 QuickBooks Online 2023. Add new accounts and opening balances. Get ready to start moving on up with QuickBooks Online 2023. Here we are in our Get Great Guitars practice file. We started up in a prior presentation using the 30-day free trial. We also have opened the free QuickBooks Online Test Drive sample company. If you want the two open at the same time we suggest using the incognito mode or another browser if using Google Chrome. 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. You can find incognito mode with the three dots and then new incognito window then search for QuickBooks Online Test Drive. We will be using the sample company to look at the difference between the accountant view the view that Get Great Guitars is in and the business view the view that the sample company is in. You can toggle between the two views by going to the cog drop down and switch between the views on down below. We're going to open up a couple tabs to put our reports in right clicking the tab up top and duplicating like we do every time I'm going to right click the duplicate a tab to duplicate again as the tab to the right is thinking I'm going to go to the tab to the left open up the reports on the left hand side and then the balance sheet reports. If you're in the business view by the way that's going to be in the business overview. That's where your reports are located and then I'm going to go to the tab to the right and go to the reports on the left hand side this time open up the profit and loss reports close up the hand boogie up top I'm going to change the range from 010122 to 123122 run it to refresh it tab to the left and close the booger hand boogie and then change the range from 010122 to 123122 and run it to refresh it. Now we've been putting in balance our beginning balances imagining we have another accounting system or had one prior to using QuickBooks we're entering the beginning balances into the system. These hour hour and beginning balances we're going to enter them into the system as of the last day of the prior period that was in the prior accounting system December 31st 2022 we're going to then start the new data in our system as of January 1st 2023 moving forward. We started entering the most difficult balances which are the inventory often times and the accounts receivable and the accounts payable due to them having sub ledgers that we need to be careful of as we enter the data inventory having a sub ledger for the units of inventory accounts receivable a sub ledger related to who owes us money customers accounts payable having a sub ledger related to who we owe money to vendors. Now we're going to enter all the rest of them and we'll give a short discussion on some things you might need to consider with them but we won't go into them as in as much detail. It should be a little bit more straight forward to enter some of these transactions the checking accounts and then we'll enter the furniture equipment the accumulated depreciation the visa and the loan same strategy will enter them one at a time the other side of the transaction is going to go somehow to opening balance equity most likely to I'm sorry somehow to equity in total most likely these accounts will go to opening balance equity and then we'll fix opening balance equity or the equity accounts to represent the proper amount in equity which should be an owner's equity. Okay cash account let's open up the cash account now cash has its own kind of special concerns that we'll have to deal with and the concern is going to be for example the bank reconciliation so you can connect it to the bank we're not going to be focusing on bank reconciliation here we will do that in another section or a course later the other concern also is going to be if there's outstanding checks or deposits in the system how is that going to impact our bank reconciliation we'll talk about that in the future we'll run into that problem when we do the bank reconciliation in another course or section in the future so entering the beginning balance we have to use this 25,000 even if that balance is different than the bank balance as of December 31st 2022 which it may be if there was outstanding checks and deposits but I have to use this balance to be in balance right and then we'll worry about that issue with those outstanding checks and deposits and we'll get into how to deal with that when we get to the bank reconciliation so if I go back to our accounts tab to the left and I'm going to go into our chart of accounts I'll just do this by go into the chart of accounts and I'm going to hold control scroll down it's in the accounting on the left hand side and then chart of accounts up top if you're in the business view by the way it's going to be under the bookkeeping and then the chart of accounts on the left hand side and then you have to open up the chart of accounts okay so now this is our list of accounts that were given to us by into it by QuickBooks when we set up our accounts we have a cash account up top so you might want to like change the name of the cash account but we might just use that cash account that's her strategy I'm going to use the account if it's there if I don't like the name I'll change the name if there's not an account there then I'll add an account so this is the they put it as their cash on hand account so but that's okay I'm going to say edit let's go ahead and edit this one and then and then this sub account doesn't matter too much but I'll just change it to my checking account and then you might put like the name of your account you might put the bank name and you might put like the last four digits of the account number or something like that which is useful for internal reporting purposes because it helps you to locate which account you're dealing with if you have multiple accounts although it's a little bit messy for external reporting purposes but oftentimes our goal is to get the data input as easy as possible here and then we're going to go down below and we've got this thing that says start date opening balances now you're only going to use these when you're first setting up the accounts as we're doing here to get those beginning balances in place so I'm going to say it's going to be a beginning balance as of let's say beginning of the month so say other date and I'm going to choose the date as has been our process at the end of December December 31st 2022 so everything is correct as of the January 1st 2023 opening balance 25,000 and that should allow us when