QUICKBOOKS ONLINE:

Part 1: Set-up, Lists and Reports

Heather C. Young
September 2018
Quickbooks Online Part 1

Introduction 3
Dates 5
1. Getting Started 6
Migrating Sample Books to QBO 6
A word about database software 7
The Gear Icon 8
Save your own copy of the Sample Company file 9
Screen Layouts 10
Modules Not Being Used 1​2
Extras 1​3
A Few Notes on Lights Out Theatre Co 1​4
2. Explore Reports Using the Sample Company 15
Report Arithmetic 16
“Drilling Down” – Magnifying Glass 19
Exporting QBO Reports 2​0
Customizing Reports 2​0
Reports \ Lists 2​0
Reports \ Financials 2​3
Reports \ Payables 26
Reports \ Receivables 27
Reports \ Classes 28
Exercise: Practice Looking up Report Information Using the Sample Company 29
Answers 31

Heather C. Young QBO 2018: An Experiential Approach Page 2

Introduction

This workbook is based on Quickbooks Online.

Quickbooks Online is fast becoming one of the most widely-used cloud based Canadian
accounting packages for small business. It is available in three versions – EasyStart,
Essentials and Plus. The version you need depends on the complexity of your
organization and how many users will be entering data. We will be using the Plus
version. The program is available through any internet browser.

If it becomes your responsibility at some point to purchase accounting software for an

organization, be aware that manufacturers and retailers are sometimes inclined to try to
“up-sell” their customers. Review the software features to make sure that your company
is truly receiving value for money.

QBO routinely backups and updates to the cloud, when the Canada Revenue Agency
releases new payroll deduction tables (which are built into the payroll module). These
periodic updates often add new support tools and automations, but the core functions of
QBO remain constant.

This book is intended to support a three-lecture series of computer lab

lecture-demonstrations, and to provide a tool whereby students at different skill levels
can study independently. You will have time in class to work through the material at your
own pace. The instructor will circulate, coach, provide support, and help you augment
your learning, recognizing that students’ computer experience and familiarity with
specialized software such as accounting packages may vary widely. The most commonly
used features of Sage 50 are covered; you are encouraged to go beyond the course
material to explore other menu options using the built-in Help manual.

QBO is in wide use in the business world, but it is just one of many “off the shelf”
accounting applications. Learning this package will give you a feel for what accounting
software can offer. While screen design, input procedures, built-in reports and other
features are proprietary (that is, exclusive to each product), all commercially available
packages are based on Generally Accepted Accounting Principles plus standard business
practice.

It is important to note that while we will not be covering the desktop version of
Quickbooks, it is still an option when considering accounting software for your company.
Most of the core features remain the same. The main difference lies in the layout of
information.

Treat this study unit as an opportunity to apply the information and techniques you are
learning from your finance course. Accounting software aims to provide automated
methods for accomplishing what you are learning to do manually. Part of your task as a
student is to note how software can support the accounting cycle and management
Heather C. Young QBO 2018: An Experiential Approach Page 3
reporting needs, so that when you eventually use it in a work environment, you can draw
from this experience.

In particular, take note of features intended to control user behaviour (what it will and
won’t allow you to do and why this may be), and features the designers have built in to
help you track and evaluate information, and make decisions.

This is ​experiential​ learning. Reading the exercises is not the same as doing them: your
hands need to do the work. The text assumes that you have QBO open in front of you,
and that you are performing tasks as you read. I hope that the opportunity to experiment
with accounting software will increase your understanding of records-keeping and
statement preparation, and that you will feel empowered to go further with the technical
aspects of arts management.

Heather C. Young

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Dates

You will find it useful to memorize the following table.

Accounting packages commonly use date formats where the month appears as a number.
For instance, you would typically see something like “2018-10-23” rather than “October
23, 2018” – so you need to know that October is the 10​th​ month of the year.

