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I. Title: Project 1: Financial Accounting Technology
Table of Contents
Section #
Contents
Page #
I.
Title page
1
II.
Introduction
Competencies assessed on this project
2
Scenario, the role you play in the project
3
III.
Steps to Completion
Step 1: Read the entire project file, rubric, and helpful hints and tips
before communicating with your study group
3
Step 2: Login to your QBO
3
Step 3: Setup company accounts and settings
4
Step 4: Setup and edit the Chart of Accounts
5
Step 5: Setup the Sales Tax
6
Step 6: Set up product items and contributed inventory
7
Step 7: Create journal entries for all other (non-inventory) Owner
Contributions
9
Step 8: Add customers and vendors
10
Step 9: Add Invoices, Purchase Orders (PO), and Bills
11
Step 10: Enter all transactions for the month of April
12
Step 11: Reconcile the April bank statement in QBO
15
Step 12: Review and revise the Financial Statements.
17
Step 13: Compare the Check Figures to account balances on your
financial statements. Check figures are the correct answers for
select accounts.
17
Step 14: Print and save the following QBO Reports: 1) P&L, 2)
Balance Sheet, and 3) the General Ledger in pdf format
18
Step 15: Combine these 4 files: 1) P&L, 2) Balance Sheet, 3)
General Ledger, and 4) Bank Reconciliation into 1 PDF file
18
Step 16: Review the rubric
18
IV.
Deliverables
Review the instructions before uploading your deliverable
19
V.
Rubric
Take one last look at the rubric to ensure you understand how your
deliverable will be graded
19
VI.
Helpful hints and tips
Read the hints and tips before starting the project
19
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Table List
Table
#
Table title:
Page #
1
Chart of Accounts
5
2
Standard Sales Prices (Casey’s Original Artwork)
7
3
Cost and Pricing of Prints (Reproductions of Casey’s original artwork)
8
4
Service and Non-Inventory Sales
8
5
Owner’s Contributions/Investments
9
6
Customer List
10
7
Vendor List
10
8
Consignment Vendor List
11
9
Invoices to Customers
11
10
Purchase Orders
12
11
Bills (Payables to Vendors)
12
12
April Transactions
14
13
Bank Statement
16
14
Check Figures
17
15
Summary of Report Deliverables
18
16
Report Files to be Combined into One PDF
18
II. Introduction:
All graduate accounting course deliverables use the AICPA Pre-Certification Core Competency
Framework to assess competencies deemed essential for success in the accounting profession.
Competencies assessed by this project:
§ Measurement, Analysis, and Interpretation
o Identify appropriate, reliable, and verifiable measurements.
o Analyze data for a given purpose and intended use.
o Interpret results of data analysis for the intended user.
§ Reporting
o Prepare financial statements as governed by professional standards and
required by law.
§ Technology and tools
o Use relevant technology and tools to analyze data and assigned tasks.
§ Decision making
o Propose effective business decisions based on analysis and professional
judgment.
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Scenario:
Your good friend Casey has always expressed interest in opening his own retail art studio. He
has been painting and selling his artwork for years and already has a good customer base. In
January of this year, he started the process of formally setting up a business named Casey’s
Crafts; he filed for an Employee Identification Number (EIN) in February. Casey found and
rented an art studio on March 1st, and has been cleaning, painting, and setting up the space ever
since. The grand opening was April 1, 2022.
Casey’s Crafts sells Casey’s original artwork and prints of his original artwork that he purchases
from a print shop. The original artwork and prints are inventory items. Casey also accepts
custom orders from customers, which are referred to as Custom Artwork Sales. Custom Artwork
involves Casey painting a picture for a particular customer based on the customers’ specification.
Oftentimes, his Custom Artwork is a family portrait.
Also, Casey agreed to allow a few of his artist friends to display and sell their artwork from the
Casey’s Crafts shop. These sales would be classified as Consignment Sales. Artwork on
consignment is owned by the artist who created the painting and therefore is not recorded as
inventory on the Casey Kraft’s accounting records. It is customary for the consignee (the
business owner) to retain a percentage of all consignment sales as payment for allowing the
consignor (other artists) to display his or her artwork.
