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I.
Project 1: Small Business Accounting using
QuickBooks Online
II. Introduction:
Your good friend Kyra recently opened an art studio, Kyra’s Krafts, LLC.
She has been creating and selling art work for years, and subsequently
already has a good customer base. In January of this year she started the
process of setting up an LLC, filing for an EIN in February. She found and
rented a studio March 1st and has been cleaning, painting, and setting up
the space ever since. Her grand opening was April 1st.
She knows you are going to school for your master’s degree in accounting
and has asked for your help setting up and using QuickBooks Online
(QBO). You agree to help her set up her QBO business account, complete
her first month of transactions, and then teach her how to do it. You are
not very familiar with QBO, but you know that it be beneficial to you in your
accounting career to learn the program, since it is the most used
accounting platform for small business in the United States, so you agree.
She has heard about and is interested in using the following features:
- Sales Receipts/Invoices
- Purchase Orders/Inventory tracking
- Bills and Bill Pay
Details of this project can be found below.
III. Steps to Completion:
For most of the steps below, you will have the option of viewing a short
video or referring to the Intuit Education PPT, all page references given
below.
Step 1 – Set up your QBO account.
Go to http://www.intuiteducation.com/ and follow the instructions for
student registration for QuickBooks online.
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Step 2 - Download Intuit Education PPT
• Skim over the first part of the PPT to learn about navigating
QBO (the dashboard) (Pages 17- 23).
Step 3 – Set up the account and settings
• “How to Navigate in QuickBooks” https://www.youtube.com/watch?v=vNdZmf_nLZs
• Account and Setting, Intuit Education PPT, Pages 27 – 44.
NOTE: the important information is how to get to account and
settings which can be found on page 28. Appendix A covers all
the settings that you will need to adjust for Kyra’s Krafts. The
purpose of the project is not to learn all the ins and outs of QBO
but for you to get comfortable with the program. However, if
you want to read all the details, feel free. It is just not required
for the purposes of this project.
• See Appendix A.
Step 4 – Set up and edit chart of accounts (COA)
• “How to Edit your Chart of Accounts in QuickBooks” https://www.youtube.com/watch?v=xp-rcPZtUc0
• Chart of Accounts, Intuit Education PPT, Pages 51 – 56, 59
(subaccounts)
• See Appendix B.
Step 5 – Set up sales tax
• “How to Set Up Sales Tax: Settings, Sales & More”
https://www.youtube.com/watch?v=CiIfTi0tSk0
• Sales Tax Center, Intuit Education PPT, Pages 60 – 61.
• See Appendix C.
Step 6 – Set up product items and contributed inventory –
• “Add Product Information”
https://quickbooks.intuit.com/tutorials/lessons/add-productsinformation/
• Products and Services, Intuit Education PPT, Pages 62 – 69
• See Appendix D.
Step 7 – Journal entry all other (non-inventory) owner contributions
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• “Journal Entries in QuickBooks Online”
https://www.youtube.com/watch?v=Ud0de5gGJL8
• See Appendix E
Step 8 - Add customers and vendors
• “How to Add Customers and Vendors into QuickBooks”
https://www.youtube.com/watch?v=MJK63XmrJ1E
• Customer Center and Vendor Center, Intuit Education PPT,
Pages 95 – 99 (customers), Pages 121 - 124 (vendors)
• See Appendix F
Step 9 – Add invoices*, purchase orders (POs) and bills.
• “How to Create A Purchase Order”
https://www.youtube.com/watch?v=lGGUSmFPJok - (NOTE:
you should create the bill directly from the PO. If you notice in
the video where he is showing the PO summary screen, to the
right of PO there is a button called “Create bill”. You should
use that button to create the bill to the vendor.
• “How to Enter Bills, Track Expenses, & Record What You Owe”
https://www.youtube.com/watch?v=PGbS7GpdNTo
• Create Invoices and Create Bills, Intuit Education PPT, Page
103 (create invoices), Page 127 (creating bills) - NOTE: Do not
spend time on fancy invoice. Just go with the basics, unless
you want to play with this feature.
