 Zero Accounting Software 2023. Add new accounts and opening balances. Get ready because it's time 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. We're continuing on with our project of entering the beginning balances as though we're putting them in from a prior accounting system and as we do so setting up those items necessary to make data input as easy as possible going forward. Let's duplicate some tabs to put our financial statement reports in like we do every time. Right click in the tab up top we're going to duplicate it and then as that's thinking I'm going to right click and duplicate again. Then I'll go back to the tab to the middle and we're going to go to the accounting and let's open up the balance sheet report. As it's thinking I'll tab right and go to the accounting again. This time the profit and loss or the income statement the two financials as it's thinking I'll tab to the left and just change the range. Looks like we got a good range here we're going to go on December 31st 2022. This is what we have thus far on the income statement side of things. We have nothing in the year 2023. We might have stuff in 2022 but we're okay with that because the income statement will roll over to the equity section of the balance sheet. So that is okay. So we're going to do our data input on the first tab over here. Going to our beginning balances. So we've been entering these one at a time taking care of the specific needs related to each of them as we go. And we've done kind of the more difficult ones first. Now we're going to do all the rest of them here and these should be a little bit easier just basically entering the beginning balances. So the first one is the checking account. Now the checking account is probably the one that's most likely that someone has set up even if they didn't have a prior accounting system. They probably set up a checking account and started doing some transactions before you started your accounting system within zero. So it's likely that you have prior transactions that you're going to have to kind of pull in. So you could think about when you're going to start pulling in the data to zero. But the other thing with the checking account is that if you had a prior accounting system and you were reconciling the checking account, then you might have timing differences that are in play. So when we go to the first bank reconciliation, sometimes we have this problem with timing quite often. We have this problem with timing differences. Because for example, the bank as of December 31st, 2022 might not have the same $25,000 balance I had as of December on my prior accounting system. I need to put the $25,000 into the system so we are in balance, so the balance sheet balances out. And because it's probably right from our perspective, but it's different from the bank because of outstanding checks and deposits. So we will deal with that later when we get into the bank reconciliation issue. So just be aware of that. The other thing to be aware of is oftentimes you would be putting up the bank feeds with the checking accounts. We will have a whole other section on bank feeds. We want to think about the accounting system without the bank feeds first. And then you can get a grasp of the forms that are being happening as we do the accounting system. And then we will do the bank feeds and you'll have a better idea of how the bank feeds kind of fit into your accounting system. All right. So that said, we're going to go back on over and say, all right, we got to put in our checking accounts. So a couple of ways that we might do that. We could go into our accounting and we could go into our chart of accounts. So if I go into my chart of accounts here, then we have all of our accounts. Now the main account we want to be setting up is the bank account. So they didn't give us a bank account yet. And I believe that's because even though they gave us kind of like this default chart of accounts, because you want to set up the bank accounts and possibly attach them to the bank feed. So they have kind of a special, a special thing for most companies with that attachment. So we could add the bank account here. So I'm going to say add a bank account. So we're not just adding any old account. We're adding a bank account. So we'll hit add the bank account. And then it's going to make a search for a bank. Now I'm going to just choose a bank, but I'm not going to actually attach to it. I'm going to say bank of America. Let's say that's a big one in here. Bank of America. So we'll say boom, picking that one. The key is I'm going to skip this part. I'm not going to connect. So I'm going to skip the connecting. We'll talk about bank feeds later. Account name. I'm just going to call it checking. Now in practice, you might want like the last four digits of the account number or something like that so that you can differentiate it from other accounts, which might not be necessary if you only have one. But if you have multiple cash accounts, then something to differentiate them can be good for internal reporting, although it kind of messes up a little bit the external reporting when you give the financials to others. And then we've got the account type. So this is going to be I'll say every day, day to day account number. I'm not going to add the account number. That's a required field. Account code is going to be an optional item here. I think everything has a account code, which is basically an account number. So you probably want to be consistent and be adding those account numbers. I'll take a look at that in a second. Maybe we'll go in and adjust it, but I'll leave it blank for now. And then the currency, we're going to have this in our currency that we're using US dollars. If you have some other currency that you're working in, this would be your standard currency all