In addition, you need to know how many days are in each month so that you can issue
correct month-end reports. (If you issue a report dated March 30, it’s not just a cosmetic
or logical error: you are potentially omitting a day’s worth of financial transactions.)

# of Month Month # of Days

1 January 31
2 February 28 or 29 (leap year)
3 March 31
4 April 30
5 May 31
6 June 30
7 July 31
8 August 31
9 September 30
10 October 31
11 November 30
12 December 31

Windows establishes the global date format (i.e. for all software packages) from the
Control Panel. It offers “short format” dates (numeric) as well as “long format”
(incorporating the names of months and/or days). To change options, go to Windows
Settings and locate the Time and Language Options (known as Regional and Language
Options on earlier versions of Windows).

Some software packages, including QBO, allow you to over-ride the global Windows
setting. See Setup \ Settings \ Company \ Date Format. From this dialog box you can set
up short and long date formats, and determine how dates will appear on-screen as you use
QBO, and in QBO’s printed reports.

The formats used in this workbook may not match what you see on the particular
machine you are using in the lab – but you now know how to change the options to suit
your preferences.

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1. Getting Started

Migrating Sample Books to QBO

To import a set of books into QBO:

- Create a QBO account. You will have received an email already from Intuit to set this
up
- Name your company using your own name. ​VERY IMPORTANT: When
prompted, select number of years in business (any number is fine) and select the
option to “Bring in desktop data”
- Select the “cog” icon in the top right hand corner of the screen.
- Under the “Tools” menu select “Import Desktop Data”
- Open QuickBooks Desktop and follow the onscreen instructions in QBO

Note: Logging into QBO often requires two factor authentication. You can either get an
email notification OR a text message. Regardless, make sure to bring your phones when
in class.

- Once your data is ready you will receive an email notification. Your file is ready to
use.

When you log back in, you will be see the Dashboard of QBO. This provides you with an
overview of your company, shortcuts to typical tasks, and set-up options. You can
explore this on your own. For the moment, we will ignore it.

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A word about database software

Accounting software is database software. QBO is a relational database made up of many

linked files. The software performs file operations on all of the database files at the same
time.
Database packages such as Access and FileMaker Pro are designed to let you create your
own relational databases. However, QBO is a proprietary database program, and you
cannot change its structure. Users can make only those modifications the designers built
in as user-defined options.

Two important notes related to this.

1. The designers control how users interact with the program to protect the integrity
of the accounting information. We will take note of some of these controls as we
explore the product.

2. A few of the commands available in QBO perform exactly the same tasks as they
do in Word and Excel. You will find familiar commands such as Save, as well as
many that are immediately intuitive – but it’s worth noting that they work on ​all
of QBO’s integrated files at once.

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The Gear Icon

The Gear icon in the top right hand corner of the screen is where you can access your
company settings and some of the higher level accounting tasks. We will look at the most
commonly used functions. You can explore other features using the Help icon in the top
right hand corner plus individual classroom coaching as needed.

Your Company​ allows you to access and update your company settings, manage users
for your company, create custom forms such as invoices, and access your chart of
accounts.

Lists​ gives you access to all lists such as classes, products and services, and currencies.

Tools ​allows you to perform some the more advanced accounting functions such as
reconciling, budgeting, and importing your company.

Note that you can create multiple sets of books in QBO, each called a “company.” These
are billed separately.

Closing Off Fiscal Years, Audit Logs and Exporting Your Data

After a fiscal year has been completed, you have the option in QBO to lock anyone from
making changes by closing off the fiscal year. To do this, click the cog icon, then click
“Account Settings” under “Your Company. From the left hand side of the new menu,
select “Advanced”. You should see the option to “Close books” in the Accounting section
which is currently off.

To toggle it on, click the Off text. The options for closing off the books will then pop up.
Here you can select the beginning of your fiscal year, the accounting method and the
option to select a date to close off the books. For the purposes of our sample company,
we will be setting the fiscal year to begin in July and close the books as of June 30, 2018.
From the pulldown menu, we can select whether to set a password or not. Select the
password option and enter LightsOut2018 as the password.

