 Zero Accounting Software 2023. Record short-term investment. Get ready to become an Accounting Hero with Zero 2023. Support Accounting Instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category. Further broken out by course each course then organized in a logical reasonable fashion making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems PDF files and more like QuickBooks backup files when applicable. So once again click the link below for a free month membership to our website and all the content on it. Here we are in our custom zero homepage going into the new company file we set up in a prior presentation that being get great guitars. Thus far we have set up the new company file we entered the beginning balances imagining we pulled them in from a prior accounting system as we did that we laid down those foundational items to make the data input going forward as easy as possible and now we are doing the data input for the first month of operations. Let's go ahead and duplicate some tabs up top like we do every time to put our reports in right click in the tab up top to duplicate it right click in the tab up top to once again duplicate. Let's go back to the tab to the middle and go to the accounting drop down open up the balance sheet report as it is thinking we're going to go to the right hand side go to the accounting drop down at this time open up the income statement the profit and the loss let's go to the tab to the left as the income statement is thinking and change the date here let's make a custom date bring it on up to 2023 that's the year that we are working in pull it in through December we're working on January of 2023 well then going to go to the profit and loss and we can do the same thing so the income statement is January 2023 to December 2023 it looks good we don't have anything in it yet because we're now thinking about going back to the balance sheet those foundational items are those first kind of transactions that happen for a business so in other words we put in those beginning balances but we're kind of imagining here that we're starting the business and we have those transactions that are a little bit different than the day to day transactions we'll focus on the day to day transactions in month number two and a little bit more in month number one but right now we're looking at those financing transactions so last time we brought money into the company so we can use that money in order to buy say fixed assets which are necessary to help us generate revenue in the future we did so with partially alone and partially by us putting money into the company so before we buy the fixed assets though we're going to imagine that we have a little more cash than we need in the business right now and we want to basically put a little bit of it in an investment account so we can hold it there possibly for a short term period to get some return on the investment until the point in time that we're going to be purchasing equipment with it in which case we'll pull it out of that short-term investment to purchase the equipment so we are imagining now we're going to buy short-term investments now a couple things I want to point out with short-term investments if you're talking about a sole proprietor type of business note that when we're investing in stocks and bonds or something like that that's what we're going to imagine we're going to put into our short-term investments most like businesses aren't in the business of investing in stocks and bonds in other words this business is not geared towards financial investments that would then have a primary revenue generation of dividends and income our business is going to be selling guitars and having guitar lessons so uh that means that we're only going to be wanting the cash in our business that is necessary to meet the future needs of the day-to-day operations as well as to buy the equipment necessary to generate revenue if we get more cash in the business than we need then then if we're not using it to generate revenue by doing our primary purpose of selling guitars and doing guitar lessons in our case we should just give it to the owner for the owner to then invest in any way they they they choose right so if I had excess cash because the business generated more cash and I'm not going to put it back into the business to sell more guitars and have more guitar lessons then you would think you would give it to the owner if a sole proprietor in the form of draws if corporation and the form of dividends so they can take the money and then invest it in say stocks and bonds or whatever they're going to invest it in you can also use zero to track your personal investments as well if if you wanted to to use that it works quite well as well so you want to keep those two things basically separate however if you're going to have a short-term investment we sell guitars and whatnot but we've got some excess cash that we're not yet spending but we plan on buying equipment for it then we would think that we might put it into an investment under the umbrella of the company and so that's what we're thinking about doing here all right so what we're going to do is and this isn't a day-to-day transaction this is something that that would happen periodically possibly we're going to take money out of the checking account we're going to put it into a short-term investment which is going to be an other current assets type of account so we're going to there's no form to do that meaning there's no set form in our little plus button to put money into an investment so the next question is when we think about which forms should we use is is cash affected in this case it is cash is going up so if you have the bank feeds on you might just do the transfer wait till it clears the bank and then make sure that you do not record it as once again income like we saw before but or or an expense but make sure that that you record it to the investment account is the general idea but the but or you can use a receive I mean I spend money because you're taking it out of the checking account or we can use the register which is probably the easiest thing for us here so we're going to do that we're