• See Appendix G
Step 10 – Enter all transactions for the month of April
• “Create Sales Receipts in QuickBooks”
https://quickbooks.intuit.com/tutorials/lessons/sales-receipts/
• Create Sales Receipt, Intuit Education PPT, page 102
• “Receive Payments in QuickBooks”
https://quickbooks.intuit.com/tutorials/lessons/receivecustomer-payments/
• Receive Payments, Intuit Education PPT, pages 104, 106 NOTE: make sure you are receiving the payment to Kyra’s
Bank account, not undeposited funds
• “How to Record & Print Checks”
https://www.youtube.com/watch?v=eNSPai2twcM
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•
•
•
Create Check, Intuit Education PPT, page 126 (& debit
charges) –NOTE: Be sure to change the check number to
Debit or EFT or something else. QBO will accept duplicate
words so pick one and stick with it for consistency. However,
make sure that checks are numbered correctly.
“How to Record Bill Payments”
https://www.youtube.com/watch?v=zan6MC0zSYY
Create Check, Intuit Education PPT, page 128 – NOTE: Make
sure you document the check number used to pay the bill.
Step 11 – Reconcile April Bank Statement –
• “Reconcile your accounts”
https://quickbooks.intuit.com/tutorials/lessons/reconcileaccounts/
• Intuit Education PPT, pages 142 – 144.
• Appendix I
Step 12 – Review and Revise Financial Statements
• “Understanding Profit & Loss Statement: Income, Cost of
Goods” https://www.youtube.com/watch?v=nSGeKUO4HHE
• “How to Customize Reports: Basics, Sorting & Date Ranges
https://www.youtube.com/watch?v=Hy5MQAPDa-U
• Intuit Education PPT, page 77 – 84.
• Appendix J
Step 13 – Print Reports
• P&L and Balance Sheet for the current month. Make sure the
report basis is Accrual.
• Print the General Ledger for “all time”
• Intuit Education PPT, pages 77 – 84
Step 14 – Performance Excel Analysis
• Using Excel, perform a:
▪ Vertical analysis for the Income Statement and Balance
Sheet, and
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▪ Financial ratio analysis using a minimum of 10 financial
ratios
Step 15 – Create a Manual Journal
• Using Excel create a manual journal including all the
transactions.
Step 16 – Create a Bank to Book Reconciliation
• In other Excel worksheet, create a bank to book reconcilation.
Step 17 – Write Report
• Prepare a 2-page summary of the company’s financial status
based on the financial statements, vertical analysis, and
specific ratios you chose to compute.
IV. List of Deliverables:
1.
2.
3.
4.
Balance Sheet, accrual basis ending April 30, 20XX
Profit & Loss, accrual basis for April 20XX
General Ledger Report for all time
Using Excel, perform a vertical analysis for the accrual basis Income
Statement and accrual basis Balance Sheet, and financial ratio
analysis using a minimum of 10 financial rations and
5. In Excel, prepare a manual journal for all the transactions in April.
6. In Excel, perform a bank to book reconciliation.
7. Prepare a 2-page summary of the company’s financial status based
on the financial statements, vertical analysis and specific ratios you
chose.
V. Helpful Hints:
•
•
•
•
Appendix A: QBO – Account and Settings
Appendix B: Chart of Account Changes
Appendix C: Overview of Sales Tax
Appendix D: Overview of Inventory
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•
•
•
•
•
•
•
•
•
•
•
•
Appendix E: Owner Contributions
Appendix F: Customers and Vendors
Appendix G: Invoices, POs, and Bills
Appendix H: April Transactions
Appendix I: Bank Statement
Appendix J: Financial Statement Review (JEs)
Review and refresh your memory of APA style formatting.
Prepare a draft version of your report and ask a classmate,
friend, or family member to read your report before submitting it
to the Graduate Writing Center.
Submit your draft to the Graduate Writing Center at least 1
week before this project is due. This FREE resource can be
accessed in your LEO classroom.
Make edits to your report after reviewing feedback from the
writing center tutors.
Submit the Project deliverables on or before the due date.
Ask your supervisor (professor) questions as needed.
