employee ID number into the “Account No. (Employee ID)” field.
13. Enter information into the “Custom Fields” section of this tab.
14. Use the “Change tabs:” drop-down to select “Employment Info” and show the “Employment” tab.
15. Enter the hire date of the employee into the “Hire Date” field.
16. Enter the last payroll date into the “Release Date (Last Date on Payroll)” field when an employee leaves.
17. In the “Employment Details” section, classify the employee as a “Regular” (W-2) employee, a “Statutory”
(1099) employee, or an “Officer” or “Owner” of the company.
18. When you are ready to enter payroll and workers compensation information, choose those options from
the “Change tabs:” drop-down. This information is discussed in depth in Chapter 20, which is included in
the Advanced QuickBooks program.
19. Note that if you start to create a new employee, but don’t enter payroll information, then you will be
prompted by QuickBooks do so when you click “OK” to save the record and close the window. If you
want to save the record as is, then just click the “Leave As Is” button. If you want to return to enter
payroll information, then click the “Set Up Now” button and enter the payroll data.

EDITING EMPLOYEES IN THE “EMPLOYEES” TAB- 2006:2012:

1. Click the “Edit Employee…” button towards the upper-right corner of the Employee Center window.

OR

1. Double-click on the name of the employee shown in the “Employees” tab.

2. Change or add necessary employee or payroll information on the tabs in the “Edit Employee” window.
3. Click the “OK” button when you are finished to save the data entry.

DELETING EMPLOYEES FROM THE “EMPLOYEES” TAB- 2006:2012:

1. Select the unused employee record to delete from the “Employees” tab in the Employee Center window.
2. Choose “Edit| Delete Employee” from the Menu Bar.
3. Click “OK” to permanently delete the selected employee record.

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 ACTIONS-
Using Lists
VIEWING THE EMPLOYEE LIST- 2003:2005:

1. Select “Lists| Employee List” from the Menu Bar.

ADDING NEW EMPLOYEES TO THE EMPLOYEE LIST- 2003:2005:

1. Select “Lists| Employee List” from the Menu Bar.

2. Click the “Employee” button in the lower left corner.
3. Select “New” from the pop-up menu that appears.
4. In the “New Employee” window, select what type of employee information to set-up from the “Change
tabs” drop-down at the top center of the screen.
5. Fill-in the appropriate information for each tab. Repeat steps 4 and 5 for all of the sections available
through the “Change tabs” drop-down to set up the employee.
6. Click “OK” when you are done.

EDITING EMPLOYEE INFORMATION IN THE EMPLOYEE LIST- 2003:2005:

1. Select “Lists| Employee List” from the Menu Bar.

2. Click on the name of the employee whose information you want to edit in the Employee List.
3. Click the “Employee” button in the lower left corner.
4. Select “Edit (“Edit Employee” in 2005)” from the pop-up menu that appears.
5. In the “Edit Employee” window, change the information for the employee.
6. Click “OK” when you are done.

DELETING EMPLOYEES IN THE EMPLOYEE LIST- 2003:2005:

1. Select “Lists| Employee List” from the Menu Bar.

2. Click on the name of the employee that you want to delete in the Employee List to select it.
3. Click the “Employee” button in the lower left corner.
4. Select “Delete (“Delete Employee” in 2005)” from the pop-up menu that appears.
5. Click “OK” if you are sure that you want to permanently delete this employee.

VIEWING THE “VENDORS” TAB- 2006:2012:

1. Open the Vendor Center by clicking the “Vendor Center” button in the QuickBooks toolbar.
2. Click the “Vendors” tab at the left side of the Vendor Center window.

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 ACTIONS-
Using Lists
ADDING NEW VENDORS TO THE “VENDORS” TAB- 2006:2012:

1. Click the “New Vendor…” button that appears in the upper-left corner of the Vendor Center. In
QuickBooks 2010 and 2012, then select “New Vendor” from the drop-down menu that appears.
2. Type a unique name for this vendor into the “Vendor Name” text box.
3. If you are adding a vendor to whom you owed money as of the start date of your company,
a. Enter the amount outstanding (as of the start date) into the “Opening Balance” field.
b. Select your company file’s start date from the “as of” calendar selector. Only perform this task
when initially adding vendors to whom you owed money as of your start date. If you are creating
a vendor that did not owe you money as of your company file’s start date, then you will skip the
“Opening Balance” and the “as of” fields.
4. Click the “Address Info” tab and enter the company name of the vendor into the “Company Name” field.
5. Enter the “Mr./Ms./…,” “First Name,” “M.I.,” and “Last Name” information if the vendor is an individual.
6. Enter the billing address of the vendor into the “Name and Address” text box. Click the “Address Details”
to edit the vendor address information. Click the “OK” when you are finished.
7. If the vendor has a primary contact, enter that name into the “Contact” field.
8. Enter contact information into the “Phone,” “FAX,” “Alt. Phone,” “Alt. Contact,” “E-mail,” and “Cc” fields.
9. Input the vendor name, as it should appear on checks, into the “Print on Checks as” field.
10. Click the “Additional Info” tab.
11. Type your company account number with the vendor into the “Account No.” field.
12. In the “Categorizing and Defaults” section, select vendor “Type” from the drop-down, or enter your own
into the text box.
13. Select the “Terms” that you have been assigned from the drop-down.
14. Enter your credit limit into the “Credit Limit” text box.
15. If the vendor is a subcontractor, enter the tax ID of the subcontractor into the “Tax ID” text box.
16. If the vendor is eligible for a 1099 form, check the “Vendor eligible for 1099” check box. This will include
the vendor when printing 1099 forms and reports.
17. At the right side of the “Additional Info” tab, enter any custom field values for your vendors.
18. Click the “OK” button to save the new vendor record and close the window.

EDITING VENDORS IN THE “VENDORS” TAB- 2006:2012:

1. Select the vendor from the “Vendors” tab in the Vendor Center.
2. Double-click on the name shown in the list, or click the “Edit vendor…” button in the upper-right corner
of the Vendor Center to open the “Edit Vendor” window.
3. Make whatever changes are needed in the tabs displayed in this window.
4. Click the “OK” button to save the record.

DELETING VENDORS FROM THE “VENDORS” TAB- 2006:2012:

1. Select the unused vendor record to delete from the “Vendors” tab in the Vendor Center.
2. Choose “Edit| Delete Vendor” from the Menu Bar.
3. Click “OK” in the confirmation message box that appears to permanently delete the selected record.

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 ACTIONS-
Using Lists
VIEWING THE VENDOR LIST- 2003:2005:

1. Select “Lists| Vendor List” from the Menu Bar.

ADDING NEW VENDORS TO THE VENDOR LIST- 2003:2005:

1. Select “Lists| Vendor List” from the Menu Bar.

2. Click the “Vendor” button in the lower left corner.
3. Select “New” from the pop-up menu that appears.
4. Enter the information for the vendor in each tab of the “New Vendor” window.
5. Click “OK” when done.

EDITING VENDOR INFORMATION IN THE VENDOR LIST- 2003:2005:

1. Select “Lists| Vendor List” from the Menu Bar.

2. Click on the name of the vendor that you want to edit the information of in the Vendor List to select it.
3. Click the “Vendor” button in the lower left corner.
4. Select “Edit (“Edit Vendor” in 2005)” from the pop-up menu that appears.
5. Change the information for the vendor in the “Edit Vendor” window.
6. Click “OK” when you are done.

DELETING VENDORS FROM THE VENDOR LIST- 2003:2005:

1. Select “Lists| Vendor List” from the Menu Bar.

2. Click on the name of the vendor that you want to delete in the Vendor List to select it.
3. Click the “Vendor” button in the lower left corner.
4. Select “Delete (“Delete Vendor” in 2005)” from the pop-up menu that appears.
5. Click “OK” if you are sure that you want to permanently delete this vendor.

USING CUSTOM FIELDS IN THE CUSTOMER, VENDOR, OR EMPLOYEE LISTS:

1. Open the list in which you want to create customized fields.

2. Open either the “New” or “Edit” window within the selected list.
3. Click the “Additional Info” tab.
4. Click the “Define Fields” button.
5. In the first blank field, type the name for your new custom field.
6. Place check marks in the column, under the lists, in which you want the new custom field to appear (no
more than seven checks per list column).
7. Click “OK” in the “Define Fields” window when you are done.

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 ACTIONS-
Using Lists
ADDING CUSTOM FIELDS TO THE ITEM LIST:

1. Open the Item list.

2. Open either the “New Item” or “Edit Item” window from the list
3. Click the “Custom Fields” button.
4. In the “Custom Fields” window, click the “Define Fields” button.
5. In the first blank field, check the “Use” checkbox.
6. To the right of the “Use” checkbox, type the you want to give to your new custom field.
7. Click “OK” in the “Define Fields” window when you are done.
8. Click “OK” in the “Custom Fields” window when you are done.

SORTING LISTS MANUALLY:

1. Open the list.

2. Click and drag one of the list items by the little black diamond to the left of its name.
3. Release it in its new location in the list.

SORTING LISTS AUTOMATICALLY:

1. Open the list you want to sort by the values shown in one of its columns.
2. Click on the gray column header at the top of the column by whose values you wish to sort the list. A
small arrow will appear next to the title of the column, pointing up or down. An “up” arrow indicates an
ascending sorting order, and the “down” arrow indicates a descending sorting order. Clicking the name
of the column shown in the column heading will toggle the arrow between the “up” and “down” positions.
3. When you automatically sort a list, a large black diamond appears at the far left side of the row of gray
column headings. This lets you know that the list is being sorted. To remove the automatic sorting and
return the list to its default sorting order, just click the large black diamond to remove the applied sorting.

RE-SORTING LISTS:

1. Open the list you want to return to its original sorting order.
2. If the list you are re-sorting has a button in the lower-left corner, then click the button in the lower left
corner and select “Re-sort List” from the pop-up menu that appears.

OR

2. In QuickBooks 2006:2012, you can re-sort the Employee, Vendor and Customer lists by selecting an
item in one of the lists and then selecting “View| Re-sort List” from the Menu Bar.

MAKING LIST ITEMS INACTIVE:

1. Open the list that contains the item that you want to make inactive.
2. Right-click on the list item
3. Select “Make Inactive (“Make [list item] Inactive” in 2005 through 2012)” from the pop-up menu.

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 ACTIONS-
Using Lists
ACTIVATING INACTIVE LIST ITEMS:

1. Open the list that contains the inactive item that you want reactivated.
2. If you are using QuickBooks 2003 through 2005, click the check box for “Show All (“Include Inactive” in
2005)” at the bottom of the list window.

OR

2. If you are using QuickBooks 2006:2012 and are using either the “Customers & Jobs,” “Vendors,” or
“Employees” lists, then use the “View” drop-down above the list to select “All [item type].”
3. Click the “X” in front of the list item that you want to reactivate from the left column that appears.

PRINTING LISTS:

1. Open the list that you want to print.

2. For most lists, click the button in the lower left corner and select “Print List…” from the pop-up menu.

OR

2. If you are using QuickBooks 2006:2012 and are using either the “Customers & Jobs,” “Vendors,” or
“Employees” lists, click the “Print…” button at the top of the respective Center.
3. Choose the name of the list from the drop-down that appears.
4. Click “OK” to bypass the List Reports message.
5. Select to print to a printer, and click “Print.”

RENAMING LIST ITEMS:

1. Open the list in which you want to rename an item.

2. Open the “Edit” window for the list item.
3. In the “Edit [list item]” window, type in a new name for the entry and click “OK.”

MERGING LIST ITEMS:

1. Open the list in which you want to rename an item.

2. Open the “Edit” window for the list item.
3. In the “Edit [list item]” window, type in the exact same as the entry that you will keep.
4. Click “OK.”
5. QuickBooks wants to know if you mean to merge these items, select “Yes,” if you do.

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 ACTIONS-
Using Lists
USING THE “ADD/EDIT MULTIPLE LIST ENTRIES” WINDOW- 2010:2012:

1. Select “Lists| Add/Edit Multiple List Entries” from the Menu Bar.
2. First, use the “List” drop-down at the top of this window to select the list into which you would like to
copy data from your Excel worksheet.
3. If needed, you can customize the columns shown in this window to match the columns within your Excel
worksheet by clicking the “Customize Columns” button that appears in the upper-right corner of the
window.
4. In the “Customize Columns” window that appears, you can select column names from the “Available
Columns” and “Chosen Columns” lists, and then click either the “Add >” or “< Remove” buttons to add or
remove desired columns.
5. If you wish to reorganize their display, you can select the name of a column shown in the “Chosen
Columns” list and then click the “Move Up” or “Move Down” buttons in order to move the selected fields
up or down within the list. The order that they are displayed from top to bottom within the “Chosen
Columns” list is the order in which they will be displayed from left to right in the window once you click
the “OK” button to approve your changes.
6. After you have the desired columns shown in the correct order within the “Add/Edit Multiple List Entries”
window, you can then copy the data from your Microsoft Excel worksheet and paste it into the columns
shown within the “Add/Edit Multiple List Entries” window.
7. Once you have finished copying and pasting the data, you can then click the “Save Changes” button to
save your new list entries.

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 EXERCISES-
Using Lists
Purpose:

To be able to add and edit list items, to be able to sort list items, to be able to rename list items.

Exercises- 2006:2012:

1. Open up the “California Construction Company” company file you created in the Chapter 1 Exercise.
2. If needed, click the “Begin Using QuickBooks” button in the “QuickBooks Learning Center” window,
and close any “Alert” windows that appear.
3. Select “Lists| Chart of Accounts” from the Menu Bar.
4. Click the “Account” button in the lower left corner of the list, and click the “New” command from the
pop-up window that displays.
5. If using QuickBooks 2006, then in the “New Account” window , select “Expense” from the “Type”
drop-down. If using QuickBooks 2007:2012, select the “Expense” option button and then click
“Continue.”
6. If using QuickBooks 2006, in the “Name” text box, type “Carpet Cleaning.” If using QuickBooks
2007:2012, in the “Account Name:” text box, type “Cleaning/Janitorial.”
7. If using QuickBooks 2006, click the “Subaccount of” check box and then select “Cleaning/Janitorial”
from the drop-down list that follows it.
8. If using QuickBooks 2006, click “OK” to add the account to the chart of accounts. If using
QuickBooks 2007:2012, click the “Save & Close” button to save the account and close the window.
9. If using QuickBooks 2012, click the “Account” button in the lower left corner of the list, and click the
“New” command from the pop-up window that displays. Select “Bank” as the account type, and then
click the “Continue” button. Enter “Checking” into the “Account Name” field. Then click the “Save &
Close” button. Select “No” if prompted to setup online services.
10. Click the “Checking” account in the chart of accounts window
11. Click the “Account” button in the lower left corner of the list, and then click the “Edit Account”
command from the pop-up window that displays.
12. In the “Description” text box, type “National Bank.”
13. In the “Bank Acct. No.” text box, type “12-1234567.”
14. Click “OK” to save your editing changes, if using QuickBooks 2006. If using QuickBooks 2007:2012,
click the “Save & Close” button, instead.
15. At the top of the chart of accounts, click the gray column heading for “Name.”
16. Click the big black diamond to the left of the “Name” column heading to remove the sorting.
17. Click the “Checking” account in the chart of accounts.
18. Click the “Account” button in the lower left corner of the list, and click the “Edit Account” command
from the pop-up window that displays.
19. Type “Primary Checking” in the “Name” (“Account Name:” in QuickBooks 2007) text box.
20. Click “OK” (“Save & Close” in QuickBooks 2007:2012) to rename the account.
21. Select “File| Close” company from the Menu Bar to close the company file when you are finished.

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 EXERCISES-
Using Lists
Purpose:

To be able to add, edit, and delete items in lists; to be able to inactivate and reactivate items, to be
able to sort list items, to be able to rename list items.

Exercises- 2003:2005:

1. Open up the “California Construction Company” company file you created in the Chapter 1 Exercise.
2. Select “Lists| Chart of Accounts” from the Menu Bar.
3. Click the “Account” button in the lower left corner of the list, and click the “New” command from the
pop-up window that displays.
4. From the “Type” drop-down, select “Expense.”
5. In the “Name” text box, type “Carpet Cleaning.”
6. Click the “Subaccount of” check box, and select “Cleaning” from the drop-down list that follows it.
7. In the “Description” text box, type “Office Carpet Cleaning.”
8. Click “OK” to add the account to the chart of accounts.
9. Click the “Checking” account in the chart of accounts.
10. Click the “Account” button in the lower left corner of the list, and click the “Edit (“Edit Account” in
QuickBooks 2005)” command from the pop-up window that displays.
11. In the “Description” text box, type “National Bank.”
12. In the “Bank Acct. No.” text box, type “12-1234567.”
13. Click “OK” to save your editing changes.
14. Click the “Commissions Earned” account in the chart of accounts.
15. Click the “Account” button in the lower left corner of the list, and click the “Delete (“Delete Account”
in QuickBooks 2005)” command from the pop-up window that displays.
16. Click “OK” to delete the selected account.
17. Select the “Sanitation” expense account.
18. Click the “Account” button in the lower left corner of the list, and click the “Make Inactive (“Make
Account Inactive” in 2005)” command from the pop-up window that displays.
19. Click the “Show All (“Include inactive” in 2005)” check box at the bottom center of the chart of
accounts.
20. Click the gray “X” next to the “Sanitation” expense account to reactivate it.
21. At the top of the chart of accounts, click the gray column heading for “Name.”
22. Click the big black diamond to the left of the “Name” column heading to remove the sorting.
23. Click the “Checking” account in the chart of accounts.
24. Click the “Account” button in the lower left corner of the list, and click the “Edit (“Edit Account” in
2005)” command from the pop-up window that displays.
25. Type “Primary Checking” in the “Name” text box.
26. Click “OK” to rename the account.
27. Select “File| Close” company from the Menu Bar to close the company file when you are finished.

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 CHAPTER 4-
Setting Up Sales Tax
4.1- The Sales Tax Process

4.2- Setting Up Your Tax Agencies

4.3- Setting Up Your Tax Rates

4.4- Creating a Sales Tax Group

4.5- Setting Sales Tax Preferences

4.6- Indicating Who and What Gets Taxed

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 Setting Up Sales Tax

4.1- The Sales Tax Process:

Collecting and paying sales tax can be complicated for some types of business. For example, a
company may have to collect and pay more than one sales tax. Many companies may have a mix of taxable
and non-taxable items that are sold. Many also have some customers that are taxable while other
customers aren’t. In QuickBooks, you can apply sales tax on selected items for taxable customers during
the sales process. It also keeps track of how much you collect, and for whom you are collecting the sales
tax. From this information, QuickBooks later helps you to write the check or checks to the appropriate tax
agency or agencies when the taxes you have collected are due. However, in order to use QuickBooks to
track and pay your sales tax, you’ll have to do the following steps listed in the table. We will then examine
each part of this process in detail, to assist you in setting up your company to track and pay sales tax.

What to do: Description:

Set up your taxing In the Vendor list, you set up the tax agencies to whom you submit the collected taxes.
agencies, sales tax In the QuickBooks Item list, set up the separate tax rates you need to charge for each
rates and sales tax tax you collect. If needed, you can also create sales tax groups that asses a set of taxes
groups. on sales in each district for which you collect and report sales tax.
Indicate who and In your Item and Customer:Job lists, you indicate which items and customers are
what gets taxed. taxable or non-taxable. You can then assign sales tax rates or sales tax groups to your
taxable customers.
Apply tax to taxable When you create an invoice or sales receipt that includes taxable items for a taxable
sales. customer, QuickBooks calculates, collects and tracks the sales tax automatically.
Find out what you As you record taxable sales, QuickBooks keeps track of the taxes you’ve collected in
owe. your Sales Tax Payable account. When you’re ready to pay your sales tax agency, you
can open the Sales Tax Payable register to see how much you owe, or you can create a
sales tax liability report.
Pay your tax In the “Pay Sales Tax” window, QuickBooks shows the sales tax owed and writes the
agencies. check or checks to the tax agency or agencies for the amount or amounts collected.

4.2- Setting Up Your Tax Agencies:

The first thing that you have to do is enter the agencies for whom you collect sales taxes, and to
whom you pay the sales taxes collected, as vendors in the Vendor List.

