QUICKBOOKS 2015:

A COMPLETE COURSE CHAPTER

3
LECTURE

PAYABLES AND
PURCHASES:
SERVICE
BUSINESS

Fadi Alshiyab
 CHAPTER FOCUS: PAYABLES AND
PURCHASES
Record purchase on account by completing a
bill
 Bill replaces Purchases Journal
 Vendor list used as Accounts Payable Subsidiary Ledger
 Balance of Vendor List = balance of Accounts Payable Account
Record cash purchase by creating a check or
using Petty Cash
 Checks replace Cash Disbursements Journal
 Petty Cash used when paying cash for a small item
 Example: postage due

Fadi Alshiyab
 LECTURE NOTE

Examples in lecture may or may not match

textbook
Lectures illustrate key points within chapters
Lectures do not contain every transaction
completed in text
Not everything presented in chapters will be
shown in lecture
Some parts of lecture show results of
transactions entered in lecture
Fadi Alshiyab
 PREPARE BILL

Record a bill:
 Supply Station
 Date of 01/18/15
 Invoice 1035A
 Terms Net 10
 Bill is for:
 One month rental of fax machine for $25
 Fax supplies of $20 to be used during the month
 Memo: Fax Rental and Supplies
Click icon

Fadi Alshiyab
 SECTIONS OF BILL

Bill is divided into two sections

 Vendor
 Detail

Fadi Alshiyab
 VENDOR SECTION OF BILL

Vendor section includes:

 Vendor
 Transaction date
 Reference number (vendor’s invoice number)
 Amount Due
 Terms
 Memo

Fadi Alshiyab
 COMPLETE VENDOR SECTION OF BILL

Complete
Vendor section
of bill
 Make sure Bill is
marked
 Click drop-down
list arrow for
Vendor
 Click Supply
Station

Fadi Alshiyab
 COMPLETE VENDOR SECTION OF BILL

Tab to Date, enter 01/18/15

Tab to Ref. No., enter 1035A
Tab to Amount Due, enter 45, press Tab

Fadi Alshiyab
 ADD NEW TERMS WHILE COMPLETING
VENDOR SECTION OF BILL
Key Net 10 on line for Terms
Press Tab
Click Set Up button on Terms Not Found

Fadi Alshiyab
 ADD NEW TERMS WHILE COMPLETING
VENDOR SECTION OF BILL
Standard should be
selected
Net due in 10 days
Discount percentage
remains 0.0%
Click OK button

Fadi Alshiyab
 COMPLETE VENDOR SECTION OF BILL

Terms show Net 10

Bill Due date is 01/28/2015
Enter Memo: Fax Rental and Supplies

Fadi Alshiyab
 DETAIL SECTION OF BILL

Detail Section of a bill contains:

 Accounts used
 Amount for each account used
 Memo column for memos about each part of transaction
 Additional Columns are available to:
 Assign a bill to a Customer:Job
 Attach Billable hours (discussed later)

Fadi Alshiyab
 COMPLETE DETAIL SECTION OF BILL

Expenses tab shows $45.00

 Total amount of transaction
Click drop-down list arrow for Account
Scroll through accounts
First part of bill is for fax rental, click
Equipment Rental
 QuickBooks put entire 45.00 as amount

Fadi Alshiyab
 COMPLETE DETAIL SECTION OF BILL

Tab to Amount column

Enter 25
Tab to Memo column
Enter: Fax Rental

Fadi Alshiyab
 COMPLETE DETAIL SECTION OF BILL

Office Supplies
 Account selection: Expense or Asset?
 Use within month = Expense
 Have on hand = Asset

Fadi Alshiyab
 COMPLETE DETAIL SECTION OF BILL

Click drop-down list arrow on next line in

ACCOUNT column
Click Office Supplies Expense
 Used within month = Expense
QuickBooks should enter amount of $20.00 (If
not, enter it.)
Tab to Memo column, enter Fax Supplies for the
Month

Fadi Alshiyab
 COMPLETE BILL

Click Save icon to save bill and keep on screen

Added Terms of Net 10
QuickBooks asks if terms should be changed
Do not want to change terms for vendor, click No

