Option 1: Introduction To QuickBooks Journal Entries 848683

Option 1introduction To Quickbooksjournal Entries For Merchandisin

Option 1introduction To Quickbooksjournal Entries For Merchandisin

Option #1: Introduction to QuickBooksâ„¢: Journal Entries for Merchandising Activities: Sales and Purchases Register for QuickBooks Online Simple Start 2015: For PC and Mac. You may have to start with a free trial with a credit card and cancel directly after module 5 is completed Once QuickBooksâ„¢ is loaded, you may have to reboot your computer. 1. Setting up company: Go to Home page, select the widget to the direct top right of the word ‘help’ and select on the left side ‘settings’, then company setting. For each edit, hit the pen picture on the right hand side of each section.

Enter the company name, Pit Bull Sings T-Shirt. Enter information as indicated below: Company address : c/o CSU- Global; 7800 Orchard Road- Suite 200 City : Greenwood Village, CO 80111 State : CO ZIP code : 80111 Phone Number : 999.999.9999 Choose Accrual Basis Go to advanced setting and be sure everything is turned on except the accounting setting for the closing of the books. X out of this screen, which returns you to the home page. TIPS: In the home page, go to the top right hand corner, to the right of the name of the company, click the gear symbol, which is the main link for everything you need for changes. Input is on the left-hand side of the home page with links to customers, vendors, and transactions.

Add one customer (see tight top corner for the button for new): Lair Corp. Add three vendors: Arotek, Sheng Freight, and Waters Corporation. Also in the left, in chart of accounts, be sure there is a current asset account called accounts receivable and a current liability account called accounts payable. For doing the journal entries below: Go to top panel, in the middle of the top of the screen, where there is a plus sign (+) and select journal entries found in the other section. In the cash on and credit to opening equity, give company an opening balance of $100,000 cash and equity.

It is up to you to create the correct accounts, with the proper journal entries Important to remember: Do not forget to click on ‘save and new’ after you input and file. Backup your company information many times as you work. To do this, click the button at the bottom of each screen called: save and new Always check to be sure your input dates are correct. Transaction input date are on the top left side above the journal entry Always best to record terms within the journal entry in the extra line provided to the right of A/R or A/P Always best to record terms within the journal entry in the extra line provided to the right of A/R or A/P 2. Prepare journal entries.

Be sure all dates agree with the problem and are not today’s date AUG 1, 2015 – Purchased T-shirts (BI= 0, other assets, inventory) from Arotek. Bought 1950 shirts at $3.846 each. Round to nearest dollar. Arotek, vendor, terms are 1/10, n/30. AUG 4, 2015 – At Arotek’s request, Pit Bull sings paid $200 cash to Sheng Freight for freight expenses on the August 1.

AUG 5, 2015 – Sold merchandise to Laird Corp. 1040 T-shirts at $5.00 each. Liar Corporation, customer, is given credit terms to 2/10, n/60, FOB destination. The merchandise had cost of $3.846. Round to nearest dollar.

AUG 8, 2015 – Purchased Specialized T-shirts from Waters Corporation. Bought 1000 shirts at $4.50 each. Waters Corporation, vendor, terms are 1/10, n/45. AUG 9, 2015- Pay Arotek Company for the shirts purchased on AUG 1. Round to nearest dollar.

Instructions: Enter above transactions into QuickBooks. To submit: go to home à reports à balance sheet and be sure your dates include August 1, 2015 to August 8, 2015. Also click on the inventory figure on the balance sheet to see the transactions within inventory. Cut and paste both of these reports into a document to submit.

Paper For Above instruction

This paper outlines the process of recording merchandising transactions within QuickBooks for Pit Bull Sings T-Shirt company, emphasizing the correct setup, journal entries, and reporting to accurately reflect purchasing, sales, and inventory activities during August 2015.

Introduction

QuickBooks is a widely used accounting software that facilitates recording business transactions, managing accounts receivable and payable, and generating financial reports. For a small merchandising business like Pit Bull Sings T-Shirt, mastering journal entries related to purchases and sales is critical, especially using the accrual basis of accounting. This paper will detail the steps for setting up the company, creating necessary accounts, entering initial balances, and recording transactions corresponding to inventory purchases and sales during August 2015.

Company Setup and Initial Balances

The process begins with configuring the company profile on QuickBooks. The company name, Pit Bull Sings T-Shirt, and address details are entered as specified. It is essential to select the accrual basis for accounting to properly match revenues and expenses during the period. Additional settings, like turning on necessary features, ensure the software tracks quantities, costs, and accounts correctly.

Adding a customer, Lair Corp., and vendors—Arotek, Sheng Freight, and Waters Corporation—are achieved through the customer and vendor setup interfaces. Confirming that the accounts receivable and accounts payable accounts are properly categorized as current assets and liabilities is vital for recording sales and expenses effectively.

The initial company balance is established with an opening cash and equity balance of $100,000, entered via journal entries. This step ensures the financial statements begin with the correct starting figures.

Recording Transactions

Transactions from August 1 to August 9, 2015, include inventory purchases, freight expenses, sales, and payment to vendors. Each journal entry must be date-specific, referencing the precise date, and correctly classifying the transaction type (inventory, expense, sale, or payment).

August 1, 2015: Purchase of T-shirts

Inventory of 1950 shirts at $3.846 each (rounded to $4) is recorded as an increase to inventory assets. The vendor, Arotek, has credit terms of 1/10, n/30, indicating a 1% discount if paid within ten days.

August 4, 2015: Freight Expense

Cash payment of $200 is recorded as a freight expense, increasing freight costs and decreasing cash.

August 5, 2015: Sale of Merchandise

Sale of 1,040 shirts at $5 each generates revenue of $5,200, with cost of goods sold totaling approximately $7,950 based on per-shirt cost. The sale terms, 2/10, n/60, specify a potential 2% discount within ten days.

August 8, 2015: Purchase of Specialized T-shirts

Acquisition of 1000 shirts at $4.50 each is recorded, enhancing inventory assets. Terms are 1/10, n/45.

August 9, 2015: Vendor Payment

Payment to Arotek for the August 1 purchase is recorded based on the invoice amount, considering any applicable discounts if paid within the discount window.

Recording in QuickBooks and Reporting

Each transaction is entered through QuickBooks' journal entry function, ensuring accurate dates and account classifications. After input, saving and backing up data promote data integrity. The final step involves generating a balance sheet report for the period August 1 to August 8, 2015, and reviewing inventory details by clicking on the inventory figure. These reports provide comprehensive financial insight into the company's merchandising activities.

Conclusion

Proper setup and detailed recording of transactions in QuickBooks facilitate accurate financial reporting and inventory management for small merchandising businesses. By meticulously entering journal entries aligned with the specified dates and terms, Pit Bull Sings T-Shirt ensures its financial records reflect its operational activities, enabling better decision-making and compliance.

References

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