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Small Business Finance Basics: QuickBooks & Beyond

Lesson 22 of 37

Expenses in Quickbooks

 

Small Business Finance Basics: QuickBooks & Beyond

Lesson 22 of 37

Expenses in Quickbooks

 

Lesson Info

Expenses in Quickbooks

I'm going to do these entries into QuickBooks. I'm gonna go back one slide. I'm gonna do these and then I'm actually going to do some others again. Part of this is getting you used to the concepts. Part of you is just getting you used to looking at debits and credits and part of you. Part of this is just to get you used to negotiating QuickBooks. Okay. Used to negotiating. QuickBooks. Here we go. We're gonna post this this again is a in a cruel deferral type of entry. All right, I'm gonna go into QuickBooks. I'm gonna go home. I do not have a transaction category. That really fits this over here, So I'm gonna make a journal entry. I know you guys are getting weary of the journal entries, but we've got to go through him. And if you and the repetition helps, I'm gonna go accounts. I'm sure that QuickBooks has a prepaid account of some kind already built in to the chart of accounts. You had it out out out of a prepaid expenses. I'm gonna call it prepaid expenses just to keep it simple. I'...

m going to debit it to increase it. $500. I paid out cash. Checking it automatically fills. It gets credited, and I'm gonna call it one month Prepaid rent. I'm gonna copy the explanation. Down. Copy Pais. Prepaid expense. So now I'm gonna do that is one journal entry and we're doing it. I'm going to do it as of January 1st beginning of the month. So I've changed my date. Be careful on your dates and QuickBooks and I'm gonna hit. I'm gonna hit Save and the journal entry saved. Now again, Tricky. With dates I get to the end of January, I am going to recognize insurance expense. I know my expense categories air at the bottom as I scroll. I'm looking for I. There's insurance expense now, even though it says insurance, it is an expense account and it's gonna And when you when you go into the detail, you'll see that it says expense. And I'm recognizing the expense of $500 debit to increasing expense. Gory 100 Was her cool. Oh, interest expense. It was interesting. Well, insurance, liability and and disability. Oh, we're doing rent. What are those? Were doing rent expense on this one. We're not doing insurance. I misspoke. We're doing red. So here's a category that is rent or lease. And it is an expense account. Read, Release expense. I am now going to reduce that prepaid account. So I have to go up, and there's my prepaid expenses, and it's reduced by $500. Okay, Now I'm gonna make sure I did these, right? Oh, no. I'm going to say I need an explanation. I'm going to say to record insurance expense, and this is nice to connect these so you can follow what's happened. Prepaid on 1- rent. Keep stuck on insurance. Thank you. Prepaid rednecks to record rent expense. That was prepaid on 11 So that is enough. Where if I went back into QuickBooks, I could remember what happened. Okay, Now, I just want to check and see if I did these journal interest correctly. So I got a home. I go to this clock, and I'm gonna look a recent transactions. There's the prepaid expense for the rent debit to increase an asset credit, checking to reduce it. So that one looks ok. Journal entry 12 save ex out of journal entries. I want to look at the other transaction to I go to the clock prepaid. So I went backwards. Sorry. That's so that we have prepaid and checking. That's transaction clock. 13. There's the expense and reducing the prepaid. Okay, so what? We just did Waas. We recorded a prepaid expense and cash going out the door in QuickBooks. In one journal entry we recorded reducing the prepaid and expensing it in the second entry. Okay, as I mentioned, this one's it's very likely that QuickBooks is going to give you a customer deposit account. Here we go. Plus, let's say this more smaller show more journal entry. I know we're almost done with journal entries for the day. If you could just hang in there, Okay, we get cash in the door. We increase in asset by deboning $ customer deposit. I know it's a liability account. I wonder if there's one already built in QuickBooks. I look at my chart of accounts. Excuse me. Unearned revenue. Customer deposits already in there credit $ to record pre. Now, let's say this with customer deposits. Make it easy. I copied the memo I copied down in the next life. Okay. Last entry I need to reduce the one I circled. I need to Devon under revenue to get rid of it. Bring the balance of zero and I need to recognize photo revenue. Okay. Unearned revenue. Customer deposit. I'm going to debit to reduce it. 50 bucks. I'm going to recognize now. I could move it in the revenue because I've delivered the photos. I've delivered the product or service. Okay. I'm just gonna recorded under sales. Now, I may need an explanation. And the explanation is, uh, provided photos to customer deposit now, Revenue. And I'm gonna copy that down. Copy Paste? Yes, for an answer. Okay, I would be helpful to know Take what customer it was. Absolutely. Thank you. I would know what customer waas. And and now the question is, let's say you get five customer deposits. What do I do in QuickBooks to make that distinction? I would not make a separate account for