Fadi Alshiyab
 COMPLETE BILL

View bill

Fadi Alshiyab
 COMPLETE BILL

Look at Recent
Transactions in
History section
Bill for 01/18/15
has been added
Point to word Bill
View pop up
information
Click Save & New
to go to a New Bill Fadi Alshiyab
 ADD NEW VENDOR
WHILE ENTERING BILL
A vendor may be added while entering a bill
To do this:
 Click drop-down list arrow for Vendor, click <Add New>
 Type Vendor Name: Computer Technologies Magazine
OR
 Type Computer Technologies Magazine for Vendor Name, press
Tab
 Click Set Up (shown)

Fadi Alshiyab
 ADD NEW VENDOR
WHILE ENTERING BILL
Vendor Name is entered in New Vendor Screen
If an opening balance:
 Amount is entered
 As of Date is entered (unless computer date is correct date)
Only time an opening balance can be entered is
when vendor is added
New vendors rarely have an opening balance
Most common opening balance entries are for
existing vendors when creating a company in
QuickBooks

Fadi Alshiyab
 ADD NEW VENDOR
WHILE ENTERING BILL
Copy or enter VENDOR NAME—Computer
Technologies Magazine—in COMPANY NAME
Click in or tab to Main Phone, enter number:
510-555-3839

Fadi Alshiyab
 ADD NEW VENDOR
WHILE ENTERING BILL
Click at end of company name in BILLED FROM
in Address Details section,
 Name is too long to show in full
 Press END button on your keyboard to go to end of name
Press Enter
Type street address: 12405 Menlo Park Drive,
press Enter
Type city, state and Zip: Menlo Park, CA 94025

Fadi Alshiyab
 ADD NEW VENDOR
WHILE ENTERING BILL
Click Payment Settings tab
Select Terms : Net 30
Enter Credit Limit given by vendor: 1,000
 Company name is entered automatically for Print on Check as

Click OK to add new vendor

Complete bill (not shown)
Fadi Alshiyab
 ACCOUNTS PAYABLE REGISTER

Accounts Payable Register shows all

transactions in which account was used
Transactions may be entered directly into
Accounts Payable Register

Fadi Alshiyab
 VIEW ACCOUNTS PAYABLE REGISTER

Click Chart of
Accounts icon
on Home Page
Click Accounts
Payable
Click Activities
button
Click Use
Register

Fadi Alshiyab
 VIEW ACCOUNTS PAYABLE REGISTER

Register shows all transactions using Accounts

Payable

Fadi Alshiyab
 ENTER TRANSACTION IN ACCOUNTS
PAYABLE REGISTER
Record a bill in Accounts Payable Register
 Enter date: 01/19/15
 Click calendar icon next to date
 If necessary, click Back arrow until you get to January
 Click 19, press Tab

Fadi Alshiyab
 ENTER TRANSACTION IN ACCOUNTS
PAYABLE REGISTER
Record Bill in Accounts Payable Register:
 Enter Ref. No. 88764, press Tab
 Click drop-down list arrow for Vendor, click Speedy Delivery Service
 Terms: Net 10
 Due date should show 01/29/2015, enter if necessary
 Tab to Billed, enter $175
 Click drop-down list arrow for account, click Postage and Delivery
 Tab to Memo section, enter: January Delivery Expense
 QuickBooks inserts BILL under Ref. No. 88764
 Click Record to save transaction

Fadi Alshiyab
 CREDIT MEMOS

Credit Memos are prepared when a return is

made or when an allowance is given for
damaged items
Amount of credit should be deducted when
paying bill

Fadi Alshiyab
 ENTER CREDIT MEMO

Returned $5 of fax paper to Supply Station

Click Enter Bills icon
Click Credit to change from Bill to Credit

Fadi Alshiyab
 ENTER CREDIT MEMO

Enter information for Credit Memo

 Vendor: Supply Station
 Date: 01/19/15
 Ref. No.: 789
 Credit Amount: 5.00
 Account: Office Supplies Expense
 Account used when recording purchase of Fax paper to use during month
 Memo: Returned Damaged Fax Paper
 Click Save icon

