 QuickBooks Online 2022 deposits owner investment and loan. Get ready because it's go time with QuickBooks Online 2022. Here we are in our Get Great Guitars practice file we set up with a free 30-day trial. Holding down control, scrolling up just a bit to get to that one to five percent. We're currently in the home page, otherwise known as the Get Things Done page. In the business view as opposed to the accounting view if you wanted to change to the accounting view it is something that you can do by going to the cog up top and then going down to the accounting view on down below. We will be going back and forth from the accounting view here or by jumping on over to the sample file just to see where the navigation differences will be. Let's open a few tabs up top by going to the tab up top and right clicking on it and duplicating that tab. I'm going to go back to the tab to the right, duplicate it again by right clicking on it and duplicating it again. If I was to find the reports in the accounting view just as that is thinking, jump on over here. It's in the reports area. If we go back on over to the business view, the reports are located in the business overview which we're in the second tab now. I'm going to go to the reports. We're going to be opening up the balance sheet report. So open up the good old balance sheet, one of our faves, one of our faves. I'm going to close up the hamburger and scroll up top and change the range from 010122 to 123122 and run it in the report to the right. Let's go to the tab to the right. I'm going to open up another report. This time it's going to be the trial balance. I'm not opening up the income statement because we will not have an impact on the profit and loss or income statement here. I'm going to type in instead trial balance to open it up. I'd like to get used to using the trial balance because it's a great report to check when you're entering data into the system in essence being a balance sheet on top of the income statement but without the subtotals. Even if you're not familiar or too familiar with the debits and credits, it's still a great report just to see those accounts and see what the activity is and you can drill down on them. I'm going to go back up top and change the range again from 010122 to 123122 and run that report. So there we have it. I'm going to go back then to the balance sheet at this point. Hold control down, scroll up just a bit. Now we're imagining we're starting up a business. This is the startup process. The first thing that typically many businesses will need is some form of capital. They're going to need money in order to invest. So we've got to generate some money that we can then invest in and then hopefully use those investments in order to generate revenue. So how do we get the money at first? Later on we hope most of the money is going to be coming from customers at the beginning for the initial investment. It might be coming from the owner. So we're going to first take a look at an investment from the owner putting money into the business which if it was a sole proprietorship would be just like the owner taking money from their personal account putting it into the business account. If it was a corporation then it would be like the issuance of stock, the issuance of the stock in essence being the owner investing money into the business. And we'll also take a look at a loan which would be the other primary way to finance the operations of the business and get that capital or cash that is first needed. Then when you're first starting the business depending on how capital intensive it is how much money you need for the startup you will typically be buying inventory or fixed assets, property, planting, equipment, long-term assets that you're going to use to then generate money in the future either through selling the inventory or through the use of the machinery, trucks, equipment, so on in order to generate revenue. So that means that this deposit will be hopefully a little bit different than the normal kind of deposits that we expect to have throughout the business which will be from us generating revenue from customers. And we want to make sure that we make that distinct in basically our accounting system to look at it a little bit closer. Let's take a look at our flow chart here and this is basically the revenue cycle. Now this is a flow chart from the desktop version but I'm just looking at the normal flow of any accounting system and we happen to have nice forms here which tie into the forms, names in general that we're going to be using and the online version. So note that if you're in a system, the three kinds of systems that you can have with the revenue cycle I would say is one in which you're on a cash basis but even a step further you are dependent on the bank meaning you're constructing your entire books from the bank so that's even a step further in simplification from a cash basis and then two, you're on a cash basis but you are using what QuickBooks wants you to use on a cash basis which means you're at a cash register for example you're collecting cash and you're creating sales receipts doing the work at the same point in time as you get paid and then three, you're on an accrual basis because you're in an industry such as bookkeeping or accounting or the legal industry or something like that where you do the work first and you invoice the client and therefore have to have an accrual component of accounts receivable on the revenue cycle. So if you consider those three methods this first method is one in which the one where you're basically just getting money and you're going to say that possibly from gig work or something like that and you're just recording every deposit then when it