Quickbooks 2020 All-in-one for Dummies

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  • Format: Paperback
  • Copyright: 2020-01-09
  • Publisher: For Dummies

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Supplemental Materials

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The quickest way to do the books for small business owners and managers

No one looks forward to doing the finances: that’s why QuickBooks 2020 All-in-One For Dummies is on hand to help get it over with as quickly and painlessly as possible. This comprehensive one-stop reference combines 8 mini-books in one, all written in plain and simple language that makes it easy for even the most accounts-averse to get the most out of the latest version of the QuickBooks software and save time.

Written and revised by financial expert Stephen Nelson, the latest version of this invaluable guide takes readers step-by-step through every aspect of small business accounting procedures, including understanding the fundamentals of double-entry bookkeeping, setting up and administering the QuickBooks system, and carrying out complex tasks such as ratio analysis and capital budgeting. 

  • Write a business plan and create a forecast
  • Learn how to use profit-volume-cost analysis tools
  • Prepare financial statements and reports
  • Protect your financial data

Time is money—get this time-saving resource today and start reaping the rewards!


Author Biography

Stephen L. Nelson, MBA, CPA, provides accounting, business advisory, and tax planning and preparation services to small businesses. He has written more than 100 books explaining how to use computer software to manage personal and business finances.

Table of Contents

Introduction 1

About This Book 1

Foolish Assumptions 2

Icons Used in This Book 3

Beyond the Book 4

Where to Go from Here 4

Book 1: An Accounting Primer 7

Chapter 1: Principles of Accounting 9

The Purpose of Accounting 9

The big picture 10

Managers, investors, and entrepreneurs 10

External creditors 11

Government agencies 11

Business form generation 12

Reviewing the Common Financial Statements 12

The income statement 12

Balance sheet 15

Statement of cash flows 19

Other accounting statements 22

Putting it all together 24

The Philosophy of Accounting 24

Revenue principle 24

Expense principle 25

Matching principle 25

Cost principle 25

Objectivity principle 26

Continuity assumption 26

Unit-of-measure assumption 26

Separate-entity assumption 27

A Few Words about Tax Accounting 27

Chapter 2: Double-Entry Bookkeeping 29

The Fiddle-Faddle Method of Accounting 30

How Double-Entry Bookkeeping Works 32

The accounting model 33

Talking mechanics 35

Almost a Real-Life Example 38

Recording rent expense 39

Recording wages expense 39

Recording supplies expense 40

Recording sales revenue 40

Recording cost of goods sold 40

Recording the payoff of accounts payable 41

Recording the payoff of a loan 42

Calculating account balance 42

Using T-account analysis results 44

A Few Words about How QuickBooks Works 46

Chapter 3: Special Accounting Problems 49

Working with Accounts Receivable 50

Recording a sale 50

Recording a payment 50

Estimating bad-debt expense 51

Removing uncollectible accounts receivable 52

Recording Accounts Payable Transactions 53

Recording a bill 53

Paying a bill 54

Taking some other accounts payable pointers 54

Inventory Accounting 55

Dealing with obsolete inventory 56

Disposing of obsolete inventory 57

Dealing with inventory shrinkage 58

Accounting for Fixed Assets 59

Purchasing a fixed asset 59

Dealing with depreciation 60

Disposing of a fixed asset 62

Recognizing Liabilities 63

Borrowing money 63

Making a loan payment 64

Accruing liabilities 65

Closing Out Revenue and Expense Accounts 67

The traditional close 68

The QuickBooks close 69

One More Thing 70

Book 2: Getting Ready to Use QuickBooks 71

Chapter 1: Setting Up QuickBooks 73

Planning Your New QuickBooks System 73

What accounting does 74

What accounting systems do 74

What QuickBooks does 74

And now for the bad news 75

Installing QuickBooks 76

Dealing with the Presetup Jitters 77

Preparing for setup 78

Seeing what happens during setup 79

Running the QuickBooks Setup Wizard 79

Getting the big welcome 79

Supplying company information 81

Customizing QuickBooks 82

Setting your start date 83

Reviewing the suggested chart of accounts 84