VI. Rubric:
QBO Rubric
Criteria
Income
Statem
ent
Exceeds
Performance
Expectations
22.5 points
All accounts and
amounts were
accurate.
Meets
Performance
Expectations
20 points
Most accounts
and amounts
were accurate.
Does Not Meet
Performance
Expectations
0 points
Most accounts and
amounts were NOT
accurate. Or did not
submit.
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Balance
Sheet
General
Journal
Financi
al
Analysi
s
Overall
Score
All accounts and
amounts were
accurate.
Most accounts
and amounts
were accurate.
Most accounts and
amounts were NOT
accurate. Or did not
submit.
All general journal
entries were
accurate.
Most general
journal entries
were accurate.
Most general journal
entries were not
accurate. Or did NOT
submit.
Vertical analysis
of Income
Statement and
Balance Sheet
were
accurate. Financia
l ratios were
accurate. Summar
y of financial
status was
accurate and
written at the
graduate level.
Vertical analysis
of Income
Statement and
Balance Sheet
were mostly
accurate. Financi
al Ratios were
mostly accurate.
Summary of
financial status
was mostly
accurate and
written at the
graduate level.
Vertical analysis of
Income Statement and
Balance Sheet were
mostly
inaccurate. Financial
Ratios were mostly
inaccurate. Summary
of financial status was
mostly in accurate and
not written at the
graduate level. Or did
not submit.
Exceeds
Performance
Expectations
90 or more
Meets
Performance
Expectations
80 or more
Does Not Meet
Performance
Expectations
0 or more
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Appendix A: QBO – Account and Settings
Remember - “QuickBooks is a very forgiving program. Most mistakes can
be fixed as you have the ability to go back and make historical changes,
however a correct setup will prevent the need in most cases.” (Intuit
Education PPT).
The following are the important pieces of information you need to set up
Kyra’s Krafts, LLC in QBO. Each of the Bolded items are Categories in
the Account and Settings page.
COMPANY:
•
Owner Name: Kyra Forester
•
Email: use your email address
•
Telephone: use your phone number
•
Company Name: Kyra’s Krafts, LLC
•
EIN: - LEAVE BLANK. EIN not received yet
•
Company Type: Limited Liability Company (Form 1065)
•
Address: 94-1278 Front Beach Road, Suite 12
Panama City Beach, FL 32413
SALES:
•
•
•
•
•
•
Kyra’s terms are Net 15 unless otherwise stated
She does offer shipping, which she charges for
She does offer occasional discounts
She does commission work and takes 50% upfront deposits for
all commission work.
She tracks quantity and price/rate.
She also tracks inventory quantity on hand for her art prints.
EXPENSES:
•
She wants use purchase orders, so make sure you check the
box. All other default settings are fine.
PAYMENTS:
•
This setting is used to allow clients to pay an invoice through
their system, right on the invoice. Although Kyra is possibly
interested in the future, she has no current interest.
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ADVANCED:
•
She is a calendar year tax payer. She received her LLC
paperwork but hasn’t received her EIN yet. (First month of fiscal
year stays January).
•
Tax form: 1065
•
She does not want to use account numbers and she will not be
using track classes nor track locations.
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9
Appendix B: Chart of Account Changes
Add:
Name:
Kyra's Bank
Refundable
Deposits
Art Displays
Consignments
Payable
Art Sales
Original
Artwork Sales
Print Sales
Commission
Income
Consignment
Income
Discounts
Given
Print Expense
Art Supplies
Expense
Gain on Sale
of PP&E
Loss on Sale
of PP&E
Group Art
Classes
Edits:
Change from:
Owner's Pay &
Personal
Expenses
Opening
Balance Equity
Rent & Lease
Office Supplies
& Software
Delete:
Job Supplies
Account Type
Bank
Other Current
Assets
Fixed Assets
Other Current
Liabilities
Income
Detail Type
Checking
Income
Income
Sale of Product Income
Sale of Product Income
Income
Service/Fee Income
Income
Service/Fee Income
Income
Cost of Goods
Sold
Discounts/Refunds Given
Supplies & Materials –
COGS
Expenses
Other Income
Supplies & Materials
Other Miscellaneous
Income
Other Miscellaneous
Income
Income
Service/Fee Income
Equity
Owner's Equity
Equity
Expense
Opening Balance Equity
Rent or Lease of Building
Office/General
Administrative
Expense
Other Income
Subaccount
of:
Other Current Assets
Furniture & Fixtures
Other Current Liabilities
Sale of Product Income
Art Sales
Art Sales
Change to:
Owner
Distributions
Add "DO NOT
USE"
Rent
Office
Expense
Expense
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Appendix C: Overview of Sales Tax
NOTE: Sales Tax must be set up in the “TAXES” area in QBO. Proceed
with this section carefully. QBO is very user friendly for the most part;
however, there are areas that are hard to fix should you set it up incorrectly
and Sales Tax is one of those areas so do not rush here. Read all the way
through this appendix, watch the how to videos and then proceed with
caution.