4.3- Setting Up Your Tax Rates:

In the QuickBooks Item list, you must create a separate tax item for each single sales tax that you
must report (not necessarily for each tax you collect- some states want you to report state sales tax and
county sales tax as separate items, while others want you report them as one item). However, even if you
collect and later pay more than one sales tax, you will usually only want your customers to see one sales
tax amount on invoices and sales receipts. Therefore, you can create a Sales Tax Group to collect multiple
taxes on a sale and have the total sales tax rate appear for the customer in the sales form as a single line
item. You create Sales Tax Items and Sales Tax Groups in the Item List in QuickBooks.

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 Setting Up Sales Tax

4.4- Creating a Sales Tax Group:

Even if you collect a combination of sales taxes that you report separately (like a county sales tax
and a city sales tax, for example), you don’t want to confuse your customers by showing different sales
taxes on your invoice or sales forms. Many customers will mistakenly assume they are being taxed twice.
QuickBooks lets you group some or all of your tax items together as a Sales Tax Group, so that customers
see a single tax amount on sales forms, while QuickBooks still reports on and collects each tax within the
group separately. You create the Sales Tax Group as another type of item in your Item List.

4.5- Setting Sales Tax Preferences:

You should inspect your sales tax preferences in QuickBooks before you begin collecting sales
taxes, in case you wish to edit any of the default settings. To do this, select “Edit| Preferences…” from the
Menu Bar to bring up the “Preferences” dialog box for QuickBooks. From the scroll box at the left side of this
screen, click the “Sales Tax” icon, and then click the “Company Preferences” tab to the right. Here you can
inspect and set the default options for collecting sales taxes, as needed, and then click the “OK” button in
the “Preferences” dialog box to save your settings.

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 Setting Up Sales Tax

4.6- Indicating Who and What Gets Taxed:

Next, you have to indicate who and what gets taxed in your company file. So, in the Customer:Job
List, you have to tell QuickBooks which customers are taxable and non-taxable. You must then assign a
default tax item or tax group to use when entering sales for the taxable customers.
After that, in the Items list, you must also set the taxable and non-taxable status of the items used in
your sales forms. QuickBooks remembers this information, and shows whether or not an item is taxable
when you enter it on a sales form. It then collects the appropriate taxes for taxable customer sales. You
most likely have already done much of the work involved with this step when you created each customer
and each item in the Customer:Job and Item Lists.
At that point, you are ready to collect sales taxes through the Sales Receipts and Invoices used in
QuickBooks. We will look at collecting the taxes in these forms, and then examine the process for paying
your sales taxes that you’ve collected in these forms, in a later chapter.

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 ACTIONS-
Setting Up Sales Tax
CREATING A SALES TAX ITEM:

1. Select “Lists| Item List” from the Menu Bar.

2. Click the “Item” button in the lower left corner of the “Item List” window.
3. Select “New” from the pop-up menu that appears.
4. Select “Sales Tax Item” from the “Type” drop-down menu in the “New Item” window.
5. In the “Sales Tax Name:” field, type a name for the sales tax item.
6. In the “Description” field, type in a description shown to the customer in your sales forms.
7. In the “Tax Rate (%)” field, type in the tax rate, as a percentage, for this tax.
8. In the “Tax Agency” field, select the name of the tax agency (vendor) to whom you will pay this tax.
9. Click “OK.”
10. If QuickBooks tells you that the vendor you selected isn’t in the list, click the “QuickAdd” button to add
the taxing agency in your Vendor List, and then click the “OK” button.

CREATING A SALES TAX GROUP:

1. Select “Lists| Item List” from the Menu Bar.

2. Click the “Item” button in the lower left corner, and select “New” from the pop-up menu that appears.
3. From the “Type” drop-down field, select “Sales Tax Group.”
4. Type a name for the sales tax group into the “Group Name/Number” field.
5. Type the description that appears for the group when used in sales forms into the “Description” field.
6. Click into the first blank row in the “Tax Item” column at the bottom of the window.
7. Choose the first tax that you want to include in the group from the drop-down menu that appears.
8. Repeat steps #6 and #7 until all the taxes that you want to include in the group are listed in the “Tax
Item” column.
9. Click “OK” when you are done to save the sales tax group.

SETTING DEFAULT SALES TAX PREFERENCES:

1. Select “Edit| Preferences…” from the Menu Bar.

2. In the “Preferences” window, click the “Sales Tax” icon in the scroll box to the left.
3. Click the “Company Preferences” tab on the right.
4. Set all of the default preferences you use for collecting and paying sales taxes, if needed.
5. Click “OK” to save your sales tax defaults.

INDICATING A TAXABLE ITEM:

1. Select “Lists| Item List” from the Menu Bar.

2. Select the item in the list that you want to indicate is a taxable item.
3. Click the “Item” button, and select “Edit” (“Edit Item” in 2005 through 2010) from the pop-up menu.
4. In the “Tax Code” field, make sure that the item is marked as taxable using the tax codes available.
5. Click “OK” to close the “Edit Item” window.

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 ACTIONS-
Setting Up Sales Tax
TO INDICATE A TAXABLE CUSTOMER- 2006:2012:

1. Click the “Customer Center” button in the QuickBooks toolbar.

2. Click the “Customers & Jobs” tab at the left side of the Customer Center window.
3. Double-click on the name of the customer in the list to open the “Edit Customer” window.
4. Click the “Additional Info” tab.
5. Select the “Tax Code” field, and make sure that the customer is indicated as being taxable.
6. Select the sales tax item or sales tax group to apply to this customer from the “Tax Item” drop-down.
7. Click “OK” to save changes and close the “Edit Customer” window.

TO INDICATE A TAXABLE CUSTOMER- 2003:2005:

1. Select “Lists| Customer:Job List” from the Menu Bar.

2. Select the customer that you want to indicate is a taxable customer from the list.
3. Click the “Customer:Job” button, and select “Edit (“Edit Customer:Job” in 2005)” from the pop-up menu.
4. Click the “Additional Info” tab for the customer.
5. Select the “Tax Code” field, and make sure that the customer is indicated as being taxable.
6. Select the tax item to apply to this customer from the “Tax Item” drop-down field.
7. Click “OK” to close and save changes.

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 EXERCISES-
Setting Up Sales Tax
Purpose:

To be able to create a tax rate and set tax preferences.

Exercises- 2003:2012:

1. Open up the “California Construction Company” company file that you created back in the Exercise
from Chapter 1.
2. Select “Edit| Preferences…” from the Menu Bar.
3. Scroll down in the list box at the left side of the “Preferences” window to the “Sales Tax” icon and
click it to select it.
4. Click the “Company Preferences” tab at the upper right corner of the “Preferences” dialog box.
5. Inspect the default sales tax settings, and then close the “Preferences” dialog box.
6. Select “Lists| Item List” from the Menu Bar.
7. Select the “Item” button in the lower left corner, and select “New” from the pop-up menu that
appears.
8. From the “Type” drop-down that displays, click “Sales Tax Item.”
9. Type “Coast Town City Tax” in the “Tax Name” text box.
10. Type “Sales Tax” in the “Description” text box.
11. Type “1” in the “Tax Rate (%)” text box.
12. Type “City of Coast Town” in the “Tax Agency” text box.
13. Press “Tab” on your keyboard to leave the field.
14. In the “Vendor Not Found” dialog box, click the “QuickAdd” button to add the vendor name to the
Vendors list.
15. Click “OK” to save the sales tax item.
16. Close the Item List.
17. Select “File| Close” company from the Menu Bar to close the company file when you are finished.

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 CHAPTER 5-
Setting Up Inventory Items
5.1- Setting Up Inventory

5.2- Creating Inventory Items

5.3- Creating a Purchase Order

5.4- Receiving Items with a Bill

5.5- Entering Item Receipts

5.6- Matching Bills to Item Receipts

5.7- Adjusting Inventory

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 Setting Up Inventory Items

5.1- Setting Up Inventory:

For many companies, inventory is enabled in the company file during the “EasyStep Interview.” If
you want to turn on this feature at a later time, or if you simply want to view the default inventory
preferences, select “Edit| Preferences…” from the Menu Bar. In the “Preferences” dialog box, select
“Purchases & Vendors” from the scroll box at the left side if using QuickBooks 2003 through 2006. If you are
using QuickBooks 2007:2012, select “Items & Inventory” from the scroll box, instead. To the right, click the
“Company Preferences” tab, and make sure the “Inventory and purchase orders are active” checkbox is
selected. Then set any additional defaults that you need for inventory and items. Click “OK” to set your
default inventory preferences.
If inventory is enabled, QuickBooks only uses the average cost method to determine the value of
inventory. QuickBooks cannot use FIFO or LIFO methods. The average cost of an inventory item equals
the total cost of the items currently in stock, divided by the number of items in stock. With QuickBooks, you
can track the number of items in stock and the value of your inventory after every purchase and sale. As
you order, receive, and sell inventory items QuickBooks records each inventory-related sale and adjusts the
inventory quantity and value accordingly.
However, in order to track inventory, you must enter each product that you want to track as an
“Inventory Part” into the Item List. Only for “Inventory Part” items in the Item List does QuickBooks track the
quantity and value as you sell or reorder the items. Use the Item List to add, edit, delete, and inactivate
inventory part items. You can display the Item List by selecting “Lists| Item List” from the Menu Bar.

5.2- Creating Inventory Items:

You can set up “Inventory Part” items in the Item List to create items for which you want to track the
quantity and value in QuickBooks. You cannot show inventory value for a manufacturing company or where
the inventory value is changed as it goes through a process, as it is simply too complex for QuickBooks to
compute. However, if you have items that you purchase from a vendor, hold as inventory, and then resell to
customers, you can set up those items as “Inventory Parts” for ease of tracking in QuickBooks.

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 Setting Up Inventory Items

5.3- Creating a Purchase Order:

Once you’ve entered your inventory into the Item List, you’ll need to reorder the products in the
future in order to keep your inventory parts stocked. While QuickBooks doesn’t require you to use purchase
orders, it is recommended. If you use purchase orders, you can see what items you have on order and
when they are due to be received. You will also be able to compare what you receive against the items in
the purchase order. If you don’t order items in advance, or don’t want to use purchase orders, you can buy
inventory directly by using the “Items” tab when writing a check to a vendor or entering a credit card
purchase from a vendor.
You can create a purchase order by selecting “Vendors| Create Purchase Orders” from the Menu
Bar. Here you enter the items you wish to purchase, the quantity, and the vendor from whom you wish to
make the purchase. After you have created a purchase order, QuickBooks creates an account called
“Purchase Orders” in the Chart of Accounts. This is a non-posting account and doesn’t affect your balance
sheet or income statement. The Purchase Orders account is used to produce a QuickReport showing
current purchase orders, so you’ll always know what is on order.

5.4- Receiving Items with a Bill:

When you receive the inventory items along with the bill for the inventory items that you have
ordered with your purchase order, you have to enter the items into inventory and also note the fact that you
have also received the bill for these items.
You can receive items into your inventory along with the bill for the items by selecting “Vendors|
Receive Items and Enter Bill” from the Menu Bar. In the window that appears, you select the vendor from
whom you are receiving the items, and choose from which purchase order you are receiving items against.
Once you have entered the quantities that arrived, QuickBooks will move the items into inventory and create
a bill for you to pay. Make sure that you record the inventory when it arrives, because QuickBooks must
have the inventory on hand before you can enter a sale for the inventory parts.

5.5- Entering Item Receipts:

When you receive inventory items that you have ordered from a purchase order, you have to enter
the items into inventory in order to sell them in your sales forms. Sometimes you receive items without a
corresponding bill for those items. In that case, you create an item receipt that you can then match up to the
vendor bill when it finally arrives.
You can create an item receipt for items that you received without a bill by selecting “Vendors|
Receive Items” from the Menu Bar. This is essentially the same process that you go through to enter items
received along with a vendor bill. However, notice that this window has no check in the “Bill Received”
checkbox, which makes it only an item receipt. When the bill does arrive, we will match it to the appropriate
item receipt to enter the bill when it is actually received.

5.6- Matching Bills to Item Receipts:

Once you get the vendor bill for items already received, you must match the vendor bill to the item
receipt created for the items when you received them. To do this, select “Vendors| Enter Bill for Received
Items” from the Menu Bar. In this screen, select the vendor from whom you received the items and the

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 Setting Up Inventory Items

5.6- Matching Bills to Item Receipts- (cont.):

item receipt that was created. QuickBooks will automatically create the bill from the item receipt by placing a
checkbox in the “Bill Received” field. Just save and close the screen, making sure that you save your
changes in order to record the bill.

5.7- Adjusting Inventory:

When you have loss, spoilage, or send out samples of your products, you will need to adjust your
inventory levels manually. QuickBooks allows you to do this in the “Adjust Quantity/Value on Hand” window.
To view this window, simply select “Vendors| Inventory Activities| Adjust Quantity/Value on Hand” from the
Menu Bar.
Here you will need to find the item for which you need to adjust the quantity, and either type the new
quantity (in the case of a physical recount) or the quantity difference (in case you broke two out of several
hundred items). If you enter in a loss of items in the “Qty Difference” column, make sure that you enter the
difference as a negative number! Once you have adjusted the inventory appropriately, just save and close
this screen to finish the adjustment.

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 ACTIONS-
Setting Up Inventory Items
ENTERING INVENTORY PARTS INTO THE ITEM LIST:

1. Select “Vendors| Item List” from the Menu Bar.

2. Click the “Item” button in the lower left corner, and select “New” from the pop-up menu.
3. In the “New Item” window, select “Inventory Part” from the “Type” drop-down. This will change the fields
available for data entry in this dialog box.
4. Enter the unique name or item number into the “Item Name/Number” text box.
5. If the item is a subitem of a larger category
a. Check the “Subitem of” checkbox and
b. Select the name of the larger item group to which this item belongs from the drop-down.
6. Type the item description as it should appear on purchase orders into the “Description on Purchase
Transactions” text box in the “Purchase Information” section.
7. Enter the default cost of the item when you purchase it into the “Cost” text box. This is optional.
8. Use the “COGS Account” drop-down to select the cost of goods sold account used in purchase
transactions.
9. Select the “Preferred Vendor” from the drop-down. This is optional.
10. Type a description of the item as it should appear on invoices and sales receipts into the “Description on
Sales Transactions” text box in the “Sales Information” section. This is optional.
11. Enter the default price at which you sell the item into the “Sales Price” text box. This is optional.
12. Use the “Tax Code” drop-down to specify the tax status of the item.
13. Select the income account affected by the sale of this item from the “Income Account” drop-down.
14. In the “Inventory Information” section at the bottom of the dialog box, use the “Asset Account” drop-
down to select the inventory account used to track the value of the inventory purchased.
15. Enter the number at which you would like QuickBooks to remind you to reorder the item into the
“Reorder Point” text box.
16. Click “OK” when you are done.

CREATING PURCHASE ORDERS:

1. Select “Vendors| Create Purchase Orders” from the Menu Bar.

2. Select the appropriate vendor for the products from the “Vendors” drop-down field.
3. In the “Item” column below, select the item that you want to order.
4. In the “Qty” field, type the quantity of the item that you want to purchase.
5. Repeat steps 3 and 4 for each line in the purchase order until you have entered all of the items needed.
6. If necessary, you can type a message to the vendor in the “Vendor Message” field.
7. Click the “Save & Close” button to save and close the Purchase Order.

GENERATING A PURCHASE ORDER REPORT:

1. Select “Lists| Chart of Accounts” from the Menu Bar.

2. In the Chart of Accounts, select “Purchase Orders” once to select it.
3. Click the “Reports” button, and choose “QuickReport: Purchase Orders” from the pop-up menu.

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 ACTIONS-
Setting Up Inventory Items
ENTERING A BILL AND RECEIVING INVENTORY:

1. Select “Vendors| Receive Items and Enter Bill” from the Menu Bar.
2. Select the name of the vendor from whom you’ve received the inventory from the “Vendor” drop-down.
3. Click “Yes” when QuickBooks asks if you wish to receive against one of the vendor’s open purchase
orders.
4. In the “Open Purchase Orders” window, click the appropriate purchase order to select it.
5. Click “OK” to move the information to the bill shown.
6. Click “Save & Close” to enter the bill and receive the inventory.

CREATING AN ITEM RECEIPT:

1. Select “Vendors| Receive Items” from the Menu Bar.

2. Select the name of the vendor from whom you’ve received the inventory from the “Vendor” drop-down.
3. Click “Yes” when QuickBooks asks if you wish to receive against one of the vendor’s open purchase
orders.
4. In the “Open Purchase Orders” window, click the appropriate purchase order to select it.
5. Click “OK” to move the information to the item receipt.
6. Click “Save & Close” to process the receipt and receive the inventory without entering the vendor bill.

MATCHING A BILL TO AN ITEM RECEIPT:

1. Select “Vendors| Enter Bill for Received Items” from the Menu Bar.
2. Select the name of the vendor for whom you’ve entered the item receipt from the “Vendor” drop-down.
3. Select the item receipt that corresponds to your received bill from the listing below the vendor.
4. Click “OK” in the “Select Item Receipt” window.
5. In the “Enter Bills” window, click “Save & Close” to process the receipt.
6. Click “Yes” in the dialog box which appears to save your changes.

MANUALLY ADJUSTING INVENTORY:

1. Select “Vendors| Inventory Activities| Adjust Quantity/Value on Hand” from the Menu Bar.
2. Enter the date of the inventory adjustment into the “Adjustment Date” calendar box.
3. Enter the desired unique reference code into the “Ref. No.” text box.
4. Use the “Adjustment Account” drop-down to select the account to affect by this inventory adjustment.
5. Select the item for which you need to adjust the quantity
a. Enter the difference (as a negative number) in the “Qty Difference” column
b. OR enter the new quantity counted into the “New Qty” column.
6. Click “Save & Close” when you are done.

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 EXERCISES-
Setting Up Inventory Items
Purpose:

To be able to create an inventory item, order it, and receive it into inventory.

Exercises- 2003:2012:

1. Open up QuickBooks.
2. Select “File| Close Company” from the Menu Bar if you have a company file open to get to the “No
Company Open” dialog box.
3. Click the “Open a sample file” button, and select “Sample product-based business” from the drop-
down of choices.
4. Click “OK” on the sample file message box.
5. Select “File| Back Up…” from the Menu Bar and make a backup of this company file, so that you
may restore the file back to its original condition when you are done using it.
6. After backing up the file, select “Lists| Item List” from the Menu Bar.
7. Click the “Item” button in the lower left corner, and click the “New” command from the pop-up menu
that appears.
8. Select “Inventory Part” from the “Type” drop-down.
9. In the “Item Name/Number” text box, type “Window- Wood Frame.”
10. Click into the “Description on Purchase Transactions” text box, and type “Window #4567.”
11. Click into the “Cost” field, and type “100.”
12. For the “Preferred Vendor,” select “Perry Windows & Doors.”
13. Click into the “Sales Price” field, and type “135.”
14. Make sure that the “Tax Code” drop-down is set to “Tax” to indicate that this is a taxable item.
15. Use the “Income Account” drop-down and select the “Materials Income” subaccount under
“Construction.”
16. For the “Reorder point,” type “5.”
17. Click “OK” to create the inventory item. Notice that in the Item List, it shows a quantity of “0” in the
“On Hand” column.
18. Select “Vendors| Create Purchase Orders” from the Menu Bar.
19. From the “Vendor” drop-down, select or type “Perry Windows & Doors.”
20. Click into the “ITEM” column, and select “Window- Wood Frame.”
21. In the “QTY” column, type “10.”
22. Click the “Save & Close” button.
23. Select “Vendors| Receive Items and Enter Bill” from the Menu Bar.
24. Use the “Vendor” drop-down to select or type “Perry Windows & Doors.”
25. Click the “Yes” button to receive the items against the purchase order we created.
26. Click in the left-most column next to the purchase order dated the same date as your sample
company file. QuickBooks will place a checkmark next to it in the list.
27. Click the “OK” button.
28. Click “OK” on the message box.
29. Click “Save & Close” at the bottom of the window to save and close the bill.
30. You should now see a quantity of “10” in the Item List for the “Window- Wood Frame” item.
31. Close the Item List window.
32. You can close the company file by selecting “File| Close Company” from the Menu Bar.

