 QuickBooks Online 2022. Enter transaction purchasing investments using bank feeds. Get ready because it's go time with QuickBooks Online 2022. Here we are in our bank feed practice file we set up with a 30 day free trial holding down control scrolling up a bit to get to the 125% currently in the home page otherwise known as the get things done page in the business view as compared to the accounting view if you want to change to the accounting view it's something you can do by going to the cog up top switch to accounting view on down below we will be toggling back and forth between the two views either here or by jumping over to the sample company file currently in the accounting view back on over to the bank feed practice file we're gonna open a few tabs to put reports in by going to the tab up top right clicking on it and duplicating that tab back to the tab to the left right clicking on it again and duplicating again back to the tab to the left right clicking one more time duplicating one more time as that is thinking let's see where the reports are located over in the in the accounting view and the sample company they're on the left hand side under reports if we jump back on over to the business view in the second tab the reports are going to be located on the left hand side in the business overview then we're gonna go into the reports then we're gonna close up the hamburger and we'll do the red do the balance sheet let's open the balance sheet up first the big balance sheet we'll do the range change up top from 0 1 0 1 2 1 to 12 31 2 1 and run and then we're gonna go to the tab to the right and do it again go into the business overview and into the reports close on the hamburger this time we're looking at the P and L profit and loss otherwise known as the income statement range change from 0 1 0 1 2 1 12 31 2 1 and run and then we'll go to the tab to the right opening up the trial balance less well-known but it's not fair that it's less well-known in the business overview the reports because it should be more well-known it's an excellent report trial balance called the trial balance I type it in because they put it way at the bottom of the list which again it should be in the faves we could add it to the favorites but I just type it in here trial balance is going to be 0 1 0 1 2 1 to 12 31 2 1 basically run is the balance sheet on top of the income statement good report for checking your work easy to scroll through and has all of the accounts that will be impacted on the balance sheet and income statement so you can have one tab open as you're doing the data input I would recommend having something open balance sheet income statement and or trial balance as you're doing data input so you could jump over and see what's happening as you enter the data so let's go to that the first tab here in prior presentations we set up our bank feed information which if you're in the business view is in the bookkeeping section on the left hand side transactions up top then in the banking we pulled this information in from our financial institution it's here in a bank feed limbo what I call bank feed limbo meaning these transactions have not yet been pulled in to create or support what has been created in the financial statements yet and we need to give them a little bit more information a little bit of help a little bit of guidance to bring them on through and that usually will include the account name that we have to add to them as well as of course the vendor and or the customer depending on if it is an outflow or inflow so the scenario we have here is going to be related to investments now the investments are going to be a little bit more unusual let's just think about them in general how they might work if I go to the tab to the right we're looking at the balance sheet now the investments if you have a business type of account are something that you might not have on personal investments you don't typically want your personal investments on the business side of things typically what you would like to do is generate revenue in the business side of things as you accumulate assets possibly cash you're either going to be choosing to put that cash back into the business or invest it if you're going to invest it then you typically want to take it out of the business distributed it to the owners if it was a sole proprietorship or partnership that being in the form of draws down below we would have draws taking money out other side recorded to equity draws and then the owner puts the money into say investment accounts to have some other side types of incomes or earnings that they can have if it was a corporation it would be the form of dividends or the outflows to the owners but you might be in a business that has some holdings in investments or you might be in a type of business that has investments as their type of business a financial type of company or you might be using quick books for personal investments and you can do that as well so let's just think about how the investments would be set up it would be similar for any of those kind of scenarios we have the same kinds of problems so that would be that we're going to take some of our money here we don't have any money right now in this file because we haven't put the beginning balance in or any of the deposits we'll talk about that later but if we had the investments we would be taking some of our money putting it into what we could call an other current asset or possibly long term assets that's one of the difficulties we need to think about is it current or long term to generate income in the form of typically capital gain interest and dividends so that's going to be the objective we're thinking here about stocks and bonds generally so how would we put those on the books how can the bank feeds fit into that type of scenario now first of all remember that quick books is not an investment type of software in that it's not used to track investments on a day-to-day basis you're not running graphs basically on a day-to-day basis to see and track what individual stocks are doing each day in quick books there are other softwares that you can use to do that if you want to do that and or use the information that's going to be available to you from your financial institution that you're purchasing the stocks from what quick