Accounts payable transactions, can drive almost every area of the financial statements. Of course, the most common are expenses. I can also enter a bill to pay for a prepaid, such as inventory, or a prepaid expense. Then I can enter a bill to pay off some other liability.
In reality, entering a bill, or accounts payable, can be used to affect every area of the financial statements, except income.
In this video I will walk you through how to enter a bill for any expense.
You will also see how to record a pre-paid expense.
You will learn how to record the entire inventory cycle – both purchase and sale.
Then I’ll show you how to record the purchase of a Fixed Asset.
In each of these transactions I am going to show you how to get the Transaction Journal, which is a report that shows you the actual journal entry behind the Bill you’re posting. You should do this on your own. Whenever you record a transaction, predict what the debits and credits are. Then run the transaction journal to see if you were right. The more you do this the better you will understand what’s really going on when you record transactions in QuickBooks Online.
This may seem inconsequential now, but I promise you this. When you run across a complicated transaction that you don’t know how to record, and then you can think it through by understanding where it should go on the financial statements. Next you’ll work out the debits and credits, and THEN you will know how to manipulate the forms in QuickBooks (such as Enter Bills) to get the desired result. Now THAT’s bookkeeping. THAT is when you have the kind of command over what you’re doing, that your work will be solid! No one will be able to stump you. They can question your work, but it will only wind up reinforcing how well you actually know your stuff.