Chapter
1
Chapter 1
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1
Introducing QuickBooks
Chapter
1
1.
2.
3.
4.
5.
6.
7.
8.
9.
Objectives
How to install the QuickBooks software
How to work with the practice files in this book
Opening QuickBooks data files
Describe the features of several editions of the
QuickBooks software
Describe some of the basic principles of accounting
Introduction to Academy Glass
Installing QuickBooks Releases
Understand how to use Navigators, Menus, Icon
Bars, and the Shortcut list in QuickBooks
QuickBooks Help and Support
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1
Chapter
1
Objective
1. How to install the
QuickBooks software
Chapter
1
Installing QuickBooks Software
To install the software, insert the QuickBooks CD
into your CD-ROM drive
2. The installation program will start automatically
3. If the installation program does not start
automatically
 select the Windows Start Menu and then select
Run
 Enter [D]:\ Setup.exe (where D is the drive letter
of your CD-ROM drive)
 Click OK
 Follow the onscreen instructions to complete the
installation.
1.
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1
Chapter
1
Objective
2. How to work with the
practice files in this book
Chapter
1
1.
2.
3.
Working With the Practice Files
The practice files for this book are located

on the book’s Web site at www.mhhe.com/sleeter5e

on the author’s Web site at www.sleeter.com/textbook
Follow the instructions on the Web site to download the
installation file QuickBooks_2004_Classroom_Files.exe to
your local hard disk
By default, the installation file will place your files in a
directory called C:\QuickBooks 2004 Classroom Files and
backup files into the QuickBooks 2004 Backup Files
directory.
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Chapter
1
1.
Computer Practices
Each chapter uses one practice file

2.
Chapter [X].QBW for all computer practice
lessons, where X is the chapter number
In order to open this file

you must “restore” the backup file that is located
inside the QuickBooks 2004 Backup Files sub
directory
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Chapter
1
About QuickBooks Files
QuickBooks has two primary types of files:
1. Data files (extension “.QBW”)
 These files are used to enter data or create
reports
 To use these files, select File Menu and then
select Open Company
2. Backup files (extension “.QBB”)
 These files are used to create a condensed
version of the data file
 You must “Restore” backup files before using it,
QuickBooks converts a backup file into a data file
when you restore it
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Chapter
1
Backing up Data Files
Most important safeguard for safety of your
data file
2. Smaller version of the data file with file
extension “.QBB”
3. To create a backup, Select Backup option in
the File menu
1.
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3
Chapter
1
1.
Restoring Backup Files
Main reasons for restoring backup files in
QuickBooks


To transfer files between computers
To recover damaged or lost data files
Restoring does not add information to your
file
3. To restore a backup file, select File Menu
and then select Restore
2.
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Chapter
1
1.
2.
3.
4.
5.
Steps for Restoring a Backup
File
Launch the QuickBooks program
Select the File menu and then select Restore
Restore From: Set the filename and location fields
of your backup disk and backup file name
Restore To: Set the filename and location fields to
where you want to store your file
Click Restore on the Restore Company Backup
window, QuickBooks will then restore your backup
file to a “.QBW” file in the directory you specified
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Chapter
1
Objective
3. Opening QuickBooks
data files
Chapter
1
Opening QuickBooks Data Files
Launch the QuickBooks program by doubleclicking the icon on your desktop or
selecting it from the Windows Start menu
2. When QuickBooks opens, it opens the
previously opened data file (unless you
specifically closed the data file before
exiting)
3. To open a different file, select the File menu
and then select Open Company
1.
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8
Chapter
1
Objective
4. Describe the features of
several editions of the
QuickBooks software
Chapter
1
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
What is QuickBooks?
A full-featured accounting program that’s very powerful
and easy to use
A double-entry accounting system
An estimating, invoicing, and accounts receivable system
A bill paying, check printing, and accounts payable
system
A fixed asset management system
A purchase order and inventory management system
A job-costing system
A sales tax tracking system
A time tracking and billing system
A loan amortization system
A payroll system
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Chapter
1
Three Primary Editions of
QuickBooks
1.
QuickBooks Basic Edition 2004
2.
QuickBooks Pro Edition 2004
3.
QuickBooks Premier Edition 2004
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Chapter
1
QuickBooks Basic Edition 2004
QuickBooks Basic 2004 does not include
Estimates, Job Costing, Time Tracking, or
two-sided Sales Items (other than Inventory
Items)
2. New features in 2004 include:
1.