books can do is help you to recap where the investments stand at certain points in time as part of the big picture with the rest of your financial investments to get an idea of where you stand on the balance sheet and your earnings on the income statement so that's going to be the basically the objective of it so you want to know what the software is actually kind of there or designed to do and how it might fit in or integrate with some other softwares note that there are other softwares that will pull in the investment information kind of like your balance sheet information and so that you can you can actually always have like your ending balance that would be pulling in from the financial institutions again that's not really what quick books is designed to do because quick books is designed for you to enter the financial transactions not just creating the balance sheet from the endpoint of the financial statements but also creating the income statement which is going to give you your performance numbers and if you were to just pull in your end numbers from financial institutions on your stocks and your bonds and your bank accounts and whatnot then you'd get a balance sheet that's that's kind of up to date on a current basis but you wouldn't have your creation of that your income statement numbers and you wouldn't be checking your financial transactions which is what the quick books is designed to do from an accounting standpoint okay so how could we set this up typically you're going to want to set up possibly like by financial institution is one way you could do it so you might have different financial institutions that you have stocks and bonds or investments with like a 401k plan possibly with your employer if it was a if it was a not if it was for your personal side of things or you might have stuff in like a vanguard or an e-trade or or you know your your actual physical bank bank of america or something like that that you then have your portfolio of stocks and bonds so that's one way that you might organize you might have see a drop down that would be your investment account and then organize your different types of investments by financial institution or you can organize by the types of things that you're investing in for example stocks versus bonds in general you could try to break out a little bit more detail than that like us stocks versus foreign stocks versus and so on but if you do that the more detail you put into your your accounting system here the more data input that you're going to have to do when you want to update your information so generally you want to keep it fairly general here when you're doing the data input into quick book so you can get an idea of where you stand at a particular point in time and get into all the details on the weeds in terms of the increases and decreases with other software and or your financial institution providing you that kind of supporting type of information the other way you might want to break it out is is a current portion versus long-term portion if it was an individual investment you might want to be saying that i'm going to put everything that's not under an umbrella of a retirement plan like a 401k plan or an IRA or some other retirement plan a 403 b plan those everything that's not under that umbrella might be a current asset everything that's under that umbrella would be long-term asset because that would be breaking out and indicating the fact that you can't get to those things under the umbrella as easily without restrictions penalties and whatnot you got to follow the rules under those you can access of course the the items that are in the current or outside of that type of umbrella so that's another way that you might want to set this up now then once you have those accounts set up then the question is well how do i track uh gains and increases and decreases in the stock so what if the investment goes up and down that can be a problem because you haven't realized the game so typically people will want to put the increases and decreases in the account because that's what the market value is saying we can track the market value because we actually have a financial institution or trading the stocks are trading on an exchange but since we haven't realized it there's kind of a question as to whether we should record the income as income on the other side so we'll talk a little bit about that and then of course the bank feeds come into play when cash takes effect so if you were to get interest and dividends that flow through from the investment to you then you're going to have cash transactions going into your checking account and you would be recording those oftentimes as income as they come through so let's just think about how this might be set up let's first set up a couple accounts in our chart of accounts to do that i'm going to right click on the tab on the left duplicate this tab and this second tab i would like to change this to the accounting view because i'm going to be dealing with the chart of accounts so i'm going to go up to the cog to the right and i'm going to switch this on over to the accounting view because i think the accounting view is nicer when you're adding accounts and dealing with the general ledger and i hope quickbooks will fix the business view so it will be easy as well there too because i think the business view from everything else works fine with it but i don't like the format of adding accounts on it currently so hopefully you know they fix that but listen hopefully someone else feels that way too possibly and we'll tell them that and they could fix it so we're going to go to the accounting down below and i'm going to say let's close up the hamburger and what i'm going to do is i'm going to put an account in here called investments and then i'll create a couple sub accounts which i'm going to imagine are my financial institutions that i have investments with and i want to do it that way because i'm going to get statements on a monthly basis quarterly basis or possibly only a yearly basis that i can use to update my quickbooks accounts to uh the current activity so i'm going to go up top and say let's make a new account and i'm going to say this is going to be an other current asset type of account and investments so i'm going to say investment let's just say