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 13 Balance sheet 16 Statement of cash flows 19 Other accounting statements 22 Putting it all together 23 The Philosophy of Accounting 25 Revenue principle 25 Expense principle 25 Matching principle 26 Cost principle 26 Objectivity principle 26 Continuity assumption 27 Unit-of-measure assumption 27 Separate-entity assumption 28 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 39 Recording supplies expense 40 Recording sales revenue 40 Recording cost of goods sold 41 Recording the payoff of accounts payable 41 Recording the payoff of a loan 42 Calculating account balance 42 Using T-account analysis results 44 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 54 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 64 Making a loan payment 64 Accruing liabilities 65 Closing Out Revenue and Expense Accounts 68 The traditional close 68 The QuickBooks close 70 One More Thing 71 Book 2: Getting Ready to Use QuickBooks 73 Chapter 1: Setting Up QuickBooks 75 Planning Your New QuickBooks System 75 What accounting does 75 What accounting systems do 76 What QuickBooks does 76 And now for the bad news 77 Installing QuickBooks 78 Dealing with the Presetup Jitters 79 Preparing for setup 79 Seeing what happens during setup 81 Running the QuickBooks Setup Wizard 81 Getting the big welcome 81 Supplying company information 82 Customizing QuickBooks 83 Setting your start date 84 Reviewing the suggested chart of accounts 86 Adding your information to the company file 87 Identifying the Starting Trial Balance 89 A simple example to start 89 A real-life example to finish 91 Chapter 2: Loading the Master File Lists 93 Setting Up the Chart of Accounts List 94 Setting Up the Item List 98 Working with the Price Level List 99 Using Sales Tax Codes 100 Setting Up a Payroll Item List 100 Setting Up Classes 101 Setting Up a Customer List 103 Setting Up the Vendor List 107 Setting Up a Fixed Assets List 111 Setting Up a Price Level List 112 Setting Up a Billing Rate Level List 112 Setting Up Your Employees 113 Setting Up an Other Names List 113 Setting Up the Profile Lists 114 Chapter 3: Fine-Tuning QuickBooks 117 Accessing the Preferences Settings 118 Setting the Accounting Preferences 120 Using account numbers 121 Setting general accounting options 121 Setting the Bills Preferences 123 Setting the Calendar Preferences 123 Setting the Checking Preferences 123 Changing the Desktop View 126 Setting Finance Charge Calculation Rules 128 Setting General Preferences 128 Controlling Integrated Applications 131 Controlling Inventory 132 Controlling How Jobs and Estimates Work 133 Dealing with Multiple Currencies 134 Starting Integrated Payment Processing 135 Controlling How Payroll Works 135 Telling QuickBooks How Reminders Should Work 137 Specifying Reports and Graphs Preferences 139 Setting Sales and Customers Preferences 142 Specifying How Sales Are Taxed 144 Setting the Search Preferences 145 Setting the Send Forms Preferences 146 Fine-Tuning the Service Connection 147 Controlling Spell Checking 148 Controlling How 1099 Tax Reporting Works 149 Setting Time and Expenses Preferences 149 Book 3: Bookkeeping Chores 151 Chapter 1: Invoicing Customers 153 Choosing an Invoice Form 153 Customizing an Invoice Form 154 Choosing a template to customize 154 Reviewing the Additional Customization options 154 Moving on to basic customization 159 Working with the Layout Designer tool 161 Working with the web-based Forms Customization tool 164 Invoicing a Customer 164 Billing for Time 170 Using a weekly time sheet 171 Timing single activities 172 Including billable time on an invoice 173 Printing Invoices 175 Emailing Invoices 176 Recording Sales Receipts 177 Recording Credit Memos 179 Receiving Customer Payments 181 Assessing Finance Charges 183 Setting up finance-charge rules 184 Calculating finance charges 185 Using Odds and Ends on the Customers Menu 186 Chapter 2: Paying Vendors 189 Creating a Purchase Order 189 Creating a real purchase order 190 Using some purchase order tips and tricks 193 Recording the Receipt of Items 193 Simultaneously Recording the Receipt and the Bill 196 Entering a Bill 198 If you haven''t previously recorded an item receipt 198 If you have previously recorded an item receipt 200 Paying Bills 202 Reviewing the Other Vendor Menu Commands 205 Vendor Center window 205 Sales Tax menu commands 206 Inventory Activities menu commands 207 Print/E-file 1099s commands 207 Item List command 208 Chapter 3: Tracking Inventory and Items 209 Looking at Your Item List 210 Using the Item Code column 210 Using the Item List window 210 Using inventory reports 211 Adding Items to the Item List 212 Adding an item: Basic steps 213 Adding a service item 214 Adding an inventory part 215 Adding a noninventory part 217 Adding an other-charge item 217 Adding a subtotal item 220 Adding a group item 221 Adding a discount item 221 Adding a payment item 223 Adding a sales tax item 223 Setting up a sales tax group 224 Adding custom fields to items 226 Editing Items 227 Adjusting physical counts and inventory values 228 Adjusting prices and price levels 231 Using the Change Item Prices command 231 Using price levels 231 Enabling advanced pricing 233 Managing Inventory in a Manufacturing Firm 234 Handling manufactured inventory the simple way 235 Performing inventory accounting in QuickBooks 235 Managing multiple inventory locations 239 Chapter 4: Managing Cash and Bank Accounts 241 Writing Checks 242 Recording and printing a check 242 Customizing the check form 247 Making Bank Deposits 249 Transferring Money between Bank Accounts 253 Working with the Register 254 Recording register transactions 254 Using Register window commands and buttons 258 Using the Edit Menu Commands 261 Reconciling the Bank Account 266 Reviewing the Other Banking Commands 270 Order Checks & Envelopes command 270 Enter Credit Card Charges command 270 Bank Feeds command 271 Loan Manager command 272 Other Names list 272 Chapter 5: Paying Employees 273 Setting Up Payroll 273 Signing up for a payroll service 275 Setting up employees 275 Setting up year-to-date amounts 279 Checking your payroll setup data 280 Scheduling Payroll Runs 280 Paying Employees 280 Editing and Voiding Paychecks 282 Paying Payroll Liabilities 283 Book 4: Accounting Chores 285 Chapter 1: For Accountants Only 287 Working with QuickBooks Journal Entries 287 Recording a journal entry 288 Reversing a journal entry 289 Editing journal entries 290 Updating Company Information 290 Working with Memorized Transactions 290 Reviewing the Accountant and Taxes Reports 291 Creating an Accountant''s Copy of the QuickBooks Data File 293 Creating an accountant''s copy 294 Handling the accountant''s copy manually 294 Sending the accountant''s copy electronically 297 Using an accountant''s copy 298 Reusing an accountant''s copy 298 Exporting client changes 298 Importing accountant''s changes 299 Canceling accountant''s changes 300 Troubleshooti.