1. CHAPTER 4 QuickBooks 2015-2016

2. QuickBooks Develop Balance Sheets and Profit & Loss Statements (Income Statements) Develop Better Management Practices 2015-2016

3. Reasons to Use QuickBooks Strong Managerial Accounting System Accountants want it Good for Larger scale operations Class system Improve Communication with lenders 2015-2016

4. Advantages of QuickBooks Ease of use Will write checks Manages accounts payable Has QuickPay Easy to reconcile & produce reports Enterprise accounting 2015-2016

5. Why Not Quicken Instead? More for personal & business finance Focused on cash flow Cannot line up income and expenses (i.e. is not accrual based) You have to buy QuickPay First stage of QuickBooks is just as easy 2015-2016

6. All the Accounting You Need to Know Assets Liabilities Equity Cash Accrual 2015-2016

7. Cash vs. Accrual Enter a bill when it is received, not when paid. Enter income when it is sold, not when you receive the money. Management orientated Enter expenses when you pay them. Enter income when it is received. Tax-based 2015-2016

8. Accrual Adjusted Entries Provides truer picture of current state of business through: – Performance measures – Financial measures – Financial position evaluation 2015-2016

9. Measuring Business Profitability Balance Sheets Profit and Loss Statement (Income Stmt) Income - Expenses 2015-2016

10. The Balance Sheet 2015-2016

11. The Balance Sheet Presents ASSETS - What the business has LIABILITIES - What the business owes (debt) OWNER’S EQUITY - What the owner is worth 2015-2016

12. Balance Sheet Reports The financial position of the business which shows: – The ability to bear financial losses (risk) – Business wealth or equity – The collateral for lenders in case of liquidation to meet debtors’ obligations – Information to address issues of estate planning, deferred tax obligation, generation transfer and retirement 2015-2016

13. Balance Sheet Components Assets – Current – Non-Current Liabilities – Current – Non-Current Equity (Net Worth) 2015-2016

14. Balance Sheet Definitions – Assets Current Assets are cash or items expected to be converted to cash in less than 12 months. Non - Current Assets are not expected to be converted to cash during the normal course of the business year. 2015-2016

15. Asset Example Current Assets - cash, saving deposits, grain for sale inventory and accounts receivable. Non - Current Assets - breeding stock, machinery, vehicles and land. 2015-2016

16. Balance Sheet Definitions – Liabilities Current Liabilities are financial obligations due within the coming fiscal year. Non-current Liabilities are long term (greater than one year) financial obligations. 2015-2016

17. Liability Examples Current Liabilities - accounts payable, accrued interest, operating loan principle. Non - Current Liabilities - principle due on a machinery or real estate loan. 2015-2016

18. Most Important Accounting Relationship Assets = Liabilities + Equity Equity = Assets – Liabilities 2015-2016

19. Understanding Debits and Credits

20. Working with Accounts, Customer, & Vendor Lists 2015-2016

21. Why are lists important in QuickBooks? Most of what’s involved when you enter transactions in QuickBooks is making selections from various lists. 2015-2016