 QuickBooks Online 2024 Journal Entry Form. Get ready because we're moving on up with QuickBooks Online. Here we are online in our browser searching for QuickBooks Online Test Drive, looking for the result that has Intuit.com in the URL, Intuit being the owner of QuickBooks, selecting the United States version of the software and verifying that we're not a robot. Opening our reports like we do every time. Reports on the left-hand side. We're in the favorite reports. Going to right-click on the balance sheet and open link in a new tab. Right-click on the profit and loss. Open link in the new tab. Scrolling up to the middle tab up top that has been opened. Closing the hamburger. There's our balance sheet tapping to the right. Closing the hamburger. There's our profit and loss otherwise known as the income statement. Going to the first tab. That's the setup process we do every time. Data input in the first tab. Looking at the result of that data input to the tabs to the right. 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We've been looking at the cycles, customer cycle, vendor cycle. And then we jumped over here to the other forms, which are forms that we use quite often. They're used often and therefore are in the area where we have the normal data input forms. But they don't quite fit exactly into a cycle. This time, we're going to look at the journal entry form. Note that we want to keep separate in our mind the concept of recording a journal entry and entering a journal entry form. In other words, most of the forms that we have looked at within the cycles, invoices, received payment, expense, bill form, and so on, will record a journal entry in the sense that when we do the data input for these forms, they will have an impact on the financial statements and possibly related reports, balance sheet, and the income statement or profit and loss. At least two accounts will be affected. We can represent the impact on the financial statements with debit and credit format, or with just an increase or decrease kind of description of the accounts or the transaction or journal entry that will be happening when we enter these forms. When we use a journal entry form specifically, that means we're going to use a form that will be in the format of the debits and credits, meaning we're going to assign the transactions directly to the accounts without the use of some other form. If you have an accounting background from a school background or a textbook, then you've probably first learned transactions from a journal entry standpoint. You start to learn the debits and credits for each of the different types of transactions. And if you're then moving into a QuickBooks area, then you have to be careful not to use the journal entry form when it's not necessary, when there's another form that you could use. So remember the general idea here would be that you want to use the forms in the cycles if there's a form to use and then only when there's not a form to use or you have some special use like adjusting entries at the end of the period, do you enter the transaction simply with a journal entry? That doesn't mean that you don't use your debit and credit knowledge. You do because you're going to be able to understand better if you know debits and credits or accounting double entry bookkeeping well, then you'll be able to understand what these forms are actually doing. You'll be able to visualize what the impact on the financial statements will be better. However, if you're going to record a sale, you want to do it with an invoice rather than a journal entry, for example, because you want to be able to track the invoice in the customer center over here, which you won't be as easily able to do if you enter basically a journal entry. So when would you use the journal entry then? You might use it for a transaction that doesn't happen periodically. So all these transactions in the cycles are the ones that happen periodically. If something happens quite often, you would think there would be a form for it so that Quickbook can standardize it. We can make the data input as easy as possible so that someone doesn't need an accounting background to do the data input of a particular form, even if it's fairly complex, such as an invoice that deals with inventory, for example. So then if it doesn't fall into one of these forms, the transaction you're looking at, I would always ask the question, is cash effective? If cash is affected, then you would think that you could use an expense form or a deposit form or enter it into the check register, which would be an expense or deposit form. And if there's no cash affected, then you might enter a journal entry. For example, a transaction for the purchase of equipment that you paid for with a loan, meaning you financed the purchase of the equipment. We don't purchase equipment all the time so it's not a normal transaction over here and we didn't pay cash for it, so we're not going to use an expense form so you might end up using a journal entry type of form in that case. You would also use journal entries possibly for year-end or period-end adjustments and using journal entries is on purpose at that time because that'll give you a differentiation between what you're doing in the adjusting process and what you're doing in the normal kind of bookkeeping process and that's actually nice and helpful for when you sort your reports. So let's give an example. If I go into a journal entry, we can see that we have just a journal entry layout and let's say we made this as of 010124 and so it's going to number the journal entry up top and then I'm going to enter the transactions directly to two accounts. We're going to do so with debits and credits. If you don't know debits and credits well, if there's only two accounts affected, then you can kind of test out the debits and credits and if you go the wrong way, you can switch it. If you get to a longer transaction like a simulated payroll transaction or something, then it can get quite complex if you don't know the debits and credits but we can also enter the journal entries into registers, which we might look at shortly as well. So let's say that we were going to purchase equipment or something and we financed it so we're going to say, let's say it was equipment that we're purchasing and I'm just going to make a new account