Home
Contents
Legal
Dedicated
Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Chapter 10
Chapter 11
Chapter 12
Chapter 13
Chapter 14
Chapter 15
Chapter 16
Chapter 17
Chapter 18
Chapter 19
Chapter 20
Chapter 21
Chapter 22
Chapter 23
Chapter 24
Chapter 25
Chapter 26
Chapter 27
Chapter 28
Glossary
Error
Messages

Chapter 22

Back to Previous Chapter

Forward to Next Chapter

Back to Contents

 

Advanced Search

 

Reference table

Your question is How do I record this in QuickBooks?  This XE "credits"  XE "debits"  table details some answers, in order by the function to be accomplished. The table tries to be complete, including duplicating those examples just above.  The logic flows like the logic of a family tree:  there is no way to present it sequentially.  Most of these transactions are handled by QuickBooks without showing the debits and credits.  When you have to get out and push, general journal transactions are done with Activities|Enter Special Transactions.

Initial investment in company (increases net worth)

                                                                                                                        DEBIT             CREDIT

Cash in Bank (asset)                                                         $10000

      Capital (equity)                                                                               $10000

Asset purchased for cash

Desk (asset)                                                                       $1000

      Cash in Bank (asset)                                                                        $1000

Asset to be re-sold, purchased on credit. QuickBooks could handle this as an inventory item, connected (firstly) to an inventory asset account. 

Paper Towels Inventory (asset)                                             $500

      Accounts Payable (liability)                                                                 $500

Pay off purchase debt

Accounts Payable (liability)                                                    $500

      Cash in Bank (asset)                                                                           $500

Outside expense purchased with credit card (the payoff is the same as Accounts Payable.)

Travel expenses (expense)                                                     $300

      UltraPlastic Card (liability)                                                                    $300

Cash sale for $1000

                                                                                                                        DEBIT             CREDIT

Cash in Bank (asset)                                                         $1000

      Services Sold (income)                                                                     $1000

Sale on credit.  Taking this as the sale of the paper towels bought above, the Paper towel Sales account would be the second account attached to the inventory item.

Accounts Receivable (asset)                                                 $700

      Paper Towel Sales (income)                                                              $700

Payment received for credit sale

Cash in Bank (asset)                                                            $700

      Accounts Receivable (asset)                                                              $700

Asset expended in producing income (the above sale was the same paper towels.  Cost of Goods Sold (COGS) is a special expense account, and a separate type in QuickBooks.)  If Paper Towels had been set up as an inventory item, COGS would be the third account attached to that item.

Cost of Goods Sold (COGS/expense)                                  $500

      Paper Towels Inventory (asset)                                                          $500

Transfer of retained earnings to capital account. This takes the earnings out of QuickBooks special Retained Earnings account, as described in the chapter on chart of accounts and transfers it to a true balance-sheet equity account.

Retained earnings (special equity account)                             $700

      Capital (equity)                                                                                  $700

Finally, distribute some of the earnings:

Capital (equity)   $700

      Cash in Bank (asset)                                                                          $700

 

Contents |   Up   |   Previous   |   Next

About BlockTax   |   Awards   |   Contacts   |   QB Newsletter   |   Home   |   Legal
Last modified: May 21, 2004