Improved Bank reconciliation features
Undo Bank Reconciliation
New Business Startup Checklist
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Chapter
1
QuickBooks Pro Edition 2004
QuickBooks Pro 2004 includes all of the
improvements to QuickBooks Basic
2. New Features:
1.






E-mail forms and reports, and save as PDFs
Import data from Microsoft Excel
Price Levels
Loan Manager
Vehicle Mileage Tracker
Cash Flow Projector
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Chapter
1
QuickBooks Premier Edition 2004
QuickBooks Premier 2004 includes all of the
new features of QuickBooks Pro 2004
2. New features:
1.



Fixed Asset Tracker
Per-Item price levels
Easier time tracking
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Chapter
1
1.
Industry Specific Editions of
QuickBooks
Industry Specific Editions






QuickBooks Premier: Contractor Edition 2004
QuickBooks Premier: Retail Edition 2004
QuickBooks Premier: Manufacturing & Wholesale Edition
2004
QuickBooks Premier: Non Profit Edition 2004
QuickBooks Premier: Professional Services Edition 2004
QuickBooks Premier: Accountant Edition 2004
For the most part, these editions are very
similar to primary editions
3. The differences are in the specialized help
topics, built-in reports, and a few industryspecific features
2.
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Chapter
1
Objective
5. Describe some of the basic
principles of accounting
Chapter
1
1.
2.
3.
Accounting’s Focus
Accounting’s focus is on whether your organization
is succeeding and how well it is succeeding
It assesses the financial position of the organization
relative to its debts (liabilities), its capabilities to
satisfy those debts and continue operations
(assets), and the difference between them (net
worth or equity)
The fundamental equation, called the Accounting
Equation, that governs all accounting is:
Assets = Liabilities + Equity
or
Equity = Assets - Liabilities.
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Chapter
1
Accounts and Chart of Accounts
Business transactions (e.g., sales,
purchases, operating expense payments)
are recorded in several types of ledgers,
called accounts
2. The summary of all transactions in all
ledgers for a company is called the General
Ledger
3. A listing of every account in the General
Ledger is called the Chart of Accounts.
4. Each account has a type (i.e., asset, liability,
equity, income, or expense)
1.
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Chapter
1
1.
2.
3.
4.
Double-Entry Accounting
The rule of double-entry accounting is that total
debits must always equal total credits
In QuickBooks, every transaction creates a debit in
one or more accounts and a credit in one or more
accounts to handle double-entry accounting
Depending on the type of account, a debit might
increase the account or decrease it, the same is
true of credits
Therefore, debits are not always bad and credits are
not always good
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Chapter
1
Cash Versus Accrual
The accrual basis method specifies that
revenues and expenses are recognized in
the period in which the transactions occur,
rather than in the period in which cash
changes hands
2. In the cash basis method, revenues and
expenses are not recognized until cash
changes hands
3. With QuickBooks, you can create reports for
either method regardless of the method you
use for taxes
1.
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Chapter
1
The Accounting Behind the
Scenes
Transactions are entered in familiar-looking
forms such as Invoices, Bills and Checks
2. Program is easy to use because you don’t
have to know accounting to use it for your
daily transactions, QuickBooks handles the
accounting entries for you
3. This allows you to focus on the business
transaction rather than the debits and credits Page ref.
in the General Ledger
15
1.
Chapter
1
Objective
6.
Introduction to Academy
Glass
Chapter
1
Academy Glass Sample
Company
It is the fictitious sample company used in
the text book
2. Academy Glass is a home improvement and
contracting corporation
3. It is both a service and a merchandising
company
4. Academy Glass has two stores, one located
in San Jose and another located in Walnut
Creek
1.
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Chapter
1
Objective
7.
Installing QuickBooks
Releases
Chapter
1
QuickBooks Releases
Release Level of the QuickBooks Program
refers to the patches provided by Intuit to fix
the problems found in the program
2. Each patch increases the Release Level of
the QuickBooks application
3. To see what release level of the software
you have, press Ctrl+1 (or F2) while
QuickBooks is running, at the top of the
window, you’ll see the QuickBooks product
information including the release level
1.
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Chapter
1
Objective
8.
Understand how to use
Navigators, Menus, Icon
Bars, and the Shortcut list in
QuickBooks
Chapter
1
QuickBooks User Interface
Features
QuickBooks provides a number of shortcuts
and aids that assist the user in entering
information and data
2. There are five methods of accessing the
data entry windows:
1.