Adding your information to the company file 85

Identifying the Starting Trial Balance 87

A simple example to start 87

A real-life example to finish 89

Chapter 2: Loading the Master File Lists 93

Setting Up the Chart of Accounts List 94

Setting Up the Item List 99

Working with the Price Level List 99

Using Sales Tax Codes 100

Setting Up a Payroll Item List 100

Setting Up Classes 101

Setting Up a Customer List 103

Setting Up the Vendor List 107

Setting Up a Fixed Assets List 111

Setting Up a Price Level List 112

Setting Up a Billing Rate Level List 112

Setting Up Your Employees 113

Setting Up an Other Names List 113

Setting Up the Profile Lists 114

Chapter 3: Fine-Tuning QuickBooks 117

Accessing the Preferences Settings 118

Setting the Accounting Preferences 120

Using account numbers 120

Setting general accounting options 121

Setting the Bills Preferences 123

Setting the Calendar Preferences 123

Setting the Checking Preferences 123

Changing the Desktop View 125

Setting Finance Charge Calculation Rules 127

Setting General Preferences 128

Controlling Integrated Applications 130

Controlling Inventory 131

Controlling How Jobs and Estimates Work 132

Dealing with Multiple Currencies 133

Starting Integrated Payment Processing 134

Controlling How Payroll Works 134

Telling QuickBooks How Reminders Should Work 136

Specifying Reports & Graphs Preferences 137

Setting Sales & Customers Preferences 140

Specifying How Sales Are Taxed 142

Setting the Search Preferences 143

Setting the Send Forms Preferences 143

Fine-Tuning the Service Connection 144

Controlling Spell Checking 145

Controlling How 1099 Tax Reporting Works 146

Setting Time & Expenses Preferences 147

Book 3: Bookkeeping Chores 149

Chapter 1: Invoicing Customers 151

Choosing an Invoice Form 151

Customizing an Invoice Form 152

Choosing a template to customize 152

Reviewing the Additional Customization options 152

Moving on to Basic Customization 157

Working with the Layout Designer tool 159

Working with the web-based Forms Customization tool 162

Invoicing a Customer 162

Billing for Time 168

Using a weekly time sheet 168

Timing single activities 169

Including billable time on an invoice 170

Printing Invoices 172

Emailing Invoices 173

Recording Sales Receipts 174

Recording Credit Memos 176

Receiving Customer Payments 178

Assessing Finance Charges 180

Setting up finance-charge rules 180

Calculating finance charges 181

Using Odds and Ends on the Customers Menu 182

Chapter 2: Paying Vendors 185

Creating a Purchase Order 185

Creating a real purchase order 186

Using some purchase order tips and tricks 189

Recording the Receipt of Items 189

Simultaneously Recording the Receipt and the Bill 192

Entering a Bill 193

If you haven’t previously recorded an item receipt 194

If you have previously recorded an item receipt 195

Paying Bills 197

Reviewing the Other Vendor Menu Commands 201

Vendor Center 201

Sales Tax menu commands 202

Inventory Activities menu commands 203

Print/E-file 1099s 203

Item List 204

Chapter 3: Tracking Inventory and Items 205

Looking at Your Item List 206

Using the Item Code column 206

Using the Item List window 207

Using inventory reports 208

Adding Items to the Item List 208

Adding an item: Basic steps 209

Adding a service item 210

Adding an inventory part 211

Adding a noninventory part 213

Adding an other-charge item 215

Adding a subtotal item 216

Adding a group item 216

Adding a discount item 217

Adding a payment item 218

Adding a sales tax item 219

Setting up a sales tax group 219

Adding custom fields to items 220

Editing Items 222

Adjusting physical counts and inventory values 222

Adjusting prices and price levels 225

Using the Change Item Prices command 225

Using price levels 226

Enabling advanced pricing 228

Managing Inventory in a Manufacturing Firm 229

Handling manufactured inventory the simple way 229

Performing inventory accounting in QuickBooks 230

Managing multiple inventory locations 233

Chapter 4: Managing Cash and Bank Accounts 235

Writing Checks 236

Recording and printing a check 236

Customizing the check form 241

Making Bank Deposits 243

Transferring Money between Bank Accounts 246

Working with the Register 247

Recording register transactions 248

Using Register window commands and buttons 251

Using Edit Menu Commands 254

Reconciling the Bank Account 258

Reviewing the Other Banking Commands 262

Order Checks & Envelopes command 263