we do the bank reconciliation to have that opening balance be the right number at that point in time so I'm going to go ahead and save it and say changing the type of tax form section of the account may affect your account and so I'm going to go ahead and are you sure you want to say yes and close this out so now we've got our account there if I then go into my balance sheet up top and run it to refresh it now I've got the cash account which I'm going to say is my checking account and then I'm going to go into that number and it used a deposit form notice again I didn't enter a deposit form I just entered the beginning balance but it entered it with a deposit form which makes sense that's the form you would typically use to increase you know the checking account so that's what it used there's a deposit form it put the other side to opening balance equity which is what we expected closing this out other side in the split also indicating opening balance equity back to the report then if I scroll down opening balance equity there's the other side going into it and there it is with a deposit form no impact therefore on the income statement so I don't have to worry about that at all so that is that one so we'll get back to that opening balance issue in the bank reconciliation which is kind of an issue for the first bank rec in a future section or course on that and then we've got the accounts receivable we did inventory we did these two are related to property plants and equipment you could call them depreciable assets quickbooks generally cause them fixed assets now here we already have the fixed assets set up from our prior accounting system so we're going to pull it in I would like to find an account named furniture and equipment now note this one represents those large assets which are building automobiles furniture and fixtures that we have to put on the books as an asset instead of expensing them when we buy them and even if you are on a cash basis you have to do this which is an accrual concept even if nothing else for taxes generally now that means you're gonna have to have a sub ledger tracking the actual units of equipment as well as the depreciation and possibly have one on a tax basis method which is usually different than the book method or if you're a small company you can just appreciate on a tax based method so you don't have different schedules possibly but usually since you have to do it for taxes anyways the sub ledger is often useful to have done in the tax software by your tax preparer so when you set up these accounts I would not if I was I would use the talk to your CPA and use the accounts that are in the tax software as your guide in terms of what your subcategories will be QuickBooks adds a whole bunch of subcategories in here which is not may not be the best way to go depending on what your needs are they're a little too detailed or and you might just again want to follow the software that you're gonna use to calculate your depreciation which is action which is often the tax software we'll talk more about that later but right now I'll just choose our normal strategy I'm gonna go to the tab to the left and I'm gonna look at my chart of accounts and I'm gonna try to find one that has an account type of fixed assets and one that has something that's similar to furniture and fixer and again you can look how many fixed assets they have they got building that's normal land and then they got all this stuff here long-term office equipment computers copiers blah blah there's furniture but it's in that subcategory so I mean here's tools machinery and equipment so so they've got a whole lot of stuff which you might not need this detail in the subcategories right because that might not be how it sorts out when you look at your your tax returns and your depreciation schedules you want to make it as easy as possible to tie them out to whatever your subledgers are gonna be often done by the time okay I already said that so let's go ahead and just do use this one so I'm gonna hit the drop down and I'm gonna say edit this and I want to change the name to the name that that I have here so I'm just gonna use the similar account it's a fixed asset account and I'm gonna call it I'm gonna call it furniture and equipment usually I would call it furniture and fixture as I think what you would call it on but we'll talk more about that later so it's save under fixed assets and I'm gonna call it that's that's the tax form section and then I'm gonna say okay furniture and equipment okay description looks good I'm not gonna worry too much on the description so the main things I need to have right are this one the tax line could be important if you're if you're using the software to kind of locate your tax line exactly or exporting it to the software exactly but oftentimes in my experience that doesn't like work perfectly you can have to use the financial statements anyways so I'm not overly concerned with that line although I'm always hopeful that they get that to the point where it is a time efficient thing to do but I haven't seen it work perfectly and I've tested it out a few times in the case then you've got the account name and so that's what we changed and the description isn't a big issue as well so I'm gonna hit the drop down and then I'm gonna say that the date I'm gonna say other date and I'm gonna be picking it up at the end of 2022 and then the amount we said was 75,000 75,000 and then it'll make a journal entry for that so I'm gonna say save it it'll probably just use a journal entry form because there's not usually a good form for this meaning well I'll show you here I'll go to the balance sheet and then let's run it to refresh it and so now we've got furniture and equipment boom if I go into that we're building the balance sheet we can see that we got the journal entry so notice it used a journal entry unlike every time we did something else where where they used a form last time they used a bank form and before we saw an invoice used a bill used now it's used in the journal entry why because there is no form for for the purchase of equipment that's like a default form if you purchased it without cash like if you financed it or something so that's why because buying equipment isn't something that happens every day therefore it went to the journal entry so if I go into that it's an actual debit and credit type of form that is being used okay let's close that back out the other side went to opening balance equity like we would