Kyra’s new art studio is located in Panama City Beach Florida. Because of
the location, she is required to pay 7% sales tax to the State and 1% to the
City of Panama City Beach.
The State of Florida requires most tax payers to file monthly sales tax
returns, Kyra falls into this category. April 1st she must start collecting
taxes and her first return is due no later than May 20th (QBO knows when it
is due) for the reporting period of April 1 – April 30.
Kyra needs to make sure she charges customers and remit sales tax for
everything she sells except her group art classes. Those are not taxed
because they are for services only.
Address: 94-1278 Front Beach Road, Suite 12
Panama City Beach, FL 32413
Go to the “TAXES” area and set up sales tax for the state of Florida and the
city of Panama City Beach. If you entered the business address when you
were setting up the account, QBO should suggest both of the above
agencies. If not, it should ask you for an address here. Make sure you
select both taxing bodies from the dropdown list. You will have to select
them individually, just make sure you go back and select the 2nd one as
well. Again, make sure you find the taxing bodies in the dropdown list to
select. Do NOT manually add any taxing body. QBO already has all the
information it needs to correctly tax products and it will automatically
update taxes should laws change but only if it is set up correctly from the
beginning.
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11
Appendix D: Overview of Inventory
The set up of Inventory will be done in the “SALES” area of QBO. Once in
SALES, got to the Products and Services tab.
•
•
•
•
•
•
The “initial quantity on hand” will be the owner contributed inventory.
As of date will be 4/1/2018.
Do not put any quantity in the “Reorder Point” field for any items.
The Inventory asset account is “Inventory asset”
She does not use product codes aka SKU numbers.
She does want you to put the Sales price in for each item for all items
that have a fixed sales price associated with it.
• She also wants you to put in the costs price for the prints.
• Remember, all but the Group Art Project, is taxable so make sure you
click the “Is taxable” box. NOTE: Just click the “Is taxable” box. Do
not put anything in to the “Sales tax category” nor “What you sell”.
These should stay blank.
Amy primarily sells 3 types of original artwork and prints - large, medium,
and small.
Pricing and Cost of Original Artwork:
Pricing:
She uses the standard linear model to price her original artwork at $20 per
linear inch. Calculations:
Size
Large artwork 24″ x 36″
Medium Artwork 11” x
14”
Small artwork 5” x 7“
Calculation
(24 + 36) x 20
(11 + 14) x 20
Sales Price
$1200.00
$500.00
Quantity
5
12
(5 + 7) x 20
$240.00
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All of the artwork in the table above should set the product Income account
to: Art Sales:Original Artwork Sales
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Cost:
She was instructed years ago by her tax accountant that her original
artwork inventory should not have a COGS associated with it. Instead she
needs to expense all of her art supply purchases. However, if she buys a
painting or has prints in her inventory, the cost of those items should be
considered COGS. So although her original artwork inventory will have
zero cost associated with it, you will be able to enter the sales price of the
inventory she transfers in to the business.