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QBO does not allow you to download backups of your company files. To keep track of
potential changes to your books, we use a combination of the Audit Log and exports of
the General Ledger.

The Audit Log can be found in the Tools menu of the cog icon. It tracks which users
logged in and any changes made to the books over a selected period of time.

A general ledger is a record of all entries made into a set of books. By exporting this data,
you can have a control copy to compare to in case any incorrect entries are made.

→ TAKE NOTE!​ QBO will automatically back-up your company file to

its own servers. It never hurts however to export your company data
periodically, especially after a fiscal year has been completed.

Save your own copy of the Sample Company file

Take the time NOW, before you go any further, to export a General
Ledger, Profit and Loss and Balance sheet using the Export Data
function from the Tools section of the cog Icon. Select Last Year as the
date and export a General Ledger, Trial Balance, Balance Sheet & P&L.

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Screen Layouts

The main screen of QBO contains has two main features:

● The top menu bar which contains

○ The Plus icon from which you can add transactions
○ The Gear icon from which you can access various settings (discussed
earlier)
● The side menu bar from which you can access various ​modules​:
○ Dashboard (which is where you are brought automatically on sign-in)
○ Banking (where you can set up online banking)
○ Sales
○ Expenses
○ Employees (we will not be exploring this feature for this course)
○ Reports
○ Taxes (we will not be exploring this feature for this course)
○ Accounting (where your Chart of Accounts is located)
○ My Accountant (we will not be exploring this feature for this course)
○ Apps (we will not be exploring this feature for this course)

These main sections are where you will access two major components of your books:
● Ledgers- These are lists of accounts and records. Each ledger is separated by their
purpose (ie a list of vendors is kept in the Expenses module, separate from
customers in Sales)

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 ● Journals- These are transactions you have recorded in QBO and also where you
can create new ones

When accessing the Sales, Expenses or Employees modules, you can toggle your view of
the journals (Expenses) and ledger (Suppliers) by using the two tabs at the top of the
screen:

Clicking on the suppliers tab brings up a list of all of your vendors. On the screen you
will see:
- Batch action button to select what to do with various transactions
- Print cheque button
- New supplier button
- Print, Export to Excel and Menu options on the right hand side
- Vertical scroll bar allowing you to move through the list
- Click on any list item to go to a screen that allows you to view transactions for the
supplier and a tab to edit the information, add a new item or remove an existing item
o For instance, if you click on Amelia Lopez, then click on the Supplier Details
Tab, then click Edit, you will get the following dialog box:

Feel free to open the other ledger icons, and click through the list items to the dialog
boxes that allow you to edit list details. In chapter 3 of this workbook, we’ll explore
ledger options in more detail.

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Back to the home screen of QBO.

When you click on the plus icon, you open a menu that allows you to select a transaction
to record. The various journals contain options specific to the type of transaction you’re
entering. Thus, the Suppliers Journal is set up to deal with supplier invoices, and the
Employees Journal contains fields necessary to process employees’ pay.

Parts of QBO’s journal input screens, from top to bottom, using the Suppliers Journal as
an example:

- title bar- shows the type of transaction being entered (ie

- menu bar (different options from the home screen menus)
- toolbar (different options from the home screen buttons)
- data input fields

Modules Not Being Used

QBO has a variety of features and apps that can be turned on and integrated at any time.
Some of the features, such as payroll, require an extra fee from your QBO subscritption.
Some simply need to be turned on from the settings menu.

Anything that you hide can be unhidden later. Sage 50 does not delete
any of its elements.

There are three major modules that we will not be using:

- Inventory & Services – a function of retail, wholesale and manufacturing

organizations
- Employees – payroll requires an additional fee from QBO and does not come with the
demo version

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- Apps- We will not be exploring which apps currently integrate with QBO but it is
worth nothing these can help make your work in QBO more efficient.