Menus
Icon Bar
Shortcut List
Navigators
Shortcut Keys
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Chapter
1
Menus run along
the top of the
screen
2. To open a menu,
select the menu
name and then
choose the
option desired
Menus
1.
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Chapter
1
1.
2.
Icon Bar
The QuickBooks Icon Bar allows you to select
activities and lists by clicking icons on the bar
The contents or position of the icons on the Icon
Bar can be modified by select the View menu, and
then choosing Customize Icon Bar
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Chapter
1
1.
2.
Shortcut List
The QuickBooks
Shortcut List allows
you to select activities
and lists by picking
them from items on a
bar located at the right
or left of the screen
Click Customize at the
bottom of the Shortcut
List to modify the
contents or position of
the list.
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Chapter
1
1.
2.
Navigators
QuickBooks has
several navigators
that help you work
through the program
and understand how it
functions.
The Customer
Navigator shows a
flowchart of the sales
process as well as
several other icons
that relate to the sales
part of your business
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Chapter
1
1.
2.
3.
Shortcut Keys
You may use your
mouse or the keyboard
shortcut keys to select
the menu options
To use the keyboard,
press the ALT key then
press the underlined
letter of the desired
menu item
Some of the menu items
have control-key
shortcuts (to open a
register, you can press
CTRL+R as indicated on
the Edit menu)
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Chapter
1
Open Previous Company
You can open a previous company file by
selecting it from the Open Previous
Company submenu of the File menu
2. QuickBooks lists the last few companies you
have most recently accessed, allowing you
to open any one of them
3. You can set the number of previous
companies that show on the list (from 1 to
20)
1.
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Chapter
1
1.
2.
3.
Entering Data In Forms
In QuickBooks,
transactions are created
by filling out familiarlooking forms such as
invoices, bills, and checks
As you fill out forms, you
choose names from lists
such as the customer list,
the Item list, and the
account list
When you finish filling out
a form, QuickBooks
automatically records the
accounting entries behind
the scenes
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Chapter
1
Objective
9.
QuickBooks Help and
Support
Chapter
1
1.
2.
3.
Support Resources
QuickBooks provides a
variety of support
resources that assist in
using the program
Some of these resources
are on the Internet and
others are in help files on
disk
To access the support
resources, select the Help
menu and then select Help
& Support
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Chapter
1
1.
2.
3.
Context-Sensitive Help
You can access
onscreen Help by
clicking the How Do I
button on any screen, or
by pressing the F1 key
Depending on what you
are doing at the time,
you’ll get advice from
the Help system that is
relevant to what you’re
doing
This is known as
Context-Sensitive Help.
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Chapter
1
1.
2.
3.
4.
5.
6.
7.
8.
9.
Summary of Key Points
How to install the QuickBooks software
How to work with the practice files in this book
Opening QuickBooks data files
Describe the features of several editions of the
QuickBooks software
Describe some of the basic principles of accounting
Introduction to Academy Glass
Installing QuickBooks Releases
Understand how to use Navigators, Menus, Icon
Bars, and the Shortcut list in QuickBooks
QuickBooks Help and Support
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27