Fadi Alshiyab
 ENTER CREDIT MEMO

View Credit in Recent Transactions section of

History

Click Save & Close

Fadi Alshiyab
 CUSTOMIZE REPORT FORMAT

To make a permanent change to a report

format, change QuickBooks’ Preferences
Click Edit on Menu bar
Click Preferences

Fadi Alshiyab
 CUSTOMIZE REPORT FORMAT

Click Reports & Graphs

Click Company Preferences tab
Click Format button

Fadi Alshiyab
 CUSTOMIZE REPORT FORMAT

Header/Footer tab,
remove check mark
by clicking:
 Date Prepared
 Time Prepared
 Report Basis
Removing check
marks means
headings will not
show as part of
Header information

Fadi Alshiyab
 CUSTOMIZE REPORT FORMAT

Click OK on Report Format Preferences screen

Click OK on Preferences screen
Date prepared, time prepared, and report basis
will no longer appear in reports

Fadi Alshiyab
 PREPARE VENDOR BALANCE SUMMARY

Vendor Balance Summary gives balances for each

vendor
To prepare:
 Click Reports on icon bar, use List view
 Click Vendors & Payables as category
 Double-click Vendor Balance Summary
OR
 Click Vendor Balance Summary, click Run

Fadi Alshiyab
 PREPARE VENDOR BALANCE SUMMARY

Enter dates: From 01/01/15 To 01/19/15

Press Tab to generate report
 Date prepared, time prepared, and report basis are not shown in
heading

Fadi Alshiyab
 VIEW VENDOR DETAILS

Double-click amount for Supply Station to view

individual vendor details:
 Account column shows Accounts Payable
 Amount column shows amount of each transaction
 Balance column shows vendor balance after each transaction
 This includes:
 Opening Balance $350, Bill $45, Credit -$5, Total $390

Fadi Alshiyab
PREPARE UNPAID BILLS DETAIL REPORT

Unpaid Bills Detail Report lists each unpaid bill

grouped and subtotaled by vendor
Double-click Unpaid Bills Detail in Vendors &
Payables section of Report Center
OR
Click Unpaid Bills Detail and click Run
Enter date of 01/19/15, press Tab

Fadi Alshiyab
 PREPARE UNPAID BILLS DETAIL REPORT

Supply Station shows:

 Beginning balance
 Bill recorded for fax rental and
supplies on 01/18/15
 $5 credit
Speedy Delivery Service
shows:
 Bill recorded in Accounts Payable
Register
Number shown for Aging,
if any:
 Depends on date of computer
 May be different from text

Fadi Alshiyab
 PAYING BILLS AND WRITING CHECKS

Pay Bills feature

 Bill is recorded without being paid use Enter Bills
 Pay a recorded bill use Pay Bills
 Pay Bills
 Marks bill Paid
 Generates a check for printing and mailing
Writing checks
 Used for “Cash” purchases or when a bill has not been
recorded

Fadi Alshiyab
 PAY BILLS

Pay bills from:

 Artistic Advertising for $500
 Supply Station bill of 01/18/15 for $45
Click Pay Bills icon
Click Show All Bills to see all bills
Click Due on or before and enter 01/30/15
Filter By All vendors and Sort By Due Date

Fadi Alshiyab
 PAY BILLS

Click Artistic Advertising to select bill

View Discount & Credit Information for
Highlighted Bill
 Terms: Net 30, Suggested Discount: 0.00, Credits: 0

Fadi Alshiyab
 PAY BILLS AND APPLY CREDIT

Click bill for Supply Station with Due Date of

01/28/15
Discount & Credit Information for Highlighted
Bill
 Terms: Net 10, Suggested Discount: 0.00, Credits: 1 for 5.00

Fadi Alshiyab
 PAY BILLS AND APPLY CREDIT

Apply Credit:
 Click Set Credits button
 Verify BILL information:
 Ref. No. 1035A
 Date 01/18/2015
 Original Amt. 45.00
 Amount Due 45.00
 Discount Used 0.00
 Credits Used 5.00
 Amt. To Pay 40.00
 Verify CREDIT AMT. and AMT.
TO USE of 5.00
 Click Done

Fadi Alshiyab
 PAY BILLS AND APPLY CREDIT

Supply Station shows:

 AMT. DUE: 45.00
 CREDITS USED: 5.00
 AMT. TO PAY: 40.00
Artistic Advertising shows:
 AMT. DUE: 500.00
 AMT. TO PAY: 500.00
Totals in AMT. TO PAY column for both bills is
540.00

Fadi Alshiyab
 PAY BILLS

In PAYMENT section

 Enter Date of 01/26/15
 Verify
 Method: Check
 To Be Printed is selected
 Account: Checking
Click Pay Selected Bills

Fadi Alshiyab
 PRINT CHECKS FOR BILLS PAID

QuickBooks:
 Records payment of
bills
 Prepares payment
checks
Click Print Checks
on Payment
Summary

Fadi Alshiyab
 PRINT CHECKS FOR BILLS PAID

On Select Checks to Print, both checks prepared

should be checked
First Check Number should be 1, change if
necessary
Click OK

Fadi Alshiyab
 PRINT CHECKS FOR BILLS PAID

Print Checks
screen should
show:
 2 checks to print
for $540.00
 Correct printer
selected
 Check Style is
Standard
 Print company
name and address
should be selected
Click Print

Fadi Alshiyab
 PRINT CHECKS FOR BILLS PAID

If checks print correctly, click OK on Print

Checks - Confirmation screen
If checks do not print correctly, click in Reprint
column to select check(s)

Fadi Alshiyab
 VIEW PAID BILL

After a bill has been paid using Pay

Bills, it is marked PAID by QuickBooks
 View RECENT TRANSACTIONS in History to see Bill Pmt-Check

Fadi Alshiyab
 WRITE CHECK

Some transactions (Rent) not recorded as bills

They are paid by writing a check
Bill was not recorded for rent, click Write
Checks icon
Check Face Section contains information for
actual check
Detail Section provides transaction information

Fadi Alshiyab
 WRITE CHECK

Complete
check face:
 Bank Account:
Checking
 Payee: California
Realtors
 Date: 01/26/15
 Amount: $1,500
 Memo: inserted by
QuickBooks or
entered manually

Fadi Alshiyab
 WRITE CHECK

Complete Detail area of check:

 Account: Rent
 Amount: 1,500.00 (inserted by QuickBooks)

Fadi Alshiyab
 PRINT CHECK

Click Print icon

at top of check
Print Check 3
 If 3 isn’t shown,
highlight number and
type 3
Complete Print
Checks screen
Click Print

Fadi Alshiyab
 VOIDING AND DELETING CHECKS

Void or Delete check by:

 Accessing check
OR
 Using Checking account register
When check is voided
 Amount is changed to $0.00
 Memo will be VOID:
 Check remains in company records
When check is deleted
 Check is removed from company records completely

Fadi Alshiyab
 VOID CHECK

Click Write
Checks icon
Click
Previous
icon until
you reach
Check 3 for
California
Realtors

Fadi Alshiyab
 VOID CHECK

Click Edit on QuickBooks Menu bar

Click Void Check

Fadi Alshiyab
 VOID CHECK

Amount is $0.00
VOID: is added to Memo

Fadi Alshiyab
 VOID CHECK

Click Save & Close button

If you get a QuickBooks dialog box about
journal entries, click No, just void the check

Fadi Alshiyab
 ACCESS CHECKING ACCOUNT REGISTER

Use Ctrl+A to
open Chart of
Accounts
Click Checking
Click Activities
button
Click Use
Register

Fadi Alshiyab
 VIEW VOIDED CHECK 3

View Check 3 in Checking Register

Amount is $0.00
Memo includes Void:

Fadi Alshiyab
 DELETE CHECK USING CHECKING
ACCOUNT REGISTER
Click Check 3 in Register
Click Edit on QuickBooks Menu Bar
Click Delete Check

Fadi Alshiyab
 DELETE CHECK USING CHECKING
ACCOUNT REGISTER
Click OK on Delete Transaction dialog box
Check 3 no longer shows in Checking
Account Register

Fadi Alshiyab
 VIEW VOIDED/DELETED TRANSACTION
SUMMARY
Click Reports on Menu bar
Point to Accountant & Taxes
Click Voided/Deleted Transaction Summary
 Enter Dates: From 01/26/2015 To 01/26/2015 (shown)
 OR Click drop-down list for Date Entered/Last Modified, click All
 View details regarding Deleted check
 Note Entered/Last Modified column
 Student dates won’t match because computer date is used
 Student transactions may not match due to deleting and voiding additional
transactions