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 CHAPTER 6-
Setting Up Other Items
6.1- Service Items

6.2- Non-Inventory Items

6.3- Other Charges

6.4- Subtotals

6.5- Groups

6.6- Discounts

6.7- Payments

6.8- Changing Item Prices

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 Setting Up Other Items

6.1- Service Items:

You can set up “Service” items in the Item List for services that you provide. This helps you avoid
having to enter new item information repeatedly into the sales forms. Like all items, you create “Service”
items by first opening the “Item List.” To then create a new item, click the “Item” button in the lower left
corner of the list window and then select the “New” command. In the “New Item” window that appears, you
can then select “Service” from the “Type” drop-down.
The fields that then appear in the “New Item” window are similar to the ones shown when you
created an “Inventory Part” item. First, you can enter a name for the service into the “Item Name/Number”
box. If you want this service to be a subitem of another service, check the “Subitem of” checkbox and then
select the main service item under which the current item should be categorized. Then enter a description
of the service to display in invoices and sales receipts into the “Description” field. You can then enter the
“Rate,” set the “Tax Code,” and assign the amount to an income account using the “Account” drop-down.
For services which are purchased and then applied to customer invoices, such as subcontractor
labor, you can check the “This service is used in assemblies or is performed by a subcontractor or partner”
checkbox in order to change the fields that are available. If checked, this changes the fields to resemble the
ones used when creating “Inventory Part” items. In this case, you enter the information for the purchasing
side of the service into the fields shown in the “Purchase Information” section. You can then enter the
information used for the sales aspect of the service into the “Sales Information” group of fields. This then
allows you to use the service item in both purchase and sales transactions, if necessary.
Once you have created the “Service” item, click the “OK” button to save the item into the “Item List.”

6.2- Non-Inventory Items:

You can set up “Non-inventory Parts” in the Item List. A non-inventory part is used to create items
that are bought and/or sold, but that are not tracked as “inventory parts.” QuickBooks tracks neither the
quantity on hand nor the value of “non-inventory part” items.
Like all items, you create “Non-inventory Part” items by first opening the “Item List.” To then create a
new item, click the “Item” button in the lower left corner of the list window and then select the “New”
command. In the “New Item” window that appears, you can then select “Non-inventory Part” from the “Type”
drop-down.
The fields that appear in the “New Item” window are similar to the ones shown when you created an
“Inventory Part” item. First, you can enter a name for the part into the “Item Name/Number” box. If you want
this to be a subitem of another part, check the “Subitem of” checkbox and then select the main non-
inventory part item under which the current item should be placed. If needed, you can then enter a part
number into the “Manufacturer’s Part Number” field. Next enter a description of the part to display in
invoices and sales receipts into the “Description” field. You can also enter the “Rate,” set the “Tax Code,”
and assign the amount to an income account using the “Account” drop-down.
For non-inventory parts which are purchased for specific customer jobs, you can check the “This
item is used in assemblies or is purchased for a specific customer:job” checkbox in order to change the
fields that are available. If checked, the fields available will be the same ones used when creating “Inventory
Part” items. In this case, enter the information for the purchasing side of the item into the fields shown in the
“Purchase Information” section. You can then enter the information used for sales into the “Sales
Information” group of fields. This allows you to use the item in both purchase and sales transactions. Once
you have created the “Non-inventory Part” item, click the “OK” button to save the item into the “Item List.”

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 Setting Up Other Items

6.3- Other Charges:

You can set up “Other Charge” items within the Item List. An “Other Charge” could be used to collect
amounts for things such as freight charges or photocopying charges in an invoice. You could also use it to
collect membership dues or asses some other type of miscellaneous fees to customers.
You create “Other Charge” items by first opening the “Item List.” To then create a new item, click the
“Item” button in the lower left corner of the list window and then select the “New” command. In the “New
Item” window that appears, you can then select “Other Charge” from the “Type” drop-down.
In the “New Item” window you can enter a name for the charge into the “Item Name/Number” box. If
you want this charge to be a subitem of another charge, then you can check the “Subitem of” checkbox and
then select the main charge item under which the current item should be categorized from the adjacent
drop-down menu. You can then enter a description of the charge to display in invoices and sales receipts
into the “Description” field. You can then enter the “Rate,” set the “Tax Code,” and assign the amount to an
income account using the “Account” drop-down.
For charges which are reimbursable, you can check the “This item is used in assemblies or is a
reimbursable charge” checkbox in order to change the fields that are available. If checked, this changes the
fields to resemble the ones used when creating “Inventory Part” items. In this case, you enter the
information for the purchasing side of the charge into the fields shown in the “Purchase Information” section.
You can then enter the information used for the sales aspect of the charge into the “Sales Information”
group of fields. This then allows you to use the charge in both purchase and sales transactions, if
necessary.
Once you have created the “Other Charge” item, you can click the “OK” button to save the item into
the “Item List.”

6.4- Subtotals:

You can set up “Subtotal” items in the Item List. A subtotal will total all of the items in the invoice up
to the last subtotal entered, if there was one. This can be handy for totaling all of the previous line items in
an invoice before applying a discount to the subtotal amount.
You create “Subtotal” items by first opening the “Item List.” To then create a new item, click the
“Item” button in the lower left corner of the list window and then select the “New” command. In the “New
Item” window that appears, you can then select “Subtotal” from the “Type” drop-down.
In the “New Item” window you can enter a name for the subtotal into the “Item Name/Number” box.
You can then enter a description of the subtotal to display in invoices and sales receipts into the
“Description” field. Once you have created the “Subtotal” item, you can click the “OK” button to save the
item into the “Item List.”

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6.5- Groups:

You can create “Groups” in your Item List for items that you may purchase individually, but want to
display as a single line item in a sales form. For instance, if you sold gravel by the ton and also assessed a
service charge for the delivery, you could create both the gravel (a “non-inventory part”) and the service
charge (an “other charge”) and then create a “Group” (like “Gravel Delivery”) that consists of gravel and the
delivery charge. You can then display a single line item in the invoice, instead of two separate line items.
However, you can also show the component items, if you prefer. Note that before you can create a group,
you must first create all of the necessary items that will be included as parts of the group in the Item List.
Once you have created the necessary items to add to the group, you can then create the group item
by clicking the “Item” button in the lower left corner of the Item List window and then selecting the “New”
command. In the “New Item” window, select “Group” from the “Type” drop-down menu. You can enter a
name for the group into the “Group Name/Number” box. You can then enter the line item description of the
group to display within invoices and sales receipts into the “Description” field.
To then add the items to the group, click into the “Item” column and use the drop-down that appears
to select the first item to add to the group. To specify a quantity to place into the group, click into the “Qty”
column, and enter the desired quantity. Note that you can leave this blank to specify the quantity when you
use it in a sales form, if desired. You then repeat this process of adding items and specifying quantities, until
you have added all of the necessary items into the group.
Note that if you wish to display the items within the group within the sales form when this item is
used, then you must check the “Print items in group” checkbox to enable the display of the group’s items in
the printed view of the sales forms. Also note that the items listed in a “Group” item are always displayed in
the data entry view of the sales forms, so that you can change the quantities if needed. Once you have
created the “Group” item, click the “OK” button to save the item into the “Item List.”

6.6- Discounts:

You can create “Discount” items in your Item List to discount another line item, or line items, within
your sales forms. If you create a discount and then use it in an invoice, it will apply the discount to the line
item amount directly above it- not to any other items. Therefore, this item is often used in conjunction with
the “Subtotal” item in your sales forms. For example, you can place the subtotal item underneath a list of
items within an invoice, and then place the discount item under the subtotal item- removing the specified
amount or percentage of the discount item from the subtotal.
You create “Discount” items by first opening the “Item List.” To then create a new item, click the
“Item” button in the lower left corner of the list window and then select the “New” command. In the “New
Item” window that appears, you can then select “Discount” from the “Type” drop-down.
In the “New Item” window you can enter a name for the discount into the “Item Name/Number” box.
If you want to place the discount as a subitem of another discount item you have created, then you can
check the “Subitem of” checkbox and then select the main discount item from the adjacent drop-down.
You can then enter a description of the discount to display in invoices and sales receipts into the
“Description” field. Next enter either the percentage or amount of the discount into the “Amount or %” field.
Note that you must include the percent symbol if the number that you want to enter is a percentage
discount. Otherwise, QuickBooks will assume the number entered is a flat amount.
Next, you can select the account used to track discount amounts from the “Account” drop-down.
Finally, you must decide whether the percentage discount is taken before or after sales tax has been
calculated. To do this, use the “Tax Code” drop-down to set either “Tax,” which applies the discount before

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 Setting Up Other Items

6.6- Discounts (cont.):

sales tax is calculated, or select “Non” to apply the discount after tax has been calculated. Once you have
created the “Discount” item, you can click the “OK” button to save the item into the “Item List.”

6.7- Payments:

You can create “Payments” in your Item List to subtract the amount of a customer payment from the
total amount shown in an invoice while you are creating the invoice. You need a payment item when you
receive a partial payment that you need to apply to an invoice at, or before, the time you create the invoice
or statement. Note that this is not what is used when receiving full payment at the time of sale. In that case,
you simply fill out a “Sales Receipt.”
With the payment items, you have to create one for each unique type of payment that you use (i.e.
“Cash,” “Check,” “VISA,” etc…). When this item is used, it actually receives funds from the customer.
Therefore, when creating this item type, you will also have to select whether the amount received when this
item is used in an invoice is to be directly deposited into a specific account, or placed into the “Undeposited
Funds” account for deposit at a later time.
To add a new “Payment” item into the Item List, click the “Item” button in the lower left corner of the
“Item List” window and then select the “New” command from the pop-up menu that appears. In the “New
Item” window that then displays, select “Payment” from the “Type” drop-down.
Next, click into the “Item Name/Number” text box and enter a name for the payment item. You can
then enter the description that you want to have appear within your invoices when this item is used into the
“Description” field that is available. Next, use the “Payment Method” drop-down to select the method of
payment associated with this particular payment item. You must then decide where to place the money
received when this item is used by either selecting the “Group with other undeposited funds” option button,
or by selecting the “Deposit To” option button and then selecting the account to deposit the amount directly
into from the adjacent drop-down. Once you have created the “Payment” item, you can click the “OK” button
to save the item into the “Item List.”

6.8- Changing Item Prices:

While you can always edit an item’s price in the Item List by opening up the “Edit Item” window and
changing the price directly in that window, you can also change the price of multiple items in the Item List
simultaneously. If you’d like to do that, just select “Customers| Change Item Prices” from the Menu Bar to
open the “Change Item Prices” window.
Here you can use the “Item Type” drop-down to filter the list to show only items that you have
created in the Item List that match the item type you select: “Service,” “Inventory Part,” “Non-inventory Part,”
or “Other Charge.”
You can then click into the leftmost column next to any items for which you want to change the price
to mark them with a check. You can check or uncheck the “Mark All” checkbox to assist you in your
selection, if needed.
Once you have selected the items whose prices you want to adjust, type either an amount or a
percentage (you must type a percent sign in that case) into the “Adjust prices of marked items by (amount
or %)” text box. Then use the adjacent drop-down to select whether you are marking it up based on the
“Unit Cost” or the “Current Price.”
Below that, you can use the Round up to nearest” drop-down to select how to round the amounts

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 Setting Up Other Items

6.8- Changing Item Prices (cont.):

that are calculated. You can select a choice from the listing shown, or you can enter your own rounding
specifications.
To actually adjust the pricing, just click the “Adjust” (“Markup” in 2003:2005) button to adjust the
pricing of the selected items. After you do that, you should see the new amount in the “New Price” column.
Notice that this is a white column, so you could also just click in there for any item and type in a new price if
you wanted to, as well.
In order to set the pricing shown in the “New Price” column, click the “OK” button at the bottom of
this window to close and save your pricing changes.

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 ACTIONS-
Setting Up Other Items
CREATING A SERVICE ITEM:

1. Select “Lists| Item List” from the Menu Bar.

2. Click the “Item” button in the lower left corner and select “New” from the pop-up menu.
3. Use the “Type” drop-down at the top of the “New Item” window to select “Service.”
4. Enter a name for the service into the “Item Name/Number” box.
5. If you want this service to be a subitem of another service.
a. Check the “Subitem of” checkbox.
b. Select the main service item under which the current item should be categorized.
6. Enter a description of the service to display in invoices and sales receipts into the “Description” field.
7. Enter the “Rate.”
8. Set the “Tax Code.”
9. Assign the amount to an income account using the “Account” drop-down.
10. For services which are purchased and then applied to customer invoices, such as subcontractor labor,
a. Check “This service is used in assemblies or is performed by a subcontractor or partner.” This
changes the fields to resemble the ones used when creating “Inventory Part” items.
b. Enter the information into the fields shown in the “Purchase Information” section.
c. Enter the information used for the sales into the “Sales Information” group of fields. This allows
you to use the service item in both purchase and sales transactions.
11. Click the “OK” button to save the item into the “Item List.”

CREATING A NON-INVENTORY PART:

1. Select “Lists| Item List” from the Menu Bar.

2. Click the “Item” button in the lower left corner and select “New” from the pop-up menu.
3. Use the “Type” drop-down at the top of the “New Item” window to select “Non-inventory Part.”
4. Enter a name for the part into the “Item Name/Number” box.
5. If you want this to be a subitem of another part,
a. Check the “Subitem of” checkbox.
b. Select the main non-inventory part item under which the current item should be placed.
6. If needed, you can then enter a part number into the “Manufacturer’s Part Number” field.
7. Enter a description of the part to display in invoices and sales receipts into the “Description” field.
8. Enter the “Rate.”
9. Set the “Tax Code.”
10. Assign the amount to an income account using the “Account” drop-down.
11. For non-inventory parts which are purchased for specific customer jobs,
a. Check “This item is used in assemblies or is purchased for a specific customer:job”. This
changes the fields to resemble the ones used when creating “Inventory Part” items.
b. Enter the information into the fields shown in the “Purchase Information” section.
c. Enter the information into the “Sales Information” group of fields. This then allows you to use the
item in both purchase and sales transactions.
12. Click the “OK” button to save the item into the “Item List.”

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 ACTIONS-
Setting Up Other Items
CREATING AN OTHER CHARGE:

1. Select “Lists| Item List” from the Menu Bar.

2. Click the “Item” button in the lower left corner and select “New” from the pop-up menu.
3. Use the “Type” drop-down at the top of the “New Item” window to select “Other Charge.”
4. Enter a name for the charge into the “Item Name/Number” box.
5. If you want this charge to be a subitem of another charge,
a. Check the “Subitem of” checkbox.
b. Select the main charge item under which the current item should be categorized.
6. Enter a description of the charge to display in invoices and sales receipts into the “Description” field.
7. Enter the “Rate.”
8. Set the “Tax Code.”
9. Assign the amount to an income account using the “Account” drop-down.
10. For charges which are reimbursable,
a. Check “This item is used in assemblies or is a reimbursable charge”. This changes the fields to
resemble the ones used when creating “Inventory Part” items.
b. Enter the information into the fields shown in the “Purchase Information” section.
c. Enter the information into the “Sales Information” group of fields. This then allows you to use the
charge in both purchase and sales transactions.
11. Click the “OK” button to save the item into the “Item List.”

CREATING A SUBTOTAL:

1. Select “Lists| Item List” from the Menu Bar.

2. Click the “Item” button in the lower left corner and select “New” from the pop-up menu.
3. Use the “Type” drop-down at the top of the “New Item” window to select “Subtotal.”
4. Enter a name for the subtotal into the “Item Name/Number” box.
5. Enter a description of the subtotal to display in invoices and sales receipts into the “Description” field.
6. Click the “OK” button to save the item into the “Item List.”

CREATING A GROUP:

1. Select “Lists| Item List” from the Menu Bar.

2. Click the “Item” button in the lower left corner and select “New” from the pop-up menu.
3. Use the “Type” drop-down at the top of the “New Item” window to select “Group.”
4. Enter a name for the group into the “Group Name/Number” box.
5. Enter the line item “Description” of the group to This will display on invoices and sales receipts.
6. Click into the “Item” column and use the drop-down to select the first item to add to the group.
7. Click into the “Qty” column, and enter the desired quantity.

(cont.)

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 ACTIONS-
Setting Up Other Items
CREATING A GROUP (CONT.):

8. Note that you can leave the “Qty” field blank to specify the quantity when you use it in a sales form.
9. Repeat steps 6 and 7 until you have added all of the necessary items into the group.
10. Note that you must check the “Print items in group” checkbox to display group components in the
printed view of the sales forms.
11. Also note that the items listed in a “Group” item are always displayed in the data entry view of the sales
forms, so that you can change the quantities, if needed.
12. Click the “OK” button to save the item into the “Item List.”

CREATING A DISCOUNT:

1. Select “Lists| Item List” from the Menu Bar.

2. Click the “Item” button in the lower left corner and select “New” from the pop-up menu.
3. Use the “Type” drop-down at the top of the “New Item” window to select “Discount.”
4. Enter a name for the discount into the “Item Name/Number” box.
5. If you want to place the discount as a subitem of another discount item you have created,
a. Check the “Subitem of” checkbox.
b. Select the main discount item from the adjacent drop-down.
6. Enter a “Description” of the discount. This will display in invoices and sales receipts.
7. Enter the amount or percentage into the “Amount or %” field. Note that you must include the percent
symbol if the number that you want to enter is a percentage discount. Otherwise, QuickBooks will
assume the number entered is a flat discount amount.
8. Select the account used to track discount amounts from the “Account” drop-down.
9. Finally, you must decide whether the percentage discount is taken before or after sales tax has been
calculated.
a. Use the “Tax Code” drop-down to set either “Tax,” which applies the discount before sales tax is
calculated,
b. OR select “Non” to apply the discount after tax has been calculated.
10. Click the “OK” button to save the item into the “Item List.”

CREATING A PAYMENT ITEM:

1. Select “Lists| Item List” from the Menu Bar.

2. Click the “Item” button in the lower left corner and select “New” from the pop-up menu.
3. Use the “Type” drop-down at the top of the “New Item” window to select “Payment.”
4. Click into the “Item Name/Number” text box and enter a name for the payment item.
5. Enter the payment item “Description”. This will appear on your invoices.
6. Use the “Payment Method” drop-down to select the method of payment associated with this particular
payment item.

(cont.)

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 ACTIONS-
Setting Up Other Items
CREATING A PAYMENT ITEM (CONT.):

7. Determine where to place the money received

a. Select the “Group with other undeposited funds” option button,
b. OR select the “Deposit To” option button
c. Selecting the account to deposit the amount directly into from the adjacent drop-down.
8. Click the “OK” button to save the item into the “Item List.”

CHANGING ITEM PRICES:

1. Select “Customers| Change Item Prices” from the Menu Bar.

2. Use the “Item Type” drop-down to filter the list to show only that match the item type you select:
“Service,” “Inventory Part,” “Non-inventory Part,” or “Other Charge.”
3. Click into the leftmost column next to any items needing a price change. This marks them with a check.
4. Check or uncheck the “Mark All” checkbox to assist you in your selection.
5. Type either an amount or a percentage (you must type a percent sign in that case) into the “Adjust
prices of marked items by (amount or %)” text box.
6. Use the adjacent drop-down to select a mark up based on the “Unit Cost” or the “Current Price.”
7. Use the “Round up to nearest” drop-down to select how to round the amounts that are calculated. You
can select a choice from the listing shown, or you can enter your own rounding specifications.
8. Click the “Adjust” (“Markup” in 2003:2005) button to adjust the pricing of the selected items.
9. The new amount appears in the “New Price” column. Notice that this is a white column, so you could
also just click in there for any item and type in a new price if you wanted to, as well.
10. Click the “OK” button at the bottom of this window to close and save your pricing changes.