in the same kind of currency as the idea. So let's put it, they want an account number. All right. All right. Okay. So I added an account number. Now notice that here we have these are what I would call our account numbers in terms of our chart of accounts, not the number of the bank account for the bank. So notice that we probably want something that's up in the 1,100 range. So if I was to edit this account, let's put the code in now that I can see here. And let's put a code in, which is the account number. Let's put it for 1,100. Now note when you're adding these account numbers, you want to make sure that you have it in the same, in a proper sequence with the other numbers because you want to organize your accounts first by name and then, you know, account number. So you want to, and you also have to want to have a good distance from account number to account number. So that if you want to put an account number between them, then you can do so. Right? Like if I, if I called this 1,100 and the next one 1,101, then that would mean that I couldn't put another account in between them if I needed to at some future points. That's kind of an issue. All right. So let's go ahead and save it. And so now we've got the account number in place. So now we got to enter that beginning balance. Now normally when you have a 25,000, it would be a deposit form. So we could use like a money in form, or we could basically go to like a registered type of data input. So if I go to the accounting tab up top, for example, and then we go into our bank accounts up top, this is usually where like the bank feeds would be taking place. Oftentimes we'll talk about bank feeds possibly again in the future course or section. But if I open this item up and I say I want to find account transactions, then you get basically a register type of look here. And that sometimes is the easiest way to do some data input in like a register kind of format as opposed to or the other option being you could say a receive money form up top. So let's go into here and I'm going to say account transactions here. And I'm going to say new transaction and then up top you've got the send money and then you've got the receive money. So I'm going to say receive money. And I'm going to see if I can not put a customer because this is the beginning balance. I want to make sure I put this as all of our beginning balances are as of the end of last year. So the end of last year, this is going to be the beginning balances. And then I'm just going to say beginning balance here. See if I can show that. And then I want to put the amount is going to be let's say 25,000. So I'll say 25,000. I'll say one here to pull it over. And the other side I'm going to put into equity once again, which I think we've been putting into that capital account. So let's go into owner's capital. So that should record the deposit increase to the checking account. The other side go into that capital account. Let's save it and check it out. So it wants a from. So I'm going to say owner, the owner. This is the beginning balance from the owner, I'm going to say. And then let's try it again. And transaction has been saved. Great. Let's go to the balance sheet and update it. So there's our 25,000 here. So that looks good. I'm going to go into it. Then we see the 25,000 here and they put it in as a receive money form. So if I go into that, it's going to go not to like the register transaction, but to a receive money type of form. That's going to be the transaction type that was used going back to the balance sheet here. Let's go back and then back the other side going into the capital account. That's what we put. I got a hiccups. Hold on a sec. I got the hiccups. It's in the capital accounts. And so there's the 25,000 there. All right. Let's go back and then let's make that green. The next one is going to be the accumulated depreciation and the furniture and equipment. So I'm going to put this one in first. This is the fixed asset property, plant and equipment. We'll get more into fixed assets later. Note that there is a sub ledger account that gets quite detailed for fixed assets for the accumulated depreciation. However, in the United States, there's often a different tax code. Well, the tax code is different than what you might do on bookkeeping in terms of the types of depreciation methods you might use. And therefore in the United States, it's quite common that you might use the tax software to help you with your depreciation schedules. And so that's what I'm going to kind of assume here. So I'm going to put it on the books as a lump sum. And then we will do periodic adjustments to it. We'll show how that is done when we get to an adjusting entry course or section. And so that's what that's going to be the strategy. And we'll do the calculations of the schedules, the sub ledgers, actually in another software, tax software typically in the United States, which has the capacity oftentimes to do both tax depreciation schedules as well as book depreciation schedules. So therefore the fact that you have to put these numbers into the tax software anyways, often is rationale and reason to be able to say, well, maybe I should just use the tax software to do both depreciation schedules and then input periodic adjustments based on those calculations into our zero software either monthly or yearly. So we'll talk more about that in the adjusting entries. For now it's a pretty basic straightforward entry. Then I'm going to go back on over and say, all right, we're going to go back. Let's go back to our chart of accounts and see if we have an account for the fixed assets, see what they gave us. I'm sure they gave us something. So we're going to go down and say, all right, we've got the inventory. We've got the computer equipment. So they're calling it a computer and office equipment. So