Cost and Pricing of Prints:
She transfers all her print inventory (reproductions of original artwork) to
the business April 1st, as follows:
Size
QTY
Cost
Sales Price
Large Prints 24″ x
10
$40 each
$200 each
36″
Medium Prints 11” 50
$20 each
$100 each
x 14”
Small Prints 5” x 7“ 110
$5 each
$25 each
All of the artwork in the table above should have the following setting:
1. Income account to: Art Sales:Print Sales
2. Expense account to: Cost of Goods Sold
In addition to original artwork and prints, Kyra has several non-inventory
items that you will need to add.
Service
item:
Group Art Classes*
NonInventory
Item:
Sales
Price
$30
each
Income Account
Group Art Classes
Art Sales:Original Artwork
Sales
Commission Work
Consignment
Artwork**
Unusual Sales:
PP&E***
Consignment Income
Gain on sale of PP&E
13
For all commission work, Kyra requires 50% deposit due at time of order
and the remainder due at time of pickup.
* Remember, this is the only non-taxable item.
** She also displays and sells consignment pieces. She gets 20%
commission on each piece sold. The consignee sets the price, so Kyra
keeps those records on an excel spreadsheet and won’t put them in QBO
until she sales the pieces. In other words, the consignment inventory is not
an inventory item but you need to set up a product item to handle the
transaction when you do. However, make note of all consignment sales
because in order to complete the sales transaction, you will need to make a
JE to move 80% of the sale from the P&L to the balance sheet as
Consignments Payable.
*** Sales of PP&E will also require a JE to remove the item from the
balance sheet and reduce the gain (or increase the loss) on the sale. The
transaction is not complete until this JE is made.
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14
Appendix E: Owner Contributions
To enter all owner contributions you will need to create one or multiple JEs,
your choice. You will need to select the correct expense account to debit
for the list below and the credit entry will be to: Owner’s Investments.
Remember all of the items below were paid by Kyra from her personal
accounts. Also remember to put the description of each item in the JEs.
Owner deposit to open bank account-use
Kyra’s Bank
*Electric Deposit (refundable)-use
Refundable deposits
*Phone Company Deposit (nonrefundable)use Utilities
*Rental Deposit (Refundable)- use
Refundable deposits
*1st month rent - March (prior to opening)use Rent expense
*Gallery set up supplies - paint for walls,
cleaning supplies, lumber for building
shelves/racks- use Office expense
*Miscellaneous art supplies for classes-use
Art Supplies expense
4 large Art displays (fair market value at time
of contribution- $400 each)-use Art Displays
$ 5,000.00
$
500.00
$
150.00
$ 1,250.00
$ 1,000.00
$
350.00
$ 852.75
$ 1,600.00
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Appendix F: Customers and Vendors
Enter all customers in the “SALES” area and all Vendors in the
“EXPENSES” area.
Customers
Name
Sherry Thomas
Lifetime Learning
Joy McMasterson
Kevin Smith
Debbie Reynolds
Customers
Phone
Number
850-4741111
Email
Sherry.Thomas@lookout.co
m
Address
1173 Front Beach
Road; Panama
City, FL 32412
850-4741111
admin@lifetimelearning.com
850-7475200
joyous@mail.com
905-8722152
ksmith@example.com
619-4211478
debbier112@getgoing.com
She uses this to capture sales to non-recurring customers and
Daily Sales Receipts
Vendors
Ace Real Estate Stacy is manager
Salem Prints
850-3935555
850-9810000
leasemanager@acerealestat
e.com
Dish Network Mike Bossie
850-4247900
mike.bossie@dish.net
USA Art Supply
858-5858500
jennifer.lopez@usaartsupply
.com
3630 Bay Avenue,
Panama City, FL
32542
Orders@salemprints.com
78-541 Wildcat
Drive, Dade City,
FL 33624
2554 Underwood
Avenue, San Jose,
CA 95413
Consignment Vendors:
JoAnne Lopez
original artwork
904-5467300
Michael Koltes
850-7782211
415 Orange
Avenue, Tampa,
FL 33616
857 Rose Lane,
Panama City, FL
32551
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Appendix G: Invoices, POs, and Bills
INVOICES – Purchases from Customer
Date
1-Apr
Customer
Lifetime
Learning
Terms
Net 15
2-Apr
Product
Discount* Purchased
10% Art Classes
Commission
Work
QTY Subtotal
10
$270
Kevin Smith
Due on receipt
1
$5,000
Lifetime
30-Apr Learning
Net 15
10% Art Classes
45
$1,215
*Lifetime Learning is the only customer that receives a discount because they buy
individual art classes in bulk.