Casey knows you are going to school for your master’s degree in accounting and has asked for
your help setting up and using QuickBooks Online (QBO). You agree to help set up the QBO
business account and complete the first month of transactions. You are not familiar with QBO,
but you know it will be beneficial to your accounting career to learn QBO because it is the most
widely used financial accounting platform for small business in the United States. To feel more
confident with QBO, you decide to seek guidance and collaborate with some of your classmates
in your MS degree program at UMGC. You recall a few mentioned working as an accountant for
small business clients.
Casey is interested in using the following QBO features:
§ Sales Receipts/Invoices
§ Purchase Orders/Inventory tracking
§ Bills and Bill Pay
Eager to get started, you carefully read the Steps to Completion and review all QBO learning
resources before beginning.
III. Steps to Completion:
Step 1 – Read the project and rubric before you begin communicating with your study group
members. You will discuss the project together but will submit individual deliverables.
Step 2 – Set up your QBO account.
You should have received an email invitation to QuickbooksOnline from Intuit, which your
professor initiated. Create your account by clicking the link in the email invitation.
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Step 3 – Set up the company account and settings
§ View the Video:
o How to Navigate in QuickBooks
o The transcript for this video is in Content/Course Resources/Projects &
Rubrics/Project 1.
Remember – QuickBooks is a very forgiving program. Most mistakes can be fixed as you have
the ability to go back and make historical changes, however a correct setup will prevent the need
in most cases.
The following are the important pieces of information you need to set up Casey’s Crafts in QBO.
Each of the Bolded items are Categories in the Account and Settings page.
COMPANY:
§ Company Name: Casey’s Crafts_YOUR NAME
§ Your name must be part of the Company name
o There are no exceptions
o Example: Casey’s Crafts_SHARON LEVIN
§ Email: Enter your UMGC email address that appears in our classroom
§ Telephone: Enter your phone number associated with your UMGC profile
§ EIN: Leave the EIN Blank because the EIN has not been received yet
§ Company Type: Sole proprietor
§ Address: 500 Grand Blvd. Miramar Beach, FL 32550
§ Website: Enter UMGC.edu
§ Tax form: Sole Proprietor (Form 1040)
§ Method of Accounting: Accrual
§ Casey’s Crafts will not be using track classes or track locations
SALES:
§ Casey’s Crafts sales terms are Net 30, unless otherwise stated
§ Shipping is available for a fee
§ Discounts are offered occasionally
§ Casey’s Crafts requires a 50% deposit on all Custom Artwork sales
§ Track the quantity and price/rate for all sales
§ Track inventory quantity on hand for the art prints.
EXPENSES:
§ Casey’s Crafts wants to use purchase orders, so make sure you check the box.
§ All other default settings are fine.
PAYMENTS:
§ This setting is used to allow clients to pay an invoice through their system. Although
Casey’s Crafts is possibly be interested in this feature in the future, he has no current
interest.
ADVANCED:
§ Casey’s Crafts is a calendar year taxpayer, but he hasn’t received an EIN yet.
o The first month of the fiscal year is January
§ Use the tax form: Sole proprietorship Form 1040
§ Do not use account numbers
§ Do not track classes or track locations
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Step 4 – Set up and edit the Chart of Accounts (COA)
§ View the Video:
o How to Edit your Chart of Accounts in QuickBooks
The transcript is in Content/Course Resources/Projects & Rubrics/Project 1
Table 1: Chart of Accounts
Add the
accounts
in the
next
column to
the
Chart of
Accounts
>>>>
Name:
Type
Detail Type
Subaccount of:
Casey’s Crafts Bank
Bank
Checking
Refundable Deposits
Other Current
Assets
Other Current Assets
Art Displays
Fixed Assets
Furniture & Fixtures
Consignments
Payable
Other Current
Liabilities
Other Current
Liabilities
Art Sales
Income
Sale of Product
Income
Original Artwork
Income
Sale of Product
Income
Art Sales
Prints Sales
Income
Sale of Product
Income
Art Sales
Custom Artwork
Income
Sale of Product
Income
Art Sales
Consignment Income
Income
Service/Fee Income
Group Art Classes
Income
Service/Fee Income
Printing &
Reproduction Expense
Cost of Goods Sold
Supplies & Materials –
COGS
Art Supplies Expense
Expenses
Supplies & Materials
Shipping Expense
Cost of Goods Sold
Shipping, Freight &
Delivery
Gain on Sale of PP&E
Other Income
Other Miscellaneous
Income
Loss on Sale of PP&E
Other Income
Other Miscellaneous
Income
Make the
edits
shown to
the right:
Change from:
Change to:
Account Type:
Detail Type:
Owner Draws
Owner
Distributions
Equity
Owner’s Equity
Building & Property
Rent
Rent Expense
Expense
Rent or Lease of
Building
Office Supplies
Office Supplies
Expense
Expense
Office/General
Administrative
Expense
Mark the Purchases account Inactive.