Extra features

These features are not necessary for accounting purposes, but you may find them useful,
so take a few minutes to explore them.

1. From the Account and Settings menu, in the Company tab see the different
options for your company info. Try uploading a logo to represent your company.
How can you change it later?

2. From the top title bar, open the Search function. Click on advanced. What are
some of the different ways you can search for a transaction?

3. Open the Apps module from the side menu bar. What are some of the different
apps that will integrate with QBO?

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A Few Notes on Lights Out Theatre Co.

The sample company, Lights Out Theatre Co., was designed by Young Associates to
provide students with a set of books that reflect the realities of working in the non-profit
world. At this moment, they are still incomplete but for our purposes will still be suitable
to learn the software.

Lights Out Theatre Co. has a June 30 fiscal year-end. The sample data contains opening
entries for July 1, 2015 to June 30, 2016 and transactions for July 1, 2016 to June 30
2017. All modules contain journal entries.

QBO has the ability to have multiple currencies set up in a set of books.. Most
not-for-profit arts organizations would not need this feature. (Organizations might have
both Canadian and US bank accounts if they toured regularly to the States, or if they had
a lot of American visitors.) This workbook does not cover working in multiple
currencies.

The chart of account codes used in the sample company are similar to the types of
accounts used in most arts organizations. The major headings are mapped to CADAC
lines for easier reporting.

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2. Explore Reports Using the Sample Company

Reminder: By now, you should have exported your own copy of the
sample company and set up the closing date for the 2016-17 year. You
can now add, edit and remove items from the 2017-18 year. DO NOT
ATTEMPT TO POST TRANSACTIONS INTO THE CLOSED YEAR,
We will need this to stay static for the assignments.

As you work through this chapter, you will open and close various reports, examine them
on the screen and print them. The exercises cover a number of the most commonly used
reports. Explore QBO’s other reports at your leisure.

Each report opens and contains a top menu bar allows you to set certain parameters:

- Most reports allow you to choose either a ​single date or a range of dates​. You can
work with the entire fiscal year, or isolate one month, one week, one day, or
whatever series of dates you need to examine.

- QBO currently does not have a limit to the amount of data it can store. You can
create reports for the years that have been stored within the data file for your
company.

- Many of QBO’s reports offer a ​comparative​ choice, which allows you to review
multiple date ranges side by side. This is useful for comparing:
o current year versus previous year
o a date range within the current year versus a date range within the
previous year
o two different date ranges within the same year

- QBO structures its comparative reports to provide up to 4 columns of data – two

date ranges and two ​variance calculations​. You can see the variance either in
dollars (a straight subtraction) or in percentages.

- Some reports allow you to select which ​accounts​ you want to include. You can
choose to work with all accounts on the system (“Select All” button), or pick the
specific ones you need to examine. Just as in Excel, you can click and drag to
select a series of accounts, or hold down the Ctrl key and click on a selection of
accounts.

- Some reports have ​context-specific parameters​. For instance, employee reports

have a tick-box allowing you to include “inactive employees.” An “​active
employee” is one who is still working for the company. QBO assumes that most
commonly you only want to look at the active staff members, but you might need

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 to access records for inactive employees, e.g. so you can issue a T4 slip for them
at the end of the year.

Report Arithmetic

QBO uses a built-in arithmetical structure to ensure that the financial statements balance.
You cannot change this structure.

What does “balance” mean? We need to refer back to finance class for that!

The basic accounting equation states that Assets = Liabilities + Equity. This equation,
highlighting assets, reflects a business-oriented viewpoint. How did we acquire this
wealth? Well, we put in some of our own money (the equity) and we borrowed the rest
(the liabilities). Remember the “house” illustration, where you own your home thanks
to the downpayment + the mortgage?

Another way to express the same thing is Assets – Liabilities = Net Assets (the
not-for-profit term for Equity). This equation, highlighting the organization’s residual
value, is simpatico to a not-for-profit viewpoint, where sustainability is the main
concern. How can we tell that we’re solvent? Well, if we subtract what we owe from
what we own and the result is positive, we’re okay. If we owe more than we own, the
result is negative, and we’re in trouble.