expect so the other side is down here in opening balance equity so that looks good nothing happened to the income statement so okay let's go to the next one next is accumulated depreciation so now that is something that will track on the sub ledgers again but this is the beginning balance I'm gonna go over here this is this is how much we've we've decreased the asset by to allocate the expense to the period applicable let's see if they have one it should be also a fixed asset account so we doesn't look like they have one called accumulated depreciation so I'm gonna add it I'm gonna say let's just add a new one new and this is that notice the method I'm using if they have an account that's close I'm gonna use it if they don't then then I'm gonna make that's when I'm gonna make my own account right and so I'm gonna say this is gonna be saved under and they changed it they've changed this kind of layout up a little bit so you might not be it takes a little bit to get used to hopefully it'll be kind of an easier layout it's kind of nice it's gonna be an asset type of account so that's kind of a generic overarching balance sheet account and then it gives you basically your drop downs now this is a category of ass of of asset the fixed assets that's kind of like an account type that we're gonna have here if you wanted to make a sub account then you can select you know an actual account that it would be a sub account of so we're gonna pick the fixed asset so it's gonna go under a fixed asset which I would call the account type the tax line I'm not overly concerned with but I'm gonna just gonna call it accumulated depreciation I'm not concerned with the same reason I talked about before because oftentimes we're just gonna generate the financial statements to make the tax return if you can export it directly to a software that would be great I haven't seen it work perfectly or better than just entering it into the software thus far so I might test it out again though because I'm always curious to see if they've improved it and so I'm gonna say account name is gonna be accumulated depreciation I'm not gonna put any description it's not adding a lot of value in my opinion I have a description there so I'm gonna keep that as is and then we're gonna say the start date I'm gonna add the other on the date and we're gonna put this to to the end of last year now this is where the tricky part is because accumulated depreciation is a contra asset account meaning it's like a negative asset so I would say it goes up it's gonna be an increase so I would think it would be a positive but I think they're categorizing it as an asset so it's actually kind of like a negative asset and this is why debits and credits are actually better than a plus and minus kind of system gets kind of weird walkie with the plus and minus but I'm gonna assume I'm gonna bet that they're gonna record it with a negative 7500 which will which will make it a positive amount in accumulated depreciation because accumulated depreciation is a contra asset if that makes sense if it goes the wrong way I'll have to go back in here and adjust it or fix it in some way shape or form so there's there it is so now you can see where it gives you a little image on the balance sheet on where it's gonna populate so this is this is pretty neat that they give you this little preview it's kind of a kind of a new a newer type of thing here so I'm gonna save it and then we'll check it out so if I go to the balance sheet and run it again now we've got under the fixed assets you can you can all it put it on there see I got it wrong it put it on there as a positive so so I think that I think it used to be that way so now you increase it with it with a positive instead of a negative so that's why it gets a little tricky I can fix it this way I can go into it and then it entered it with a journal entry so the journal entry is actually more specific if I go into the journal entry I'm just gonna flip it now so I got it backwards I'm gonna say this is I'm gonna change it by making this a credit and this a debit okay and then I'm gonna save it and say yes and boom so there it should be the right going the right way so there it is and so now I'm gonna go back and so there it is so then these two should net out to a negative so this is the the dollar amount the cost and this is what we decreased it by we'll get into more about fixed assets in a future presentation the thing that's kind of annoying here is that you'll note that that the accumulated depreciation is above the furniture and equipment which is kind of annoying because it's in alphabetical order under the fixed assets you can fix that by using possibly sub accounts although it's still a little tricky to fix it that way or you can use account numbers or you could try to sort your when you when you go to your sorting you can say you want the totals in descending order and so that might that might sort so that sorted it out that way so that's another method you can use we'll get into more that formatting stuff in future presentations so we'll get back to the beginning balance entries but there it is the other side went to opening balance equity by the way as we would expect opening balance equity other side washing out to the equity section as we expected okay keep on moving here keep on moving so we already did furniture equipment accounts payable we did the credit card now the credit card has the same issues as the checking account in that you could have bank feeds related to it we'll get it will dive into bank feeds later other than that it's it's you know the same it's pretty straightforward to enter the beginning balance once we set it up so I'm going to go to the tab to the left I'm gonna see if they have a credit card type of account it should be a liability in the liability area so it should be a credit card type I don't see one so I'm gonna add one so I'm gonna say new and it's gonna be a liability type drop down and then we've got the current liabilities I'm sorry that's not I want the credit cards so notice they have assets and then they got bank broken out separately because bank has its special needs even though it's an asset and then they got then they've got liabilities but credit cards is broken out separate because it has its own special needs okay so we'll go to the credit card save under credit cards and then I just called it and then the tax category credit card and then I called it visa I think visa is the account name so I'll just keep I'll