Tip for Success: The Opening Balance Equity account balance MUST = $0 before
printing your final deliverables. Whenever the Opening Balance Equity account has a
balance other than zero ($0), prepare a journal entry to eliminate its balance and credit
the appropriate account, which in this case will likely be the Owner’s Investment
account.
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Step 5 – Set up the sales tax
§ View the Video:
o How to Set Up Sales Tax: Settings, Sales & More
o The transcript is in Content/Course Resources/Projects & Rubrics/Project
Overview of Sales Tax
NOTE: Sales Tax must be set up in the “TAXES” area in QBO. Proceed with this section
carefully. QBO is very user friendly for the most part; however, there are areas that are hard to
fix should you set it up incorrectly and Sales Tax is one of those areas so do not rush here.
Read all the way through this appendix, watch the how to videos and then proceed with caution.
Casey’s new art studio is located in Miramar Beach, Florida, 32550. He is required to pay 7% in
sales tax to the State of Florida. Of that 7% state tax, the state of Florida disburses 1% to
Walton County.
The State of Florida requires most taxpayers to file monthly sales tax returns, Casey’s Crafts falls
into this category. As of April 1st, Casey’s Crafts must start collecting taxes and the first return is
due no later than May 20th (QBO knows when it is due) for the reporting period of April 1 – April
30.
Casey’s Crafts needs to make sure he charges customers and remits sales tax for everything he
sells except for the group art classes. Florida does not collect taxes on the sale of services.
Address: 500 Grand Blvd. Miramar Beach, FL 32550
Go to the “TAXES” area and set up sales tax for the state of Florida. If you entered the business
address when you were setting up the account, QBO should suggest the correct tax agency(s).
If not, it should ask you for an address here. Make sure you select Florida Department of
Revenue from the dropdown list. Again, make sure you find the taxing agency in the dropdown
list to select. Do NOT manually add any taxing body. QBO already has all the information it
needs to correctly tax products and it will automatically update taxes should laws change but
only if it is set up correctly from the beginning.
Step 6 – Set up product items and contributed inventory –
§ View the Video:
o Add Product Information
o The transcript can be viewed in the video by clicking CC.
The setup of Inventory will be done in the “INVOICING/SALES” area of QBO. Once in SALES,
go to the Products and Services tab.
Then click “New” in the upper, right corner. Next click “Inventory” and fill in the name, category,
and:
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• Fill in the name of the first inventory item.
• Select the category. The first time you will have to add a new category.
o You will be adding these categories: Casey’s Originals, Prints, and Non-inventory
items
• The “initial quantity on hand” will be the owner contributed inventory, see the table below.
• As of date will be 4/1/2022.
• Do not enter a quantity in the “Reorder Point” field for any items.
• The Inventory asset account is “Inventory asset”
• Do not use product codes aka SKU numbers.
• For all items that have a fixed sales price associated with it, enter the Sales price for each
item
• Also, make sure you associate the correct Income Account with the correct product.
o Note: all sales of original artwork should be recorded to Income account: Art
Sales: Original Artwork Sales
• Enter the costs to have the prints made.
• Remember, all sales are taxable EXCEPT FOR Group Art Classes.
o Be sure to select “Taxable Standard” under “Sales tax category” for all sales other
than group art classes, which will be “Nontaxable.”
Casey’s Crafts primarily sells 3 types of original artwork and prints – Large, Medium, and Small.
Pricing of Original Artwork:
Table 2: Standard Sales Prices for Casey’s Original Artwork
Size of Artwork
Sales Price
Number of Pieces
Contributed
Large Originals
$4,500
5
Medium Originals
$2,500
12
Small Originals
$900
32
Sales of Casey’s original artwork should set the product Income account to: Art Sales: Original
Artwork Sales.