for it. Actually, let me say equipment and I'm going to make a new account. I'll just make a new account because I'm going to say it's a fixed asset account. So I'm going to say it's a fixed asset account and it's going to be, I'll just say furniture asset, I'm going to call it equipment, fixed asset instead of an expense. That's the point I'm going to say okay and let's say it was for 5,000. We probably want to put a description of what exactly we purchased here but I'm going to leave it blank for our purposes because I just want to look at the increase and the decrease and then the other side didn't go to the checking account. The checking account's not going to go down instead it went to a loan. So I'm going to say loan payable. So we have a loan payable. Let's just use that one. So this is going to increase the equipment with a debit because assets go up with a debit and it's going to increase the loan with a credit because I mean liabilities go up with a credit. So let's check that out. So I'm going to say save and close and if I go to my balance sheet and I change the range to 010124Tab, run it to refresh it, then we're going to see that we should have our equipment. There's the equipment. There's the 5,000 that we put in the equipment and if I drill down on it, you can see that it was entered with a journal entry form instead of some other form type of transaction. If I go into it, we can see there is our journal entry. So it's talking about it like it's a form and it's a data input form although all forms do enter journal entries in that a journal entry is the fact that the double entry accounting system has two accounts that are impacted which can be represented in debit and credit format or increase and decrease format if you want to talk about it that way, accounting equation format. So if I then go down to the bottom, we said that we have a loan payable, there's our loan payable and we can go into it here and there is once again our journal entry. Let's go back. Now you can also sometimes enter those journal entries if you aren't comfortable with the debit and credit form or sometimes it's just easier if there's only two accounts affected, you might enter it directly into a register. So just to check that out, if I go to this first tab over here and I go into my transactions and then I'm going to go to my chart of accounts on the right-hand side, chart of accounts or close the hamburger up top for now, usually when we think of a register, we think of it as connected to a checking account and it looks kind of like the check register if you used to have the old checkbook and your recording stuff into your checkbook. But there's actually a register for every balance sheet account. So you can see every balance sheet account has a register not on the income statement accounts because the income statement accounts are temporary accounts and if they close out to the balance sheet they can start over periodically from month or year to year. So if I go up top, if I enter a transaction such as we just did increasing the equipment recording alone, I could go either into the notes payable register or I can go into the equipment register and possibly record the journal entry directly in there. I'll show you what I mean if I go into the register. I know that I'm in the register now and if I select the dropdown, I can see I have only two forms that I can use a transfer and a journal entry because this is a much more limited account than say the checking account where you'd have a whole bunch of forms you can use. So we'd probably be using like a journal entry and then I'm going to say this happened on 010524 and let's just say it's the same thing but this time I'll say it's for 6000 just to make it different and it's going to be an increase they have the decrease first it's going to be an increase 6000 and the other side once again I'm going to say it's going to loan loan payable. So you can enter the same transaction here and you can see it's a little bit easier because I can think about it as saying in some senses it's a little bit easier right we could say if there's only two accounts affected I'm going to say well the increase is going to the account that I'm in which is the fixed asset account which I know is increasing because I bought equipment and then the other side is going to go to the loan payable and if I don't know if the loan payable should be debited or credited I'm just going to record the other side to it and it should be going the right direction so that way I just need to look at the asset and say the asset's increasing so I'll just increase it there and the other side you could do what it's going to do or I can go into the loan payable and do the same thing I could have entered it as an increase the loan payable and just record the other side okay so if I save it and close it so there it is and then if I go back into it here and I edit it it's going to open up a journal form similar to what we saw with the deposit form and the expense forms where I can enter it in kind of a quicker fashion and one that might make more sense but when I drill down on it it's going to give me the full form because that's what QuickBooks does being built on the financial statements is backed up by some form and if there's not a standard form then the form will be the journal entry form so if I go to the balance sheet and run it again you can see that now we have the equipment two journal entries in here that have been recorded and then if I go back and I go to my loan payable we have the two journal entries in here that have been recorded I go back again and I go back to this first tab and I go back to my chart of accounts up top note that you could have done that the other way as long as you just want to make sure you're on the balance sheet account so if I went to the loan payable most people would probably first think about the asset because they think about the asset increasing but if I go to the loan payable I have a register here and you can see if I entered this transaction directly into the register now I have I could have just said I know the loan payable is going to increase instead of talking about debits and credits and then the other side went to wherever it's going to go which was the equipment account if I edit this let's go into the equipment account so there's the