Accounting software is constructed to protect this logic by preventing users from

creating imbalanced journal entries, or from giving the system any other input that
would cause the basic accounting equation not to be true.

QBO automatically creates Balance Sheet sections for:

Assets
Liabilities
Equity

QBO automatically creates Profit and Loss Statement sections for:

Revenue
Expense

Even if there is $0 activity within a certain class of accounts, the class exists, and QBO
creates the following headings and totals by default:
Assets and Total Assets
Liabilities and Total Liabilities
Equity and Total Equity
Revenue and Total Revenue
Expense and Total Expense
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You can add as few or as many accounts as you need to each class. There are options for
creating sections inside each class of accounts. You can also create subtotals within the
sections you create.

To illustrate, look at the following screenshot of part of the sample company’s chart of
accounts. (From the Accounting section, choose Chart of Accounts.)

The account type appears in the “Type” column (eg Other Current Assets). The “blocks”
of accounts were created by the user. You can have as many of these as you need to
group your expenses, income, assets and liability accounts meaningfully. QBO uses the
account type to determine the class of account, however numbers can also be used for this
purpose. Accounts are categorized as follows:

Accounts that start with the number… Belong to the class…

1 Assets
2 Liabilities
3 Equity (Net Assets)
4 Revenue
5 Expense

Typically when we set up accounts, we have what is known as a Header account followed
by a list of sub-accounts. QBO does not have any limitations on which accounts can be
posted to, but we typically do not post to Header accounts. We put header accounts in all
capitals to help differentiate from posting accounts.

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Sub-accounts are set up under the header account and will generate a separate subtotal on
a report. A sub-account can be created when adding a new account. In the creation
screen, tick off the “Is a sub-account” box and then select the header account from the
pull-down menu. This can be deselected at any time. QBO differentiates between Header
and Sub accounts by giving the sub-accounts a right indent.

Take a closer look at the section titled Artistic and Production Fees. The Header account,
51000, is positioned further to the left than its sub-accounts, numbered 51110 to 51700.
QBO leaves it up to the user to customize the numbering system. To make things simpler
to organize, we tend to number any sub-accounts with the same first two digits of the
header account. When we look at reports later, we will see how these accounts sub-total
and total.

Like the major headings for classes of accounts, the Current Earnings account in the
Equity section is created automatically by the software. If you are setting up new books
from scratch, the Current Earnings account appears even when the books are otherwise
completely empty. You cannot post to this account; it exists for calculation purposes
only. Its balance equals the bottom line from the Profit & Loss Statement. It brings
forward the year’s operating result to the Equity section of the balance sheet, so that the
Balance Sheet balances.

To illustrate, have a look at these excerpts from Lights Out’s Balance Sheet and Profit &
Loss Statement dated June 30, 3018. (You’ll find them under Reports \ Business
Overview.) On the Balance Sheet, find the Current Earnings number. Compare it to the
Net Income recorded at the foot of the Profit & Loss. The numbers match, indicating that
QBO has recognized that the company’s profit increases its equity position.

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The Retained Earnings account also has an important function within QBO’s arithmetic.
QBO also creates this account automatically. However, you can rename it to whatever
you choose, and you are allowed post to it.

The purpose of Retained Earnings (which a not-for-profit might name Unrestricted Net
Assets, or Prior Years’ Surplus) is to provide a home for the earnings of closed fiscal
years. The Current Earnings account deals with the year in progress. When you close the
year, whatever sits in Current Earnings is automatically moved by QBO to Retained
Earnings. This empties out Current Earnings so that it’s ready to receive data for the new
fiscal year.

Note that in ​almost​ every circumstance it’s a mistake to post to Retained Earnings. Until
you’re confident that you understand the mechanics of financial statements, consult with
your accountant before putting transactions into this account.