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 EXERCISES-
Setting Up Other Items
Purpose:

To be able to create various types of miscellaneous items

Exercises- 2003:2012:

1. Open up QuickBooks.
2. Select “File| Close Company” from the Menu Bar if you have a company file open to get to the “No
Company Open” dialog box.
3. Click the “Open a sample file” button, and select “Sample product-based business” from the drop-
down of choices.
4. Click “OK” on the sample file message box.
5. Select “File| Back Up…” from the Menu Bar and make a backup of this company file, so that you
may restore the file back to its original condition when you are done playing with it.
6. After backing up the file, select “Lists| Item List” from the Menu Bar.
7. Click the “Item” button in the lower left corner, and click the “New” command from the pop-up menu
that appears.
8. Click “Service” from the “Type” drop-down.
9. In the “Item Name/Number” text box, type “Roofing.”
10. Click into the “Description” text box, and type “Roofing Labor.”
11. Click into the “Rate” field, and type “35.”
12. Use the “Tax Code” drop-down to select “LBR,” which indicates that this is non-taxable labor.
13. Use the “Income Account” drop-down and select the “Labor Income” subaccount under
“Construction.”
14. Click “OK” to create the service item.
15. Click the “Item” button in the lower left corner, and click the “New” command from the pop-up menu
that appears.
16. Click “Non-Inventory Part” from the “Type” drop-down.
17. In the “Item Name/Number” text box, type “Shingles- Cedar.”
18. Click the checkbox for “This item is used in assemblies or purchased for a specific customer:job.”
19. In the “Description on Purchase Transactions” text box, type “‘Blue Label’ Red Cedar Shingles.”
20. In the “Cost” field, type “125.00.”
21. Use the “Expense Account” drop-down to select “Job Materials,” which is a subaccount of the “Job
Expenses” expense account.
22. Use the “Preferred Vendor” drop-down to select “Sloan Roofing.”
23. In the “Sales Description” text box, type “Red Cedar Shingles” instead of “‘Blue Label’ Red Cedar
Shingles.”
24. In the “Sales Price” field, type “130.00.”
25. Use the “Tax Code” drop-down to select “Tax.”
26. Use the “Income Account” drop-down to select the “Materials Income” account, which is a
subaccount of the “Construction” subaccount.
27. Click “OK” to create the non-inventory part.
28. Close the Item List window.
29. You can close the company file by selecting “File| Close Company” from the Menu Bar.

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 CHAPTER 7-
Basic Sales
7.1- Selecting a Sales Form

7.2- Creating an Invoice

7.3- Creating a Sales Receipt

7.4- Finding Transaction Forms

7.5- Previewing Sales Forms

7.6- Printing Sales Forms

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 Basic Sales

7.1- Selecting a Sales Form:

When you sell anything for your company, you have to fill out one of the sales forms in QuickBooks.
The sales form that you use will depend on whether you expect payment in the future, or at the time of the
sale. If you expect to be paid in the future, you will fill out an invoice for sales. Later on, you will be able to
match the customer payment to the associated invoice. However, if you take full payment at the time of
sale, then you will instead fill out a sales receipt to give to the customer.
You can create an invoice for a customer by selecting “Customers| Create Invoices” from the Menu
Bar. You create a sales receipt by selecting “Customers| Enter Sales Receipts” from the Menu Bar. You can
see that these forms are very similar in their layouts and usages. In this chapter, we will examine how to
perform data entry into the sales forms in QuickBooks.

7.2- Creating an Invoice:

When a customer agrees to make a purchase for which payment will be made at a later point in
time, you enter the sale into an invoice. The invoice lists the customer’s information, along with an itemized
list of how much that customer owes for the goods or services purchased. To create an invoice, select
“Customers| Create Invoices” from the Menu Bar. The particular invoice form that is used for the transaction
can be changed by using the “Template” drop-down in the upper right corner of any invoice form in order to
switch between the various invoice templates that are available.
You enter the customer information for both invoices and sales receipts by using the “Customer:Job”
drop-down to select a customer that you have entered into the “Customer List,” or by typing the customer
information into the “Bill To” and “Ship To” areas of the form to enter the customer and\or the job for which
you are creating the invoice or sales receipt. You may also need to specify additional information if
manually entering customer data, such as selecting the desired sales terms from the “Terms” drop-down
within the form when creating invoices.
At the bottom of the invoice, you list each item bought on its own line by selecting a choice from the
“Item” column in the line item area. For each line item, you also specify the quantity and amount that the
customer owes for that item. Because information about individual items are on separate lines, they are
often called line items. In QuickBooks, you enter line items from entries made into the Item list, so you won’t
have to repetitively enter services or products that you sell frequently. Line items are also not limited simply
to goods or services. You can also enter items like discounts, subtotals, or sales tax lines. When you are
done entering the line items information into your sales form, click “Save & Close” to save the sales form.
If you fill out an invoice, QuickBooks places a record for the invoice into the “Accounts Receivable”
account. If you were filling out a sales receipt, the amount received in the receipt would usually go to the
“Undeposited Funds” account. You can always see how much is in either one of these accounts by drawing
up the Chart of Accounts.

7.3- Creating a Sales Receipt:

If you are taking payment from the customer at the time of sale for a purchase they have made, you
enter the transaction information into a sales receipt. You can create a sales receipt by selecting
“Customers| Enter Sales Receipts” from the Menu Bar. This will bring up the sales receipt screen, which
you use in very much the same way you use an invoice. Also, just as with invoices, you can select which
sales receipt template to use by selecting one from the “Template” drop-down that is available in the upper
right corner of the form.

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7.3- Creating a Sales Receipt (cont.):

You enter the customer’s information into the sales receipt by either selecting a customer from the
“Customer:Job” drop-down, or by manually entering the customer’s information into the “Sold To” field. You
then enter data into any of the other fields, as needed.
Then you enter the line items used in the sales transaction by selecting the items from the “Item”
column, and then changing the “Qty” and “Rate” or “Amount,” as needed. If this receipt is to be printed later,
just ensure that the “To be printed” checkbox is checked. Once you have entered the necessary sales
information, just click the “Save & Close” button to save the sales receipt and close the window.
In QuickBooks 2003:2005, the bottom of the sales receipt window lets you indicate how you were
paid. It also allows you to deposit the money into one of your accounts. In QuickBooks 2006:2012, money
received is deposited into an “Undeposited Funds” account, by default. There is no “receiving” payment at a
later point in time when using a sales receipt- as you have taken the payment up front. You just save and
close the screen to enter the sale.

7.4- Finding Transaction Forms:

If you want to find any transaction form at a later point in time, you can use the “Find” feature of
QuickBooks to locate it. To find an invoice, or any other type of transaction, open the associated form for
which you want to search. So using the example of finding an invoice, you would open an invoice. Any
invoice will do, even a blank one.
Next, select “Edit| Find [form type]…” from the Menu Bar, which will bring up the “Find [form type]”
window. You could also just click the “Find” button in the toolbar at the top of the form to open this window,
as well.
In the “Find [form type]” window that then appears, you will have different parameters that you can
fill-in to use as the search criteria. Type what you’re looking for, and then click the “Find” button to bring up
a result set. You can then just double-click on the item you were looking for, shown in the result set, to open
it.

7.5- Previewing Sales Forms:

If you would like to see how the sales form that you are currently entering information into will look in
its printed version, you can click the drop-down next to the “Print” button on the sales form, and then select
“Preview” from the drop-down menu that appears. QuickBooks will display the sales form as it will look
when printed.

7.6- Printing Sales Forms:

When you want to print your invoices or sales receipts, just open the form that contains the
information that you would like to print, and then click the “Print” button at the top of the invoice. That will
bring up the “Print” dialog box, where you can set the printing properties. After you have set any printing
parameters, just click the “Print” button at the right side of this dialog box to continue printing to your
selected printer.

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 ACTIONS-
Basic Sales
SELECTING A SALES FORM:

1. You can create an invoice for a customer by selecting “Customers| Create Invoices” from the Menu Bar.
2. You create a sales receipt by selecting “Customers| Enter Sales Receipts” from the Menu Bar.

CREATING AN INVOICE:

1. To create an invoice, select “Customers| Create Invoices” from the Menu Bar.
2. Change the invoice form by using the “Template” drop-down. This is optional.
3. Select a customer
a. Use the “Customer:Job” drop-down
b. OR type the customer information into the “Bill To” and “Ship To” in the invoice or sales receipt.
4. Specify necessary additional information if manually entering customer data, such as customer “Terms”.
5. Input the line items purchased in the “Item” column.
6. Specify the quantity in the “Qty” field.
7. Input the “Rate” that the customer owes for each line item.
8. Add the “Amount.”
9. If this receipt is to be printed later, just ensure that the “To be printed” checkbox is checked.
10. Click “Save & Close” to save the sales form.

CREATING A SALES RECEIPT:

1. Select “Customers| Enter Sales Receipts” from the Menu Bar.

2. Select a sales receipt template from the “Template” drop-down in the “Sales Receipts” window.
3. Enter the customer’s information into the sales receipt
a. Selecting a customer from the “Customer:Job” drop-down,
b. OR manually enter the customer’s information into the “Sold To” field.
4. Specify necessary additional information, such as “Payment Method”.
5. Input the line items purchased in the “Item” column.
6. Specify the quantity in the “Qty” field.
7. Input the “Rate” that the customer owes for each line item.
8. Add the “Amount.”
9. If this receipt is to be printed later, just ensure that the “To be printed” checkbox is checked.
10. Click the “Save & Close” button to save the sales receipt and close the window.

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 ACTIONS-
Basic Sales
FINDING TRANSACTION FORMS:

1. Open the type of form for which you need to perform a search. Any form will do.
2. Select “Edit| Find [form type]…” from the Menu Bar, which will bring up the “Find [form type]” window.
3. OR click the “Find” button in the toolbar at the top of the form to open this window.
4. Type what you’re looking for using the criteria boxes provided in the “Find [form type]” window.
5. Click the “Find” button to bring up a result set.
6. Double-click on the item in the result set. This will open it.

PREVIEWING SALES FORMS:

1. Open up the sales form that you want to preview.

2. Click the drop-down next to the “Print” button on the sales form.
3. Select “Preview” from the drop-down menu that appears.

PRINTING SALES FORMS:

1. Open up the sales form that you want to print.

2. Click the “Print” button at the top of the invoice.
3. In the “Print” dialog box that appears you can set the printing properties, as desired.
4. Click the “Print” button at the right side of the “Print” dialog box to continue printing.

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 EXERCISES-
Basic Sales
Purpose:

To be able to create a basic invoice.

Exercises- 2003:2012:

1. Open up QuickBooks.
2. Select “File| Close Company” from the Menu Bar if you have a company file open, in order to get to
the “No Company Open” dialog box.
3. Click the “Open a sample file” button and select “Sample product-based business” from the drop-
down of choices.
4. Click “OK” on the sample file message box.
5. Select “File| Back Up…” from the Menu Bar and make a backup of this company file, so that you
may restore the file back to its original condition when you are done playing with it.
6. After backing up the file, select “Customers| Create Invoices” from the Menu Bar.
7. Use the “Template” drop-down in the upper right corner of the invoice form to select the “Rock
Castle Invoice” (“Custom Invoice” in QuickBooks 2003:2010) template.
8. Select “Fisher, Jennifer” from the “Customer:Job” drop-down.
9. Click into the “ITEM” column, and type “Removal.”
10. Click into the “QUANTITY” column, and type “40.”
11. Click into the “RATE” column and type “35,” if needed.
12. Click “Save & Close” to create the invoice.
13. You can select “File| Close Company” from the Menu Bar to close the company file when you are
finished.

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 CHAPTER 8-
Using Price Levels
8.1- Using Price Levels

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 Using Price Levels

8.1- Using Price Levels:

Sometimes businesses want to vary an item’s price when selling the item to different customer
types. For instance, you may charge different rates for residential customers versus commercial customers.
You can associate price levels with specific customers so that each time you create a sales form for that
customer, QuickBooks will use the appropriate price level when calculating rates and amounts for the line
items listed within the sales form for the selected customer.
You can also associate price levels with specific line items within a sales form, if desired. Using this
method, you are only discounting specific items in a sales form- not all items for a specific customer or type
of customer. Price levels make it easy to use different rates for line items within sales forms without having
to calculate percentage amounts manually. Price levels can affect amounts for service, inventory, and non-
inventory part items only. Also note that price levels are, however, only a feature of QuickBooks Pro or
QuickBooks Premier. In QuickBooks Pro, you can only set Price Level discounts as a flat percentage. If you
use the QuickBooks Premier version, however, you can set price levels for various quantities of individual
items, if preferred.
In this lesson, we will examine how to create basic price levels in QuickBooks Pro. To access and
create price levels, first open the “Price Level List.” You can do this by selecting “Lists| Price Level List” from
the Menu Bar in order to open the “Price Level List” window.
To create a new price level, click the “Price Level” button in the lower left corner of the “Price Level
List,” and then select the “New” command from the pop-up menu. That will then open the “New Price Level”
window, where you enter the information about the new price level.
Start by entering a name for the new price level into the “Price Level Name” text box. Then use the
drop-down to the right of the “This price level will” text to select either “decrease” or “increase.” Next enter
the percentage by which you wish to increase or decrease the item prices into the text box to the right of the
“item prices by” text. You can then use the “Round up to the nearest” drop-down to select how you wish to
round the pricing that is calculated. Once you have set the price level, just click the “OK” button to add it into
the “Price Level List.” As with your other lists, you can select an entry that you have made and then click the
“Price Level” button to edit or delete your entries, if needed, in the future. Once you have created your price
levels, you can then either assign them to specific customers in order to apply a selected price level to all
future sales to this customer, by default, or you can apply a selected price level to specific line items in your
sales forms manually when the need arises.
You can apply a default price level to any customer when using the “Edit Customer” or “New
Customer” windows. In either of these windows, you can select the “Additional Info” tab and then use the
“Price Level” drop-down to select a default price level to associate with this customer’s sales. Then just click
the “OK” button to set the price level for the customer. Now when you create a sales form for this customer
and select items in the line item area of the form, you will see that the customer’s price level is calculated an
applied by default.
Also notice that after you have created price levels, you can then use the “Rate” drop-down that
appears in your sales form to select a price level on a per-line-item basis, if needed. This allows you to
manually set a pricing level for selected items in a sales form, if preferred.

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 ACTIONS-
Using Price Levels
CREATING NEW PRICE LEVELS- QUICKBOOKS PRO AND PREMIER 2003:

1. Select “Lists| Price Level List” from the Menu Bar.

2. Click “Price Level” in the lower left corner and select “New” from the pop-up menu.
3. Type the name of the new price level into the “Price Level” field.
4. Select either the “Reduce sales price by” or “Increase Sales Price” radio button.
5. Enter in the appropriate percentage (as a positive number) in the text box next to it.
6. Click “OK” when you are done.

CREATING NEW PRICE LEVELS- QUICKBOOKS PRO AND PREMIER 2004:2012:

1. Select “Lists| Price Level List” from the Menu Bar.

2. Click “Price Level” in the lower left corner and select “New” from the pop-up menu.
3. Type the name of the new price level into the “Price Level Name” field.
4. Select either “decrease” or “increase” from the price level drop-down.
5. Enter in the appropriate percentage, as a positive number, into the adjacent text box.
6. Click “OK” when you are done.

ASSOCIATING DEFAULT PRICE LEVELS WITH CUSTOMERS- QUICKBOOKS PRO AND PREMIER:

1. Open the “Edit Customer” window, from the “Customer:Job” list (QuickBooks Pro or Premier
2003:2005), or from the Customer Center (QuickBooks Pro or Premier 2006:2012).
2. Select the “Additional Info” tab for the selected customer.
3. Choose the appropriate price level from the “Price Level” drop-down for the customer.
4. Click “OK” to save your changes when you are done.

CHANGING LINE ITEM PRICE LEVELS- QUICKBOOKS PRO AND PREMIER:

1. Select the line item in the sales form (invoice or sales receipt).
2. Click into the “Rate” column for the selected line item.
3. Choose the price level that you want to use from the drop-down list that displays.

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 EXERCISES-
Using Price Levels
Purpose:

To be able to use price levels.

Exercises- 2003:2012:

1. Open up QuickBooks.
2. Select “File| Close Company” from the Menu Bar if you have a company file open to get to the “No
Company Open” dialog box.
3. Click the “Open a sample file” button, and select “Sample product-based business” from the drop-
down of choices.
4. Click “OK” on the sample file message box.
5. Select “File| Back Up…” from the Menu Bar and make a backup of this company file so that you may
restore the file back to its original condition when you are done playing with it.
6. After backing up the file, select “Lists| Price Level List” from the Menu Bar.
7. Click the “Price Level” button in the lower left corner of the list, and click the “New” button.
8. In the “New Price Level” window, type “Residential” into the “Price Level Name” text box.
9. If using QuickBooks 2003, click the option button for “Reduce sales price by.” If using QuickBooks
2004:2012, select “decrease” from the drop-down available.
10. In the percentage text box, type “5.”
11. Click “OK” to save the price level.
12. Close the “Price Level” list.
13. If using QuickBooks 2003:2005, open up the “Customer:Job” list. If using QuickBooks 2006:2012,
open the “Customers & Jobs” tab within the Customer Center.
14. Double-click on “Cook, Brian” to edit the customer’s information.
15. Click the “Additional Info” tab and select “Residential” from the “Price Level” drop-down in the upper
right corner of the tab.
16. Click “OK” to save your changes.
17. Select “Customers| Create Invoices” from the Menu Bar.
18. Select “Cook, Brian” from the “Customer:Job” drop-down.
19. Click “Cancel” in the “Available Estimates” dialog box that appears.
20. Click into the “ITEM” column, and type “Removal.”
21. Click into the “QUANTITY” column, and type “40.”
22. Click into the “RATE” field and click the drop-down arrow. Notice that you can also switch price
levels within the invoice at the time you create the invoice, if needed.
23. Click the “Save & Close” button to save and close the invoice.
24. You can select “File| Close Company” from the Menu Bar to close the company file when you are
finished.

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 CHAPTER 9-
Creating Billing Statements
9.1- Setting Finance Charge Defaults

9.2- Entering Statement Charges

9.3- Applying Finance Charges and Creating Statements

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 Creating Billing Statements

9.1- Setting Finance Charge Defaults:

You can set your preferences for any finance charges that you asses in customer statements
through the “Preferences” window in QuickBooks. You can access this window by selecting “Edit|
Preferences…” from the Menu Bar. That will then open the “Preferences” window where you can set the
default behaviors of your currently opened company file.
In the scroll box to the left of the “Preferences” window, click the “Finance Charge” icon and then
click the “Company Preferences” tab. Here you can set your finance charge information for your billing
statements, if you charge finance charges. Note that it is not required that you assess finance charges, and
you should consult the laws for your district regarding assessment of finance charges before assessing
them to customers.
In this tab you can enter the annual interest rate to charge, as a percentage, into the “Annual Interest
Rate (%)” field. You can then enter a minimum finance charge to apply in the “Minimum Finance Charge”
box. Next enter the number of days that you want to use as the grace period into the “Grace Period (days)”
box. Use the “Finance Charge Account” drop-down to select which account is used to track income from
finance charges. If needed, you can check the “Charge finance charges on overdue finance charges” to
enable that feature when calculating finance charge amounts. Below that, you can then select either the
“due date” or “invoice/billed date” option button to set what date should be used when calculating charges.
Also, if you want the finance charge invoices that are created to be marked as “To be printed” by default,
then check the “Mark finance charge invoices “To be printed” checkbox. That way you can print them as a
batch after assessing finance charges, if needed. Once you have set your finance charge defaults, click the
“OK” button to apply them.

9.2- Entering Statement Charges:

Entering statement charges is the first step in preparing billing statements that you can then send to
customers. This can be a more effective way to collect customer charges over a period of time for certain
types of businesses that do not need to send out an invoice for each charge assessed to a customer. With
statement charges, you simply enter the charges directly into each customer’s “accounts receivable”
register as they are accrued. Later on at the end of the billing cycle, you can then send the customer a
statement that lists all charges that are due or past due.
You can access the customer’s “accounts receivable” register by opening either the “Customer:Job”
list in QuickBooks 2003:2005 or the “Customers & Jobs” tab within the Customer Center if using
QuickBooks 2006:2012. You can select the customer to whom you want to asses statement charges and
then select “Customers| Enter Statement Charges” from the Menu Bar. This will display that customer’s
“accounts receivable” register.
To make an entry in the register, just enter the date, the item, the quantity, and the account
receivables account under which you want to place this charge in the next available entry within the
register. Then click the “Record” button to record the statement charge.