Enter Credit Card Charges command 263

Bank Feeds command 264

Loan Manager command 265

Other Names list 265

Chapter 5: Paying Employees 267

Setting Up Basic Payroll 268

Signing up for a payroll service 269

Setting up employees 269

Setting up year-to-date amounts 273

Checking your payroll setup data 274

Scheduling Payroll Runs 274

Paying Employees 274

Editing and Voiding Paychecks 276

Paying Payroll Liabilities 277

Book 4: Accounting Chores 279

Chapter 1: For Accountants Only 281

Working with QuickBooks Journal Entries 281

Recording a journal entry 282

Reversing a journal entry 283

Editing journal entries 284

Updating Company Information 284

Working with Memorized Transactions 284

Reviewing the Accountant & Taxes Reports 285

Creating an Accountant’s Copy of the QuickBooks Data File 287

Using an accountant’s copy 292

Reusing an accountant’s copy 292

Exporting client changes 292

Importing accountant’s changes 293

Canceling accountant’s changes 294

Troubleshooting accountant’s copy transfers 294

Using the Client Data Review Commands 295

Chapter 2: Preparing Financial Statements and Reports 297

Some Wise Words Up Front 298

Producing a Report 298

Working with the Report Window 299

Working with Report window buttons 299

Using the Report window boxes 305

Modifying a Report 308

Using the Display tab 308

Using the Filters tab 310

Using the Header/Footer tab 312

Formatting fonts and numbers 312

Processing Multiple Reports 314

A Few Words about Document Retention 315

Chapter 3: Preparing a Budget 319

Reviewing Common Budgeting Tactics 319

Top-line budgeting 320

Zero-based budgeting 320

Benchmarking 321

Putting it all together 322

Taking a Practical Approach to Budgeting 322

Using the Set Up Budgets Window 323

Creating a new budget 323

Working with an existing budget 326

Managing with a Budget 327

Some Wrap-Up Comments on Budgeting 329

Chapter 4: Using Activity-Based Costing 331

Reviewing Traditional Overhead Allocation 332

Understanding How ABC Works 334

The ABC product-line income statement 334

ABC in a small firm 337

Implementing a Simple ABC System 339

Seeing How QuickBooks Supports ABC 340

Turning On Class Tracking 341

Using Classes for ABC 342

Setting up your classes 342

Classifying revenue amounts 342

Classifying expense amounts 343

After-the-fact classifications 343

Producing ABC reports 345

Chapter 5: Setting Up Project and Job Costing Systems 347

Setting Up a QuickBooks Job 347

Tracking Job or Project Costs 350

Job Cost Reporting 353

Using Job Estimates 354

Progress Billing 356

Book 5: Financial Management 359

Chapter 1: Ratio Analysis 361

Some Caveats about Ratio Analysis 362

Liquidity Ratios 363

Current ratio 363

Acid-test ratio 364

Leverage Ratios 365

Debt ratio 365

Debt equity ratio 366

Times interest earned ratio 366

Fixed-charges coverage ratio 367

Activity Ratios 369

Inventory turnover ratio 370

Days of inventory ratio 370

Average collection period ratio 371

Fixed-asset turnover ratio 372

Total-assets turnover ratio 373

Profitability Ratios 373

Gross margin percentage 373

Operating income/sales 374

Profit margin percentage 375

Return on assets 375

Return on equity 376

Chapter 2: Economic Value Added Analysis 379

Introducing the Logic of EVA 379

Seeing EVA in Action 380

An example of EVA 382

Another example of EVA 383

Reviewing Some Important Points about EVA 383

Using EVA When Your Business Has Debt 385

The first example of the modified EVA formula 385

Another EVA with debt example 387

Presenting Two Final Pointers 389

And Now, a Word to My Critics 391

Chapter 3: Capital Budgeting in a Nutshell 393

Introducing the Theory of Capital Budgeting 393

The big thing is the return 394

One little thing is maturity 394

Another little thing is risk 395

The bottom line 395

Calculating the Rate of Return on Capital 396

Calculating the investment amount 397

Estimating the net cash flows 397

Calculating the return 402

Measuring Liquidity 406

Thinking about Risk 406

What Does All of This Have to Do with QuickBooks? 408

Book 6: Business Plans 409

Chapter 1: Profit-Volume-Cost Analysis 411

Seeing How Profit-Volume-Cost Analysis Works 412

Calculating Break-Even Points 414

Using Real QuickBooks Data for Profit-Volume-Cost Analysis 416

Sales revenue 416

Gross margin percentage 416

Fixed costs 418

Recognizing the Downside of the Profit-Volume-Cost Model 418