Fadi Alshiyab
 PETTY CASH

A business may need a small amount of cash

on hand to pay minor expenses
 Example: Postage Due
Use of Petty Cash is recorded in Petty Cash
Account Register

Fadi Alshiyab
 CREATE PETTY CASH ACCOUNT

Open Chart of
Accounts
Use Ctrl+N to
create a new
account
Click Bank to
select account
type
Click Continue

Fadi Alshiyab
 CREATE PETTY CASH ACCOUNT

Type Account Name: Petty Cast (Intentional

Error)
Click Save & Close

Fadi Alshiyab
 CREATE PETTY CASH ACCOUNT

Click No button on Set Up Bank Feed

Fadi Alshiyab
 EDIT ACCOUNT

Click Petty Cast in Chart of Accounts

Use Ctrl + E to edit account
Change Cast to Cash, click Save & Close

Fadi Alshiyab
 ESTABLISH PETTY CASH FUND

Once Petty Cash Account is created, it needs

money transferred into account
Three methods for obtaining funds for Petty
Cash:
 Write a check and cash it
 Make a cash withdrawal for amount needed and record in
Checking Register as a transfer
 Make a cash withdrawal for amount needed record on a Transfer
Funds form (Illustrated on next slides)

Fadi Alshiyab
 ESTABLISH PETTY CASH FUND

Record funding of Petty Cash

 Click QuickBooks Banking Menu
 Click Transfer Funds

Fadi Alshiyab
 ESTABLISH PETTY CASH FUND

Date: 01/26/15
Transfer Funds From: Checking
 Click drop-down list arrow for TRANSFER FUNDS FROM
 Click Checking
 QuickBooks enters ACCOUNT BALANCE for Checking—
51,170.00

Fadi Alshiyab
 ESTABLISH PETTY CASH FUND

Transfer Funds To: Petty Cash

 Click drop-down list arrow for Transfer Funds To
 Click Petty Cash
 QuickBooks enters Account Balance for Petty Cash—0.00
 Enter Transfer Amount: 100
 Memo: Funds Transfer (entered by QuickBooks)

Fadi Alshiyab
 ESTABLISH PETTY CASH FUND

Click Save & Close

Look at Chart of Accounts
Petty Cash has $100.00
Balance of Checking account reduced by
$100.00

Fadi Alshiyab
 PAY EXPENSES WITH PETTY CASH

Use Petty Cash to pay for postage and office

supplies
 Open Petty Cash Register:
 Double-click Petty Cash in Chart of Accounts
OR
 Click Petty Cash and use Ctrl+R
 Verify Balance of $100.00
 Notice that Type shows TRANSFER

Fadi Alshiyab
 PAY EXPENSES WITH PETTY CASH

Record transaction
 Date: 01/26/15
 Petty Cash Voucher: 1
 Payee: May be left blank
 Payment: $17.79
 Account: click Splits button

Fadi Alshiyab
 PAY EXPENSES WITH PETTY CASH

Splits used to separate a payment among

two or more accounts
Enter accounts and amounts:
 Postage and Delivery $.34
 Office Supplies Expense $3.57
 Account is used because supplies will be used this month
 If supplies purchased to have on hand, use asset account Office Supplies
 Automobile Expense $13.88

Fadi Alshiyab
 PAY EXPENSES WITH PETTY CASH

Click Close button on Splits screen

Click Record
Account will show –split-
Balance of Petty Cash Account is shown

Fadi Alshiyab
 ACCOUNTS PAYABLE GRAPH
BY AGING PERIOD
Prepare Accounts Payable
Graph:
 Click Reports on Menu bar
 Point to Vendors & Payables
 Click Accounts Payable Graph
 Enter date 01/30/15
Accounts Payable Graph
by Aging Period shows:
 Bar chart with age of all accounts
payable
Accounts Payable Graph
by Vendor shows:
 Pie chart with percentage of
accounts payable by vendor
Fadi Alshiyab