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9.3- Applying Finance Charges and Creating Statements:

A QuickBooks statement simply prints information already recorded by the statement charges and
by other receivables transactions. Therefore, you can’t edit the statement’s information directly through the
statement. A typical statement covers a time period and shows the customer’s previous balance, any new
charges, any payments or credits that you’ve received and applied to the account, and the new balance for
the customer during the period specified. A statement can simply show information- like invoices sent to
and payments received from a customer over a time period, or they can be used for billing- showing
statement charges due and requesting payment of those charges.
To create statements, select “Customers| Create Statements…” from the Menu Bar in order to view
the “Create Statements” window. In the “Create Statements” window you can decide what type of statement
you will be creating by setting the desired parameters.
First, you can enter the statement date by using the “Statement Date” calendar date selector. This
date will appear at the top of each statement, and will also appear as the “Billed Date” for billing statements.
Next you decide what type of statement to send. The statement can either show transactions from
one date to another, or it can show all open transactions as of the statement date entered. To create a
statement that shows all transactions over a specified date range, select the “Statement Period from”
option, and then select the first date from the adjacent calendar date selector. Then select the ending date
for the transactions by selecting the ending date from the “To” calendar date selector. To show all open
transactions instead, select the “All open transactions as of the statement date” option. If you select that
option, you can check the “Include only transactions over [blank] days past due” option button and then
enter the number of days in order to create a statement that shows only past due charges, if desired.
Next, you select the customers to whom you want to send the statements by first choosing one of
the available option buttons and then making any additional selections, as needed, in the “Select
Customers” section. Once you have finished that, you can then set any additional options that you would
like your statements to possess by making your desired selections from the checkboxes available in the
“Select Additional Options” section. Also note that you can use the “Template” drop-down to select a custom
statement template, if available.
If you would like to asses finance charges, click the “Assess Finance Charges…” button within the
“Create Statements” window to bring up the “Assess Finance Charges” window. Here you will assess
finance charges on any customers and customer:jobs that are selected with a check. You can remove the
checks if you don’t want to assess a charge on them. The finance charges are shown in the rightmost
column. They are calculated based on the default finance charge settings that you created within the
“Preferences” window. You can change the amount shown by typing the desired amount to charge into the
column. Then click the “Assess Charges” button to assess the charges shown.
That will drop you off at the “Create Statements” window again. Here you can click the “Preview”
button to preview the statements that you will send. When you are ready, you can click the “Print” button to
print the statements.

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 ACTIONS-
Creating Billing Statements
SETTING FINANCE CHARGE PREFERENCES:

1. Select “Edit| Preferences” from the Menu Bar.

2. Use the scroll box at the left side of this window to find the “Finance Charge” icon.
3. Click “Finance Charge” to select it.
4. Click the “Company Preferences” tab.
5. Enter the annual interest rate to charge, as a percentage, into the “Annual Interest Rate (%)” field.
6. Enter a minimum finance charge in the “Minimum Finance Charge” box.
7. Enter the number of days for the grace period into the “Grace Period (days)” box.
8. Use the “Finance Charge Account” drop-down to select an account to track finance charges income.
9. Check the “Charge finance charges on overdue finance charges” if you would like to enable it.
10. Select either “due date” or “invoice/billed date” to set what date should be used to calculate charges.
11. Check the “Mark finance charge invoices “To be printed”” checkbox if necessary.
12. Click the “OK” button to apply them.

ENTERING STATEMENT CHARGES FOR BILLING STATEMENTS:

1. In the “Customers & Jobs” list (2006:2012) or the “Customer:Job” list (2003:2005), select the customer
for whom you want to enter statement charges.
2. Select “Customers| Enter Statement Charges” from the Menu Bar.
3. Enter the date of the statement charges in the next available blank entry in the register.
4. In the “Item” field, enter the item that you use to track this kind of charge.
5. Enter a quantity in the “Qty” field, if necessary.
6. Type a description of the charge into the “Description” field.
7. Click “Record” to record the charge.

CREATING STATEMENTS:

1. Select “Customers| Create Statements…” from the Menu Bar.

2. Enter in the beginning and end dates of your billing period into the appropriate fields.
3. Enter in the statement date in the appropriate field.
4. Choose which customers you want to create the statements for from the section at the left of the screen.
5. Set any additional options for sending statements from the options at the right of the screen.
6. Click the “Assess Finance Charges…” button if necessary.
7. Make any needed changes to finance charges.
8. Click the “Assess Charges” button to assess the selected charges.
9. Click either “Preview,” “Print,” or “E-mail” buttons to preview, print, or email the statements to your
customers.

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 EXERCISES-
Creating Billing Statements
Purpose:

To be able to create customer statements.

Exercises- 2003:2012:

1. Open up QuickBooks.
2. Select “File| Close Company” from the Menu Bar if you have a company file open to get to the “No
Company Open” dialog box.
3. Click the “Open a sample file” button and select “Sample product-based business” from the drop-
down of choices.
4. Click “OK” on the sample file message box.
5. Select “File| Back Up…” from the Menu Bar and make a backup of this company file so that you may
restore the file back to its original condition when you are done playing with it.
6. After backing up the file, select “Customers| Create Statements…” from the Menu Bar.
7. In the “Create Statements” window, click the “All customers” option in the left side of the screen.
8. At the right side of the screen, click the “with a zero balance” checkbox.
9. Click the “Preview” button to preview the selected statements.
10. After previewing the statements, click the “Close” button.
11. Click the “Close” button in the “Create Statements” screen.
12. You can select “File| Close Company” from the Menu Bar to close the company file when you are
finished.

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 CHAPTER 10-
Payment Processing
10.1- Recording Customer Payments

10.2- Entering a Partial Payment

10.3- Applying One Payment to Multiple Jobs

10.4- Entering Overpayments

10.5- Entering Down Payments or Prepayments

10.6- Applying Customer Credits

10.7- Making Deposits

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 Payment Processing

10.1- Recording Customer Payments:

If you’re receiving payment at the time of sale and you fill out a sales receipt, QuickBooks records a
customer payment. When you invoice a customer and you receive payment on that invoice at a later point in
time, you enter the payment into the QuickBooks “Receive Payments” window. This allows you to match the
customer payments to the customer invoices. You can open this window by selecting “Customers| Receive
Payments” from the Menu Bar.
The simplest payment case occurs when a customer has one outstanding invoice and sends you a
payment for the full amount. However, you can also enter partial payments, if you receive those. You can
even select to which invoices you apply the payment amount. If you have one payment, you can also apply
the amount to multiple jobs, as well. QuickBooks can also handle prepayments, down payments, and over
payments. In this chapter you will look at the different ways that you can handle customer payments.
To enter a full payment that you receive, start by selecting the customer or customer:job from whom
you are receiving the payment from the “Received From” drop-down in the “Receive Payments” window.
Any unpaid invoices for the selected customer or customer:job will then be displayed at the bottom of the
window.
Next, enter the amount of the payment into the “Amount” text box. Use the “Pmt. Method” drop-down
to select the method of payment. Enter the check number into the “Check #” (“Ref./Check #” in 2003:2004)
field, if payment was made by check. At the bottom of the window, ensure that you have a checkmark
placed in front of the invoice against which you are receiving payment.
If using QuickBooks 2003 or 2004, in the lower left corner of this window you then select either the
option to “Group with other undeposited funds” or “Deposit To.” This decides where the money is to be
placed. If you receive checks, you will probably want to place them into the “Undeposited Funds” asset
account, until you can group the different checks and other amounts that you will deposit at the bank
together to make a lump deposit by using the “Make Deposits” window. This allows you to make the
amounts that you deposit in QuickBooks match the deposit amounts recorded by your financial institution,
which will make account reconciliation go much more smoothly. If you are receiving credit card payment,
you may want to select the “Deposit To” option, and then select the account to which the funds will be
deposited.
Note that for QuickBooks 2005 and 2006, you simply choose into which account to deposit the funds
from the “Deposit to” drop-down in the upper section of the “Receive Payments” window. You can still
choose either the “Undeposited Funds” account, or one of the other bank type accounts you have created.
In QuickBooks 2007:2012, all funds collected through this window are placed into the “Undeposited
Funds” account, by default.
When you have finished receiving customer payments, click the “Save & Close” button to save and
close the “Receive Payments” window. If you have other customer payments to process, then you may find
that it is easier to click the “Save & New” button to save the transaction, but leave the “Receive Payments”
window open.

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10.2- Entering a Partial Payment:

Once again, you begin by selecting “Customers| Receive Payments” from the Menu Bar to open the
“Receive Payments” window. Then select the name of the customer or customer:job from the “Received
From” drop-down. Enter the partial payment amount and method by using the fields available at the top of
this window. The unpaid invoices will appear at the bottom of the window. If you want QuickBooks to
attribute the payment to anything other than the oldest invoice, click the “Un-Apply Payment” (“Clear
Selections” in 2003:2004)” button to clear the checkmark(s) from the selected invoice(s).
In the listing of unpaid invoices, you can click into right-most white column and change the amount
that is being applied to the invoice by typing the partial payment amount. In QuickBooks 2010:2012 entering
partial payments also allows you to select “Write off the extra amount” at the bottom of the screen. You may
want to use this feature if a customer accidentally shorted you a small amount that is not worth rebilling. By
default, though, “Leave this as an underpayment” is selected, and you will be able to receive payments on
that item in the future.
Click either the “Save & Close” or “Save & New” button to save the transaction.

10.3- Applying One Payment to Multiple Jobs:

You can also apply the amount that the customer pays you to multiple outstanding invoices by
simply placing a check in front of the invoices to which you want to apply the cumulative payment amount
received, until the total payment is attributed to the correct invoices.
To do this, just select “Customers| Receive Payments” from the Menu Bar to open the “Receive
Payments” window, if needed. As before, you select the customer or customer:job who sent you the
payment from the “Received From” drop-down. Enter the total payment amount and select the payment
method by using the “Amount” and “Pmt. Method” fields. Once again, QuickBooks should attribute the
amount entered to the outstanding invoices shown. You can check and uncheck the invoices to attribute
and remove payment amounts, as needed until the entire amount received has been attributed to the
correct invoices in the correct amounts. Note that you can also change the amounts applied to each invoice,
if needed, by changing the amounts shown in the “Payment” column at the right end of the outstanding
invoice list.
Once you have attributed that payment to the correct invoices, you can then click either the “Save &
Close” or “Save & New” button to save the transaction and then either close the window or open another
new transaction window.

10.4- Entering Overpayments:

If the customer pays you more than is due, you can enter the entire amount received into the
“Receive Payments” window. The amount that is left over after you have applied the amount due to
outstanding invoices will be shown in the “Unused payment” area at the bottom left corner of the “Receive
Payments” window. This amount can either be applied to another outstanding customer invoice (if there is
one), or you can simply save and close the “Receive Payment” window to create a credit for the amount that
was overpaid for the specific customer or customer:job.
Later on, you can either apply the credit to future invoices for that specific customer or customer:job
(and only that specific customer or customer:job), or you can issue the customer a refund check for the
amount that was overpaid.

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10.5- Entering Down Payments or Prepayments:

Just as when you receive an overpayment, if a customer gives you a down payment or prepayment
which you want to take and then invoice them at a later date, you can enter the entire payment received for
the customer or customer:job into the “Receive Payments” window. Since they have no outstanding invoice
against which to apply the amount entered, the entire amount will be saved as a customer credit when you
click either the “Save & Close” or “Save & New” buttons.
Later on, after you have invoiced the customer or customer:job, you must return to the “Receive
Payments” window to apply the credit against the invoice that was created. In the next lesson, we will
examine how to apply customer credits that are created by overpayments, down payments, or prepayments
to outstanding customer invoices.

10.6- Applying Customer Credits:

When a customer overpays you or gives you a down payment or a prepayment, you record the
amount that you received in the “Receive Payments” window. Doing this creates a credit for the customer or
customer:job specified. Later on, after you have created an invoice for the specific customer or
customer:job, you can return to the “Receive Payments” window to apply the customer’s existing credit.
To apply an existing customer credit to an outstanding invoice in the “Receive Payments” window,
select the name of the customer or customer:job who has the outstanding invoices and the credit that you
want to use. Then select the invoice against which you wish to apply the credit from the listing shown. Note
that you should NOT attempt to place a checkmark in front of the invoice, as that indicates that it is being
paid. Instead, click anywhere on the line of the invoice, except for the checkmark column, to select the
desired invoice against which you wish to apply the customer’s credit.
Once that has been accomplished, click the “Discount & Credits…” button (“Set Credits…” button in
previous versions) to open the “Discount and Credit” window. Here you should select the “Credits” tab, if
necessary, in order to view any available customer credits. To apply the entire credit shown, click the
checkmark column next to the credit. The amount shown will be displayed in the “Amt to Use” column in this
window. Note that to apply a partial credit amount, you can change the amount of credit applied by
changing the amount shown in the “Amt. to Use” column. Once you have entered the amount of credit to
apply. Click the “Done” button to apply the credit amount indicated to the selected invoice. The amount of
credit applied will appear in the “Credits” column in later versions of QuickBooks. You can then finish
distributing credit, or receiving customer payment as needed within the transaction window. When you are
finished, click either the “Save & Close” or “Save & New” buttons to save the transaction and either close
the window or clear the window, leaving it open for additional entries.

10.7- Making Deposits:

When you receive funds from customers in the “Receive Payments” window and place the funds into
the “Undeposited Funds” asset account, QuickBooks tracks that money until it is actually deposited into the
bank. Later on, when you’re ready to take your payments to the bank, you can record the deposit in
QuickBooks and group the various payments that you received and placed into the “Undeposited Funds”
account into a single amount that is shown as being deposited into your selected bank account. This makes
the amounts recorded as deposits for the bank account match the amounts recorded by your bank
statements, which makes account reconciliation much easier.
Also, when you are preparing the funds for deposit in QuickBooks, you can print a deposit slip to

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 Payment Processing

10.7- Making Deposits (cont.):

bring with you if needed, and then make the deposit at the bank.
Note that when you record the deposit within QuickBooks, it takes the deposited funds and adds it to
your selected bank account register. You can also tell it to leave out a certain amount for cash back, if
needed, that you can then record to an account like “Petty Cash.”
To make a deposit in QuickBooks, select “Banking| Make Deposits” from the Menu Bar. This will
most often then cause the “Payments to Deposit” window to appear onscreen. In the “Payments to Deposit”
window you can see all of the customer payments that you have received through the “Receive Payments”
window and elected to move to the “Undeposited Funds” account. Here you must then check any received
amounts that you will actually be taking to the bank to deposit. Once you have made your selections, click
the “OK” button to continue to the actual “Make Deposits” window.
In this window you will see the amounts that you just selected shown in a listing. Use the “Deposit
To” drop-down to select the name of the bank account into which you would like to deposit the selected
funds. Enter the date of the actual deposit into the “Date” field. If necessary, you can click into the next
available blank row in the deposit to record any other miscellaneous amounts that will be deposited, such
as owner’s contributions.
If you need to get cash back from the deposit, use the “Cash goes back to” drop-down to select the
account used to record cash back, such as “Petty Cash.” Then enter the reason why cash was held back
into the “Cash back memo” field. You can then enter the amount of cash to be held back from the deposit
into the “Cash back amount” field. Once you are ready to record the deposit amount, click the “Save &
Close” button to save and close the “Make Deposits” window.

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 ACTIONS-
Payment Processing
RECORDING A FULL PAYMENT:

1. Select “Customers| Receive Payments” from the Menu Bar.

2. Select the name of the customer from the “Received From” drop-down.
3. Enter the amount of the payment into the “Amount” field.
4. Enter the check number into the “Check #” (“Ref./Check #” in 2003:2004) field, if paid by check.
5. Select the type of payment method used from the “Pmt. Method” drop-down.
6. If using QuickBooks 2003 or 2004, select the option button in the lower left corner and then select the
account into which you will deposit the funds.
7. In QuickBooks 2005 and 2006, select the account using the “Deposit to” drop-down.
8. In QuickBooks 2007:2012, all fund collected through this window are placed into the “Undeposited
Funds” account, by default. If you wish to enable the “Deposit To” drop-down within the “Receive
Payments” window
a. Open the “Preferences” window.
b. Select the “Customers & Sales” category,
c. Click the “Company Preferences” tab
d. De-select the “Use Undeposited Funds” checkbox.
e. Click the “OK” button to set your new preferences.
9. Click the “Save & Close” button to save and close the “Receive Payments” window.
10. Click the “Save & New” button to save the transaction, but leave the “Receive Payments” window open.

ENTERING A PARTIAL PAYMENT:

1. Select “Customers| Receive Payments” from the Menu Bar.

2. Select the name of the customer from the “Received From” drop-down.
3. Enter the amount of the partial payment into the “Amount” field.
4. Select the type of payment method used from the “Pmt. Method” drop-down.
5. Enter the check number into the “Check #” (“Ref./Check #” in 2003:2004) field, if they pay by check.
6. To attribute the payment to anything other than the oldest invoice, “Un-Apply Payment” (“Clear
Selections” in 2003:2004) button to clear the checkmark(s) from the invoice(s).
7. Enter the amount to apply to the appropriate invoice under the “Payment” column. This will also place a
checkmark to the left of the selected invoice.
8. If using QuickBooks 2003 or 2004, click the radio button you want in the lower left corner and select the
account into which you will deposit the funds.
9. In QuickBooks 2005 and 2006, select the account using the “Deposit to” drop-down.
10. In QuickBooks 2007:2012, all fund collected through this window are placed into the “Undeposited
Funds” account, by default. If you wish to enable the “Deposit To” drop-down within the “Receive
Payments” window
a. Open the “Preferences” window.
b. Select the “Customers & Sales” category,
c. Click the “Company Preferences” tab
d. De-select the “Use Undeposited Funds” checkbox.
e. Click the “OK” button to set your new preferences.
11. In QuickBooks 2010 select “Write off extra amount” if you are going to forgive the remaining balance.
12. Click the “Save & Close” button to save and close the “Receive Payments” window.
13. Click the “Save & New” button to save the transaction, but leave the “Receive Payments” window open.

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 ACTIONS-
Payment Processing
APPLYING ONE PAYMENT TO MULTIPLE JOBS:

1. Select “Customers| Receive Payments” from the Menu Bar.

2. Select the name of the customer from the “Received From” drop-down.
3. Enter the amount of the partial payment into the “Amount” field.
4. Select the type of payment method used from the “Pmt. Method” drop-down.
5. Enter the check number into the “Check #” (“Ref./Check #” in 2003:2004) field, if they pay by check.
6. To attribute the payment to anything other than the oldest invoice, “Un-Apply Payment” (“Clear
Selections” in 2003:2004) button to clear the checkmark(s) from the invoice(s).
7. Enter the amounts that you want to apply to the appropriate invoices.
8. If using QuickBooks 2003 or 2004, click the radio button you want in the lower left corner and select the
account into which you will deposit the funds, if necessary.
9. In QuickBooks 2005 and 2006, select the account using the “Deposit to” drop-down.
10. In QuickBooks 2007:2012, all fund collected through this window are placed into the “Undeposited
Funds” account, by default. If you wish to enable the “Deposit To” drop-down within the “Receive
Payments” window
a. Open the “Preferences” window.
b. Select the “Customers & Sales” category,
c. Click the “Company Preferences” tab
d. De-select the “Use Undeposited Funds” checkbox.
e. Click the “OK” button to set your new preferences.
11. Click the “Save & Close” button to save and close the “Receive Payments” window.
12. Click the “Save & New” button to save the transaction, but leave the “Receive Payments” window open.

ENTERING OVERPAYMENTS:

1. Select “Customers| Receive Payments” from the Menu Bar.

2. Select the name of the customer from the “Received From” drop-down.
3. Enter the entire amount of the payment into the “Amount” field.
4. Enter the check number into the “Check #” (“Ref./Check #” in 2003:2004) field, if they pay by check.
5. Select the type of payment method used from the “Pmt. Method” drop-down.
6. If using QuickBooks 2003 or 2004, select the desired option button in the lower left corner and then
select the account into which you will deposit the funds.
7. In QuickBooks 2005 and 2006, select the account using the “Deposit to” drop-down.
8. In QuickBooks 2007:2012, all fund collected through this window are placed into the “Undeposited
Funds” account, by default. If you wish to enable the “Deposit To” drop-down within the “Receive
Payments” window
a. Open the “Preferences” window.
b. Select the “Customers & Sales” category,
c. Click the “Company Preferences” tab
d. De-select the “Use Undeposited Funds” checkbox.
e. Click the “OK” button to set your new preferences.
9. The overpayment amount is listed as an “Unused Payment” in the bottom left corner of the window.
10. Click the “Save & Close” button to save and close the “Receive Payments” window.
11. Click the “Save & New” button to save the transaction, but leave the “Receive Payments” window open.

