Accounting Principle - using QuickBooks

  • Thread starter WhoTurnedOffTheLights
  • Start date

W

WhoTurnedOffTheLights

Hello,

I'm accounting illiterate but learning.
(so please be gentle and understanding.)

In re-entering my bills/purchases into QBpro, I realised that perhaps the
way I was going about entering particular purchases from the past year
wasn't in my best interest.

----Here's a simple example of what I mean:
for auto gas purchased through the year, I've created a MAIN account for:
Car Maint/Services

Underwhich I created sub-accounts for purchases:
- Supplies
- Gas
- Auto Mech.Services

This all works fine for me. BUT, Should I be going the EXTRA tedious MILE by
entering in the names of any/all shops I purchased from as YET MORE SUB
ACCOUNTS OF THE ABOVE?

My thinking was how doing so would leave me with yet another 100 or so
meaningless sub-accounts. Would it be better to just notate the
companies'/gas stations'/supply stores' names within the Memo????

Hope my question was clearly understod by all and it makes sense.

Many, many thanks for any insight and advice!

;-))
 
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S

S.M. Serba

When entering purchases for NON INCORPORATED sole proprietors or general
partnerships, I use Gas for the vendor of any gas purchase. I use the
specific vendor name for supplies like oil, washer fluid etc. and the vendor
name for repairs, parts (tires, windshield wipers, fuses etc).

DON"T set up separate sub accounts in your GENERAL LEDGER/ACCOUNT LIST for
each VENDOR!

Also, for restaurants, I just use Restaurant as a vendor for meals &
entertainment, unless it is a significant bill (eg. several hundred dollars
or more).


--
Stephanie Serba, AICIA
Partner, Durham Business Outsource
Accounting & Technology
smserba <at> dbo <dot> ca
www.dbo.ca
 
W

WhoTurnedOffTheLights

Hmmmmm, I follow ya', and already doing as you say.

Note: I'm the head of my own Corporation.

but how does this sound. There are plenty of items I used my own credit
cards & cash for this year (no, my company still doesn't have a credit card
of its own). So's to later determine which items were Out-Of-Pocket
expenses, I coded each of these Bills as "Out Of Pocket" in the CUSTOMER:JOB
entries.

I figured this'll allow me to do accurate reports of all Out Of Pocket
Expenses at any later date. (for the sake of reconciliation, accountabiity
and whatever else). Does that sound retarded? Or do you think I'm on the
right track.

(& yes, of course I've got all related proof, statements and receipts)

BTW, thanks Stephanie so much for the response, It's greatly appreciated
!!!!!!!!

--
 
S

S.M. Serba

First, if the OP is Canadian and using the Canadian version of QB PRIOR to
2004, this WILL NOT WORK.

If you want to track your "out of pocket expenses" you can do it 2 ways, in
one step or many.

The many step way: Enter your bills as normal but with yourself set up as
the Vendor. Reimburse yourself with a cheque out of the Bank account and
take the cash. If you don't want to take the cash, enter a credit to your
Vendor account, with the credit side to Owner's Equity.

OR if you don't want to cut a cheque, but rather apply any out of pocket
purchases you have made to your equity (funds you have paid into the
business), you can make a journal entry for the purchases, with the credit
side to Owner's Equity...


--
Stephanie Serba, AICIA
Partner, Durham Business Outsource
Accounting & Technology
smserba <at> dbo <dot> ca
www.dbo.ca
 
G

Gary V. Deutschmann, Sr.

Hi WTOTL

In my chart of accounts I set up a couple of Credit Card accounts, one
is for Out of Pocket, the other is for Short Term Loans to the
company.

When an item is purchased Out of Pocket, it appears on the Ledger as
being paid by Credit Card and Expensed to the proper expense account.
That way, whenever I'm paid as the credit card company, it does not
affect the original transaction in the ledgers.

When working on large contracts that may not be paid until the end of
the contract, more funds may be used to complete this contract than
what the company has on hand. So I created a Credit Card account for
Short Term Loans to the company. I can loan cash to the company so
that the bills for materials, labor, etc. can be paid using company
checks.

TTUL
Gary
 
W

WhoTurnedOffTheLights

Hey there Stephanie,

yah, that second sounds like something similar to what I discovered within
QB last night and somethnig which might be more to my liking (sort of).
Though for the sake of learning every aspect of accounting and of QB, I'll
definitely look into all options.

Thanks much!
 
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W

WhoTurnedOffTheLights

Hmmmm, thanks Gary.

I'd just recently purchased QB and learning my way around. Huge transition
from simple record keeping in MS Money to such a robust application as QB
Pro.
 

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