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 10 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 23 The Philosophy of Accounting 24 Revenue principle 25 Expense principle 25 Matching principle 25 Cost principle 26 Objectivity principle 26 Continuity assumption 26 Unit-of-measure assumption 27 Separate-entity assumption 27 A Few Words about Tax Accounting 28 Chapter 2: Double-Entry Bookkeeping 29 The Fiddle-Faddle Method of Accounting 30 How Double-Entry Bookkeeping Works 33 The accounting model 33 Talking mechanics 35 Almost a Real-Life Example 39 Recording rent expense 39 Recording wages expense 40 Recording supplies expense 40 Recording sales revenue 40 Recording cost of goods sold 41 Recording the payoff of accounts payable 42 Recording the payoff of a loan 42 Calculating account balance 42 Using T-account analysis results 45 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 55 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 60 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 68 The traditional close 69 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 73 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 80 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 91 Setting Up the Chart of Accounts List 92 Setting Up the Item List 96 Working with the Price Level List 97 Using Sales Tax Codes 98 Setting Up a Payroll Item List 98 Setting Up Classes 100 Setting Up a Customer List 101 Setting Up the Vendor List 106 Setting Up a Fixed Assets List 109 Setting Up a Price Level List 111 Setting Up a Billing Rate Level List 111 Setting Up Your Employees 112 Setting Up an Other Names List 112 Setting Up the Profile Lists 112 Chapter 3: Fine-Tuning QuickBooks 115 Accessing the Preferences Settings 116 Setting the Accounting Preferences 118 Using account numbers 118 Setting general accounting options 119 Setting the Bills Preferences 121 Setting the Calendar Preferences 121 Setting the Checking Preferences 121 Changing the Desktop View 123 Setting Finance Charge Calculation Rules 125 Setting General Preferences 126 Controlling Integrated Applications 128 Controlling Inventory 129 Controlling How Jobs and Estimates Work 130 Dealing with Multiple Currencies 131 Starting Integrated Payment Processing 132 Controlling How Payroll Works 132 Telling QuickBooks How Reminders Should Work 134 Specifying Reports & Graphs Preferences 135 Setting Sales & Customers Preferences 139 Specifying How Sales Are Taxed 140 Setting the Search Preferences 141 Setting the Send Forms Preferences 142 Fine-Tuning the Service Connection 143 Controlling Spell Checking 143 Controlling How 1099 Tax Reporting Works 144 Setting Time & Expenses Preferences 145 Book 3: Bookkeeping Chores 147 Chapter 1: Invoicing Customers 149 Choosing an Invoice Form 149 Customizing an Invoice Form 150 Choosing a template to customize 150 Reviewing the Additional Customization options 150 Moving on to Basic Customization 155 Working with the Layout Designer tool 157 Working with the web-based Forms Customization tool 160 Invoicing a Customer 160 Billing for Time 166 Using a weekly time sheet 166 Timing single activities 167 Including billable time on an invoice 169 Printing Invoices 171 Emailing Invoices 171 Recording Sales Receipts 172 Recording Credit Memos 175 Receiving Customer Payments 177 Assessing Finance Charges 179 Setting up finance-charge rules 179 Calculating finance charges 180 Using Odds and Ends on the Customers Menu 181 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 194 If you haven''t previously recorded an item receipt 194 If you have previously recorded an item receipt 196 Paying Bills 198 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 206 Using inventory reports 207 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 214 Adding a subtotal item 215 Adding a group item 216 Adding a discount item 217 Adding a payment item 218 Adding a sales tax item 218 Setting up a sales tax group 219 Adding custom fields to items 219 Editing Items 221 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 Payroll 267 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 288 Creating an accountant''s copy 288 Handling the accountant''s copy manually 288 Sending the accountant''s copy electronically 291 Using an accountant''s copy 292 Reusing an accountant''s copy 292 Exporting client changes 293 Importing accountant''s changes 294 Canceli.