comes through and possibly with the use of bank feeds as revenue at the point in time you have an increase to the checking account and that event you can use that method depending on the industry that you're in but you have to be careful when you're using that method if you have deposits that are not from customers so that you do not accidentally record them as a deposit from a customer you want to be able to differentiate that and report the deposit correctly otherwise you'll report it as income and for taxes you're reporting income on it you'll end up reporting basically income on it so from a cash basis and especially one where you're basically reliant on the bank you want to make sure that you're able to differentiate those deposits from the customers which hopefully will be most of them and those deposits that might not be which will be more rare such as those from the owner or from a loan so the next thing we want to note is that you could enter the deposits then with the use of the deposit form and if you were doing the normal kind of accounting process you're creating an invoice, receiving a payment that you put into undeposited funds or created a sales receipt that you put in undeposited funds that's when I would use the deposit form because the deposit form will then help you to take the money out of the undeposited funds group them in the proper fashion so that you can have them grouped in our accounting system and the same way as they are grouped on the bank statement allowing us to do a bank reconciliation much more easily so that's why this actual form is really good however if you're doing a deposit that isn't connected to undeposited funds it's not connected to a received payment or create sales receipt then I would just use the register and that's what I'll basically do here so let's go back on over I'm going to go back to the first tab imagine we the owner are putting money into the company the process when you enter a transaction will generally be I'll hit the drop down and say well first off is there going to be some kind of form designed specifically for this task and usually I will use that form now there's no specific form like an invoice because it's not coming from a customer sales receipt doesn't work because it's not coming from a customer we could use the deposit form and that's basically what we will use but I don't really need to go to the deposit form here in this case because it would be easier often times for me to enter it directly into the register so that's what I'm going to do here I'm going to enter it into the register and I'll do that by going to the bookkeeping down below if you were in the accounting view it would be in accounting down below I'm going to then go to the chart of accounts which is usually the default here chart of accounts I'm going to close up the hamburger and then I'm going to go into the cash here I'm going to go to the view register note that the view register here is on all of the balance sheet accounts in essence, possibly not the retained earnings ones but all of the balance sheet accounts so the register you usually think about it as a cash thing but there is a register that you can do this kind of transaction for all of them also note that you have a difference here than the desktop version where you can identify the type of transaction you are entering so if you hit this drop down or rise up in this case it'll have all the types of transactions that you can put into the system so even though I'm putting it into the register I can clearly designate that I want it to be entered with a deposit form so this will give me the minimum data or detail I will need to enter in essence a deposit here so I'm going to say alright this is going to be as of 0101 let's say 22 beginning of the current period and it's going to be from the owner I'll just add owner here owner, tab and the owner notice I don't really have it's not a customer or a vendor I'll just add the two I'll say customer and we'll say owner memo for the memo we could say owner investment and then it's going to be a deposit we're going to say it was for 65,000 and now the other side this is where you want to be careful that it doesn't go to income it's not income because we the owner put the money in here other deposits we would hope would be income we want to put it into some equity type of account and you'll recall that they gave us like 100 equity type of accounts which is quite kind of weird honestly and they're kind of out of order here as well because they put the expenses up top but you get down here to the equity accounts and you might put it into basically the retained earnings sometimes it'll just be in the retained earnings or you might break it out as its own basically owner investment account in other words you could generally have one account as your owner investment account or you might break out basically the owner investment into its own account that you should roll into the like equity account or retained earnings periodically so that's kind of a judgment call but they gave us the owner investment account and I like that we're going to put it into the owner investment account remember if it was a corporation it would be like the issuance of stock would be a similar kind of transaction here so let's go ahead and save it and there we have it we'll go to our balance sheet and freshen up the report going up top and running it we've got something fresh to work with going to the 90,000 there is our deposit now if I drill back down on it it'll take us to the actual deposit form not to the check register so we go into the deposit form and there is the actual deposit form and notice on the deposit form we got just the checking account up top and then the