Cost of Original Artwork:
Casey was instructed years ago by his tax accountant that his original artwork inventory should
not have a COGS associated with it because it is impossible to accurately determine the costs
associated with his original artwork, some of which he painted decades ago. Instead, he needs
to expense all of his art supplies purchases. However, the prints in inventory are classified as
inventory until sold and then those costs will be classified as COGS. So, although the original
artwork inventory will have zero costs ($0.00) associated with it, you will enter the sales price of
the inventory Casey transfers into the business.
On April 1st, Casey contributed his personal inventory of prints (reproductions of original artwork)
to the business, as follows:
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Table 3: Cost and Pricing of Prints (Reproductions of Casey’s original artwork)
Size of Prints
QTY
Cost per
Unit
Sales Price
per Unit
24 x 36 Print
12
$95
$214.99
11 x 14 Print
48
$30
$79.99
5 x 7 Print
125
$7.75
$19.99
All of the prints in the table above should have the following setting:
1. Income account to: Art Sales: Print Sales
2. Expense account to: Cost of Goods Sold (COGS) account
Note: QBO will automatically credit the Opening Balance Equity account when you enter the
prints. Thus, you must prepare a journal entry to move each print size balance in the Opening
Balance Equity to the Owner’s Investment account. The Opening Balance Equity account must
be zero ($0).
In addition to original artwork and prints, Casey has several non-inventory items that you need to
add.
Table 4: Service and Non-Inventory Sales
Type
Sales Price
per Unit
(student)
Income Account
Service
(non-taxable)
Group Art Classes*
$35
Group Art Classes
Non-Inventory Sale
Custom Artwork
N/A
Art Sales: Original
Artwork
Non-Inventory Sale
Consignment Artwork**
N/A
Consignment Income
Non-Inventory Sale
Unusual Sales PP&E***
N/A
Gain on sale of PP&E
For all Custom Artwork, Casey’s Crafts requires a 50% deposit at time of order and the balance
when the buyer picks up the artwork.
* Remember, this is the only non-taxable item.
** Casey also displays and sells consignment pieces. He earns a 25% commission on each
piece sold. The consignee sets the price, so Casey keeps those records on an Excel
spreadsheet and does not enter the prices in QBO until he sells the pieces. In other words, the
consignment inventory is not an inventory item, but you need to set up a product item to handle
the transaction. However, make note of all consignment sales because in order to complete the
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sales transaction, you need to make a journal entry (JE) to move 75% of the sale from the P&L
to the balance sheet as Consignments Payable.
*** Sales of PP&E will also require a JE to remove the item from the balance sheet and reduce
the gain (or increase the loss) on the sale. The transaction is not complete until this JE is made.
Step 7 – Create journal entries for all other (non-inventory) owner contributions
§ View the Video:
o Journal Entries in QuickBooks Online
The transcript is in Content/Course Resources/Projects & Rubrics/Project 1
Owner Investments (aka Owner Contributions)
To enter all owner contributions, you may create one or multiple JEs. Determine the correct
account to debit from the list below and credit: Owner’s Investments. Reminder: all of the
items below were paid by Casey from his personal bank account. Also remember to put the
description of each item in the JEs.
Table 5: Owner’s Contributions/Investments
Date
Description
Account
Amount
3/1
*Rental Deposit (Refundable)
Refundable deposits
$2,500
3/1
*1st month rent – March
(prior to opening)
Rent expense
3,000
3/1
*Electricity Deposit (Refundable)
Refundable deposits
900
3/5
*Chesapeake Communications Network
Deposit (nonrefundable)
Utilities: Phone &
Internet
300
3/10
*Gallery set up supplies –
paint for walls, cleaning supplies,
lumber for building shelves/racks
Office Supplies
435
3/15
*Miscellaneous art supplies
for classes
Art Supplies
expense
750
3/25
4 large Art displays
(Fair market value at time of contribution
= $450 each)
Art Displays
1,800
3/31
Owner’s deposit to open
a business bank account
Casey’s Crafts Bank
20,000
Total:
$29,685
Step 8 – Add customers and vendors
§ View the Video:
o How to Add Customers and Vendors into QuickBooks
The transcript is in Content/Course Resources/Projects & Rubrics/Project 1
Customers and Vendors:
Enter all customers in the “SALES” area and all Vendors in the “EXPENSES” area.