just stick with that I won't put any further description I'll hit the plus button as of and say we want other date and we'll bring that back to December and put the balance this should be a positive liability now so 1000 it's a bad thing but it's gonna be a positive number credit to it so it's gonna increase with a credit and save it boom should be set up no problem no problem so there it is down here in the liabilities so it's a credit card type of account credit card type I go to the balance sheet and run it to refresh it give me something fresh here people I don't work with stale stuff so there it is the visa if I go into the visa it entered that with a credit card expense which makes sense because that's the type of form you would think to enter a credit card charge open that up and there's our expense form the other side went to opening balance equity now we've got the same issue with the credit card possibly as with the bank accounts for the reconciliations although the reconciliations for the credit cards are often easier because we might do those directly with the bank feeds more likely like because it's quite common whereas the cash account we might still have some issues with just entering our data with the bank feeds we'll talk more about that later when we get to the bank reconciliation type of area but the other side went to opening balance equity did it not right yeah it did of course it did poor su puesto so let's go back then what do we got loan payable another one I'm gonna make that other current liability so I'll see if they have a loan payable down here if they do I'll use it I would think that's gonna be a liability type of account I want to make it current liability so tax payable long term business loan so they only have a long term I think I'd like to make it oh here it is short term business loan let's do that one so I can edit that boom edit it and then do I want to just call it short term business loan maybe I just call it what I had which was loan I'll just call it loan payable loan payable I'll change the name to what I like and use the account that's applicable other current liability loan payable okay going with our standard strategy drop-down and I'm gonna say other date bring this back to December 31st and what's in our loan payable account 22,000 22,000 credit 22,000 boom shaka laka and it gives you the preview down below which is pretty neat I kind of like their new setup even though I'm not I think the other I'm still preferring the other one right now but maybe I'll it's growing on me it's growing on me it's not horrible it's not completely horrible so I'll scroll down and there's our loan payable if I go into the loan payable it entered that with a journal entry why because there's no normal form to enter in a loan you could if you're entering a loan and you got the money you could use a deposit form but there's no entering a loan isn't a standard transaction therefore there's no default form therefore it used the journal entry the last thing used if there's no other form applicable going into the journal entry there it is debits and credits being used closing that back out scrolling up other side balance sheet down here in the opening balance equity boom shaka laka shaka laka okay I'm still I gotta stop saying I don't know why that's in my head so I think this was this one right so yeah so now let's let's just double check our numbers this is where we stand at this point in time our opening balance have been input we only have an issue now with the equity down here being messy it should be that's what I hope is the case but the total equity is seventy seven eight nine six which is correct it's just broken out funny like it's just broken out funny like and then our income statement has stuff in it for not from this round but from the prior presentations of five thousand five hundred but that's in the prior period I'm not worried about it because it's going to roll into the equity so no problem it's going to be nothing going forward after the cutoff of January 1st 2023 I'm gonna open up one more report right clicking on this duplicating the tab that being the trial balance because I think that's the easiest way to check the numbers let's go to the reports on down below I like to just type in up top the trial balance the trustee trial balance the trustee TB just type in t r i a l balance and then open it so if I run this for 010123 to 1231 to 3 run it I was running why cuz Jen I told me to Jen I okay that's from force go anyways this is what we have so if we do the side-by-side comparison checking account 25,000 accounts receivable 20,500 inventory 2008 we've got the 7,500 accumulated depreciation 7,500 furniture and equipment 15,000 accounts payable the visa at the 1,000 the loan payable at the 22,000 and then this mess down here that should add up to 77896 if I pull up the trustee calculator to see if it indeed does do that calculator for some calculations you got the 7,2,3,9,6 plus I'm adding these two the 5,500 there's the 77896 and if I do a range change to to to actually it's in I'm in 2023 if I change this to 2022 010122 to 1231 222 run it then you'll you'll have the same numbers down here you should right 25,000 to to to to to to to to to to to to to to and then down here you've got kind of the mess so now down here the mess is including the opening balance equities 7,2,3,9,6 plus the 20,500 income minus the expense of 15,000 because the the income statement accounts are included on the income statement but when I roll over to the first day of the following year these income statement accounts will roll into the equity account and I don't care what happens prior to the cutoff January 1st 2023 with regards to the income statement accounts because they're in the prior accounting software so if I change this one day up 010123 to 01 so let's just say 1231 1231 23 and run it now QuickBooks rolled over the income to retained earnings that's where the 5,005 is at and then I've just got this mess of opening balance equity which isn't a proper account I don't want to keep it in there I just need to do a journal entry taking it out of there putting it into the retained earnings retained earnings isn't the proper name for a sole proprietorship so I could then just rename retained earnings to a sole proprietorship type name for the equity account which would be like owner's equity or something like that then we should be good to go we'll do that in a following presentation and then we will go from there