other investment and i'll just call it investments here now you might want to put like a short term investment versus a long term investment anything that would be under an umbrella like an ira or a 401k if it was a personal business or quickbooks on the personal side might go into into other assets down below which will be kind of long term assets you can think of as opposed to current assets so these are going to be the investments i'm going to say let's let's save that and then i'm going to put a couple sub accounts under that investment account i'm going to say let's add another one and i'm going to call one of them a this is going to be once again an other current asset and it's going to be let's say investments other and then i'll call this one a bank of america investments so that's going to be investments i'm imagining in stocks and bonds with bank of america so this is not the check-in account this is our investment account we're imagining through that financial institution we'll make it a sub account of the investment accounts so i'm going to put the investment accounts and then it's going to be the sub account don't get it mixed up with our inventory accounts okay so i'm going to save that and then if i scroll down if i scroll down there's our investments there's our sub account let's do it again i'm going to say let's do a new one again ultra vase another time we're going to say this is going to be the other current asset other current asset and we'll just call it investments other again this time this one's going to be prime america prime america i think i did i spell that right no i clearly did not prime america is that even a word i don't even know if that's a word okay i think i got it now i got it and then we're going to hit the we're going to hit the plus button and this is going to be investment again investments so there we have it and so i'm going to say let's save that and close it so now we've got our investments that's one of the difficulties that we have to do this now the next thing is that we might have beginning balances in our investments before we had entered the information into our quick book system so we might want to be putting our beginning balances in how could you do that you might look at the prior statement before the cutoff most likely if you could do this before january january first being the cutoff that's not in this practice problem but that's often a good practice to do so you can have a whole years of information in the current accounting system you might then go into the register for example and enter that beginning balance in place the beginning balance would not be going through your checking account as of this point in time because it was something that happened prior to when you started the quick books bookkeeping system and remember what quick books does not do is just pull in the ending balance on your financial institutions on the bank accounts or on the on your investment accounts you have other software that can do that for you but what quick books does is have you enter the transactions the detail to get to the end result because that records the activity given you the income statement so let's just enter this i'm going to hit the drop down right here and i'm going to enter a transaction i'm just going to call it a journal entry let's just call it well we can call it deposit maybe i guess we'll deposit it into there now let's go with the journal entry i'm going to go with the journal entry this is going to be on let's say 01 01 2 1 and so the beginning of the year would be best if you can enter these ads at the beginning of the year or start your books at the beginning of the year and then memo this is going to be to record initial or let's say beginning beginning balance and then i misspelled beginning i misspelled beginning i spelled it right the dictionary has it wrong and so this is going to be then 10 000 and then the other side needs to go into some kind of equity account so it's going to go into some kind of equity account so we got opening balance and then they gave us retained earnings so we could put it basically into the retained earnings that's what the accounts are going to roll into you don't typically post to retained earnings but when you're doing the beginning balances that's what you you might post it to the retained earnings the point being it needs to go to the equity account because it's not going to the income statement in the current time period it's part of the beginning balances which had already rolled into equity that's why it would generally be appropriate on the beginning balances to put it into the retained earnings so i'm going to go ahead and save it and close it so now if we check that out if i go back to my balance sheet and hold down control i'm going to scroll up i'm going to run it run it i was running and then we're going to go down here so now we got our investments dropped down we only have something in the primarica at this point in time if i opened that up we've got our beginning balance journal entry that we entered into it so that looks good if i go back up we're going to go back to our balance sheet and then scrolling down to the equity section if we go into the retained earnings note they don't let you drill down on retained earnings which is kind of annoying because that's the account that you roll into so if you want to see the detailed and retained earnings and i do you have to run a report i'm going to go to the tab to the right just to show that right click on the tab and duplicate it and then let's see if we can run a report which i'm going to call a general ledger report so i'm in now the accounting view where the reports are on the left hand side and then we can close up the handbook and let's call this the general ledger the general ledger the gl sometimes referred to as let's change the range shall we i'm just going to put that one day 0101 2 1 2 0101 2 1 and then run it and i'm looking for the for the retained earnings account which is a balance sheet account so there's retained earnings there's the activity there's the journal entry activity for it okay so back then to the balance sheet so now let's say that we're going to put more money in at this point in time that's when it's going to hit the bank feeds right so now i got some money in primarica