journal entry form so just note that if I recorded some other transaction with a journal entry so if I hit the drop down for example an invoice what does an invoice do? increases accounts receivable the other side goes to revenue so if you're not used to using the form you might say well I could just do a journal entry for that but if you do it messes up the internal bookkeeping generally so for example if I enter a journal entry and I try to enter one for like an invoice transaction and I say this is going to happen on the 8th and I'm going to say accounts receivable is going to go up this is what I learned in my debits and credit accounting course it goes up let's say by 600 and then the other side is going to go to income I'll just make up an income account income and we'll say it's going to go to income other primary income boom save it and close it now it probably won't even let me record this because QuickBooks is going to say hey wait a sec you don't even have a customer here I can't let you record it because if you do your subledger is going to be off for accounts receivable so it's trying to help us out by not even letting us record it see it says when you use accounts receivable you must choose a customer name so we're going to be like okay maybe I'll just put a name in here and so we'll just say let's say this was customer number one and I'll add a name and then I can save it and close it and say ha QuickBooks there we have it so if I go back on over here so now if I run this then I can go into my accounts receivable and there's my transaction but it looks like a journal entry instead of an invoice you might say that's not too bad but I'm going to say there's that and then the other side it goes into the profit and loss report list range change 010124 tab 123124 tab run into refreshing there's the 600 also in there as a journal entry if I go to the first tab because they forced me to put a name in it the subledger should be okay so if I go to the tab to the right right click it double duplicate it so I can open up the AR form and go to the reports close the boogie hand boogie that is and we'll say we're going to go to the customer balance detail so now we can see there's our customer everything else has an invoice this one has a journal entry so again it's kind of funny looking there but it still ties out because QuickBooks forced us to put a name so I could put it into the subledger it's at the 588152 which ties out to the balance sheet 588152 let's go to the first tab now and look at it internally we go to the sales side of things and I go to my customers for example customer number one and so there we have it here but there's no little button that can say I see the journal entry but I don't see a button saying I can match a payment to it right because the next thing that's going to happen is they're going to pay us that money hopefully and normally if you have the you'd make a payment thing here and you apply it out now this one it's still letting you apply it out so that's actually nice that you still have the capacity to apply it out here to the payment but you can see where the issues come in when you don't use the forms right if I did this again and I said I got paid with a payment form for example and they paid me and I said well I'm not going to enter a payment form I'm going to enter a journal entry and say now I got the money which went into the checking account cash I went let's say checking checking account boom and it was for 600 and the other side is going out of accounts receivable accounts receivable then I'm going to have to put the name in here customer number one so it lets me record it and then I save and close that one so now you've got these now I've got this kind of two journal entries but they're not really linked together in here right that's going to so that's kind of messy and if you do that over time it's going to get to be messy if I look at my subledger report up top then I'm going to run it and so now it didn't cancel each other out here I could see that it went in and out but I can't really cancel them out because I want those to disappear I want them to go away now you might be able to still to fix it you might be able to make a payment form and tie those two things out just out of curiosity let's check it out so now you have these two journal entries that you could tie out and fix it but you see the problem that I'm pointing at here you want to use the forms because those are used for internal bookkeeping purposes and then you want to see what's happening behind the scenes when these forms are entered so you want to see what's happening behind the scenes with regards to the debits and credits to create the financials if you can or at least know them in increase and decrease format and then be able to see why the form is useful from an internal perspective one because it's good for data input and two because the forms will be linked together so you can track the information internally in the centers the customer center, the vendor center and the employee center now remember the other main place that you'll use the journal entries are adjusting entries at the end of the period which you might not do on the bookkeeping side of things because you might work with an accounting firm that's at least doing the taxes and they might be doing like adjusting entries at the end of the period or they might have to make adjustments to create the financial statements in accordance to either the accrual method possibly or the tax basis in order to at least do the taxes or financial statements so then you have to the question is how do you make that process as smooth as possible do you give them the access they can do the journal entry or do they give you the information and you enter the journal entries and so on and so we'll touch on that a little bit more as we work through the longer practice problem and we'll actually have a section on section or course on adjusting entries if you're interested in that but if you're on the bookkeeper side of things what you need to have an understanding of is both sides need to know what the other side is doing so that you can do what you need to do well and then they can do what they need to do well and we have a good divide between the splitting of the duties so we'll talk more about that in future presentations