Thanks again to Tony for these notes on our 4/8/2015 class: (pictures were removed as they did not appear.)

Proper Bookkeeping gives an excellent measure of how well a business is doing.

Customers - Anyone who pays you

Vendor - Anyone that you pay, except for employees

Item - Anything that you want to charge for on an invoice (parts, services, labor, discounts, etc.)

Accounts - In bookkeeping, they group similar transactions together.

(e.g., You may want to create expense accounts to track advertising and rent)

Chart of accounts - organizes accounts according to similarities (Income, expenses, assets, liabilities, etc.)

The basis of accounting

1. Cash basis - income and expenses are recognized when cash changes hands

2. Accrual basis - income and expenses are recognized when earned or incurred

1. Accounts receivable - for people who owe you money
2. Accounts payable - for those that you owe money to

The fundamental accounting equation says that: Assets must always equal liabilities plus equity

Assets - what a business owns

1. Land
2. Buildings
3. Accounts Receivable

Liabilities - What your business owes others

1. employees
2. credit balances
3. loans
4. Accounts Payable
5. Taxes

Equity - What the business is worth to owners or stockholders
The Total of your Debits (the left side of a ledger) must always equal the total of your Credits (the right side of a ledger). Quick books insures that this happens when it sets up transactions.
Practice Exercise on the computer: Starting a new company

1. Start Quick Books
2. If you are asked if you want to update the company file, click yes
3. Click File, then New Company
4. Click Express Start
5. For the company name, type your name, followed by the word company
6. For the industry, pick one
7. Click help me choose for Type of Industry
8. Pick the form of ownership
9. Select Yes to indicate that you have employees
10. Fill out a fictitious address and phone number, then create the company file
11. Click Start Working
12. Click the Quick Start Close button X to view the home screen for the new company
13. Click Chart of Accounts and Maximize its window.
14. Click Account then New
15. Pick Bank then continue
16. Enter some information for a Business checking account, including a fictitious checking account number, and then click Save & close.
17. Skip the direct deposit option
18. Double-click the new bank account to get an introductory journal entry
19. Record the following transaction:
    
    
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20. Click Record
21. Click Company on the menu then Chart of Accounts
22. Set up a new account as follows, enter an opening balance of $5,000 using the button and pass up on an electronic banking options:
    
    
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23. Click View then Top Icon Bar
24. Click the Home button
25. Click Enter Bills on the home page
26. Quick Add The Carn Co
    
    
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27. Add Merchandise Inventory for the purchase of widgets for $5,000​
28. Add Office Supplies Purchase of $5,000 as follows (Quick Add Staples as a Vendor):
    
    
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29. Click on Write Check
30. Pay $1,000 to Commercial Real Estate Inc for Rent (Quick Add them as a vendor).
31. Click on Create Invoices
32. Invoice Joshua Novelties $400.00 for 40 Widgets at $50.00 a widget (Quick Add Joshua as a Customer and Widgets as an Item Associated with the Account Inventory).
33. Write a check for $1,500 to Lewis & Lewis as Attorneys.  Quick Add Lewis & Lewis and Legal Expenses.
34. Display a balance sheet and a P&L statement