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Table 6: Customer List
Name
Phone Number
Email
Address
Jackson Madonna
898-474-1111
Jackson.Madonna@JM.jm
Kids Love Art
898-474-0000
KidsLoveArt@KLA.bb
1173 Front Beach Rd
Miramar Beach, FL 32550
Bowie Castiel
898-747-5200
Bowie@Castiel.bc
Marley Veloso
897-872-2152
Marley@Veloso.es
Armstrong Presley
899-421-1478
APresley@APresley.ap
Customers
Casey uses this “Customers” account to record sales to non-recurring
customers and Daily Sales Receipts
Table 7: Vendor List
Name of
company/account
managers
Phone
Number
Email
Address
Jamie MacKenzie
Real Estate
Laurie Sweet (Manager)
850-393-5555
Jamie@MacKenziereale
3630 Bay Avenue
Miramar Beach, FL 32550
state.com
Red Hook Prints
Sasha Levin (Manager)
850-981-0000
Orders@RedHookprints
.com
Chesapeake
Communications
Network
Ron Primo (Manager)
850-424-7900
Ron.Primo@Chesapeak
78-541 Alligator Drive
Dade City, FL 33624
eCommunications.net
Casey
USA Art Supply
Veronica Paz (Manager)
813-771-3161
Paz@usaartsupply.com
602 Rose Lane
Brandon, FL 33617
Table 8: Consignment Vendor List
Name
Phone Number
Email
Address
Aba Zahara
Original artwork
904-546-7300
AbaZahara@gmail.com
415 Orange Avenue
Tampa, FL 33616
Evander Duran
850-778-2211
EDuran@hotmail.com
910 Boxer Lane
Marco Island, FL 34145
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Step 9 – Add invoices, purchase orders (POs) and bills.
§ View the Video:
o How to Create a Purchase Order
The transcript is in Content/Course Resources/Projects & Rubrics/Project 1
§ View the Video:
o How to Enter Bills, Track Expenses, & Record What You Owe
The transcript is in Content/Course Resources/Projects & Rubrics/Project 1
§ NOTE: Do not spend time creating fancy invoices. Use the basic form unless you want to
play around with this feature.
Table 9: Invoices to Customers
INVOICES – Purchases from Customer
Date
Customer
Terms
Discount*
Product
Purchased
QTY
Amount
1-Apr
Kids Love Art
Net 30
10%
Art Classes
10
$350 before
discount
2-Apr
Marley Veloso
Due on receipt
Custom Artwork
1
$4,500
+ tax
30-Apr
Kids Love Art
Net 30
10%
Art Classes
35
$1,225 before
discount
* Kids Love Art is the only customer that receives a
discount because they buy individual art classes in bulk and pay within 15 days.
Table 10: Purchase Orders (PO)
PURCHASE ORDERS – Orders to Vendor
Purchases:
Description
QTY
Cost
Totals
Red Hook Prints*
order 4/1/2022
24 x 36 Prints
4
$95
$380
11 x 14 Prints
12
$30
$360
5 x 7 Prints
14
$7.75
$108.50
Subtotal
$848.50
Tax (non-taxable online purchase)
$0
Total Order
$848.50
IMPORTANT NOTE: Create the bill directly from the PO.
* Note: be sure you create the bill for the
Purchase Order from the Purchase Order.
It is very easy, please make sure the dates are
correct, see table below. Use “Copy to Bill.”
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Table 11: Bills
BILLS – Payable to Vendors
Received
Due
To
For
Amount
1-Apr
1-Apr
Jamie MacKenzie Real Estate
April Rent
$3,000
1-Apr
16-Apr
Chesapeake Communications
Network
Utilities: Telephone and
internet bill
$186.35
4-Apr
19-Apr
Red Hook Prints
Print order 4/1*
$868.50
24-Apr
9-May
USA Art Supply
Purchased large glass
art display
$4,010.99
30-Apr
30-Apr
Jamie MacKenzie Real Estate
May Rent
$3,000.00
*Make sure you create the bill from the P.O. When the
bill arrived you see there is a $20 shipping expense
that you must add to the bill.
Step 10 – Enter all transactions for the month of April
§ View the Video:
o Create Sales Receipts in QuickBooks
The transcript can be viewed in the video by clicking CC.