PURCHASE ORDERS – Orders to Vendor
Purchases:
Salem Prints order
4/1/20XX
Each
Price
Description
QTY
Totals
24 x 36
large prints
5
$40
$200
11 x 14
medium
prints
10
$20
$200
5 x 7 small
prints
20
$5
$100
Total Order (Price includes shipping
and tax)
$500
NOTE: Make sure you create the bill for the Purchase Order from the
Purchase Order. It is very easy. Just make sure the dates are correct,
see table below.
BILLS – Payable to Vendors
Received Due
1-Apr
1-Apr
1-Apr 16-Apr
4-Apr 19-Apr
24-Apr
30-Apr
To
Ace Real Estate
Dish Network
Salem Prints
For
April Rent
Telephone and internet bill
Print order 4/1
Purchased large glass art
9-May USA Art Supply display
30-Apr Ace Real Estate May Rent
*Make sure you create the bill from the P.O.
Amount
$1000
$150.09
$500 *
$3524.33
$1000
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Appendix H: April Transactions
Make sure you pay all bills through the EXPENSES area and receive all
invoice payments in the SALES area.
Make sure you pay the sales tax through the TAXES area. If your sales
taxes due for the period of April is different than the transaction amount
below, there is a problem with your sales tax somewhere along the way.
All receipts that were not invoice payments will require a Sales Receipt.
You will create Sales Receipts in the SALES area. All sales can be
considered cash. Just make sure the dates are correct and the account the
money is deposited to is Kyra’s bank.
Unless Kyra does recurring business with a customer, or it is a special sale,
all Sales receipt transactions will be from customer “Customers"
Write checks for all expenses that are not bill payments. However, if there
is no check number associated with the transaction, it is a debit card
transaction so change the check number to sometimes like EFT, DEBIT or
something like that. Just be consistent.
Small purchases, under $500, are usually expensed. Make sure you select
the appropriate account for each transaction. You should not have to add
any more accounts as you enter these transactions. Think macro instead
of micro. For example, paying for a PO Box or making small furniture
purchases should be considered an Office Expense.
QBO is sometimes limited in what you can do in a single transaction. This
is where JEs will be necessary. Make note of the transactions where JEs
will be necessary (hint: sale of fixed assets, sale of consignment artwork). I
suggest you make the JEs as you go to complete the transactions;
however, you can also take care of all adjusting journal entries after the
bank reconciliation during the financial statement review.
Date
Description
Owner deposit to open bank account (this was
already done in Appendix E as long as your debit
1-Apr entry was to Kyra’s Bank)
Expenses
Deposits
5,000.00
18
1-Apr Paid April rent (bill) check #1001
(1,000.00)
1-Apr Sold medium print
Coffee and fingers foods for grand opening –
1-Apr Kroger DEBIT
(221.54)
2-Apr Sold medium original artwork
Deposit to complete a commissioned piece Kevin Smith (Paid ½ of Invoice. Receive partial
2-Apr payment)
Sold 4 large, 2 medium and 9 small prints at art
4-Apr fair
5-Apr USA Art supplies (art supplies) DEBIT
(187.21)
5-Apr Paid phone bill received 4/1 check# 1002
(150.09)
12-Apr Sold 4 small art prints
Paid for Post Office box through 4/11/20XX (1
12-Apr year) DEBIT
(80.00)
Sold a consignment piece for Lopez $1000 to J.
13-Apr McMasterson
Received payment from Lifetime Learning for
14-Apr invoiced amount
14-Apr Paid Lopez for consignment sale check # 1003
(800.00)
14-Apr Sold large original artwork
Goodwill - Purchased shelving to store art
15-Apr supplies DEBIT (put to office supplies)
(285.24)
19-Apr Took out cash for personal use DEBIT
(2,000.00)
Paid bill for prints to Salem Prints 4/4 bill check #
19-Apr 1004
(500.00)
Commission piece completed and picked up for
Kevin Smith – (Receive the remaining invoice
21-Apr amount)
24-Apr Sold 1 large, 5 medium and 10 small prints
25-Apr Sold 1 large art displays
30-Apr Bank Fees
(12.50)
Paid Sales Tax to Fl Dept of Revenue Online30-Apr DEBIT (Pay through TAXES area)
(775.25)
Paid Sales Tax to Panama City Dept of Rev.
