 QuickBooks Desktop 2023 Item Lists Let's do it within 2-its QuickBooks Desktop 2023 QuickBooks Desktop Sample Rock Castle Construction Practice File Provided by QuickBooks Going through the setup process We do every time Maximize in the home page to the gray area Going to the view dropdown Noting that we have the hide icon bar And open windows checked off Open windows left hand side Reports drop down Company and financial looking at the P&L Profit loss income statement with the range Change 010124 123124 January to December 2024 Customize it Fonts and numbers to change the font to 12 OK Yes OK And then reports drop down again Company and financial this time The big balance sheet with the date at 123124 Customize it Fonts Change 12 Yes OK Yes OK And then we're going to go back to the home page That's the setup process we do every time Now we're going to be focusing in on the items Noting that items historically have been housed Under the lists dropdown And therefore from a QuickBooks terminology standpoint Might be called one of the major lists Also realize that if you learn accounting From a college for example They wouldn't use the term list because that's going to be Specific generally to a QuickBooks terminology You might not even hear the term item When referring to like inventory items in a college Because they might just be referring to inventory And services The term item is going to be referring to those Underline foundational tools That will be used when we're populating Specific forms Remembering that the forms then Are what are going to be used to record the financial Transaction The double entry accounting transaction Affecting at least two accounts on the financial Statements that being the balance sheet And the income statement So when we think about the items we're thinking about Inventory items and service items are the primary Items we are considering The main forms they will have an impact on Are those which are used to record The sales transactions And the two forms used for the sales transactions Or designed to be used Are the invoice and the sales receipt Note that we also might record sales Or record to the revenue accounts When we make a deposit But remember that's what happened in a more Simplified type of system So if you have gig work for example And you get money that goes directly into your account From a platform that's just paying you And you're going to record it as revenue As you use bank feeds as we've talked about possibly And just record it to revenue With a deposit in essence when it clears the bank But that would be the simplest situation Normally when we make sales We've got to issue an invoice Or even on a cash based system We're going to create a sales receipt As we make these two data input forms We want to make the process as easy as possible So that the person entering this data into the system Does not really have to know what an item is Other than just to be able to populate it How it works Or what the impact of it will be on the financial statements We want someone to just be able to pick up Whatever is there Enter it into the system for example If I go into an invoice I'm going to go back a couple to An invoice with some detail in it So we'll pick this one here for example If someone was to be entering the data input Into the system recording this invoice Recording the sales We would like them to just be able to discuss with the client Let's imagine that it was a client Where they're just buying something This is a job cost system Which is a little bit more complex But if they were just to buy something We would say okay What item are you buying We can just look for that item in our dropdown And then once we populate it in the invoice That item will then drive what the rate is That will show on the invoice That the customers can then tell the client What the cost will be for that It will also drive the transaction for the invoice Which at the least is going to be An increase to accounts receivable If it's an invoice Increase to some kind of cash account If it was a sales receipt The other side going to revenue And it might have an inventory component If we're using a perpetual inventory system The item also recording then A decrease to the inventory account So those items are going to be really important Even if we have service items Even if you're doing bookkeeping And you're sole proprietor for example And you're doing bookkeeping services You might just say Well the items aren't that important I will just charge hourly And I'll just basically put in my hourly rate You could do that But even then it's really It could be a useful system If you can group what you're doing Into like a fixed charge And possibly charge your bookkeeping For example by how many transactions they do We'll talk more about this When we go to the practice problem And that can make your billing cycle easier It can make it easier to discuss With the client what exactly you're going to bill Try to show them what you did So a lot of times if I can move away From an hourly kind of thing To being able to bill on something else Based on the result that I put in How many transactions I put into the system I think a lot of times that's an easier Way to go a more transparent way to go But in any case those are the items Now the other place that an inventory item Will be in place will be the sales receipt Also when we buy inventory So if we're purchasing inventory We'll need to be able to populate that In the purchase order If we use purchase orders And then when we enter the bill For the inventory Because that's going to record the increase In the inventory Okay so those are going to be the underlying Very crucial underlying foundations To enter those particular forms In particular to get to the items I usually go to the lists dropdown And then the items list When you think item lists You're probably first thinking What you sell inventory items Service items So here we've got all the items here This is going to be a job cost system So again it's a little bit different Than maybe some other systems Even an inventory system Because of that But let's go into here You've got major Generally you've got the service items You've got the inventory items The service items Are usually going to be easier items To enter into the system Let's just open one up And that's because you've got the dropdown Service item You're just going to name the item that you have And then if you have a standard rate for it You can put the rate in place If you do not have a standard rate for it Then you could put zero here and populate it As you enter the item into the system This is going to be the tax code Whether it be taxable or not With regards to this tax We're talking sales tax In the United States We have a sales tax But it's not a federal tax It's a state tax And it's imposed on When you make the sale When you make an invoice Or a sales receipt Usually the state tax Will be applicable to the end product When it's charged to the customer For inventory Generally then Service items not being taxable Therefore no tax being applied So when I create an invoice With this item It's not going to have any tax applied The other account that it's going to go to Will be this account here An income account So when I populate this Into an invoice or sales receipt Then it's not going to have a rate So I'll have to add a rate to it There's no tax that will be applied to it If it was populated into an invoice It would increase accounts receivable When I record it Because it is an invoice The other side would go here Simply to an income account And that's assigned here So if I populated this into An invoice Let's make an invoice What is this called? Bright blue print charges So we're going to say We're going to go to customers Invoice And I'll say blue print charges So notice here And then if I populated something There we have it Notice that it's not telling me Which account that it's going to go to Ask the bookkeeper What's going to be the impact on the balance sheet Or