§ View the Video:
o Receive Payments in QuickBooks
The transcript can be viewed in the video by clicking CC.
NOTE: make sure you are receiving the payment to Casey’s Bank account, NOT the
undeposited funds
§ View the Video:
o How to Record & Print Checks
The transcript can be viewed in the video by clicking CC.
NOTE: Be sure to change the check number to Debit or EFT. QBO will accept
duplicate words so pick one and stick with it for consistency. However, make sure
that checks are numbered correctly.
§ View the Video:
o How to Record Bill Payments
The transcript can be viewed in the video by clicking CC.
§ NOTE: Make sure you document the check number used to pay the bill.
April Transactions:
Make sure you pay all bills through the EXPENSES area and receive all invoice payments in the
SALES area.
Make sure you pay the sales tax through the TAXES area. If your sales taxes due for the period
of April is different than the transaction amount below, there is a problem with your sales tax
somewhere along the way.
All receipts that were not invoice payments will require a Sales Receipt. You will create Sales
Receipts in the SALES area. All sales should be considered cash sales. Just make sure the
dates are correct and the account the money is deposited to is Casey’s bank account.
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Unless Casey does recurring business with a customer, or it is a special sale, all Sales receipt
transactions will be from customer “Customers.”
Write checks for all expenses that are not bill payments. However, if there is no check number
associated with the transaction, that means it is a debit card transaction so change the check
number to EFT in place of the check number.
Small inexpensive purchases, under $500, should be expensed. Make sure you select the
appropriate account for each transaction. Do not add any more accounts as you enter these
transactions. Think macro instead of micro. For example, paying for a PO Box or purchasing
small, inexpensive items, such as a lamp, should be considered an Office Supply.
QBO is limited in what you can record in a single transaction. This is where journal entries (JEs)
will be necessary. Hint: transactions where JEs will be necessary include sale of fixed assets
and sale of consignment artwork. I suggest you make the JEs as you go to complete the
transactions.
Table 12: April Transactions
Date
Description
Expenses
Deposits
Method of
Entry into
QBO
31-Mar
Owner deposit to open bank account
(This was already done in Appendix E as
long as your debit entry was to Casey’s Crafts
Bank)
20,000.00
J/E
1-Apr
Paid April rent (bill) check #1001
(3,000.00)
Bill Payment
1-Apr
Sold one 11 x 14 print
85.59
Sales
Receipt
1-Apr
Coffee and fingers foods for grand opening –
Trader Joe’s using a debit card (Add Trader Joe
payee while writing check) use
Office Supplies account
(79.61)
Check
2-Apr
Sold medium original artwork
2,675.00
Sales
Receipt
2-Apr
Deposit to complete a Custom Artwork painting
for Marley Veloso
(Paid ½ of Invoice. Receive partial payment)
2,407.50
Receive
Invoice
payment
4-Apr
Sold four 24 x 36, two 11 x 14 and
nine 5 x 7 prints at art fair
1,283.84
Sales
Receipt
5-Apr
USA Art supplies (art supplies) DEBIT
(287.21)
Check
5-Apr
Paid Chesapeake Communications Network
received 4/1 check# 1002
(186.35)
Bill Payment
12-Apr
Sold four 5 x 7 art prints
85.56
Sales
Receipt
12-Apr
Paid for Post Office box (for 1 year) using debit
card (Add USPS as a vendor and use
Office Supplies account)
(75.00)
Check
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Date
Description
Expenses
Deposits
Method of
Entry into
QBO
13-Apr
Sold a consignment piece for
Zahara $1,500 to Bowie Castiel
1,605.00
Sales
Receipt
14-Apr
Received payment from Kids Love Art
for invoiced amount
315.00
Receive
Invoice
payment
14-Apr
Paid Zahara for consignment sale to Bowie
Castiel
check # 1003 (to account Consignment Income)
(1,125.00)*
Check
14-Apr
Sold one large original artwork
4,815.00
Sales
Receipt
15-Apr
Purchased shelving from IKEA using a debit card
(EFT) record to office supplies and add IKEA
vendor)
(369)
Check
19-Apr
Withdrew cash for personal use using a debit