30-Apr Online – DEBIT (Pay through TAXES area)
(110.75)
30-Apr Paid rent May rent check # 1005
(1,000.00)
30-Apr Paid Bill for art display on 04/25 check #1006
(3,524.33)
Subtotals: $(9,646.91)
Total:
108.00
540.00
2,700.00
1,323.00
108.00
1,080.00
270.00
1,296.00
2,700.00
1,026.00
1,080.00
$17,231.00
$7,584.09
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Appendix I: Bank Statement
Business Checking Statement: Kyra's Krafts, LLC
Account
number:
April 1, 20XX to April 30, 20XX
0001247588
Account summary
Beginning Balance on March 31, 20XX
Deposits and other additions
Withdrawals and other subtractions
Checks
Service fees
$0.00
17,231.00
(2,773.99)
(2,450.09)
(12.50)
Ending Balance on April 30, 20XX
$11,994.42
Deposits and other additions
Date
1-Apr
1-Apr
2-Apr
2-Apr
4-Apr
12-Apr
13-Apr
14-Apr
14-Apr
21-Apr
24-Apr
25-Apr
Description
Counter Deposit
Counter Deposit
Counter Deposit
Counter Deposit
Counter Deposit
Counter Deposit
Counter Deposit
Counter Deposit
Counter Deposit
Counter Deposit
Counter Deposit
Counter Deposit
Total deposits and other additions
Amount
5000
108.00
540.00
2,700.00
1,323.00
108.00
1,080.00
270.00
1,296.00
2,700.00
1,026.00
1,080.00
$17,231.00
Withdrawals and other subtractions
1-Apr Kroger
5-Apr USA Art Supplies
United States Post
12-Apr Office
15-Apr Goodwill
Counter
19-Apr Withdrawal
Total withdrawals and other subtractions
(221.54)
(187.21)
(80.00)
(285.24)
(2,000.00)
($2,773.99)
Checks
1-Apr #1001
(1,000.00)
20
5-Apr #1002
14-Apr #1003
19-Apr #1004
Total checks
Total # of checks
(150.09)
(800.00)
(500.00)
($2,450.09)
4
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Appendix J: Financial Statement Review (JEs)
Review Accounts:
Balance Sheet ACCRUAL BASIS
Report period: ALL DATES
Bank Statement
A/R
Inventory Asset
Refundable Deposits
Fixed Assets
Total Assets
All Payables
Owner Distributions
Net Income
Opening Balance Equity
Check Figures
Book to Bank
Reconciliation Required
$1,215.00
$1,975.00
$1,750.00
$4,724.33
$16,248.42
$0.00
- $2,000
$5,595.67
$0.00
Note, make sure the basis for the financial statement is accrual.
Other than the accounts listed above, make sure you scan and make sure
all balances make sense. For example, the only negative numbers in the
financials should be the Owner Distributions and Discounts given.
You may notice a balance in the Opening Balance Equity account (QBO
“junk” account). QBO made this entry against the owner contributed
inventory when you created the product inventory. If there is a balance,
you will need to create a J/E to move the balance from Opening Balance
Equity to Owner Contribution. (Debit: Opening Balance Equity DO NOT
USE to Credit: Owner Investment)
If you have not already done so, you will also need to create a J/E to
account for the consignment sale/consignment due. You already paid the
vendor so Consignment Due should also be zero. However, if it is a
negative number then you need a J/E (Debit: Consignment Sales Income
to Credit: Consignments Payable.)
If your fixed asset account is incorrect, another J/E will be required is to
remove the art display PP&E that was sold from the books because it
hasn’t been done yet. (Debit: Gain on Sale of PPE and Credit: Art
Displays.)
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