the income statement They're not going to know Based on the invoice Because they're going to have to look up the item To figure that out But they don't need to know that They just need to know how to charge the customer That's going to be the general idea I'm going to close that back out Now close this back out The other major item is an inventory item So if I go into an inventory item Then that's an inventory part And so we're going to say Now we've got two sides It looks a lot more complex to it Because we're going to buy the inventory And when we buy the inventory We're going to buy it at cost That means when we enter a purchase order And a bill We're going to be dealing with this side Also when we sell the inventory We're going to have to deal with The cost of the thing that we sold When we sell it It's going to go to a cost of good sold account So we have to populate that account here We need the chart of accounts Set up properly to do that The preferred vendor This will be... You don't have to populate this form But this is who we buy this particular thing from Typically And then we're also going to need a sales price Which they don't have one here Because again this is a little bit tricky Because it's a job cost system But in the case if it was a sales price You would think it would be higher than the cost That would populate here This is a taxable item Because it's a physical item Subject to sales tax And then we've got the income account That's going to be charged When we populate an invoice We also have the inventory account That's going to be charged When we buy and sell this stuff So let's say we have this door frame Let's go back to the home page When we populate the purchase order For a door frame Let's say we put this in here And say it's a door frame Door...door frame Then it's going to populate at the rate That's the cost of the door frame This purchase order isn't actually Going to record anything It's just a request You'll recall from when we talked about The purchase order Then when we actually Receive the door frame Or enter the bill for the door frame This is us buying the door frame Then we're going to say On the item side We're going to say door frame And once again it's going to increase The cost of the door frame And this is going to be Doing multiple things We talked about when we entered the bill The bill is going to increase the accounts payable It's also going to be increasing The inventory account And we're charging directly to inventory On the expense side We entered the item So that it can also track The item in the sub ledger The units of the items And the unit costs of the items And that's why the item Is going to be important on the purchasing side But only when we have inventory items We're not going to have the purchasing side For service items Because we don't buy service items So we're going to close this back out And then when we sell the inventory item With a sales receipt Or an invoice Or a sales receipt Let's choose a sales receipt this time And then I put in Door frame So now we have the door frame Notice the rate did not populate Because they didn't have a rate But if I had a rate in there It would populate the sales price Which we would think would be higher than the cost And this is something hopefully That can be easily input By someone doing the data input Without really needing to know Much about the door frame Much about the item Other than that's what's being purchased And then this will record the transaction If there was a rate here Let's say it was $50 Then it's a sales receipt So it would be increasing Some kind of cash account In this case, undeposited funds For the full amount Including the sales tax, $53.88 The other side would be going to A sales account driven by the item It's not showing here which sales account Because we saw it in the item Which that's going to be determined there That's why we need it But it's going to go up by $50 We set it with a taxable item And that was given to us by the thing That said it was taxable And therefore it's charging a tax For the sales tax here And that helps us to determine That the sales tax is going to go into The sales tax payable account We also have inventory related to this Which again, the amount of the inventory I believe was $12 Isn't on here But is known by the system From the item So it's going to decrease the inventory Due to the item It's going to decrease the sub ledger For inventory and the units of the inventory By the item And it's going to record the cost Of goods sold So if we have a perpetual inventory system The items can do a lot There's actually a lot happening When we create a sales receipt And an invoice And we have to have an understanding Of that The best way to get an understanding Is to set up a company That has inventory Which will do In the second half of the course Closing this back out Going back to Our lists So those are the major two item components You also might have like a non-inventory part These are going to be parts Where they're going to be kind of inventory But you're not tracking them in the system On a perpetual inventory Method system And then you've got other charges Which we saw some uses for Like the bad debt charge On the other charges Which we might set up items For some of these particular things as well And so to add an item We could go here And add an item by going to new And going to a new item And then we determine Whether it be an inventory item A non-inventory part Or an inventory part Are the major items We saw also an other item Subtotal or a group and so on And so I'm going to close this back out So those are the items That we'll set up in the second Half of the course Let's go back in there one more time If I go back in there one more time And just see the difference If it's a service item It's a lot more easy of a data input If I go into the inventory part That's when you get a bit more complexity Because again you got that Purchasing side of thing that cost As well as the sales price So closing that back out And I'm going to say no Don't record it Now you've also got some other things That could be included in the item So we've got the sales tax down here Items These are going to be the things That we put into place So once we determine that something Is subject to the sales tax Then we have to say which sales tax It's going to be subject to And we set up items That will be lining up the sales tax So when you hear the terminology item Usually the first thing that would come to mind Are going to be the inventory items And the service items And then you also have anything That kind of drives Like the data input process So the sales tax items You could have payroll items Also hearing similar terminology For those types of things as well So we've got then the sales tax items When you go into the lists drop down You've got the payroll item list Which again you're using that terminology Of items These are going to be a tool That's going to be used in order For QuickBooks to be able to determine What's going to happen When you put in a data input process To make it as easy as possible So if I go back to the homepage Then the general idea is When setting up the company Which we'll do in the second half of the course We need the foundational lists to do so The primary one being the chart of accounts Once we have a chart of accounts We can then set up the items The items using some of those accounts To determine where we're going to post Certain things Especially when we make sales With the use of the sales forms The invoices and the sales receipts Are going to be driven by those items So that when we record these It's as easy as possible And they then are going to help us to determine Which accounts are impacted On the financial statements That being the balance sheet and the income statement As well as any kind of other reports All other reports being some kind of Added detail related to in some way Some line item or multiple line items On the balance sheet or income statement Profit and loss