as per our normal rule, I'm going to say that account looks good, but I'd like to name it exactly what I have on my beginning balances first and then maybe I'll go in there and adjust it. And in the United States, oftentimes you want these line items to match what's going to be the categories on the depreciation schedules, which are driven by tax law. And that'll make your integration between the schedules on the tax software and your books in zero easy. Again, we'll talk more about how to do that. So I'm not saying furniture and equipment is even the best name either because the tax software will often be breaking out equipment versus furniture because sometimes those two categories have different lives in terms of tax lives. But again, we'll talk about that more in a future presentation. So I'm going to save that. And for now, we'll just put these beginning balances on the books. And the other side is going to go to accumulated depreciation. So that represents the expense portion that we have used up already of the equipment, the difference between the two being the book value. And so I'm going to say, let's go into this one. And it says, I'll just call it accumulated depreciation like that for now. And let's go ahead and save that. So there we have it. So now we're going to put some input into those two. Now we can often do these with a journal entry type of form. So I'm going to go up top. Now for some reason, this is under reports. That seems a little unusual to me. But once you get used to it, not that bad to get to the journal entries because we don't enter journal entries all that often because usually we do the data input with the forms. But we're going to go to the reports to enter a journal entry. So I'm going to go to the reports and then I'm going to find the journal report. Journal, if you could spell it right. So I'm going to pick up the journal report. And within the journal report, we have the capacity to be adding the new journal. So add a new journal. So I'm going to say, OK, let's do that. So I'm going to say this is going to be the beginning balance, beginning balance. I'm just going to say as of we want this to be in there as of the end of last year, 2022. And so we're not going to reverse it default narration. OK, I think that's good up top. So there's the description that pulled down automatically very nice. And then we've got the furniture. What do we call it? Furniture and equipment. And that's going to go on the books for $75,000. $75,000. The other side, I'm just going to put this on at the same time is accumulated depreciation, which is going to go on the books for $7,500 credit because this is going to be like a reduction. So not $75,700. And then the difference is I'm going to put into that capital account again, capital, owner's capital. And there's the 60. Notice how it kind of forced it to work. That's the book value then that's going to be the net amount that's going to show up on the balance sheet. We recommend that only your accountant or book or create journals. OK, that's a good recommendation. So that looks good. Let's go ahead and post it. And then we're going to go up top to the balance sheet and check it out again. Update. And so now we've got our $75,000 and our $7,500 for the net value of the $67,500. That looks good. The subsidiary reports, we're going to imagine on the tax return. We'll talk more about that when we get to adjusting entries, no impact on the income statement. If we go down here to the capital account, the other side once again went into the owner's capital account. As we can see here, where are the journal entry? They were entered with this manual journal entry. So that looks good. All right, let's go back and try the next one. Let's make those green, greenify. You best greenify. All right, so we're going green in this business. Anyway, Visa. So now we're going to put the Visa on the books. Now, if your credit card was set up through bank feeds, then you want to set it up as a specific credit card type of account because then you might be able to connect the bank feeds with it as well. Again, we'll talk more about bank feeds in its own section. So we're not going to be putting in the bank feeds right now. I'm going to go to the first tab and then let's actually go into the chart of accounts again. So we'll go into the chart of accounts. And so let's set up as if we're going to make it like a bank type of account as well. It's going to be a credit card type of account, but because it's a financial institution, you might normally add it like a bank feed kind of thing. So let's say we're going to add a bank account type of thing. And I'm going to say, let's say it was American Express. American Express is our credit card company. So I'll say American Express, but once again, I'm not going to connect it to the bank. So I'm going to skip the bank connection. We'll talk more about that later. Are you sure you want to? I'm going to say, don't connect to the bank. I told you. And then this is going to be, I'll just going to call it credit card. If you have multiple credit cards, you might want the name of the credit card company and the last four digits of the credit card number. Per credit card, you might want to use a sub-account kind of strategy as well. But we're just going to tie out to our beginning balances here. The account type is going to be our credit card. So now it's a credit card and then credit card number. I'll just put a random number here. And then the code, I'll put the code in later again. Once I see where I think it should fit well in our general ledger. That's the account code, the account number. It's going to be in dollars once again. So let's save it and continue and see k-passo. So there's the credit card up top. Notice it's a bank account type because oftentimes we might set it into the