Customizing Your Chart of Accounts in .NET

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6 Customizing Your Chart of Accounts
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5. Go to Activities menu button Use Register. In the empty transaction at the bottom of the register, enter a transaction. 6. Enter your start date. 7. From the drop-down menu in the account eld list, choose Uncategorized Expenses. 8. In the Decrease eld, enter the total amount from the Uncategorized Expenses QuickReport. 9. Click Record to record the transaction.
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Summary
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This chapter focused on program features and accounting practices that enable you to customize your accounting system to your unique business needs. The information provided in this chapter enables you to manage your Chart of Accounts more ef ciently and ensures that balances shown on the Pro t and Loss Statement and Balance Sheet accurately re ect your company s performance and nancial position. QuickBooks automatically adds certain accounts to your Chart of Accounts as transactions are entered, such as Undeposited Funds, Uncategorized Income and Expenses, and Cost of Goods Sold. You can always add accounts, but you can delete accounts only if they do not have positive balances and are not associated with any Items, subaccounts, or online messages. Implement a numbering system if you need to quickly locate speci c accounts or rearrange accounts into logical groups as your Chart of Accounts grows larger. You can simplify your Chart of Accounts by merging or combining accounts. Making accounts inactive enables you to remove them from all lists and drop-down menus until you want to view them by using the Show All Accounts option. To correctly match revenue and expenses to the year in which they are appropriately recognized, you may make optional adjustments directly to the opening balance shown in the owner s equity register.
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Entering Historical Transactions and Data
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he task of entering historical data as of your start date is time-consuming, but there is no way around it. In 2, I acknowledged that in choosing a start date, a major consideration for many businesses is the amount of work involved in entering historical data. The more recent your QuickBooks start date, the less historical data you are required to enter. On the other hand, the more historical data you have at your disposal, the more information you can use for creating graphs, charts, and budgets.
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C H A P T E R
In This
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Entering past sales and accounts receivable Entering past accounts payable information Entering historical bank transactions Entering opening balances for asset and liability accounts tracked on your company s Balance Sheet
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Record-Keeping Goals
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The integrity and reliability of your QuickBooks accounting system depend on the accuracy of the historical data that you enter in the system. Its scope and exibility as a tool for budgeting and analysis also depend on the start date you choose and how much historical data you have entered. When entering historical data in the system, you are always entering all transactions from the start date to the current date. Assume that you choose January 1 of the current year as your start date, and today is March 15. You would enter all transactions as of January 1 through March 15. You then have records identical to those that you would have had if you had actually started using QuickBooks on January 1. If you want to compare your company s performance in the current year to its performance in the prior year, you would have to enter all transactions for the prior year to generate comparative reports, charts, and graphs.
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108 Part II Establishing Your Own QuickBooks Business
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Compiling and entering historical information is labor intensive and requires thought and familiarity with the business. How far back in time should you go How much historical information is enough If you enter the data indicated at the end of this chapter, you can rely on your accounting system to help you with four questions that every small business must be able to answer: Question No. 1: Do I have suf cient working capital to meet my liabilities What is my current bank account balance QuickBooks calculates accurate balances for your bank accounts and can be used to reconcile your bank statement to the account balance shown on the QuickBooks system. Question No. 2: Am I making a pro t QuickBooks gives you an accurate year-to-date Pro t and Loss Statement at any time updated as of the very last transaction entered into the system. Question No. 3: Are my payroll and sales tax liabilities current No small business can afford to fall behind in paying its payroll and sales tax liabilities. 2 gave you a feel for the different types of penalties imposed on late lers and how quickly they mount. With QuickBooks, sales tax and payroll records are a mouse click away if you have properly entered the relevant historical data. Question No. 4: Do I have suf cient cash ow to meet my current obligations With QuickBooks, you can generate reports as to your accounts receivable and accounts payable at any time to see what your customers owe you and what you owe to vendors.
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