going to go to the tab to the left accounting drop down and let's go into our our bank accounts and we want to go into the checking account and let's add a transaction so we're going to go back into the register here and just do another one and so let's go new transaction this will be a money out transaction so this looks good this time and let's say this is going to go to i'm just going to make up a vanguard is just g u g u a r d i think is how it's spelled so let's just say vanguard and we're going to say this is on the fourth i just uh i'm going to say uh o one say o one slash uh o four slash two three and we'll say that no tax is happening here this is short-term investment and we'll say that we're going to put 12 000 into the short-term investment and the uh the other side is going to go into an investment account now note that we probably don't have one given to us by zero because this isn't like always a normal account so if i look into their assets i'll follow my general policy which is as i do the data input i'm going to see if they're they gave me account an account that's appropriate for what i need to do if they did i will use it if they gave me an account but i don't like the name exactly then i'll go into the chart of accounts and change the name if i don't have an account that was provided to me that's good for what i needed for only then will i add the chart of account so i'm going to add an account here because i don't have one add an account and i'm going to say it's going to be a current asset type of account now i can't see my the account codes right now so i'll come back and adjust the account code later which is basically the account number the name i'm going to call it short short term investment and then the description i won't put here it's tax exempt okay and so that looks good so i think that's good let's go ahead and save it and they want they want a code so it should be somewhere in the 100 let's do let's duplicate the tab up top and check out our chart of accounts i'll duplicate the tab go into my banking and or accounting and look at the chart of accounts to get an appropriate account number so it's accounts receivable probably after accounts receivable somewhere and then the the prepayments are here so maybe maybe like uh 1250 or something let's put 1250 on the account it's available good okay so there we have it so there we have it so this is going to be decreasing the checking account and the other the other side is going to go into this new short term asset of the short term investment let's save it and close it and then go to the balance sheet and update to check it out so now we've got the checking account if i go into the if we check out the checking check out the checking man a lot of stuff going on there a lot of action so we've got the money out if i go into if i drill down on the on the spend money form there it is and then i'm going to go back and back the other side not go into the income statement but rather going into the new account that we set up which is the short term investment so there's the 12,000 in the short term investment now i just want to touch on a couple more things with regards to investments because it's it's one of those items that are often confusing so number one we we don't typically put like you wouldn't really want to put all of your investments in your business uh quickbooks file if you're not if it's not a short term investment right because what you would do like we said before is you would give the money to yourself in the form of a draw and then invests personally the short term investment so that your business account is lined up towards your business objective render revenue generation which is which is a specific thing typically in our case we're looking to generate revenue with guitar sales and with possibly guitar lessons so so that's one thing now it's possible for you to use zero for example to track your personal investments as well so that's quite fine you can do that if you use zero to track your personal investments then you have a similar kind of of balance sheet i mean it'll be just your personal balance sheet it'll be the same thing but personal and you might then on your asset side have your types of investments and the types of investments you might want to break out your investments for example a little bit differently on the personal side in that you might say that your short term investments are those maybe that aren't restricted and that they're not under the umbrella for example of like an IRA or a 401k plan i'm sorry yeah and then your long-term investments you might have other current assets would be the ones that are restricted meaning you can't get to them because they're under the umbrella of like an IRA or a 401k plan now whether you're if you're tracking investments whether it be under your personal zero account or whether it's under your business account the other things that will come up with investments when you invest in the stocks and bonds is that you're going to get income in a few different ways hopefully one is one is you might get dividends from stocks two is you might get interest from bonds and three you might have an increase in the value of the stocks and bonds uh over time and therefore you can sell them at a higher price so the value of the stock and bond went up so how do you deal with those kinds of transactions so some you might be able to try to connect your your financial institution to zero to help you to kind of track uh those transactions however you're still you're going to need to do a periodic adjustment for example because because what will typically happen is you're going to get a statement from your investment provider like a vanguard or an e-trade or your finance or your bank or whatever and then you might look at at those transactions and and then determine what's on your books versus what's on the financial transactions now the dividends and interest that if you got paid out dividends and interest then you can record those basically as revenue right so they're going to be recorded as income dividend and interest but then you could have a difference between the short term investment