let's say we're going to put some money out of our checking account into the primarica and wait till it clears the bank before we record it that's when we'll see it on the bank feeds that's one thing we'll see on the bank feeds so if i go to the first tab then and i'm going i'm now i'm in my bank feeds again note that you might need to refresh the screen up top because we added some accounts and we're going to be using some of those new accounts as we do the as we do the data input so as you go back and forth between those screens you might need to refresh them i'm going to go into this item and pretend this is another investment that we're putting into place so there's the investment now note that i could put it in this way and change this category to the investment investment if it allows me there it is investment for primarica right there but if i do that and it would be fine for me to do that but note what's going to happen it's going to show then this as expense type of form but i'm really going kind of from one financial institution to another so it might be easier or it might be better for me to say what if i do it with a transfer so if it was a wire transfer you might want to transfer because then when uh when it goes into when it goes into the investment side it looks like a transfer going from your checking account to the other side as opposed to an expense form that's actually increasing your investment account that's kind of what the transfer form does you don't really need the transfer form because you can you can do the same functions with an expense form or sometimes a deposit form if it's going from one checking account to another for example but it makes it a little bit more clear that this is going to two of your your financial accounts if it's a transfer form so that's gonna so let's do that it's going to be a transfer form here i'm not going to save the rule or anything of course and if you were doing this often you could save then the rule that you're putting into place and this might be typical if you had an investment that you put money in on a steady basis if you're basically saying okay i have it set up so i put another whatever it is in i think it was 25 dollars this time a month goes into the investment each time then it would be a standard transaction we can memorize it we could put a rule to it and then it would be increasing the investment account rather than going to basically an expense account so i could then add that and that would just be a normal type of transaction but it's not hitting an expense then if i go back on over to my balance sheet and run it again then i'm going to say now the checking account should be going down it's still negative because we have to do that beginning balance thing kind of like we did with the investment account to it we'll talk about that later but there's the transfer notice that's in there as a transfer that gives you an indication of oh it didn't go to an expense i didn't and this indication by the by the way that it's an expense form doesn't necessarily mean you did an expense to it because you could have bought equipment for example but it tells you hey i didn't buy anything it didn't go to a third party it went to me right i put i went out of this account and back to me in some other account that's what it's saying so if i go back in here it doesn't go to an expense form it doesn't go into the bank feeds when i drill down on the source document it goes to a transfer form so i'm going to close this back out and go back up top and say we're going to go back to the other side and this one's going to be in the investments so in investments down here in primarica now we have our beginning balance which we put into place by putting it putting that into place and then the ending balance that we have here this is the money that we're saying that we're imagining that we kind of put in there on a monthly type of basis back on over now while we're here just let's think about the other kind of problem you'll typically have with these investment accounts and and it's not a bank feed type of issue because it's not going to be money that's going through your bank feeds it's going to be the fact that the investments just went up in value so if these were stocks and bonds that were representing here and they went up in value or they went down in value how do i reflect that periodically so we're going to we want to reflect it typically periodically it's different than say an investment in equipment where we usually put it on the books at cost and we just leave it there at cost and then depreciate it because with the equipment the equipment is unique in nature i don't know what the value of is if it is changing this is one reason we've recorded at depreciated cost as opposed to the investments where those are trading on the stock market and they're not unique in nature they're exactly the same they're exactly the same stocks that are currently trading on the stock exchange and i can see what they're trading for therefore i at least have a real-time you know market value of what the stocks are at any given time i haven't realized the value until i sell it but i can see that change in what's going on in real time because i own something that is exactly the same as something else in theory and it's trading for a current current price therefore it becomes more reasonable for us really to kind of do a fair market value calculation on our stocks so we might do that in quickbooks periodically we can't do it we're not going to have the software that's going to just put the put the market value on the books because for example if this was an increased market value by five hundred dollars if quick books was just to put that on your books then it wouldn't record the activity it wouldn't record the income statement other software does that kind of thing and you can get a balance sheet but what quickbooks does is try to allow you to enter the data to record the activity that is going to be happening to get to the ending balance therefore you might do that periodically you might get the statement from primarica if the statement says hey this thing is now five hundred dollars more it's worth in other words ten thousand five twenty five fifty for example then you might increase the primary account here and you could