Using the Profit-Volume-Cost Analysis Workbook 420

Collecting your inputs 420

Understanding the break-even analysis 423

Understanding the profit-volume-cost forecast 424

Looking at the profit-volume-cost charts 426

Chapter 2: Creating a Business Plan Forecast 431

Reviewing Financial Statements and Ratios 432

Using the Business Plan Workbook 433

Understanding the Workbook Calculations 440

Forecasting inputs 440

Balance Sheet 441

Common Size Balance Sheet 448

Income Statement 450

Common Size Income Statement 454

Cash Flow Statement 454

Financial Ratios Table 461

Customizing the Starter Workbook 467

Changing the number of periods 467

Performing ratio analysis on existing financial statements 467

Calculating taxes for a current net loss before taxes 468

Combining this workbook with other workbooks 468

Chapter 3: Writing a Business Plan 469

What the Term “Business Plan” Means 469

A Few Words about Strategic Plans 470

Cost strategies 470

Differentiated products and services strategies 471

Focus strategies 471

Look, Ma: No Strategy 471

Two comments about tactics 472

Six final strategy pointers 473

A White-Paper Business Plan 474

A New-Venture Plan 477

Is the new venture’s product or service feasible? 477

Does the market want the product or service? 478

Can the product or service be profitably sold? 478

Is the return on the venture adequate for prospective investors? 479

Can existing management run the business? 480

Some final thoughts 480

Book 7: Care and Maintenance 483

Chapter 1: Administering QuickBooks 485

Keeping Your Data Confidential 485

Using Windows security 486

Using QuickBooks security 486

Using QuickBooks in a Multiuser Environment 487

Setting up additional QuickBooks users 488

Changing user rights in Enterprise Solutions 494

Changing user rights in QuickBooks Pro and Premier 495

Using Audit Trails 496

Enabling Simultaneous Multiuser Access 497

Maintaining Good Accounting Controls 498

Chapter 2: Protecting Your Data 503

Backing Up the QuickBooks Data File 503

Backing-up basics 504

What about online backup? 507

Some backup tactics 508

Restoring a QuickBooks Data File 509

Condensing the QuickBooks Company Files 513

Cleanup basics 514

Some cleanup and archiving strategies 518

Chapter 3: Troubleshooting 521

Using the QuickBooks Help File and This Book 521

Browsing Intuit’s Product-Support Website 523

Checking Another Vendor’s Product-Support Website 525

Tapping into Intuit’s Online and Expert Communities 525

When All Else Fails 526

Book 8: Appendixes 527

Appendix A: A Crash Course in Excel 529

Starting Excel 529

Stopping Excel 530

Explaining Excel’s Workbooks 530

Putting Text, Numbers, and Formulas in Cells 531

Writing Formulas 532

Scrolling through Big Workbooks 533

Copying and Cutting Cell Contents 534

Copying cell contents 534

Moving cell contents 535

Moving and copying formulas 536

Formatting Cell Contents 537

Recognizing That Functions Are Simply Formulas 538

Saving and Opening Workbooks 541

Saving a workbook 541

Opening a workbook 542

Printing Excel Workbooks 543

One Other Thing to Know 544

Appendix B: Government Web Resources for Businesses 545

Bureau of Economic Analysis 545

Finding information at the BEA website 546

Downloading a BEA publication 546

Uncompressing a BEA publication 547

Using a BEA publication 548

Bureau of Labor Statistics 548

Finding information at the BLS website 549

Using BLS information 550

Census Bureau 552

Finding information at the Census Bureau website 552

Using the Census Bureau’s publications 554

Using the Census Bureau search engine 554

Using the Census Bureau Subjects index 555

Securities and Exchange Commission 555

Finding information through EDGAR 556

Searching the EDGAR database 556

Federal Reserve 557

Finding information at the Federal Reserve website 558

Using the Federal Reserve website’s information 559

Government Publishing Office 559

Information available at the GPO website 559

Searching the GPO database 560

Internal Revenue Service 560

Appendix C: Glossary of Accounting and Financial Terms 563

Index 593

Supplemental Materials

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The New copy of this book will include any supplemental materials advertised. Please check the title of the book to determine if it should include any access cards, study guides, lab manuals, CDs, etc.

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