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 ACTIONS-
Payment Processing
ENTERING DOWN PAYMENTS OR PREPAYMENTS:

1. Select “Customers| Receive Payments” from the Menu Bar.

2. Select the name of the customer from the “Received From” drop-down.
3. Enter the entire amount of the payment into the “Amount” field.
4. Enter the check number into the “Check #” (“Ref./Check #” in 2003:2004) field, if they pay by check.
5. Select the type of payment method used from the “Pmt. Method” drop-down.
6. If using QuickBooks 2003 or 2004, select the desired option button in the lower left corner and then
select the account into which you will deposit the funds, if necessary.
7. In QuickBooks 2005 and 2006, select the account using the “Deposit to” drop-down.
8. In QuickBooks 2007:2012, all fund collected through this window are placed into the “Undeposited
Funds” account, by default. If you wish to enable the “Deposit To” drop-down within the “Receive
Payments” window
a. Open the “Preferences” window.
b. Select the “Customers & Sales” category,
c. Click the “Company Preferences” tab
d. De-select the “Use Undeposited Funds” checkbox.
e. Click the “OK” button to set your new preferences. The down payment or prepayment amount is
listed as an “Unused Payment” in the bottom left corner of the window.
9. Click the “Save & Close” button to save and close the “Receive Payments” window.
10. Click the “Save & New” button to save the transaction, but leave the “Receive Payments” window open.

APPLYING CUSTOMER CREDITS:

1. Select “Customers| Receive Payments” from the Menu Bar.

2. Select the name of the customer from the “Received From” drop-down.
3. Select the invoice against which you wish to apply the customer’s credit. Remember that you do not
want to mark it with a checkmark, but instead want to select it by clicking on some other column
available.
4. Click the “Discount & Credits…” or the “Set Credits” button, depending on your QuickBooks version.
5. In the “Discount and Credit” window, select the “Credits” tab to view any available customer credits.
6. To apply the entire credit shown, click the checkmark column next to the credit.
7. The amount shown will be displayed in the “Amt to Use” column in this window. Note that to apply a
partial credit amount, you can change the amount of credit applied by changing the amount shown in
the “Amt. to Use” column.
8. Click the “Done” button to apply the credit amount indicated to the selected invoice.
9. Continue distributing credit or receiving customer payment within the “Receive Payments” window.

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 ACTIONS-
Payment Processing
MAKING DEPOSITS:

1. Select “Banking| Make Deposits” from the Menu Bar.

2. This will most often then cause the “Payments to Deposit” window to appear onscreen.
3. Check any received amounts that you will actually be taking to the bank to deposit in the “Payments to
Deposit” window.
4. Click the “OK” button to continue to the actual “Make Deposits” window.
5. In the “Make Deposits” window, you will see the amounts that you just selected shown in a listing.
6. Select the bank account from the “Deposit To” drop-down.
7. Enter the date of the actual deposit into the “Date” field.
8. Click into the next available blank row in the deposit to record any other miscellaneous amounts that will
be deposited, such as owner’s contributions.
9. If you are receiving cash back
a. Use the “Cash goes back to” drop-down to select the account used to record cash back.
b. Enter the reason why cash was held back into the “Cash back memo” field.
c. Enter the amount of cash to be held back from the deposit into the “Cash back amount” field.
10. Click the “Save & Close” button to save and close the “Make Deposits” window.

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 EXERCISES-
Payment Processing
Purpose:

To be able to receive customer payments.

Exercises- 2003:2012:

1. Open up QuickBooks.
2. Select “File| Close Company” from the Menu Bar if you have a company file open to get to the “No
Company Open” dialog box.
3. Click the “Open a sample file” button, and select “Sample product-based business” from the drop-
down of choices.
4. Click “OK” on the sample file message box.
5. Select “File| Back Up…” from the Menu Bar and make a backup of this company file, so that you
may restore the file back to its original condition when you are done playing with it.
6. After backing up the file, select “Customers| Receive Payments” from the Menu Bar.
7. Select “Fisher, Jennifer” from the “Received From” drop-down.
8. In the “Amount” field, type “1,400.”
9. Use the “Pmt. Method” drop-down to select “Check.”
10. Type “5678” in the “Check #” (“Ref./Check No.” in 2003:2004) field.
11. If using QuickBooks 2003 or 2004, click the “Group with other undeposited funds” option in the lower
left corner.
12. If using QuickBooks 2005 or 2006, select “Undeposited Funds” from the “Deposit to” drop-down. In
QuickBooks 2006:2012, this is the default account used- so you will not need to change this.
13. Click “Save & New” to save and leave the customer payment window open.
14. Select “Natiello, Ernesto: Kitchen” from the “Received From” drop-down.
15. In the “Amount” field, type “622.26.”
16. Use the “Pmt. Method” drop-down to select “Check.”
17. Type “9876” in the “Check #” (“Ref./Check No.” in 2003:2004) field.
18. Since this is a down payment on a job, ensure that there are no invoices selected to be paid.
19. If using QuickBooks 2003 or 2004, click the “Group with other undeposited funds” option in the lower
left corner.
20. If using QuickBooks 2005 or 2006, select “Undeposited Funds” from the “Deposit to” drop-down. In
QuickBooks 2006:2012, this is the default account used- so you will not need to change this.
21. Click “Save & Close” to save and leave the customer payment window open.
22. You can select “File| Close Company” from the Menu Bar to close the company file when you are
finished.

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 CHAPTER 11-
Handling Refunds
11.1- Creating a Credit Memo and Refund Check

11.2- Refunding Customer Payments

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 Handling Refunds

11.1- Creating a Credit Memo and Refund Check:

You can easily refund a customer’s purchase if they return merchandise by creating a credit memo
and then issuing a refund check. To do this, you first have to create a credit memo for the return. After
creating the credit memo, you can then create a check for the amount of the credit memo to then issue the
check as a refund to the customer.
To create a credit memo for a customer’s return, select “Customers| Create Credit Memos/Refunds“
from the Menu Bar. In the “Credit Memos/Refunds” window that appears, select the name of the customer
or customer:job for whom the credit memo is being issued from the “Customer:Job” drop-down. Next, enter
the items that were returned in the line items area at the bottom of the window.
If using QuickBooks 2005:2012, you can click the drop-down arrow to the right of the “Use Credit to”
button in the toolbar at the top of the window to select “Give refund” to issue a refund check for the amount
of the credit memo. If using QuickBooks 2003 or 2004, on the toolbar at the top of the window, click
“Refund” to create the same type of refund check.
Within the refund check, leave “Accounts Receivable” as the account shown in the “Expenses” tab
detail area of the refund check. This ensures correct accounting for the refund check back to the credit
memo that you also created. Finally, ensure that you save and print the refund check, as well as the credit
memo.

11.2- Refunding Customer Payments:

If a customer overpays an invoice or statement, or gives you a down payment or prepayment, you
create a credit for that customer when you enter the payment into the “Receive Payments” window. Later
on, if the customer requests that you send the amount back or cancels the order, you can issue a refund
check on the credit for the payment that you accepted.
To create the refund check, just select “Banking| Write Checks” from the Menu Bar in order to open
the “Write Checks” window. At the very top of the window, use the “Bank Account” drop-down to select the
account against which the funds will be withdrawn. Then enter the date of the check into the “Date” field.
Use the “Pay to the Order of” drop-down to select the name of the customer or customer:job to whom you
are issuing the refund. If you will be printing this check, then check the “To be printed” checkbox.
Enter the amount of the credit refund into the “$” field, and set the account in the “Expenses” tab to
“Accounts Receivable.” Then save and print the check and give it to the customer.
After that, you must return to the “Receive Payments” window to match the credit to the refund check
that you just wrote to the customer or customer:job. To do this, simply open the “Receive Payments”
window, and then select the name of the customer or customer:job from the “Received From” drop-down. In
the listing at the bottom of the window, you should see the refund check that you just wrote listed. Select the
check in the list and then click the “Discount & Credits…” button (“Set Credits” in 2003:2004) button. Then
select the “Credit” tab, select the credit that was refunded, and then click the “Done” button to apply the
credit to the check. You can then click the “Save & Close” button to finish the transaction.

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 ACTIONS-
Handling Refunds
CREATING A CREDIT MEMO AND REFUND CHECK:

1. Select “Customers| Create Credit Memos/Refunds“ from the Menu Bar.

2. Select the name of the customer or customer:job from the “Customer:Job” drop-down.
3. Enter the items that were returned in the line items area at the bottom of the window.
4. If using QuickBooks 2005:2012, click the drop-down arrow to the right of the “Use Credit to” button in the
toolbar at the top of the window to select “Give refund” .
5. If using QuickBooks 2003 or 2004, click “Refund” to create the refund check.
6. Leave “Accounts Receivable” as the account shown in the “Expenses” tab.
7. Finally, ensure that you save and print the refund check, as well as the credit memo.

REFUNDING A CUSTOMER PAYMENT:

1. Select “Banking| Write Checks” from the Menu Bar in order to open the “Write Checks” window.
2. Use the “Bank Account” drop-down from the top of the window to select the account against which the
funds will be withdrawn.
3. Enter the date of the check into the “Date” field.
4. Use the “Pay to the Order of” drop-down to select the name of the customer or customer:job.
5. If you will be printing this check, then check the “To be printed” checkbox.
6. Enter the amount of the credit refund into the “$” field.
7. Set the account in the “Expenses” tab to “Accounts Receivable.”
8. Save and print the check and give it to the customer.
9. Return to the “Receive Payments” window.
10. Match the credit to the refund check that you just wrote to the customer or customer:job.
11. Open the “Receive Payments” window.
12. Select the name of the customer or customer:job from the “Received From” drop-down.
13. In the listing at the bottom of the window, you should see the refund check that you just wrote listed.
14. Select the check in the list.
15. Click the “Discount & Credits…” button (“Set Credits” in 2003:2004) button.
16. Select the “Credit” tab.
17. Select the credit that was refunded.
18. Click the “Done” button to apply the credit to the check.
19. You can then click the “Save & Close” button to finish the transaction.

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 EXERCISES-
Handling Refunds
Purpose:

To be able to refund customer payments.

Exercises- 2003:2012:

1. Open up QuickBooks.
2. Select “File| Close Company” from the Menu Bar if you have a company file open to get to the “No
Company Open” dialog box.
3. Click the “Open a sample file” button, and select “Sample product-based business” from the drop-
down of choices.
4. Click “OK” on the sample file message box.
5. Select “File| Back Up…” from the Menu Bar and make a backup of this company file so that you may
restore the file back to its original condition when you are done playing with it.
6. After backing up the file, select “Banking| Write Checks” from the Menu Bar.
7. In the “Pay to the Order of” field, select “Natiello, Ernesto:Kitchen” from the drop-down.
8. In the “$” field, type “622.26.”
9. Click into the first column of the “Expenses” tab, across from the amount in the “Amount” column.
10. Select “Accounts Receivable” from the drop-down there.
11. Click “Save and Close” to save the check.
12. Select “Customers| Receive Payments” from the Menu Bar.
13. Select “Natiello, Ernesto:Kitchen” from the “Received From” drop-down.
14. Click the item anywhere but the first column for the check that you just created that shows up in
bottom section.
15. Click the “Discount & Credits…” (“Set Credits” in 2003:2004) button.
16. Click “Done” in the “Apply Credits” window.
17. Click “Save & Close.”
18. You can select “File| Close Company” from the Menu Bar to close the company file when you are
finished.

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 CHAPTER 12-
Entering and Paying Bills
12.1- Setting Billing Preferences

12.2- Entering Bills

12.3- Paying Bills

12.4- Early Bill Payment Discounts

12.5- Entering a Vendor Credit

12.6- Applying a Vendor Credit

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 Entering and Paying Bills

12.1- Setting Billing Preferences:

You can set your bill payment preferences before you use the Accounts Payable features of
QuickBooks by selecting “Edit| Preferences…” from the Menu Bar in order to open the “Preferences” dialog
box. In the scroll box at the left side of the preferences window, you can click the “Bills” (“Purchases &
Vendors” in QuickBooks 2003:2006) icon. Then click the “Company Preferences” tab that appears at the
right side of this dialog box to view and set your default billing preferences.
In the “Entering Bills” section, you can enter the default number of days after entry that bills without a
due date should be paid by entering that number into the “Bills are due __ days after receipt” text box. You
can also check the “Warn about duplicate bills from same vendor” checkbox to be alerted to that fact, if it
occurs.
In the “Paying Bills” section, if you wish to automatically use discounts and credits when available,
then check the “Automatically use credits” and/or the “Automatically use discounts” checkboxes
(“Automatically use discounts and credits” checkbox in QuickBooks 2003:2011). If selected, use the
adjacent drop-down to select the account to use for tracking vendor discounts and credits. Now, once you
have set your desired billing preferences, click the “OK” button to apply them.

12.2- Entering Bills:

You should always enter bills into QuickBooks as soon as you receive them. Use the “Enter Bills”
window to do this. To enter a bill, select “Vendors| Enter Bills” from the Menu Bar. The top half of the “Enter
Bills” window is where you enter your bill information. The bottom half of the window is where you assign
the bill amount to different expense accounts, or list the inventory items purchased.
When entering bills for inventory items that have been received, notice that the “Bill Received”
checkbox has a checkmark in it by default. You should only clear the check from this box if you are using
QuickBooks for purchase orders and inventory, and you want to record items that you’ve received but
haven’t been billed for yet. Removing the check from this box in that situation changes the transaction into
an “Item Receipt,” instead.
When entering a bill, select the name of the vendor that sent you the bill from the “Vendor” drop-
down. Ensure that you have entered the date on which you received the bill into the “Date” field. You can
then enter the bill’s number into the “Ref. No.” field. Then enter the amount of the bill into the “Amount Due”
field. Ensure that you have the correct due date set in the “Bill Due” field.
For bills that you receive that are not related to purchasing inventory parts, you enter the expense
account that this bill will affect in the “Expenses” tab at the bottom of the bill payment. That way, when you
create the check that pays this bill, you won’t have to re-enter any accounting information.
Note that on the “Expenses” tab, you can allocate the total amount of the bill entered in the “Amount
Due” field between multiple expense accounts. To do this, choose the first account that the bill affects and
then enter the amount that will be attributed to that particular expense account in the “Amount”

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 Entering and Paying Bills

12.2- Entering Bills (cont.):

column. Then click down into the next row under the “Account” column and select the next account that
would be affected by the amount of the bill. Then enter the amount to attribute to the second selected
account in the “Amount” column. Repeat this process, as needed, until you have allocated the total amount
of the bill to the necessary expense accounts.
Once you have entered the bill and attributed it to the correct accounts, you can then save the bill by
either clicking the “Save & Close” button to save the bill and then close the window, or by clicking the “Save
& New” button to save the transaction and leave the “Enter Bills” window open for further bill entry.

12.3- Paying Bills:

To pay bills that you have entered, you have to open the “Pay Bills” window. You can do this by
selecting “Vendors| Pay Bills” from the Menu Bar. At the top of the “Pay Bills” window you select the option
button either to show bills that are “Due on or before” a date that you select or to “Show all bills.” Then place
a checkmark in front of the bill or bills that you’d like to pay by clicking within the column to the left of the
bills you will pay. It will place the amount that you will pay in the rightmost “Amt. To Pay” column. Notice that
this is a white column. If necessary, you can change the amount that is shown here in order to make a
partial payment on a selected bill.
In the middle of the “Pay Bills” window you’ll see the vendor, discount, and credit information for the
currently selected, or highlighted, bill. You can click the “Go to Bill” button in order to open the original bill in
the “Enter Bills” window if you need to review it. The “Set Discount” and “Set Credits” buttons are used to
take early payment discounts and apply vendor credits to selected bills, if available. You will see how to
perform these tasks in separate lessons in this chapter.
In the lower corner of the “Pay Bills” window, you select the account from which the funds to pay the
checked bills will be withdrawn. Choose the desired account from the “Payment Account” drop-down. You
can use the “Payment Method” drop-down to select the desired method of payment for the checked bills. If
you select “Check” from this drop-down, then you must select either the “To be printed” or “Assign check
no.” option button. If you select the “To be printed” option, then the checks will be assigned a check number
later when you print them. Also, ensure that you have the correct date shown in the “Payment Date” field. At
that point, just click the “Pay Selected Bills” (“Pay & Close” in 2003:2006) button to pay the checked bills in
this window.
When you pay a bill through QuickBooks, an entry is made in the “Accounts Payable” register,
showing a decrease by the amount of the bill payment to the total accounts payable balance. QuickBooks
also creates a check from your checking account to pay the bill. You can open the “Accounts Payable”
register by opening the “Chart of Accounts” and then double-clicking on the “Accounts Payable” entry to see
its register. You could also view the check that is created by double-clicking on your checking account in the
“Chart of Accounts” to view that register. You may also notice that this type of check is called a “Bill
Payment” check, and differs from the typical check that you use when creating checks in the “Write Checks”
window. On those checks you see the expenses directly on the check voucher portion, while in the “Bill
Payment” checks the bottom portion shows the bills paid by the check, instead.

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 Entering and Paying Bills

12.4- Early Bill Payment Discounts:

If you take advantage of discounts for early payment offered by some vendors, you can record the
discounts directly in the “Pay Bills” window when you pay the bills by the date specified by your vendor’s
terms. This allows you to let QuickBooks track the discount amounts. You can manually take this discount
as you pay the bill in the “Pay Bills” window if you do not have QuickBooks set up to automatically take
vendor discounts and credits.
To do this, first select the qualifying bill to pay and then click the “Set Discount” button. QuickBooks
will then display the “Discount and Credits” window where the amount of the discount based on the terms of
the agreement will be displayed. Here you will select the “Discount Account” that you use to track the
amount of early payment discounts. Once you’ve selected the appropriate account, click the “Done” button
to close the “Discount and Credits” window. Then continue to pay the bill as you normally would.

12.5- Entering a Vendor Credit:

If you receive a credit from your vendors that you want to enter and later use against the next bill
you receive from them, you can easily do that in QuickBooks. To enter the vendor credit, open the “Enter
Bills” window by selecting “Vendors| Enter Bills” from the Menu Bar. Next, select the option button for
“Credit” at the top of the “Enter Bills” window. The word “Credit” should appear in the dark purple band at
the top of the form.
At that point, select the name of the vendor who issued you the credit from the “Vendor” drop-down.
Then enter the date that you received the credit from the “Date” calendar selector. If there is a number
associated with the credit, you can enter that number into the “Ref. No.” field. Next, enter the amount of the
credit into the “Credit Amount” field. Next, select the accounts that the credit will affect on the “Expenses” or
“Items” tabs, as appropriate, at the bottom of the window. Then click the “Save & Close” button to save the
credit for later use when you go to pay the next bill from that vendor through the “Pay Bills” window.

12.6- Applying a Vendor Credit:

If you’ve received a credit from a vendor and entered it into QuickBooks, you can use it on the next
payment that you make to that vendor. You can manually take this credit as you pay the next bill in the “Pay
Bills” window, if you do not have QuickBooks set to automatically apply discounts and credits.
To do this, open the “Pay Bills” window by selecting “Vendors| Pay Bills” from the Menu Bar. Then
simply select the bill to which you have a vendor credit that you would like to apply. Then click the “Set
Credits” button. QuickBooks will then display the “Discount and Credits” window and show the “Credits” tab
where the amount of the credit will be displayed. You can select how much of the available vendor credit to
use by typing it in the “Amt. To Use” column, if you only want to use a portion of the credit. Next, click the
“Done” button to close the “Discount and Credits” window.
From this point, just enter the rest of the bill payment information as normal to finish paying the
remainder of the bill.