funds received the account basically down below on it so I'm going to close that back out and then go back up top back to our summary and then the other side went into the equity side of things down here went into the owner's investment 65,000 increasing the equity so assets went up, equity went up but net income did not go up because it's not a performance item we're putting money from their personal account into the business account we didn't actually generate any revenue so there's the 65,000 scrolling back up, let's go back to the balance sheet so now we've got some cash we've got some capital that we can invest in some machinery and inventory but it's not enough we need more, we need more capital so let's take out a loan that's a good idea let's go to the first tab over here we're going to do the same kind of thing to the hamburger up top and we could use the deposit form again but we're going to say that this month we're going to do the same thing enter it into the register which is in essence the fastest way generally to enter a deposit that's not connected to a sales receipt or a receipt payment type of form in other words it's not coming out of un-deposited funds which has that specific need of grouping the deposits in the way you want them grouped so I'm going to go back in here and let's say this one happens as of the second we're going to take out a loan and we're going to imagine this comes from Chase which is a bank chase tab we're going to set them up we'll set them up as a customer again it's kind of like other they're not really like a customer but we'll keep it at that and then we're going to say this is a loan that we're getting we're getting a deposit of this time let's say 50,000 loan and the other side once again not income it's not income this side's going to go to a loan payable as well note that the loans payable can be tricky too because you might have a short term and a long term portion in other words this loan might be due back in like 5 years but you might be paying monthly installments on it or something like that that means there's a short term and a long term portion to it so typically I will put the loan payments in loan payable in a current liability type of account and I would like to have the entire loan generally in one account so that when I record the information in accordance with the amortization table with the payments I can tie it out to that one account and then if I need to break it out to a short term and long term portion I'm going to do that periodically at the end of the month or year as is needed for financial reporting purposes and then reverse it back to one account so that I can use it for internal use that would be my preferred method I would also have a different loan account for each loan that you have possibly sub accounts to a master or a parent loan account and that way you can track each of your individual loans in the system and tie it out to the amortization table and when you work with your accountant that wants to tie out the short term and long term version that's fine we just want to break it out for that timeframe and then put it back into the system that works best for the bookkeeping we'll talk more about those adjusting entries to the adjusting entry to part area but remember just keep in mind that when you're doing the data input the goal is to make the data input as easy as possible and then make the adjustment process as easy as possible and have everything reported properly so the goal of entering things easily and making them correctly reported at the end of the timeframe can be two separate goals that's why you have the adjusting process and people that are focused on the adjusting process sometimes forget the first goal of the accounting department as easy as possible as efficient as possible and the accounting department often doesn't have fully appreciate the reporting needs at the end of the period so we'll talk more about that in the adjusting area but anyways let's go back to the balance sheet sidetrack let's run this one again freshen it up that's what I'm talking about we can then go into that let's drill down there's our deposit form there's the 50,000 using a deposit form if I go into it I see an actual deposit form not the check reg so let's close that back out scroll back up again the other side this time is going into a payable account also not on the income statement no impact on the income statement thus far we haven't earned any revenue or created any expenses thusly thus far so if I go into the accounts payable or the loan payable at this point we've got then the original amount was the 22 and now the 50 in the loan payable scrolling back up back to the balance sheet we can see this in a nice quick view on the trial balance and look how nice and easy you can jump back and forth between those with like minimal scrolling everything fits on like one page without even I don't even need to scroll I've got it zoomed in 150 and I don't need to scroll well maybe a little bit but still like this pretty minimal that's the beauty of the trial balance I could scroll down if I wasn't at 150 I was over so at 150 I don't need to scroll pretty much at all in any case this is where we're standing at this point in time we got the trustee trial balance so if you're following along with the practice problem I think this is the easiest one to check your numbers at if your numbers tie out great if they don't tie out then you might want to do a range change up top and see if it's a date issue that is the problem and then at the end of each section we'll go over the transaction detail report and that's another place that we can kind of drill down and figure out if there's any problems at that point as well