BA228_QB_Chapter5_2018.docx - BA228: QUICKBOOKS CHAPTER 5...

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BA228:QUICKBOOKS CHAPTER 5 NOTES1.IntroductionAccounting for inventory (merchandise sold to customers for aprofit) involves many of the same processes that were used with a servicecompany covered in chapters 2 and 3 as follows:oTo track inventory transactions, you must first establish a file for eachinventory item in theItem Listunder Lists.oFor making purchasesthere are two optionsto handle the processdepending on whether the purchase is on accountor a cashpurchase.If the purchase is on account, you first use theEnter Billswindowto record the purchase and then you use thePay Billswindow torecord the payment of the bill at a later date.If the purchase is one that is paid for immediately, then you use theWrite Checkswindow.You do NOTtrack cashpurchases throughtheEnter Billsand thenPay Billswindows.oTo record transactions for the sale of goods or services to customers, thereare two optionsto handle the process depending on whether the sale is onaccountor a cash sale.If the sale is on account, you first use theCreate Invoiceswindowto record the sale and then you use theReceive Paymentswindowto record the receipt of a payment from the customer at a later date.If the sale is one where the payment is received immediately, thenyou use theEnter Sales Receiptswindow and please note that youwill still be given an invoice number.You do NOTtrack cash salesthrough theCreate Invoicesand thenReceive Paymentswindows.oInventory can be adjusted through theAdjust Quantity/Value onHand.2.QuickBooksVersus Manual Accounting: Inventory TransactionsThe same journals used for a service company is also used for a merchandisingcompany as follows:oIn a manual system, purchaseson accountwould be recorded in a multi-columnpurchases journal(in QuickBooks use theEnter Billswindow).oIn a manual system, thepaymentson account would be recorded in amulti-columncash payments journal(in QuickBooks use thePay Billswindow).BA228Chapter 5 - Rev. 4/19Page 1
oIn a manual system,cashpurchases would be entered in a multi-columncash payments journal(in QuickBooks use theWrite Checkswindow).oIn a manual system, sales on accountwould be recorded in a multi-columnsales journal(in QuickBooks use theCreate Invoiceswindow).oIn a manual system, thepayments receivedfrom customers on accountwould be recorded in a multi-columncash receipts journal(inQuickBooks use theReceive Paymentswindow).oIn a manual system,cash saleswould be entered in a multi-columncashreceipts journal(in QuickBooks use theSales Receiptswindow).oIn a manual system,inventory items would be trackedin aninventorysubsidiary ledgerfor the company. In QuickBooks, theItem Listservesas an inventory subsidiary ledger.

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Term
Spring
Professor
Willhite
Tags
invoice

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