 QuickBooks Online 2024. Apply customer deposit or credit to an invoice. Get ready and some coffee because we're going to make our books shine with QuickBooks Online 2024. Here we are in our Get Great Guitars 2024 QuickBooks Online Sample Company file. We set up in a prior presentation opening up the major financial statement reports like we do every time the report's on the left in the favorites. We're going to be right clicking on that balance sheet so we can open a link in a new tab, right click in the P&L, the profit and loss to open a link in a new tab. Same thing with the trial balance. And then we'll go to that middle tab, close up the hamburger, change the range. We're going from 010124 to 022824. I want to see it on a month by month side by side so we'll change it, run the report, tab into the right, close in the hamburger and change in the range, 010124 tab, 022824 tab, selecting the month by month breakout to refresh the report, tab into the right and repeating the process. One more time, 010124 tab, 022824 and month by month on the breakout, run it to refresh it. Let's go back to the balance sheet, recalling what we did in a prior presentation, which was deal with the fact that we have a customer deposit or otherwise known as unearned revenue situation. Let's jump over to the flow chart just to recap what this situation looks like. This is a desktop flow chart, but we're using it for online because the flow will basically be the same for the accounting process. So if we're on the revenue cycle, we expect money to be coming in at the end of the revenue cycle one way or the other, the general cycles we have looked at would be the easiest cycle where you just get paid by YouTube or something, you wait till a deposit happens and hits your bank and you just record it as income possibly with the bank feeds using that method, using a deposit form or you're at a cash register, in which case you're still on a cashed-based system, you're getting paid at the same point in time, you're doing the work, but it's a little bit more complicated because you're generally going to want to record the sale, not when it hits the bank, but when you record the sale for internal control purposes, oftentimes putting the money into a clearing account so that then you can deposit it into the bank in a format that will match what's on the bank statement or you could have an accrual method in which case we typically do the work first like a CPA firm, an accounting firm, a law firm, a landscaping company where we do the work, we invoice the client recording revenue here, track accounts receivable, then we receive the payment and then we make the deposit, but we could have things go backwards sometimes in which case we get the money first. What if we get the money before we do the work? That doesn't typically happen with most businesses, but it's quite common in some businesses, such as the classic one being the newspaper business, that's the classic textbook style, which again it's kind of outdated because the lame legacy media with their lame leg on the legacy media possibly is selling less newspapers these days, but you have a similar subscription model for a lot of applications like computer applications these days which have a similar concept. You pay for it up front, they haven't yet provided you the application, they're going to give you the application possibly for the next year you paid for it up front, in that case what has really happened is they got the money, but they haven't done, they haven't earned it yet, so you should be recording it as basically a liability. Any kind of rental property, similar kind of thing, the rental property might have last month rent that they want to collect up front or a security deposit, which is a similar situation where you get paid, but you haven't yet done the work and therefore it shouldn't be revenue because you haven't earned it even though you got the money. So what do you do in that case? Well we're going to one method the easy method for a bookkeeping standpoint would be you record the receive payment even though you don't have an invoice to link to the receive payment as we know in our mind what's the thing that is affected with receive payment it decreases accounts receivable, but there's no accounts receivable for that customer therefore for that customer it makes a negative accounts receivable which isn't exactly correct because we should have a positive liability but from a bookkeeping standpoint works quite well because we can easily see that in the customer center as a credit to that account that we can then tie to the invoice when we finally earn the revenue. So let's go back on over here just recap what we did last time we have in accounts receivable these receive payments that we put into the system. Let's take a look at the sub ledger for accounts receivable go into the tab to the right right clicking on it duplicating the tab and then we're going to go down to the reports left hand side close up the hand boogie and then scroll down so who owes you let's go to the customer balance detail and we're going to say then we have some of these that we entered this payment in for like this one for example Anderson so internally that makes sense from the bookkeeping standpoint because if Mr. Anderson contacts us we're going to say yeah it looks like you have a negative AR which is basically a credit that we can apply to your future purchase because what we did is say Anderson came in wanted a guitar we said hey look we'll order that guitar for you but you have to give us a down payment first before we commit to it so they gave us the down payment and now we're going to order the guitar and you have a credit on your books and once we get the guitar we will provide it to you and apply out the credit with Eric music we had a similar kind of situation so we have these negative amounts in here these negative amounts are not exactly correct from a financial statement standpoint due to the fact that we shouldn't have a negative receivable but rather a positive liability however the income statement is still correct which would be the primary form needed for a small business if reporting taxes on a schedule c and if we needed to adjust this for external purposes then we can do an adjusting entry decrease in accounts receivable increasing the liability periodically we'll talk about how to do that in a future course or section now let's complete the process and say okay mr. Anderson comes in we got the guitar and now we're going to sell it to mr. Anderson before we do that i'm going to put one more step in here and imagine that before we made this payment we made an estimate so in the full process you might have Anderson coming in saying i want this guitar we say okay we don't have it we're older it for you but we need a down payment and then the question is well how much is the down payment well you can make a mock invoice and to see how much it would cost and then collect like 10 percent of it or something like that or you can create an estimate which would be a common way to do it so let's go to the first tab and imagine we're going to make the estimate well so we're going to