This covers the major report arithmetic underpinning QBO’s financial statements. In the
fourth chapter of this workbook, when we get to journal entries, we will discuss linked
accounts – another feature of the software that governs the structure of ledgers, journals
and reports.

“Drilling Down” – Hand Icon

If you “float” the mouse pointer over reports, you will see that it turns into a hand icon
over various items.

When you click on the hand icon, you see the next “layer” of reports – that is, the detail
that underlies the report you’re currently looking at. In some instances, you can “drill
down” through multiple layers of reports. The final layer is the input screen where the
information was entered.

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Exporting QBO reports

All QBO reports can easily be exported to Microsoft Excel or as a PDF. These are
“static” reports: the data is not linked to QBO. When you update the books, you must
manually update exported reports.

Export ​– The export icon is located in the top right-hand corner of any report. It can be
used to export to Excel or as a PDF.

You can take advantage of Excel’s flexibility to reformat accounting reports according to
your preferences. Once you have sent a report to Excel, you can use all of Excel’s
features. For example, you can:
● group or subtotal differently from QBO’s reports
● work with only one section of a larger report (delete the portions you don’t want)
● add as many columns of additional data and calculations as you need.

Customizing​ ​Reports

QBO has a variety of pre-set reports to choose from, however you are able to customize
reports further using the Customization button found on any report. From here you can
adjust the date parameters of the report, select the columns you want to appear on your
report, and filter out any accounts or classes you want.

Pull a P&L Detail for the sample company from the Business Overview section of the
Reports menu. Try out some of the different customizations. Filter out certain accounts
and see how that changes the bottom line of the report. See what columns you can add or
take away.

Reports \ Lists

The following list of instructions walks you through an exploration of Lists in QBO.
Take a few minutes over each list, to explore the different options.

1. Choose Gear \ Lists \ Chart of Accounts. Click Run Report

a. Float the mouse arrow over the any of the accounts. Note that as you pass
over the perimeter, the pointer turns into the hand icon. You can select any
of the accounts to open a new dialogue box with other information about
the account.
b. Note that some parts of the report have a pencil symbol next to them.
Click on this to edit these parts of the report.
i. Edit the Report Header to read Lights Out Theatre
ii. Change the Report Title to Chart of Accounts

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 c. Note that all reports have their own gear icon. Experiment with the options
(ie which columns will you include).
d. Export this report to Excel and observe how QBO downloads the
information.
e. Now open the downloaded Excel file
i. How are the account numbers captured in Excel?
ii. How is the formatting affected? Experiment with reformatting.

2. Ditto for Lists/All Lists/Classes

a. Check out the options above

Note on Classes: This feature offers an additional way to classify information. By

now, you are familiar with accounts as categories of financial information. Lights
Out Theatre Co. has expense accounts to capture its production and admin
expenses. Expense accounts are reported on the Profit and Loss Statement, and
they show the reader how much was spent company-wide. The Class feature
subdivides accounts, and creates reports showing how much was spent on each
individual project. This is a very useful feature in the arts, where we’re all about
project management!

Much like the Chart of Accounts, Classes can have header classes and
sub-classes. These can be reorganized at any time.
Heather C. Young QBO 2018: An Experiential Approach Page 21
 3. Expenses \ Suppliers
a. Click the gear icon to see what columns you can include on the screen.
b. Click the Export to Excel icon in the right corner of the list. What
information appears when you open the downloaded file?
c. Who might use this list? What fields would be useful for, say, the person
responsible for planning the budget, or the person responsible for issuing
cheques?

4. Sales \ Customers
a. Check out the options above
b. Who might use this list? What fields would be useful for, say, the person
who sets credit limits for customers, or the person who chases customers
who pay late?