amount and the amount that's on your financial statement because the market value of your investments has changed how do you deal with that well oftentimes we want to keep our investments on more of a fair market value basis as opposed to what we do in the united states at least for the for the fixed assets in which case we put it on there at depreciated depreciated cost because the short term investment like stocks and bonds if traded on a stock exchange we can determine exactly what the price is because all those stocks are the same and we see other stocks trading at the same time so we might want to increase and decrease the short term investment amount in accordance periodically possibly monthly or yearly with the statements that we receive the problem is if i increase then this to coincide with the statement balance let's say it was 12 500 i increase this by 500 what do i do with the other side of the transactions the two ways you can deal with that is you could put something into equity which would be the other side of the transaction as unrealized gain on the transaction but the easiest thing to do and what most people would probably do is put it on the income statement as unrealized income and you might put it on the bottom as other income because you haven't yet sold it therefore have not yet realized the gain but you might put it on the income statement it's kind of the easiest thing to do when you're adjusting like the value of your stocks and bonds periodically now sometimes people also have confusion about the types of software and what the software is designed to do because there's some software that's financial software which will actually pull in the information from your financial institution including your investment oftentimes in 401k plans iras and whatnot and pull that into a balance sheet which matches what's on the financial statements and that's great however that's not what a zero software is designed to do because the zero software is designed to pull in from financial institutions like your checking account for example the activity that is happening in this case like the the stocks in this case if you pulled in the information was able to pull it in the dividends and interest transactions are pulling in it's not designed to pull in the ending balance right because if you just pull in the ending balance which you will end up with is just a balance sheet you won't be able to create an income statement from that data because the income statement is created from the activity that is happening so so notice that's a that's a difference that people get confused in you can use other software and there's like finance software and that's great you can use both of those tools if you want and that tool will allow you to see the ending balances at any given point in time by pulling that information in directly from the financial institutions but it won't give you a good income statement and then on your zero account what you want to do is typically adjust your investment accounts periodically possibly just in accordance with the statement at the end of the month or year so that you have the overarching view on on your financial statements and then possibly you can get a more detailed view using other financial software as of a point in time and then if you want more detail about the activities of individual accounts oftentimes you can have other software to do that or you can just you can go into your financial institution website and look at the activity or the performance of particular stocks and whatnot from from that perspective the other thing to keep in mind just want to point out here is that you want usually like an overview of your stock investments in the zero software in other words you probably if you if you are the type of investor that are investing in a whole bunch of different types of investments you probably don't want to list out every type of investment in zero because you're not trying to get the granular detail here you're trying to get the overarching big picture look and feel and properly break out the income in a general sense for the income statement to give an overall financial perspective you get to the granular detail using other software or possibly just go into the financial reports like the vanguard and look at the performance of of the stocks themselves so you might break out your investments for example by institution so you might say i'm going to say i've got investments with my bank vanguard e-trade and then you can tie out each of these each of these totals to the total summary per financial that you get or you might try to break out between stocks and bonds which becomes more difficult if you're investing in like retirement accounts that have a mixture of stocks and bonds right and then you can't really do that you can only you can only break out your information by the you know the institution or the funds that you're investing in or if you're talking on the personal side of things you might simply break out your investments by those short-term investments those not under the umbrella of like an IRA that aren't restricted and the long-term ones the ones that are restricted which are under the umbrella of like an IRA or something like that so just a few thoughts on on the investments we'll talk more about a little bit more about the short-term investments in a future presentation but let's first just open a trial balance over here so we can see where we stand at this point is are going to be our normal process for the most part let's go into the reports and type in trial balance because that's what we want to see and so we'll type in the thing we want to see and then it just magically appears that's how things that's how the computer works we're going to custom date 2023 and the end of the year and there we have it so if your numbers tie out to these numbers great if not it might be a date range issue and it probably is going to be having something to do with this one since that's the new step that we did and so you might extend the date range to have the future and see if if that is the issue if it is you could double click on it go into the transaction change the date