 We're now going to be entering a sales receipts which are going to be the sales items that we make on like a cash based system and then we will make the deposit. So what do we expect to happen? Sales receipts, we expect to be increasing, not cash because we're going to put it into that undeposited funds like account or funds to be deposited account or payments to deposit. I think they're going to call it and then the other side is going to go into the revenue account and then when we deposit it we're going to take it out of the clearing account and put it into the checking account. Let's go to the tab to the left to do this. Quick look at the flow chart. Just remember that if you're on the customer cycle we expect money to be going into our checking account at the end of the cycle in some way shape or form. The easiest method or cycle we could have is if we were in like gig work getting paid by like YouTube or something and we just wait till it clears the bank possibly recording with bank fees using just a deposit form and that would be the easiest thing to do although it's not really a full service accounting system but it would be nice to do if we're in that type of industry. But a step away from that is what we're going to do now the sales receipt form meaning it's still on a cash based system. We're not tracking accounts receivable but we're doing a full service cash based system because we have to typically because we're going to get receipts from a customer at like a cash register for example and then we want to be able to check the sales receipts for the day versus the cash that we have or the credit cards versus the grouping of the credit cards and then we're going to physically make the deposit into the bank and we want our deposit in our books to match what we physically deposit into the banks. That's why it's a bit more of a challenge and you can't just rely on the bank feeds and then the step away from that would be the accrual method in which case we have to track the accounts receivable and enter an invoice track the accounts receivable receive the payment and then deposit. Remember that these two forms the receive payment and the sales receipt represent us receiving money and both of them we can either put directly into the checking account however we might want to use that undeposited funds like account payments to deposit as a clearing account to help us to then group the deposits in our system in the same format as will be put into the bank either by us with physical checks or the cash that we physically put into the bank in a group or with the credit cards where the credit card company might group the deposits in a way to group multiple deposits together or multiple sales in one deposit that goes into our checking account. Okay so let's go back on over I'm going to say new on the left we're going to go into the sales receipt sales receipt we're matching we imagine whenever we're at the sales receipt we're at like a check register in our shop and like our guitar shop and then Garcia we're going to say Garcia we're going to have a new customer Garcia guitars guitars is going to be the new customer very creative name that I came up with with that one I feel like or our team came up with a really creative name on that one Garcia guitars because it has two G's so that's why it's cool anyways we'll save that one obviously we might want their email address and whatnot but it's not as important because if we're making the sale in the shop we might not even get their name because we're at the cash register if it was a food truck or something we probably wouldn't get their name we would just have a generic customer called customers because no one wants to give us their name so that we can give them a peanut butter and jelly sandwich although no one orders peanut butter you know whatever sandwich we're making whatever you get what I'm saying so then the date is going to be let's make the date let's go with 0223 for the date and then this populates automatically and then the location is necessary for the sales tax calculation no tax payment method I'm just going to keep going with cash to imagine us grouping it remember that if we got an actual check we would imagine that the check is something that would hit our bank account in the same amount as we would enter for the actual sale because it would so in that case we could use a deposit directly into the checking account but if you're doing if you're working at a sales register you're thinking I might get paid by cash check or credit card and so you probably want to keep your deposit system the same all the time meaning I'm going to put everything into undeposited funds or payments to deposit the clearing accounts and not try to pick and choose when I want to put it into the checking account or not right because if I got cash then for sure I or almost certainly I don't want to put it directly into the checking account because when I make the deposit physically into the bank I'm going to group multiple sales together at one time and that'll mess up my bank reconciliation same with the credit card here if I get a credit card then the credit card company might group multiple sales together and deposit them into my checking account in some grouped format I want to match that on my end so I'm just going to say cash for the example problem and we're not going to put it indirectly into the checking account here we're going to put it into the clearing account just remember also that if you did put it into the cash account then you also have the added kind of little bit of a complication in that in your transaction detail you'll have sales receipts that will increase your checking account as opposed to just deposits and possibly transfers not a big deal if you want to do that but you've got to kind of remember that it's another little sorting issue that that could I like to have all the increases be basically deposits in my checking account that it's easy to know what the increases are they're all deposit transactions but whatever so now we're going to go down here and we're going to add the stuff the stuff that was purchased so we're going to say it's an EPSP is one of the things that were purchased so we've got that one and so I'm going to say we've got how many of those two of those I'm going to say gets us to the 1200 it is a taxable item and then the next one the next line is going to be an ELP an ELP which we set up in a prior presentation this is an Epiphone Les Paul and we're going to say that let's say we sell two of those two so that comes out to the sales of 2200 and then the tax is being applied based on the location let me I had to click down here for it to reformat and calculate based on location but I'm going to change it to our generic problem of just the five percent you could do that if you want to do the generic problem by changing the math here and just override it to five percent or I set up this another item of just five percent so I can make it generic and not related to just California so you can just see the concept and follow along no matter where you are so then we've got the three the 2003 10 and so that looks good so what's this going to do it's a sales receipt so it's going to increase some kind of cash account this it's going to go for us into the clearing account like undeposited funds payments to deposit that's for the full amount 2003 10 the other side is going to go into revenue 2200 the difference the sales tax is not going to be revenue because we're just the tax collector they forced us to collect taxes for that one they said you want for we want protection money and you've got to give us five percent we're like okay so then we got to increase the payable account of of a liability of 110 and then also we're going to have the inventory go down not by the amounts on here but by the cost which is no one because we have a perpetual inventory system that was set up by the items that we put in place and the cost to goods sold is going to go up by that same amount the expense account related to us consuming the inventory the net impact income impact is going to be income minus the cost of goods sold and the the sub ledger for inventory is also going to go down by unit not just by the cost okay that's a lot of action let's save it and close it and check it out