Heather C. Young QBO 2018: An Experiential Approach Page 22

Reports \ Financials

5. Choose Reports \ Business Overview \ Balance Sheet.

a. In the Report Type box, choose Balance Sheet
i. Open a balance sheet for June 2017. The date range should be July
1, 2016 to June 30, 2017.
ii. Customize it to filter out accounts payable. What happens to the
report?\
iii. Experiment with the drop down menu next to the date range and
experiment with some of QBO’s preset date ranges.

b. Now back in the Business Overview section, select Balance Sheet

Comparison
i. Open a balance sheet where the first period is as at June 30, 2017
and the second period is as at May 31, 2017.
ii. While the Balance Sheet will report numbers as of a single date,
you still need to select a range of dates in order for QBO to
determine what period you need to compare. Select June 1-30,
2017 as your date range. Under the “Compare Another Period”
menu, select Previous Period (PP). Select Run Report.

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 6. Note that when selecting which period to compare you also have the option
whether to display the variance between the two periods.
a. Open a comparative Balance Sheet (your choice of dates) showing the
Previous Period Comparison with the difference in percentages.
b. Now modify the report to show the difference in amounts.

7. Use Export to create a Balance Sheet to Excel. Examine individual items as well
as subtotals and totals, to see how Excel treats the information.

8. Choose Reports \ Business Overview\ Profit & Loss

a. Repeat questions 5 through 7 for the profit & loss statement. Note that you
must still choose a period of time to cover, however this time we are not
covering a single moment in time, but rather a ranger of data within the
period. Use the period July 1, 2016 to Feb 28, 2017.

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 9. Open a comparative Profit & Loss Statement where the first period is June 1,
2017 to June 30, 2017 (current month) and the second period is Jul 1, 2016 to
June 30, 2017 (current fiscal year). Why might a manager want to look at the
current month in relation to the year to date?

10. Close this Profit & Loss Statement, and create another one comparing the month
of June 2017 to the month of May 2017. Why might a manager want to look at
one month compared to another month?

11. Close this Income Statement and create another one comparing the month of June
2016 to the month of June 2017. Why might a manager want to look at a month
this year compared to the same month last year?

12. Choose Report \ For My Accountant \ Trial Balance.

a. Try out the various options available for this report.
b. What purposes does the Trial Balance serve in manual bookkeeping?

c. How could the Trial Balance be useful in computerized bookkeeping?

Heather C. Young QBO 2018: An Experiential Approach Page 25

Reports \ Payables

13. Choose Reports \ What You Owe \ Accounts Payable Aging Summary. Open a
Summary report for all vendors for June 30, 2017. This report lists all suppliers to
whom we owe money, organized by how old our debt is. The “aging” in an
Accounts Payable report refers to how the information is organized. The Total
column shows how much we owe each vendor. The Current column sums
transactions from the last 30 days. The 31 to 60 column from two months ago.
The 61 to 90 day column from three months ago. The 91+ column sums
transactions older than three months. Suppliers commonly require payment within
30 days. Anything older is late. Anything 91+ days old is seriously delinquent.

14. Now open a Vendor Aged summary report for January 31, 2017. Is the company
in a better position in June or in January? What elements of the report indicate
improvement?

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 15. Click on one of the items. This gives you a detailed list of purchases from this
vendor.

16. Go back to reports/What You Owe. Select an Unpaid Bills report as of June 30,
2017. Contrast the information from the A/P Aging Summary: which vendors
appear, and what the detail is.

Note that QBO shows both the invoices received from vendors, as well as the
payments. If the company paid one bill using one cheque, you would see one
Invoice line and one Payment line. (Look at Associated Designers of Canada) If
the company paid one bill over multiple installments, you would see one Invoice
line and a number of Payment lines. If the company paid off a number of bills on
a single cheque, you would see the same Payment line under each of those bills.

Note that QBO also allows you to record prepayments, discounts, and other types
of transactions with suppliers.

17. Close the Detail report for all vendors, and try opening Summary and Detail
reports for only a few vendors. Select a few at random by highlighting names
using the mouse. You can click and drag over a series of names or hold down the
Control key and pick individual names.