do so by going directly to this account increasing it with basically a journal entry the question is what did i what do i do with the other side then should it be income because it's not really realized but the other the other where place you can put it is is into equity but most people don't on at least on the individual side because that's kind of confusing i think other income is a typical place that it will go so let me just show you how that might work so let's imagine that we got our statement at the end from primarica uh you could you could then say if it was increased by five hundred dollars let's say what did it go it was increased by five hundred dollars i could put it directly to this account i could try to create another account that is a sub account of primarica that would be tracking my unrealized gains and losses too so then i can break out my cost versus my unrealized gains and losses on it that could be a useful bit of information i'll add that little bit of detail just for the practice problems to see so there's a lot of different ways you can do it but let's go back to the register here i'm going to go back to my chart of accounts so i'm going to go into the chart of accounts and i'm going to add another account account up top which i'm going to say let's make another one and i'm going to say that this is going to be another current asset it's going to be an investment other and i'm going to say this is uh unrealized gains and losses for primarica for primarica primarica okay and then i'm going to make that a subcategory of the primarica account so we'll have this the unrealized gains and losses kind of connected to it so i'm going to say save it and close it and let's say i looked at my statement now and it was the value had going up by $500 so here's my sub account i'm not going to put that directly into here because i'm going to try to keep that at the cost and then i'm going to go down here and put my unrealized gains and losses and go into here and say this is going to be a journal entry and let's say this happened at let's say the end of the month like like we'll just put 103121 for our practice problem and then i'll say that this is going to be gains for october statement and this is going to be an increase of $500 and the other side now where does the other side go should it go to income not just normal income i usually would put it to other income so it's on the bottom of the income statement because this isn't part of our normal income so i'll possibly say this is going to be unrealized now i got i want to make another account here not the same unrealized gain add a new one let's add a new one and this one's going to be an other income not just income but other income so it goes on the bottom of the income statement because it's not part of normal operations and i'm going to say this is let's say miscellaneous income let's say it's unrealized income and you could say gains and losses but i'll say one income or loss just to differentiate it and let's save that and close it so there we have it and i'm gonna say save it so now when you have those those unrealized gains and losses i can go back on over to my balance sheet i can refresh it let's run it again and take a look at it so now i can say that we had our investment in primarica this is the amount we originally put in and then we put an unrealized gain or loss it went up we didn't realize that we didn't sell it but it went up by that much according to the bank statement and that means that the ending balance here that 10525 would tie in to what my bank statement says from primarica or my investment statement would say the unrealized gain then is going to be on the income statement and it's something i'm very dubious about i'm skeptical about that gain i don't put it in income up top because i haven't really realized it for number one and number two it possibly is not part of my normal business because the stock market could go down the next day i haven't locked in that game by selling it and therefore i put it on the bottom at the other income so that i can see my net income before that other stuff and then here's the other stuff which i would put the unrealized gains and losses your other option is to put your unrealized gains and losses and just not record them as income at all but put another account on the equity section of the balance sheet but that's usually a little bit more confusing for people to do so i think the bottom of the income statement is a typical way to go now if you're doing gap generally accepted accounting principal accounting then of course there's there's more standardized rules on when you use unrealized gains and so on and so forth i'm not trying to get into that in detail here just giving you some ideas on how you can record this stuff in quickbooks and use the bank feeds in order to do so so also note that you might have your your dividends and incomes that you have the income rolling in and then it gets fed back into the investments that could be a little bit tricky to when you want to try to break out these unrealized gains and losses too because because you've got you've got to you know figure out the way to break it out into two accounts when you have your income dividends and interest rolling back in to the investment in other words the last thing you could you could think about with these investments that i'll talk about now is the dividends and interest which is income to you if you were to receive the dividends and income then it would roll in through the bank fees because you would have deposits from them on the bank feeds and you can then record them as income to dividend and interest income however if you roll those income back into the into the system then they're not going to show up on you roll it back into the investment they're not going to show up on your checking account because you didn't actually receive them they're going to show up on your primary statements as reinvestments back in to to the account here so that means that when you see the new balance that you're looking at some of that new balances unrealized gain and losses and some of that balance is because you rolled in the dividends and interest into the and back into the investment okay i think we've gone way beyond the the bank feed portion here so we'll stop it there