card
(This is an Owner Distribution transaction)
(1,250.00)
Check
19-Apr
Paid bill for prints to Red Hook Prints
4/4 bill check # 1004
(868.50)
Bill Payment
21-Apr
Custom Artwork painting completed
and picked up for Marley Veloso – (Receive the
remaining invoice amount)
2,407.50
Receive
Invoice
payment
24-Apr
Sold one 24 x 36; five 11 x 14; and ten 5 x 7
prints
871.88
Sales
Receipt
25-Apr
Sold one large (owner contributed)
art displays for $800
(Product/Service: Unusual Sales)
856.00
Sales
Receipt
30-Apr
Bank Fees
(18.50)
Check
30-Apr
Paid Sales Tax to Fl Dept of Revenue Online
DEBIT
(Pay through TAXES area)
(1,118.23)
Through
Taxes Tab
30-Apr
Paid rent May rent check # 1005
(3,000.00)
Bill Payment
30-Apr
Paid Bill for art display on 04/25 check #1006
(4,010.99)
Bill Payment
Subtotals:
(15,388.39)
37,407.86
BLANK
Net Total:
$22,019.47
* Note, this transaction is instructing you to code an expense item to an income account
because the original transaction records the full sales price to consignment income. Check
#1003 is removing the consignee’s portion of the consignment sale income. The amount that will
remain in the Consignment Income account will be Casey’s Crafts’ consignment income, which
equals 25% of the sale. QBO offers multiple ways to properly record the revenue; this method is
one way.
An alternative method would create a J/E to move 75% of the consignment sale to a payable
account at the time of sale is recorded and then record the check against that payable.
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120122 Last updated by Sharon Levin
Step 11 – Reconcile April Bank Statement
§ View the Video:
o Reconcile your accounts
The transcript can be viewed in the video by clicking CC.
§ Perform a Bank Reconciliation in QuickBooksOnline
Table 13: Bank Statement
Business Checking Statement: Casey’s Crafts
Account number: 18586299
Statement Period: April 1, 2022 to April 30, 2022
Account summary
Beginning Balance on April 1, 2022 $0.00
Deposits and other additions 37,407.86
Withdrawals and other subtractions 2,060.82
Checks
$5,179.85
Bank service fees
$18.50
Ending Balance on April 30, 2022 30,148.69
Deposits and other additions
Date
Description
Amount
1-Apr
Counter Deposit
$ 20,000.00
1-Apr
Counter Deposit
85.59
2-Apr
Counter Deposit
2,675.00
2-Apr
Counter Deposit
2,407.50
4-Apr
Counter Deposit
1283.84
12-Apr
Counter Deposit
85.56
13-Apr
Counter Deposit
1,605.00
14-Apr
Counter Deposit
315.00
14-Apr
Counter Deposit
4,815.00
21-Apr
Counter Deposit
2407.50
24-Apr
Counter Deposit
871.88
25-Apr
Counter Deposit
856.00
Total deposits $37,407.86
Withdrawals and other subtractions
Date
Description
Amount
1-Apr
Trader Joe’s
-$79.61
5-Apr
USA Art Supplies
-287.21
12-Apr
U.S. Post Office
-75.00
15-Apr
IKEA
-369.00
19-Apr
Counter: Withdrawal
-1,250.00
Total withdrawals and other subtractions ($2,060.82)
Checks
Date
Description
Amount
1-Apr
#1001
-$3,000.00
5-Apr
#1002
-186.35
14-Apr
#1003
-1,125.00
19-Apr
#1004
-868.50
Total checks
($5,179.85)
Total # of checks = 4
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Step 12 – Review and Revise Financial Statements
§ View the videos:
o Understanding Profit & Loss Statement: Income, Cost of Goods
The transcript can be viewed in the video by clicking CC.
o How to Customize Reports: Basics, Sorting & Date Ranges
The transcript can be viewed in the video by clicking CC.
§ You may notice a balance in the Opening Balance Equity account. QBO automatically
created this account when you entered the print inventory. The Opening Balance Equity
account is a temporary holding account (sometimes referred to as a junk account) that
needs to be zeroed out by preparing a journal entry before financial statements are
printed. Create a journal entry to move the balance from Opening Balance Equity (debit)
to Owner Investment (credit). The Opening Balance Equity account balance must be zero
on the Balance Sheet.
§ If your fixed asset account is incorrect, another J/E will be required is to remove the art
display PP&E that was sold from the books because it hasn’t been done yet: Debit: Gain
on Sale of PPE and Credit: Art Displays.