Reports \ Receivables

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 18. Choose Reports \ Who Owes You \ Accounts Receivable Aging Summary – the
parallel aging report for the Receivables module – and repeat exercises 13 through
17. QBO is structured so that records-keeping for vendors and customers is
parallel.

19. Export your Accounts Receivable report to Excel. Open the Excel file, and
examine individual items as well as totals and subtotals.

Reports \ Classes

20. Choose Reports \ Business Overview. Run the following reports for the period of
June 1, 2016 to June 30, 2017
a. A Profit and Loss by Class (it will default to show all classes)
b. A Profit and Loss. Customize this report to filter it by just the Fundraising
Gala
c. A Profit and Loss Detail. Customize this report to filter it by just the
Fundraising Gala Class
d. A Profit and Loss Detail showing all classes but only the account 52050
Sets.

NB: Classes can be assigned to all categories of accounts (Assets, Liabilities, Expenses,
& Income), however they are more often tracked only through expenses and income.

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Exercise: Practice Looking up Report Information Using the Sample
Company

Answer the following questions on the Lights Out using QBO reports. ​You do not need
to make any calculations​; the answers are contained in the reports. The task is to ​identify
which report type and parameters will yield the answer​.

NOTE: There will be a classroom test on this material.

Income Statement

1. What was the company’s Total Revenue for the month of January 2017?

2. What was the company’s Net Income for the first two months of the current year
(July-Aug 2016)?

3. How much did the company spend on artistic travel for the first month of this year
(Jul 2016)?

4. During the last month of last year (June 2016), how much did the company spend
on Payroll Expenses? And how much did they spend on this item for the last
month of this year? (June 2017)? Answer both questions by opening ​one​ report.

Balance Sheet

5. How much cash do they have at March 31, 2017, counting all bank accounts?

6. Is this more or less cash than they had on Feb 28, 2017?

Management is assessing the current year to date as at June 30, 2017. Respond to the
following:

7. By what percentage have their Total Assets changed over June 2016?

8. By what percentage have Total Liabilities changed over June 2016?

9. By what dollar value has Accounts Receivable changed over June 2016?

Project Reports

10. For the last complete year (Jul 01, 2016 to Jun 30, 2017) what was the total
revenue on the Mainstage project?
11. For the first half of last year (Jul 01, 2016 to Dec 31, 2016), how much did they
receive in Municipal grants for the Workshop?

Heather C. Young QBO 2018: An Experiential Approach Page 29

 12. For the 2016-17 fiscal year, for how many projects did they hire performers (acct
51100)?

Customer Aged Summary & Detail

13. At the end of June 2016, which customers owed over $2,000?

14. According to the Customer Aged Summary as at 30 Jun, 2017, which client owes
the most money?

15. “Drill down” into the Customer Aged Summary of 30 Jun, 2017, to the Customer
Aged Detail report, to find out how many invoices are outstanding for this
customer.

16. According to the Customer Aged Summary of 31 July 2016, how delinquent was
the oldest invoice?

Vendor Aged Summary & Detail

17. According to the June 30, 2016, Vendor Aged Summary, to which supplier did we
owe the most money?

18. At the same period, how many invoices are outstanding to Rogers?

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Answers

1. 18,775.00
10. 86,104.80
2. 35,046.05
11. 6,525.00
3. 510.00 12. One Project- Mainstage

4. 5,206.70 / 5,206.70 13. Jack Power

5. 4,231.90 14. Jack Power

6. Less (30,867.29) 15. One

7. Total assets have decreased by 16. 31-60 days

36.26%
17. Manasa Sapir
8. Total liabilities have grown by
297.39% 18. One

9. Total accounts receivable have

decreased by 3,490

Evaluation: this is a matter of preference. Some bookkeepers project-code all entries, so

that the sum of the project reports equals total revenue and expense on the income
statement: a cross-check for accuracy. For this approach to work, administration needs its
own project. Other people prefer to minimize accounting work, and to maintain project
data only for actual projects – not for admin or overhead.

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