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Verifying File Setup

After you have cleared and closed the Open Balance Equity Account, you should verify the accuracy fo the Balance Sheet by completing the following procedures.

1. Run a Balance Sheet dated the first day of the new fiscal year – the day after the start date. Verify the account balances make sure they match the Trial balance.
2. If you created the company mid-year print a year-to-date Profit and Loss report and make sure that the amounts agree with your source documents.
3. Run a Customer Balance Detail Report and tie the Accounts Receivable ledger to your source documents.
4. Run a Vendor Balance Detail report and tie the Accounts Payable subsidiary ledger to your source documents.
5. Run the Inventory Valudation Detail report and tie the Inventory quantities on hand to your physical inventory.

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Adjusting Sales Tax Payable

The opening balance for Sales taxes payable must be adjusted to the amount indicated in the Trial Balance as of the start date. This adjustment should be made after all the open invoices are entered because recording open invoices affects the balance in the Sales Tax Payable.

The amount of the adjustment will the amount of he Trial balance less any amounts recorded in Sales Tax payable as a result of entering the outstanding invoices. So you should decrease sales tax payable so you don’t overpay you taxes.

1. From the Vendors Menu, Choose Sales Tax and then Choose Adust Sales Tax Due from the submenu.
2. Enter a separate sales tax adjustment for each sales tax authority.

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1. Run a Trial Balance as of the start date and confirm the balances of all accounts except the Retain Earnings.
2. Make any adjustments necessary using the procedures laid out above. If you entered open bills and invoices, several income and expense accounts will contain balances. These balances will be closed to Retained Earnings automatically on the day after the Start Date.
3. Note the balance of the Open Balance Equity account.
4. Once you have verified the account balances, create a journal entry to close the balance of the Open Balance Equity to Retain Earnings.

If the company is a sole proprietorship Open Balance Equity will be closed to the Owner’s Equity account. If the company is a partnership, the balance will be closed to the individual partner’s equity accounts.

5. From the Company menu, choose make General Journal Enteries.

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Negative On Hand Quality
QuickBooks allows you to sell inventory on sales forms even when it does not show a suffcient on hand quality which, in turn, drives inventory quantity on hand negative. In the absence of actual cost, QuickBooks guesses at the cost of the inventory and then adjust the Cost of Goods Sold in to Different Ways:

If the purchase form or inventory adjustment is dated prior to the invoice that causes inventory to be negative, QuickBooks adjusts Cost of Goods Sold on the invoice.

If the purchase form or inventory adjustment to receive inventory is dated after the invoice that causes it to go negative. QuickBooks adjusts Cost of Goods Sold on the purchase form. not the original invoice.

The fastest way to see if this has happen is to do a quick report on Cost of Good Sold account and if it has there will be a bill in there. Which there should not be.

You can also do a Inventory Validation Report to look for negative qualities
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One of the most common error people make is selling an Inventory item is leaving the Cost Field blank.

When the item is sold with no costed associated with it. Gross profit is overstated and the profitability picture at the customer level is distorted. If you enter a bill, item receipt, or inventory adjustment for the item in question in the same period and associates that purchase with the customer then both reports will restored to their correct state. If howerver, the purchase transaction is posted in a later period the results of the clients P & L can be overstating gross profit for that period.
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When you are setting up more than one user you need to install the Database Server Manager.  Select the option to install both programs. This option lets you access the company file from a server and to also provide access to the file to other users on the network.

The QuickBooks Database Manager is a utility that manages access to all of the company file on the QuickBooks file server. And it has Two major components

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• The Datebase server manager,which controls access to the company files across the network. This program runs as a Windows service and starts automatically when you start the computer.
• The server manager monitor utility provides a way for the users to access, configure, and control the database server manager.

The advantage of installing both of the software and the Database server Manager is that some tasks can’t be performed across the network. This way allows you to open QuickBooks on the server and preform those tasks that are required to run in single user mode.

The Closing Date Exception Report tracks changes made to transactions dated on or before the Closing Date. The report shows the original posts (debits and credits) as well as the current condition of the transaction. You can use this information to enter an adjusting entry that resets the Prior Period Ending balances and then reverse your entry in the current period.

1. Edit the Transfer to restore the original detail.

You can double-click on the Transfer shown in the report above to quickly access the

transaction. If the Current Transaction section shows a deleted transaction, you cannot

double-click to show the transaction. You will have to re-enter the transaction or enter an

adjusting entry (option 2 below).

2. Enter an adjusting entry that debits Opening Balance Equity and Credits Trucks: Depreciation.

This report is the most useful when troubleshooting changes to the previous reporting period.

However, the report above populates only while the Closing Date is turned on. Adding a

Closing Date after the fact will not retroactively populate the report.

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If you’re receiving payment at the time of a sale, and you fill out a sales receipt, QuickBooks records a customer payment. When you invoice a customer, and you receive payment later, you enter the payment in the QuickBooks Receive Payments window.

To record a payment in full:

1. From the Customers menu, choose Receive Payments.
2. In the Received From field, select The Customer from which you are taking payment for  from the drop-down list.
3. Press Tab to move to the Amount field.
4. In the Amount field and press Tab.
5. In the Payment Method field, select Check from the drop-down list and then press Tab.
6. In the Check # field, Enter the check number of the check.
7. Click Save and New.

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To enter a partial payment:

1. In the Received From field, select the customer from the drop-down list.
2. Press Tab to move to the Amount field, and then type how much the payment was for. Then press Tab again.

1. Click Un-Apply Payment.
2. In the Payment column, type the amount  as the amount you want to apply to the second invoice, and then press Tab.
3. In the Pmt. Method field, leave Check selected.
4. In the Check # field, type the check number.
5. Leave the “Leave this as an underpayment” option selected.
6. Click Save & New to record the partial payment and clear the window.

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