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 ACTIONS-
Entering and Paying Bills
SETTING BILLING PREFERENCES:

1. Select “Edit| Preferences…” from the Menu Bar in order to open the “Preferences” dialog box.
2. Click the “Bills” (“Purchases & Vendors” in QuickBooks 2003:2006) icon in the scrollbar to the left.
3. Click the “Company Preferences” tab that appears at the right side of this dialog box.
4. In the “Entering Bills” section, enter the default number into “Bills are due __ days after receipt”.
5. Check the “Warn about duplicate bills from same vendor” box if you would like to be alerted to that fact.
6. In the “Paying Bills” section, if you wish to automatically use discounts and credits when available, then
check the “Automatically use credits” and/or the “Automatically use discounts” checkboxes
(“Automatically use discounts and credits” checkbox in QuickBooks 2003:2011).
7. Click the “OK” button to apply them.

ENTERING BILLS:

1. To enter a bill, select “Vendors| Enter Bills” from the Menu Bar.
2. When entering bills for inventory items that have been received, notice that the “Bill Received” checkbox
has a checkmark in it by default. You should only clear the check from this box if you are using
QuickBooks for purchase orders and inventory, and you want to record items that you’ve received but
haven’t been billed for yet.
3. When entering a bill, select the name of the vendor that sent you the bill from the “Vendor” drop-down.
4. Ensure that you have entered the date on which you received the bill into the “Date” field.
5. Enter the bill’s number into the “Ref. No.” field.
6. Enter the amount of the bill into the “Amount Due” field.
7. Ensure that you have the correct due date set in the “Bill Due” field.
8. For bills that you receive that are not related to purchasing inventory parts, you enter the expense
account that this bill will affect in the “Expenses” tab at the bottom of the bill payment. That way, when
you create the check that pays this bill, you won’t have to re-enter any accounting information.
9. Note that on the “Expenses” tab, you can allocate the total amount of the bill entered in the “Amount
Due” field between multiple expense accounts, if necessary.
a. Choose the first account that the bill affects.
b. Enter the amount for that particular expense account in the “Amount” column.
c. Click down into the next row under the “Account” column.
d. Select the next account that would be affected by the amount of the bill.
e. Enter the amount to attribute to the second selected account in the “Amount” column.
f. Repeat this process, as needed, until you have allocated the total amount of the bill to the
necessary expense accounts.
10. Save the bill by clicking the “Save & Close” button to save the bill and then close the window,
11. Click the “Save & New” button to save the transaction add more bills.

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 ACTIONS-
Entering and Paying Bills
PAYING BILLS:

1. Select “Vendors| Pay Bills” from the Menu Bar.

2. Select which bills to view at the top of the “Pay Bills” window
a. Show bills that are “Due on or before” a date that you select.
b. OR “Show all bills.”
3. Click in the left-most column and place a checkmark in front of the bill or bills that you’d like to pay.
4. QuickBooks will place the amount that you will pay in the rightmost “Amt. To Pay” column. Change the
amount that is shown here to make a partial payment on a selected bill.
5. Vendor, discount, and credit information for the selected bill will appear.
6. Click the “Go to Bill” button to open the original bill in the “Enter Bills” window if you need to review it.
7. Use “Set Discount” and “Set Credits” buttons to take early payment discounts and apply vendor credits.
8. Selecting the desired account from the “Payment Account” drop-down.
9. Use the “Payment Method” drop-down to select the desired method of payment for the checked bills.
10. If you select “Check” from this drop-down,
a. Select either the “To be printed” or “Assign check no.” option button.
b. If you select the “To be printed” option, then the checks will be assigned a check number at print.
11. Ensure that you have the correct date shown in the “Payment Date” field.
12. Click the “Pay Selected Bills” (“Pay & Close” in 2003:2006) button to pay the checked bills.

EARLY BILL PAYMENT DISCOUNTS:

1. Select “Vendors| Pay Bills” from the Menu Bar.

2. Select which bills to view at the top of the “Pay Bills” window
a. Show bills that are “Due on or before” a date that you select.
b. OR “Show all bills.”
3. Click to put a checkmark in front of the bill that you want to pay early.
4. Click the “Set Discount” button if you can receive a discount for early payment.
5. QuickBooks will then display the “Discount and Credits” window showing the discount amount.
6. Select the “Discount Account” that you use to track the amount of early payment discounts.
7. Click the “Done” button to close the “Discount and Credits” window.
8. Enter the rest of the bill payment information.
9. Click the “Pay Selected Bills” (“Pay & Close” in 2003:2006) button to pay the bill.

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 ACTIONS-
Entering and Paying Bills
ENTERING A VENDOR CREDIT:

1. Open the “Enter Bills” window by selecting “Vendors| Enter Bills” from the Menu Bar.
2. Select the option button for “Credit” at the top of the “Enter Bills” window.
3. Ensure you see the word “Credit” in the dark purple band at the top of the form.
4. Select the name of the vendor who issued you the credit from the “Vendor” drop-down.
5. Enter the date that you received the credit from the “Date” calendar selector.
6. Enter any associated number into the “Ref. No.” field.
7. Enter the amount of the credit into the “Credit Amount” field.
8. Select the affected accounts on the “Expenses” or “Items” tabs at the bottom of the window.
9. Click the “Save & Close” button to save the credit for when you pay the next bill from that vendor.

APPLYING A VENDOR CREDIT:

1. Select “Vendors| Pay Bills” from the Menu Bar.

2. Select which bills to view at the top of the “Pay Bills” window
a. Show bills that are “Due on or before” a date that you select.
b. OR “Show all bills.”
3. Click to put a checkmark to the left of the bill on which you want to take your credit.
4. Click the “Set Credits” button.
5. The “Discount and Credits” window will display the credit amount in the “Credits” tab.
6. To use a portion of the credit, type in the amount in the “Amt. To Use” column.
7. Next, click the “Done” button to close the “Discount and Credits” window.
8. Enter the rest of the bill payment information.
9. Click the “Pay Selected Bills” (“Pay & Close” in 2003:2006) button to pay the bill.

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 EXERCISES-
Entering and Paying Bills
Purpose:

To be able to enter and pay bills.

Exercises- 2003:2012:

1. Open up QuickBooks.
2. Select “File| Close Company” from the Menu Bar if you have a company file open to get to the “No
Company Open” dialog box.
3. Click the “Open a sample file” button, and select “Sample product-based business” from the drop-
down of choices.
4. Click “OK” on the sample file message box.
5. Select “File| Back Up…” from the Menu Bar and make a backup of this company file, so that you
may restore the file back to its original condition when you are done playing with it.
6. After backing up the file, select “Vendors| Enter Bills” from the Menu Bar.
7. Select “Timberloft Lumber” from the “Vendor” drop-down.
8. Enter “100” as the “Amount Due.”
9. Select the “Job Expenses:Job Materials” subaccount for the bill on the “Expenses” tab.
10. Click “Save & Close” to save the bill.
11. Select “Vendors| Pay Bills” from the Menu Bar.
12. Click the “Show all bills” option at the top of the “Pay Bills” window.
13. Select “Discount Date” from the “Sort Bills By” drop-down.
14. Select the bill that you just entered (it will have a “Disc. Date” of 12/25/YY, depending on the sample
file) by clicking in the check column at the left end of that bill’s row.
15. Click the “Set Discount” button.
16. Select “Construction:Discounts given” from the “Discount Account” drop-down.
17. Click “Done.”
18. Select “Checking” from the “Payment Account” drop-down in the lower left corner of the screen.
19. Select “Check” from the drop-down in the “Payment Method” section and select the “To be printed”
option button.
20. Click the “Pay Selected Bills” (“Pay & Close” in 2003:2006) button to take the early payment
discount.
21. If using QuickBooks 2007:2012, click the “Done” button in the “Payment Summary” window that
appears.
22. You can select “File| Close Company” from the Menu Bar to close the company file when you are
finished.

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 CHAPTER 13-
Using Bank Accounts
13.1- Using Registers

13.2- Writing Checks

13.3- Writing a Check for Inventory Items

13.4- Printing Checks

13.5- Transferring Funds Between Accounts

13.6- Reconciling Accounts

13.7- Voiding Checks

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13.1- Using Registers:

You can enter checks directly into the checking account register rather than through a check writing
window, if you’d prefer. This doesn’t allow you to see how the check will appear if printed, but it may seem
familiar to you since it looks like a typical check book register. Also, for businesses that may not write very
many checks and do not use QuickBooks for printing checks, it may simply be easier to transfer the
information from the paper check register into this register for accounting purposes.
You should also note that for any of the accounts that appear on the “Balance Sheet” of your
company, you have an associated register that you can access in order to view and/or edit the transactions
contained within them. Using the register can be useful to view the transactions in any account, such as
“Accounts Payable” or “Accounts Receivable.”
To open an account register, first ensure that you do not have any screens open within the
QuickBooks application. Then select “Banking| Use Register” from the Menu Bar. That will open the “Use
Register” window. In the “Use Register” window, use the “Select Account” drop-down to select your desired
account, like “Checking” for example. Once you have the account selected, just click the “OK” button.
The register for the selected account will then appear. To record an entry in the account register,
you simply use the next available blank row to enter the pertinent information. Then you must click the
“Record” button at the bottom of the screen to save the transaction record. You can view any of the
transactions in a register individually by double-clicking on the desired transaction to open it within its
corresponding form view in QuickBooks.

13.2- Writing Checks:

In QuickBooks you can enter checks directly into the QuickBooks “Write Checks” window. When you
enter a check into this form, you can see the address information and easily allocate the check’s amount
between multiple accounts, if necessary, at the bottom of the “Write Checks” window. This form also
corresponds to the “check” entries made in the register for the selected checking account.
To write checks in QuickBooks, select “Banking| Write Checks” from the Menu Bar to display the
“Write Checks” window. Start by selecting the checking account from which the funds will be withdrawn
from the “Bank Account” drop-down at the top of this window.
Next, decide whether you will be printing this check, or whether you will simply be recording a check
or other electronic withdrawal transaction. If you are recording a check that you have already written, or
recording an electronic withdrawal, simply enter the check number that was issued into the “No.” field. You
can enter your own code for checking withdrawal transactions that lack a code, such as an ATM withdrawal.
Otherwise, if you intend to print this check at a later point in time, then check the “To be printed” checkbox
that is located between the upper and lower portions of this window.
Next enter the date of the check into the “Date” field, or select the date from the adjacent calendar
date selector. Then select the name of the payee from the “Pay to the Order of” drop-down. Name and
address information will then be displayed on the check. Enter the amount of the check into the “$” field.
Once you have completed the upper portion of the “Write Checks” window, assign the amount of the
check to one or more of the accounts in your company’s chart of accounts by using the “Expenses” tab in
the lower section of the window. Just select the account to which you want to attribute the amount spent
from the “Account” column. QuickBooks will attribute the entire amount to that account, shown in the
“Amount” column. If you need to split the total amount of the check to multiple accounts, then simply change
the amount shown in the “Amount” column to indicate how much of the total amount of the check to attribute
to the selected account.

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13.2- Writing Checks (cont.):

You then repeat the process of selecting the next account from the next available blank line under the
“Account” column, and then entering the amount to attribute to that account into the adjacent “Amount”
column.
Once you have distributed the total amount of the check to all of the correct accounts, click either the
“Save & Close” button to save the check and close the “Write Checks” window, or click the “Save & New”
button to save the check and then leave the “Write Checks” window open so that you can continue writing
more checks.

13.3- Writing a Check for Inventory Items:

If you don’t use purchase orders to acquire inventory parts that you sell to customers, then you can
write a check to purchase inventory items instead. To write a check for “Inventory Part” items that you have
stored in your “Item List,” select “Banking| Write Checks” from the Menu Bar. Doing this will display the
“Write Checks” window.
Fill out the upper portion of the check with the appropriate vendor information. Next, you then
indicate which inventory items you are purchasing by clicking the “Items” tab at the bottom of the “Write
Checks” window and then using the “Items” drop-down to select the inventory parts that you are purchasing.
For each item purchased, you will also need to enter the “Quantity” purchased. The total amount of
the check will be determined by the total of the inventory parts you have indicated that you purchased on
this tab. When you have finished listing the purchased inventory on the “Items” tab, click either the “Save &
Close” button to save the check and close the “Write Checks” window, or click the “Save & New” button to
save the check and then leave the “Write Checks” window open so that you can continue writing more
checks.

13.4- Printing Checks:

You can click the “To be printed” checkbox on any check that you write in the “Write Checks”
window to save it and print it later. When you do want to print your checks, just open up the “Write Checks”
window by selecting “Banking| Write Checks” from the Menu Bar.
To print a single check, use the “Previous” and “Next” buttons to display the check that you want to
print, first. Then simply click the “Print” button in the small toolbar at the top of the “Write Checks” window in
order to display the “Print Checks” dialog box, where you set the printing options for the check.
To print a batch of checks that you have saved and marked as “To be printed,” just open the “Write
Checks” window and then click the drop-down arrow next to the “Print” button in the small toolbar at the top
of the window. Select the “Print Batch…” command from the drop-down menu of choices in order to open
the “Select Checks to Print” dialog box.
In this dialog box, you can remove the checkmarks from any checks listed that you don’t want to
print, if necessary. You can also use the “Select All” and “Select None” buttons to assist you in making your
selections, if needed. Ensure that you have the correct account selected from the “Bank Account” drop-
down, and then enter the first check number to assign to the batch of check into the “First Check Number”
text box. Once you have set the desired options, click the “OK” button to continue and open the “Print
Checks” dialog box.
Next, place the paper checks into your printer and set any desired printing options in the “Print

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13.4- Printing Checks (cont.):

Checks” dialog box. This dialog box displays three tabs: “Settings,” “Fonts,” and “Partial Page.” On the
“Settings” tab, use the “Printer name:” drop-down to select the printer that contains the checks that you are
going to print. If needed, use the “Printer type” drop-down to select the type of printer that you are using. In
the “Check Style” section, select the option button that corresponds to the check style that you will use for
printing checks: “Voucher,” “Standard,” “Wallet.” To the right of that, you can enter the number of copies of
each check to print in the “Number of copies:” text box. You can check the “Collate” checkbox to ensure that
they print collated. Check the “Print company name and address” checkbox to print your company name
and address on the checks if they are not pre-printed and you are using either the “Voucher” or “Standard”
check styles.
If you want to include a company logo on your checks, check the “Use logo” checkbox. If you haven’t
loaded a logo yet, click the “File” button in the “Logo” dialog box that then appears to browse for the logo file
for your checks. The logo file must be of an acceptable type for use in QuickBooks. The accepted types
include JPEG, GIF, and bitmap file types. The logo must also be a perfect square. The smaller the logo file
size, the more quickly the logo will be loaded into QuickBooks and printed on your checks. Also note that
you can only print your logo on “Voucher” and “Standard” check styles, and that you must be in single-user
mode in order to load a logo into QuickBooks. Assuming that all of these criteria are met, you can easily
load a logo by clicking the “File” button in the “Logo” dialog box to open a “Open Logo File” window where
you can browse for and then select the logo file to print on your checks.
If you selected to print your company’s name and address on your checks, then you can click the
“Fonts” tab to set the size and font style to use. You can click the “Address Font” button to open the “Select
Address Font” dialog box where you can set the font appearance for your company name and address.
Then click the “OK” button when finished to return to the “Fonts” tab.
For multi-page checks, you can print partial pages by using the “Partial Page” tab to select the
envelope loading style used by your printer. You can print partial pages of multi-page checks, such as the
“Standard” or “Wallet” sizes, by using your printer’s envelope feeder. On this tab, simply indicate how that
feeder is set up on your printer.
Once you have set your desired printing options for your checks, click the “Print” button at the right
side of the “Print Checks” dialog box to print your checks. Before printing your checks, note that the total
number of checks to print and the total dollar value are displayed at the top of the “Print Checks” dialog box.
This can be a great way to double-check yourself before printing your checks.

13.5- Transferring Funds Between Accounts:

You can easily transfer money between accounts within QuickBooks by using the “Transfer Funds
Between Accounts” window. You can access this window by selecting “Banking| Transfer Funds” from the
Menu Bar. In this window, start by entering the date of the transfer into the “Date” field. Next, select the
bank account to transfer funds from by selecting the account from the “Transfer Funds From” drop-down.
Then select the name of the account to transfer the funds into from the “Transfer Funds To” drop-down.
Then enter the amount of the transfer into the “Transfer Amount $” field. When you are ready to save the
transaction, click the “Save & Close” button to finish the funds transfer and close the window.

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13.6- Reconciling Accounts:

Reconciling is the process of ensuring that your checking account record in QuickBooks matches
the bank statement of the account. Reconciling your checking account is a very good habit to get into. You
can often spot bank errors and avoid overdrafts. When reconciling accounts, the goal is to make your bank
statement and your checking account balance match. While you will most commonly reconcile your
checking account, you can actually reconcile several different types of accounts, if desired- such as other
asset accounts, for example.
To begin reconciling an account, select “Banking| Reconcile” from the Menu Bar. In the “Begin
Reconciliation” window, first select which account you want to reconcile from the “Account” drop-down.
Then enter the “Statement Date” for the bank statement of the account you are reconciling with your
QuickBooks account. Next enter the “Ending Balance” from your bank’s account statement. Next enter any
service charge or interest earned shown on the bank statement, but not yet recorded in QuickBooks. To
record service charges, enter the amount of service charges into the “Service Charge” field. Then select the
date that the service charges were assessed from the adjacent “Date” calendar selector. You can then use
the adjacent “Account” drop-down to select the account that is used to track service charge amounts, such
as “Bank Service Fees.” If the account has gained interest, then you can enter the amount of interest
earned, as shown on the statement, into the “Interest Earned” field. As with your service charges, you then
enter the date that the interest was earned into the “Date” field, and then select the income account used to
track interest income from the adjacent “Account” drop-down.
In QuickBooks 2004:2012, you have a “Locate Discrepancies” button that you can click to launch the
“Locate Discrepancies” dialog box. Here you can click the “Discrepancy Report” button to view a report that
shows any changes to previously cleared transactions from prior account reconciliations. This can be a
useful tool for locating data entry errors that can cause reconciliation problems. You can also click the
“Previous Reports” button to select a type of reconciliation report to run. The report will show the
transactions that were marked as cleared from your last reconciliation.
Also notice the “Undo Last Reconciliation” button at the bottom of the “Locate Discrepancies” and
“Begin Reconciliation” windows. If you click this button, it will undo your last account reconciliation for the
selected account. This is an extreme move, and doing it will completely unreconcile the last account
reconciliation you performed on the selected account. If you are still viewing the “Locate Discrepancies”
window, you can return to the “Begin Reconciliation” screen by clicking the “Restart Reconciliation” button.
In the “Begin Reconciliation” window, click the “Continue” button to view the “Reconcile” window. In
the “Reconcile” window, place checkmarks next to the appropriate withdrawals and deposits within this
screen that also appear within your bank statement to mark them as being “cleared.” As you do this, the
“Difference” shown in the lower right corner of the screen will slowly approach zero.
If you try to reconcile the account and the “Difference” amount is not zero, you may have to enter in
an “adjustment” transaction that modifies the QuickBooks balance so that it will agree with the bank
statement. You will still have to account for the difference later, though. So, a better idea would be to
instead try and find the discrepancy between the check register and the banking statement and then correct
it.
If needed, you can exit a reconciliation by clicking the “Leave” button at the bottom of the
“Reconcile” window. This will not affect the checks and deposits that you marked as being “cleared.” You
can return later by simply choosing “Banking| Reconcile” from the Menu Bar. However, you will need to re-
enter the information in the “Begin Reconciliation” screen again and click “Continue” to return to the
“Reconciliation” window. When you are done in the “Reconciliation” window and the “Difference” displayed
is zero, you can then click the “Reconcile Now” button to finish the reconciliation. At this point, a dialog box
will appear which allows you to print a reconciliation report, if you would like one.

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13.7- Voiding Checks:

You can void a check that you have created, if necessary. To void a check, first open the check that
you would like to void and display it in the “Write Checks” window. Then, select “Edit| Void Check” from the
Menu Bar to void the check displayed in the “Write Checks” window.