bank feed. So usually you want your financial, you want your accounts to line up by account type, but it's actually a liability account down here. It just functions like a bank account because it's a credit card. So you could try to put the account number somewhere down here, like under accounts payable, maybe 2040 and see if we can adjust it that way. So if I put this in under credit card, I'm going to say account type is a credit card and say this is going to be 2040 on the account type. That's available. All right. Let's save it. Okay. So we moved it down here with the account number. It's being a little bit picky when I go into it and I try to change this to the credit card. It's been thinking for a long time. So I'm going to basically leave it as it is right now and let's basically do a journal entry for that one. But because it's set up as a banking type of account, I'm going to use the register. So I'm going to go into the bank accounts, accounting bank accounts up top. And then we want to look at the credit card account and then I'm going to hit the dropdown and say I want to go to account transactions and look at, in essence, the register format here. I'm going to enter a new transaction up top and it's going to be a new spend money transaction. That's correct because we want to put in a liability account here. So I'm going to say vendor one. I'm just going to make up a random vendor. And then I'm going to say that this is going to be as of the end of last year. So here we go. And then the references of beginning balance and the description beginning balance and then the amount I believe was 1000. Is that right? Yes. So there we have it. So there's the 1000 there. I'm going to go ahead and save it. And it says there's two errors. Account must be valid. Tax rate must be valid. Okay. Let's see if I can get that account. That's something I should have saw. So this is going to be the capital account. So let's go to the owner's capital and let's try that. Let's say no tax exclusive, let's say. So we don't have a tax rate on it. Okay. So let's go ahead and save it and see if it is okay that time. It gave me the green, gave me the green light, the green ribbon, the green go ahead. All right. So if I refresh over here, then we have our credit card, which did properly populate down here in the liability section, which I was a little bit scared of because I thought it might put it up here with the assets and whatnot because of that bank thing. So very nice. The other side should be going into the capital. So perfect works beautifully. All right. So now let's do the last one that we're going to work with and then next time we'll look into this equity balance. So we've got the loan payable. So let's do that one. That one's just going to be a loan that we have to the bank or something. So straightforward transaction. We just got to put it on the books and do a journal entry for it. So let's go to our chart of accounts. I'm going kind of fast here because this is going long. We're running long here. Chart of accounts. Get it done. We're going to say, all right, this is going to be the payroll federal tax liability. I'm checking to see if they gave us an account for a loan. I don't see a good loan account. Well, they gave us a line of credit. So that looks good. Let me just, I'm just going to change the name to match exactly the name that I have instead of adding a new account. So it's still going to be a current liability. That's cool. I'm just going to call it loan payable because that's what I called it over here. So I'm just going to say loan payable. Payable. It's not a line of credit. It's a loan payable. It's spelled wrong though. It should be a loan like this. Loan payable. Is that how it works? Okay. Whoever did that last chart of accounts is an idiot. Can't even spell loan right. Whatever. We'll fix that bit. All right. Let's save it. And then we're going to go, okay, and then let's do a journal entry to the loan payable. So I'll just go accounting reports and we'll go to our journal report again. Journal report. And then we want an, an, a manual entry one last time. This is going to be the beginning balance as of the end of last year and December 31st. And so the account is going to be the loan payable. And that's going to be, what did I say? It was for the loan payables at 22,000. It's a credit because it's a liability. If you go the wrong way on one of these, then you'll, you can always go back into it. If you don't get the debit and credit thing properly placed, but the other side then is going to be going to the capital account. Once again, owner's capital, 22,000 movie B to the end. I think that's good movie B to the end B and let's post it. See if it gives me a red note green flag. We've got the green go green means go. So let's update it and then down in the liabilities. There's our loan payable. Okay. So if we compare and contrast our numbers, let's do a side by side comparison like so and just double check everything here and tidy, tidy things up. So we've got, then I'll make this kind of small for the comparison. This one, this one needs to be smaller. All right. Hurry up. Your time is out. You're out of time. Hold on. Hold on. Just give me another second. So 25,000, 25,000. We've got, you've got the 25,000, 500, 20,000, 500, the two, eight, nine, six, two, eight, nine, six. You've got the 75,000, 75,000, 75,000, 75, the 75, the 15, the 15, the one, the one, the 22,000 here. And then it nets out to that 77,896. So we did just like we wanted to do one at a time. And the net comes out correctly on the equity section, but I have two accounts down here in equity. And I only want one account in our case. So we'll talk about one last journal entry next time to get to clean up the equity when you're using this kind of method to get your beginning balances on the books.