each couple of customer deposit, but I would mention their name in your memo. That's a very good point. Okay, let me do one on payroll. This is a payroll. Ah, cruel. And I don't have it in my deck. And I've done enough journal entries. So I'm not gonna do it in QuickBooks, cause I think you're gonna get the idea. I could, but I think it's going to get a little repetitive. Alright, Peril Cruel. His the issue. All of you out there gonna have this issue if you're paying people. All right, here's the issue. The expense belongs in one period, but the check is written in a later period. We've all done this. You guys all know this cash moves later. So it's the last week of the year. And you have employees who you owe $700 to for the period from December 27th my wedding anniversary to December 31st. I'm told it was the happiest day of my life. Ask around. I own that money. But I'm not paying him until January 5th of next year. But I need to make an entry on on 12. 31. Why? I need to get the expense in before the end of the year because they worked those that time before the end of the year. The expense belongs before the end of the year. And the question is, what do I do? I got to record an expense. I don't It doesn't really matter what the numbers are. I know I've got to reap record an expense. And after I get through this one, I'm gonna ask the group of question on a different subject. Help me remember that I got a record expense 700 But I haven't paid him the money. Do I own the money? Is that a liability? Yeah. Now, the title of the account you put it in could be a crude payroll. A cruel for payroll accrued liability. The point is, this is a liability account because you own the money. Okay, That's the entry that I make a 12 31 to make sure that I get that expense in the right year. Deputy. Increasing expense. January 5th, I think was my grandmother's birthday. There's some significance to that. I always wake up in the morning. I think what day it is And think of that. If that isn't that has any significance to me. I think that was my my grandmother's birthday. I knew there was a reason. So now I'm gonna pay the payroll. I am going to debit this account to get rid of it. and that balance is going to go to zero. I'm sorry to write solo for the people who are watching. I know that's kind of low on the screen. I'm then going to pay cash of $700. So what's happened is I have the expense before the end of the year. I have the cash being paid in January, and I've now. This account has been adjusted to zero. All right, Any questions on that? Let me switch gears here because there's something I want to cover the rest of the day. Yes, Jackie. Just going back to that previous when you're making your entry for 12. 31 even though you know you're not gonna actually pay toe 15 when you're closing out 12 31. How does that work? Ooh, that's a good question. Great question. When you close out for the year, that expense will reduce your profit for this year. Absolutely. And it should, because of the work happened before the end of the year. Good question. Yes, Anything else? It doesn't get resolved until the next year, though It goes on to the next year's books. The expended is posted and done with. But the payment does not occur until next year. So I assume everybody now is gonna run out and start apparel company. Because that's kind of the vibe I'm getting, man, I can't wait to get out of here. Apparel company. Awesome. All right. What What would be? Let me just draw this, General, I'm switching gears. General questions. Here's a question question. What would you like to know? To plan your business going forward? What would you what? In other words, what concerns you? What is an issue financially going forward? And if you can think of some and then I'll throw some out. I mean, Virgin Mary. You know, we've been beaten up QuickBooks pretty good this afternoon. What concerns you? I'm gonna throw out one if I don't get one. You're trying to plan for the future about buying a machine that might increase productivity. How? How much profit with that? Perfect. And we're gonna cover that one at the end of the day tomorrow, which is making a decision about buying spending a lot of money on an asset. So that's a good one.

Class Description

Accounting can be easy if you know how to use the right tools. In this course, Ken Boyd offers an in-depth introduction to the accounting and QuickBooks skills that are the foundation of every thriving small business.

Learn QuickBooks Online

Ken covers everything you need to know about understanding and managing your business’s cash flow to insure that your business stays profitable and that you have the right amount of money at the right time. You’ll explore the principles of making sound business decisions that both grow your company and protect your bottom line. Ken will also cover best practices for integrating QuickBooks as an accounting tool, from setting up payment and invoicing systems to generating accounting reports to paying your company’s bills, and much more.

Whether you’re a first-time entrepreneur ready to learn the basics or a long-time business owner looking to sharpen your skills, this course will give you the tools you need to confidently manage your company’s finances -- no stress or guesswork required.

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