Step 13: Compare Check Figures
Check figures are the correct account balances for a select number of accounts. You should
compare the check figures below to your account balances. Discrepancies can be traced by
reviewing General Ledger account balances to detect transactions that may have caused your
account balance to differ.
Table 14: Check Figures – correct account balances for select accounts
Review Accounts:
Balance Sheet ACCRUAL BASIS
Report period:
ALL DATES
Check Figures
A/R
$1,102.50
Inventory Asset
$3,504.00
Refundable Deposits
$3,400.00
Fixed Assets
$5,360.99
Total Assets
$35,386.97
All Payables
$0.00
Owner Distributions
– $1,250
Net Income
$3,403.22
Opening Balance Equity
$0.00
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Note, make sure the basis for the financial statement is in the correct basis for your comparison.
The best practice is to review in both bases to ensure you do not have errors in the statements.
Other than the accounts listed above, make sure you scan and make sure all balances make
sense. For example, the only negative numbers in the financials should be the Owner
Distributions and Discounts given.
Step 14 – Print and save the following reports: P&L, Balance Sheet, and General Ledger in PDF
format
§ Print the P&L, Balance Sheet, and General Ledger in PDF.
o Choose All Dates for the reporting period
o Choose Accrual as the accounting/report basis
o Table 15 below summarizes the reports deliverable
Table 15: Summary of Report Deliverables
Report
Reporting Period
Accounting Basis
Print to PDF
P&L
All Dates
Accrual
Yes
Balance Sheet
All Dates
Accrual
Yes
General Ledger
All Dates
Accrual
Yes
Bank Reconciliation
Month Ending
N/A
Yes
Step 15: Combine the four (4) PDF report files into one PDF. If you do not have Acrobat Pro,
you may use the free APP: CombinePDF.com to combine the report files listed below and in
Table 15.
a) Profit & Loss, accrual basis for report period All dates
b) Balance Sheet, accrual basis report period All dates
c) General Ledger accrual basis for report period All dates
d) Bank Reconciliation report for the month ending
Table 16: Combine Report Files into One (1) PDF
Deliverable:
Page #
Combine into 1 PDF
P&L
1
Yes
Balance Sheet
2
Bank Reconciliation
3
General Ledger
Starts on page 4
Step 16: Review the rubric
Review the rubric one last time to ensure you know how your deliverable will be graded.
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120122 Last updated by Sharon Levin
IV. Deliverables
Submit the one (1) PDF Reports file you created in Step 15 above. There are multiple free
software options to combine PDF files on the Internet, such as Combine PDF.
V. Rubric:
You will find the rubric in LEO under Content>Learning Resources>Assessments: Projects,
Discussions, Quizzes, & Rubrics>Project 1.
VI. Hints and Tips:
General Hints and Tips:
§ Read the entire Project before beginning the project; make notes as you read
§ Read the Rubric before beginning the project
§ In QBO:
1. Do NOT track Classes
2. Do NOT track Locations
§ Submit the Project deliverables on or before the due date.
1. Review the Late Policy in advance of the due date; your professor is required to
enforce the late policy.
§ Ask your supervisor (professor) questions as needed.
Inventory Hints and Tips:
§ When first setting up the inventory account, associate each inventory item with the
correct Sales account.
§ Be cautious not to confuse Custom Artwork with Consignment artwork
§ The inventory account includes two types (only) of inventory:
o Original artwork created by Casey
§ Casey’s originals have a cost basis of $0
o Prints of Casey’s original artwork
§ When inputting the print inventory items, record the costs incurred to pay
the print shop to make the prints
Non-Inventory Hints and Tips:
§ Casey’s Custom Artwork does not pass through the inventory account because these
paintings are delivered to the customers immediately upon completion, thus they not held
long enough to be considered inventory.
§ Casey’s Crafts also sells artwork created by other artists. The items belong to the other
artists and therefore do not pass through the inventory account of Casey Crafts.
§ As a reminder, the Opening Balance Equity account must be zero ($0) before printing
your deliverables. If the Opening Balance Equity account has a balance other than zero
($0), prepare a journal entry to eliminate its balance and credit the appropriate account,
which in this case will likely be the Owner’s Investment account.
Chart of Accounts:
§ Do not create account numbers for the accounts.