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 ACTIONS-
Using Bank Accounts
USING ACCOUNT REGISTERS:

1. Close any open screens in QuickBooks.

2. Select “Banking| Use Register” from the Menu Bar. That will open the “Use Register” window.
3. In the “Use Register” window, use the “Select Account” drop-down to select your desired account.
4. Click the “OK” button.
5. Use the first available blank row to enter the pertinent information in the register that appeared.
6. Click the “Record” button at the bottom of the screen to save the transaction record.
7. View any of the transactions in a register individually by double-clicking on the desired transaction to
open it within its corresponding form view in QuickBooks.

WRITING CHECKS:

1. Select “Banking| Write Checks” from the Menu Bar to display the “Write Checks” window.
2. Select the appropriate checking account from the “Bank Account” drop-down at the top of this window.
3. If you are simply recording a check that you have already written, or recording an electronic withdrawal
a. Enter the check number that was issued into the “No.” field.
b. Enter your own code for checking withdrawal transactions that lack a code, such as an ATM
withdrawal.
4. Check the “To be printed” checkbox if you intend to print the check later.
5. Enter the check “Date” , or select the date from the adjacent calendar date selector.
6. Select the payee from the “Pay to the Order of” drop-down. The payee name and address will display on
the check.
7. Enter the amount of the check into the “$” field.
8. Move to the lower portion of the check window.
9. Select the account to which you want to attribute the full amount spent from the “Account” column on the
“Expenses” tab. QuickBooks will attribute the entire amount to that account, shown in the “Amount”
column.
10. OR split the total amount of the check to multiple accounts,
a. Change the amount shown in the “Amount” column to indicate amount for the selected account.
b. Selecting the next account from the next available blank line under the “Account” column, and
enter the amount into the adjacent “Amount” column.
c. Repeat as necessary
11. Click the “Save & Close” button to save the check and close the “Write Checks” window.
12. OR click “Save & New” to save and leave the “Write Checks” window open to continue writing checks.

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Using Bank Accounts
WRITING A CHECK FOR INVENTORY ITEMS:

1. To write a check for “Inventory Part” items that you have stored in your “Item List,” select “Banking| Write
Checks” from the Menu Bar. Doing this will display the “Write Checks” window.
2. Fill out the upper portion of the check with the appropriate vendor information.
3. You indicate which inventory items you are purchasing by clicking the “Items” tab at the bottom of the
“Write Checks” window and then using the “Items” drop-down to select the inventory parts.
4. For each item purchased, you will also need to enter the “Quantity” purchased.
5. When you have finished listing the purchased inventory on the “Items” tab, click either the “Save &
Close” button to save the check and close the “Write Checks” window, or click the “Save & New” button
to save the check and then leave the “Write Checks” window open so that you can continue writing
checks.

PRINTING CHECKS:

1. Click the “To be printed” checkbox /in the “Write Checks” window to save it and print it later.
2. Open the “Write Checks” window by selecting “Banking| Write Checks” from the Menu Bar when you are
ready to print.
3. To print a single check,
a. Use the “Previous” and “Next” buttons to display the check that you want to print.
b. Click the “Print” button in the small toolbar at the top of the “Write Checks” window.
c. Set the printing options for the check in the “Print Checks” dialog box.
4. To print a batch of checks that you have saved and marked as “To be printed,”
a. Open the “Write Checks” window.
b. Click the drop-down arrow next to the “Print” button in the small toolbar at the top of the window.
c. Select the “Print Batch…” command from the drop-down menu to open the “Select Checks to
Print” dialog box.
d. Remove the checkmarks from any checks listed that you don’t want to print, if necessary. You
can also use the “Select All” and “Select None” buttons to assist you.
e. Ensure that you have the correct account selected from the “Bank Account” drop-down.
f. Enter the first check number to assign to the batch into the “First Check Number” text box.
5. Click the “OK” button to continue and open the “Print Checks” dialog box.
6. Place the paper checks into your printer.
7. Use the “Printer name:” drop-down to select the printer on the “Settings” tab.
8. Use the “Printer type” drop-down to select the type of printer that you are using.
9. Select the check style that you will use: “Voucher,” “Standard,” “Wallet” in the “Check Style” section.
10. Enter the number of copies of each check to print in the “Number of copies:” text box.
11. You can check the “Collate” checkbox to ensure that they print collated.
12. Check the “Print company name and address” box if checks are not pre-printed and you are using either
the “Voucher” or “Standard” check styles.
13. Check the “Use logo” checkbox to use a company logo.
a. If you haven’t loaded a logo yet, click the “File” button in the “Logo” dialog box
b. Browse for the logo file that you want to use for your checks. It must be perfectly square and of
correct file type.

(cont.)

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 ACTIONS-
Using Bank Accounts
PRINTING CHECKS (CONT.):

14. If you selected to print your company’s name and address on your checks
a. Click the “Fonts” tab to set the size and font style to use.
b. Click the “Address Font” button to open the “Select Address Font” dialog box.
c. Set the font appearance for your company name and address.
d. Click the “OK” button when finished to return to the “Fonts” tab.
15. For multi-page checks, you can print partial pages by using the “Partial Page” tab to
a. Select the envelope loading style used by your printer.
b. You can print partial pages of multi-page checks, such as the “Standard” or “Wallet” sizes, by
using your printer’s envelope feeder.
c. Indicate how that feeder is set up on your printer.
16. Click the “Print” button at the right side of the “Print Checks” dialog box to print your checks.

TRANSFERRING FUNDS BETWEEN ACCOUNTS:

1. Select “Banking| Transfer Funds” from the Menu Bar.

2. Enter the date of the transfer into the “Date” field.
3. Select the bank account on the “Transfer Funds From” drop-down.
4. Select the bank account on the “Transfer Funds To” drop-down.
5. Enter the amount of the transfer into the “Transfer Amount $” field.
6. Click the “Save & Close” button to finish the funds transfer and close the window.

RECONCILING ACCOUNTS:

1. Select “Banking| Reconcile” from the Menu Bar to make the “Begin Reconciliation” window appear.
2. Select the account you want to reconcile from the “Account” drop-down.
3. Enter the “Statement Date” for the bank statement you want to reconcile with your QuickBooks account.
4. Enter the “Ending Balance” from your bank’s account statement into the field of the same name.
5. To record service charges:
a. Enter the amount of service charges into the “Service Charge” field.
b. Select the date that the service charges were assessed from the adjacent “Date” calendar
selector.
c. Use the adjacent “Account” drop-down to select the account that tracks service charge amounts.
(Ex. “Bank Service Fees”)
6. To record interest:
a. Enter the amount of interest earned, as shown on the statement, into the “Interest Earned” field.
b. Enter the date that the interest was earned into the “Date” field.
c. Select the income account used to track interest income from the adjacent “Account” drop-down.

(cont.)

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 ACTIONS-
Using Bank Accounts
RECONCILING ACCOUNTS (CONT.):

7. In QuickBooks 2004:2012, click the “Locate Discrepancies” button.

8. Click the “Discrepancy Report” button to view any changes to previously cleared transactions from prior
account reconciliations.
9. Click the “Previous Reports” button to select a type of reconciliation report and view transactions that
were marked as cleared from your last reconciliation.
10. If you click the “Undo Last Reconciliation” button, it will undo your last account reconciliation for the
selected account. This is discouraged unless you have a good reason to do so.
11. Return to the “Begin Reconciliation” screen by clicking the “Restart Reconciliation” button.
12. Click the “Continue” button to view the “Reconcile” window.
13. Place checkmarks next to the appropriate withdrawals and deposits on this screen that also appear
within your bank statement to mark them as being “cleared.” As you do this, the “Difference” shown in
the lower right corner of the screen will slowly approach zero.
14. When the “Difference” amount is not zero,
a. Try to find the discrepancy between the check register and the banking statement and correct it .
b. Otherwise, you may have to enter in an “adjustment” transaction that modifies the QuickBooks
balance so that it will agree with the bank statement.
c. You will still have to account for the difference later, though.
15. If you must, exit a reconciliation by clicking the “Leave” button at the bottom of the “Reconcile” window.
This will not affect the checks and deposits that you marked as being “cleared.”
16. Choosing “Banking| Reconcile” from the Menu Bar to return to the reconciliation.
a. However, you will need to re-enter the information in the “Begin Reconciliation” screen again.
b. Click “Continue” to return to the “Reconciliation” window.
17. When you are done in the “Reconciliation” window and the “Difference” displayed is zero, click the
“Reconcile Now” button to finish the reconciliation.
18. Print a reconciliation report, if you would like one, from the dialog box that appears.

VOIDING CHECKS:

1. Open the check that you would like to void and display it in the “Write Checks” window.
2. Select “Edit| Void Check” from the Menu Bar to void the check displayed in the “Write Checks” window.

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 EXERCISES-
Using Bank Accounts
Purpose:

To be able to enter checks.

Exercises- 2003:2012:

1. Open up QuickBooks.
2. Select “File| Close Company” from the Menu Bar if you have a company file open to get to the “No
Company Open” dialog box.
3. Click the “Open a sample file” button and select “Sample product-based business” from the drop-
down of choices.
4. Click “OK” on the sample file message box.
5. Select “File| Back Up…” from the Menu Bar and make a backup of this company file, so that you
may restore the file back to its original condition when you are done playing with it.
6. After backing up the file, select “Banking| Write Checks” from the Menu Bar.
7. Select “Timberloft Lumber” from the “Pay to the Order of” drop-down.
8. Click the “Continue Writing Bills” (“OK” in 2003:2006) button when presented with the message box
that appears in order to inform you that this is not going to pay any outstanding bills.
9. Type “150” in the “$” field.
10. On the “Expenses” tab, select “Job Expenses:Job Materials.”
11. Click the “To be printed” checkbox to place a checkmark into the box.
12. Click the “Save & Close” button to save the check.
13. You can select “File| Close Company” from the Menu Bar to close the company file when you are
finished.

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 CHAPTER 14-
Paying Sales Tax
14.1- Sales Tax Reports

14.2- Using the Sales Tax Payable Register

14.3- Paying Your Tax Agencies

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 Paying Sales Tax

14.1- Sales Tax Reports:

If you are required to collect sales tax from customers, you must also make periodic payments of the
sales taxes that you have collected to the appropriate taxing authorities. QuickBooks gives you three ways
to view the amount of your sales tax liability. You can use either the “Sales Tax Liability” report, the “Sales
Tax Payable” register, or the “Pay Sales Tax” window in order to view your sales tax liability amounts.
In addition to this basic information, you also have two sales tax reports that you can use to show
information about the sales taxes that you owe. The “Sales Tax Liability” report provides complete
information about the sales tax or sales taxes that your company owes for a particular period of time. It will
show, for the date range that you select, the total taxable sales, total non-taxable sales, and the total
amount of sales tax that you owe to each agency for which you collect sales taxes. QuickBooks displays
your sales tax liability report on an accrual basis by default, unless you have changed the default setting in
the “Sales Tax” category within the “Preferences” window. To view the “Sales Tax Liability” report, you can
select either “Reports| Vendors & Payables| Sales Tax Liability” or “Vendors| Sales Tax| Sales Tax Liability”
from the Menu Bar in order to open the report.
Another report that can be useful when dealing with sales taxes is the “Sales Tax Revenue
Summary” report, which shows where your sales tax revenue is coming from. It will show you the sources of
all taxable and non-taxable transactions, broken down by individual sales tax codes. You can view this
report by selecting either “Reports| Vendors & Payables| Sales Tax Revenue Summary” or “Vendors| Sales
Tax| Sales Tax Revenue Summary” from the Menu Bar.

14.2- Using the Sales Tax Payable Register:

Each time that you create an invoice or sales receipt that includes sales tax, QuickBooks enters the
information into your “Sales Tax Payable” account register. QuickBooks keeps track of transactions for all
tax vendors using the same “Sales Tax Payable” account. You can open the “Sales Tax Payable” register to
inspect the entries by first opening the “Chart of Accounts” list and then double-clicking the “Sales Tax
Payable” account within the list.
Each entry in the “Sales Tax Payable” register represents a single tax transaction. Taxes that you
record on invoices and sales receipts appear as increases to the account’s balance, and payments that you
make to tax agencies appear as decreases to the balance. The ending balance of the register is your
current tax liability.
Notice that some transactions within this register may have the same invoice number shown. When
you record two tax rates on the same invoice or sale, the register makes a separate transaction for each tax
agency, because you have to make the tax payments to the individual agencies.

14.3- Paying Your Tax Agencies:

When the time comes to pay your sales tax agencies, you use the “Pay Sales Tax” window to write a
check to your tax agency or agencies. You can open the “Pay Sales Tax” window by selecting “Vendors|
Sales Tax| Pay Sales Tax…” from the Menu Bar.
In the “Pay Sales Tax” window, use the “Pay From Account” drop-down to select the bank account
that you want to use for the sales tax payments. You then enter the date that you want to print on the
checks into the “Check Date” field. You can use the “Show sales tax due through” calendar selector to
choose the date through which you want to pay the sales tax collected. If the check are to be printed, then
check the “To be printed” checkbox at the bottom of this window. Otherwise, you can uncheck the box and

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 Paying Sales Tax

14.3- Paying Your Tax Agencies (cont.):

then enter the starting number of the check issued into the “Starting Check No.” field.
The list of taxing agencies to whom you owe tax will be displayed in the “Pay Sales Tax” window.
You can select which agencies to pay by clicking into the “Pay” column to the left of the agencies that you
want to pay. Once you have your selections made, you can then click the “OK” button to have QuickBooks
automatically create the tax payment checks. QuickBooks also updates your sales tax report and sales tax
payable register to show your payment.
Note that you must pay your sales tax using this method in order for QuickBooks to accurately
update the sales tax information for each taxing authority. Do not simply write a normal check for the
amount due and attribute it to the “Sales Tax Payable” account! This will disrupt the way in which
QuickBooks tracks the individual amounts collected and paid for each sales tax authority.
Another point worth noting is that if you need to adjust the amount of sales tax due to an authority
shown within the “Pay Sales Tax” window, you can select the tax from within this window and then click the
“Adjust” button to open the “Sales Tax Adjustment” window. Here you can enter a date for the adjustment
into the “Adjustment Date” field. Then you can enter a number for the adjustment entry into the “Entry No.”
field. You then select the sales tax authority whose amounts you need to adjust by selecting the name from
the “Sales Tax Vendor” drop-down. You then select the account used to track the adjustment from the
“Adjustment Account” drop-down. Then, in the “Adjustment” section, select either the “Increase Sales Tax
by” or “Reduce Sales Tax by” option button, as appropriate. You can then enter the amount of the
adjustment into the “Amount” field. To then add the adjustment to the “Pay Sales Tax” window, so that you
can select it for payment along with your original entry for the authority, just click the “OK” button.

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 ACTIONS-
Paying Sales Tax
CREATING A SALES TAX LIABILITY REPORT:

1. Select “Vendors| Sales Tax| Sales Tax Liability” from the Menu Bar.
2. Close the report when you are done.

CREATING A SALES TAX REVENUE SUMMARY REPORT:

1. Select “Vendors| Sales Tax| Sales Tax Revenue Summary” from the Menu Bar.
2. Close the report when you are done.

OPENING THE SALES TAX PAYABLE REGISTER:

1. Select “Lists| Chart of Accounts” from the Menu Bar.

2. Double-click the “Sales Tax Payable” account to open the register associated with it.
3. Close the register when you are done viewing the information.

PAYING YOUR SALES TAX:

1. Select “Vendors| Sales Tax| Pay Sales Tax” from the Menu Bar.
2. Use the “Pay From Account” drop-down to select the correct bank account for the sales tax payments.
3. Enter the date that you want to print on the checks into the “Check Date” field.
4. Use the “Show sales tax due through” calendar selector to show the date through which you want to pay
collected sales tax.
5. If the check are to be printed, check the “To be printed” checkbox at the bottom of this window.
6. Otherwise, uncheck the box and enter the starting number of the check issued into the “Starting Check
No.” field.
7. The list of taxing agencies to whom you owe tax will be displayed in the “Pay Sales Tax” window.
8. Select which agencies to pay by clicking into the “Pay” column to the left of the agencies.
9. Click the “OK” button to have QuickBooks automatically create the tax payment checks.
10. If adjustments are needed, select the tax from within this window and then click the “Adjust” button
11. This opens the “Sales Tax Adjustment” window.
a. Enter a date for the adjustment into the “Adjustment Date” field.
b. Enter a number for the adjustment entry into the “Entry No.” field.
c. Select the sales tax authority whose amounts you need to adjust from the “Sales Tax Vendor”
drop-down.
d. Select the account used to track the adjustment from the “Adjustment Account” drop-down.
e. In the “Adjustment” section, select either the “Increase Sales Tax by” or “Reduce Sales Tax by”.
f. Enter the amount of the adjustment into the “Amount” field.
g. Click the “OK” button to then add the adjustment to the “Pay Sales Tax” window, so that you can
select it for payment along with your original entry.

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 EXERCISES-
Paying Sales Tax
Purpose:

To be able to pay our sales tax liabilities.

Exercises- 2003:2012:

1. Open up QuickBooks.
2. Select “File| Close Company” from the Menu Bar if you have a company file open to get to the “No
Company Open” dialog box.
3. Click the “Open a sample file” button, and select “Sample product-based business” from the drop-
down of choices.
4. Click “OK” on the sample file message box.
5. Select “File| Back Up…” from the Menu Bar and make a backup of this company file, so that you
may restore the file back to its original condition when you are done playing with it.
6. After backing up the file, select “Vendors| Sales Tax| Pay Sales Tax…” from the Menu Bar.
7. Click in the “Pay” column to the left of the “San Tomas” sales tax rate.
8. Click “OK” to create the check used to pay the tax agency.
9. You can select “File| Close Company” from the Menu Bar to close the company file when you are
finished.

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 QuickBooks Keyboard Shortcuts

General Key Activity Key

To start QuickBooks without a company Ctrl + double- Account list, display Ctrl + A
file click Check, write Ctrl + W
To suppress the desktop windows (at Alt (while Copy transaction in register Ctrl + O
Open Company window) opening)
Customer:Job list, display Ctrl + J
Display information about QuickBooks F2
Delete check, invoice, transaction, or item from Ctrl + D
Cancel Esc list
Record (when black border is around  (Enter key) Edit lists or registers Ctrl + E
OK, Next or Previous button)
QuickFill and Recall (type first few letters of abc Tab
Record (always) Ctrl +  (Enter name and press Tab, name fills in)
key)
Find transaction Ctrl + F
Dates Key Go to register of transfer account Ctrl + G
Next day + (plus key) Help in context, display F1
Previous day - (minus key) History of A/R or A/P transaction Ctrl + H
Today T Invoice, create Ctrl + I
First day of the Week W List (for current field), display Ctrl + L
Last day of the weeK K Memorize transaction or report Ctrl + M
First day of the Month M Memorized transaction list, display Ctrl + T
Last day of the montH H New invoice, bill, check or list item Ctrl + N
First day of the Year Y Paste copied transaction in register Ctrl + V
Last day of the yeaR R Print Ctrl + P
Date calendar Alt + down arrow QuickZoom on report  (enter key)
Editing Key QuickReport on transaction or list item Ctrl + Q
Edit transaction selected in register Ctrl + E Register, display Ctrl + R
Delete character to right of insertion Del Show list Ctrl + S
point Use list item Ctrl + U
Delete character to left of insertion point Backspace Transaction journal, display Ctrl + Y
Delete line from detail area Ctrl + Del
Insert line in detail area Ctrl + Ins Moving around a window Key
Next field Tab
Cut selected characters Ctrl + X
Previous field Shift + Tab
Copy selected characters Ctrl + C
Report column to the right Right arrow
Paste cut or copied characters Ctrl + V
Report column to the left Left arrow
Increase check or other from number by + (plus key)
one Beginning of current field Home
Decrease check or other form number - (minus key) End of current field End
by one Line below in detail area or on report Down arrow
Undo changes made in field Ctrl + Z Line above in detail area or on report Up arrow
Down one screen Page Down
Help window Key
Display Help in context F1 Up one screen Page Up
Select next option or topic Tab
Next word in field Ctrl + 
Select previous option or topic Shift + Tab Previous word in field Ctrl + 
First item on list or previous month in register Ctrl + PgUp
Display selected topic  (Enter key)
Close popup box Esc Last item on list or next month in register Ctrl+ PgDn
Close Help window Esc Close active window Esc

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