QuickBooks Online 2021 enter transaction purchasing equipment using bank feeds. Let’s get into it with Intuit QuickBooks Online 2021. Here we are in our quickbooks online bank feed test file and prior presentations, we set up our bank feeds and we start entering some of the basic types of transactions, we’re going to be continuing on here with the purchase of equipment. So we’re going to go to the transactions, or it might be the banking tab, they’ve been going back and forth between those two names on the left hand side here.
Scrolling on down, we have our information on down below, we’re not going to be opening up our two major reports balance sheet and income statement by going to the tab up top right clicking on it, duplicating that tab, we’re going to duplicate again, by going to this tab up top right clicking and duplicating again, we’re going to be opening up the P and L profit loss income statement, as well as the BLS balance sheet, we will do so by going to the reports down on the left hand side opening up the old reports. And then I’m going to open up the profit and loss report. To start off with I’m going to change the dates up top the date range change, which is going to be a 101202.
To put a little finger to 1231 to zero for me, I’m gonna go ahead and run that report. This is what we have thus far, we’ve been practicing the type of banking transactions that are usually pretty easy, pretty straightforward, those normal type of expense transactions. So we have the insurance which may not be as normal, you could have a prepaid but telephone utilities, then we’re gonna go on to the second tab over. And let’s open up our balance sheet here the BLS balance sheet in this item, go into the reports down below and open it up the BLS balance sheet, then we’ll do a date range change up top, oh 101 to zero to 1231 to zero, we’re going to go ahead and run that report, close up the good old hamburger.
And of course, here we have most of the activity up top in the checking account being the other side. Let’s go back to the first tab. Now this is what our banking information is I’m going to close up the hamburger, because we’re in the transactions tab. And we’re going to pretend that we got an item that is going to be for equipment that we purchased. So we’re gonna say that we we purchased something that went through our bank, it’s on the bank feeds now. And now we’re going to add it into the system, but it’s for equipment, it’s a larger purchase.
So if I go down through here, I’m going to be picking up then the let’s see, I want to be picking up this one. Actually, I sorted it by date. Now. So I’m going to pretend this one is for the purchase of equipment. Now if we purchase basically equipment, we might purchase it from a large store like an Office Depot or something on like an online store or something like that. And we may only know that it’s for equipment by the dollar amount. So it could be over a threshold over a certain dollar amount that we allocate, then to equipment if under that dollar amount, then we might allocate it to like supplies or something like that.
Therefore, the rule that we will have will not be as straightforward when we enter something in that of that nature. Unlike a rule for like utility bill, which is pretty straightforward. If I paid you know, Edison or whatever, it’s gonna go to the utility company. So if I select this one, we’re going to say, all right, I can add this one, I’m going to hold Ctrl scroll down a little bit. And so I’m going to add the vendor, so I’m just going to say it’s, this is the vendor.
So I’m gonna put that here on the vendor. And then owner’s equity is not the other side. This time I want to add a new account, but it’s not going to be an expense type of account, but rather a fixed asset type of account. So that’s going to be the difference, it’s not going to go on the income statement, we’re going to put it on the balance sheet because it’s over a certain dollar amount, or in other words, it’s an investment, it’s something that we should put on the balance sheet and then allocate the expense in the form of depreciation over the useful life. So I’m going to go and say, say I need to add, then let’s add something and the account type, then this is the important part.
It’s not going to be an expense, but rather a fixed asset type of account some something we’re going to put on the balance sheet. And then we could say, is it amortization? No, we’re gonna say it’s going to be equipment or something like that. So we’ve got the furniture and fixture, computers copiers. Now when you add these type of items, I would try to add it in the same kind of format that it’s going to be showing up on your depreciation schedules, which are often in the format of on your tax software. So the tax software will often be driving, what the depreciation schedules will be look like.
So I’m gonna, I’m gonna go ahead and say, this one, this line item doesn’t matter so much. What really matters is going to be the name here, and I’m just going to call it a generic equipment, that’s going to be the name of the account, equip meant now the detail for the equipment. I want to make sure that I keep that and give it to my tax preparer, because I’m imagining at the end of the period, they are the ones that are going to need to have the detailed depreciation schedules because they need to produce them for the tax return anyways, meaning that depreciation scheduled for taxes will typically differ or may differ from the books and therefore, I’m going to use that in order to enter our adjusting entries for the depreciation schedules.
And I think that’s going to be common thing to do. So I’m going to say save it and close it. So there’s our new account, no tag we’re going to have here, and then we have the memo. So that looks good. And then I’m going to make a rule for it. But the rule is going to be a little bit different. Let’s add the rule, I’m going to say that the name of my rule is going to be this organ, that’s gonna be the name money out, I’ll take it to all bank accounts. And then we’ll say all of the conditions have to be met, not any condition, because we’re going to actually add to this time, we got the description, I want to have the bank text contains it contains this information. Now, let’s imagine this was going for like Office Depot or something like that.
And I’d have to say, Okay, now I’m going to add a condition, I want to say, look, if this thing is over an amount, I’m going to say the amount an amount condition, I don’t want it to be equal to, but I want to say, look, if it’s over greater than, let’s say, and how much was this 1000, let’s say 1500. Then I want you to basically use this rule, and use the expense form and apply it to equipment. And then I might make another rule, for example, that to say that if it’s under the 1500, then you’re going to be basically sending it to a supplies type of account, possibly an expense type of account instead of a fixed asset type of account.
So you might have a rule set up like that, such as the admin, it doesn’t look like I added the vendors, the vendor is going to be this is the vendor, I’m going to add the vendor here and set that up, we’re just going to save that. So that looks good tags. And then I will have the auto confirm off. You also might have this set up so that if it’s over a certain dollar amount, you make sure not to auto confirm it right. And then if it’s if it’s under a certain dollar amount, once you get used to the system, you might say auto confirm that Vin will automatically pass through to your financial statements.
And you’ll be catching those items then that are over a certain dollar amount that you want to double check as you enter them into the system. So I’m going to say save it and close it. And so there we have it. And then if I if I scroll down to this information, we’re going to see that we have these items now set up with a rule. So I’m going to add just one of them, I’m going to add the oldest one. So I’m just going to simply confirm that one and then check out what happens if I confirm that.
Then let’s take a look at the financials go into the financials balance sheet first going up top refreshing the report holding CTRL down scrolling up a little bit, we can see that in the checking account, if we go into the old checking account here, we still have the decrease to the checking account in an expense type form. If I go into it, that’s kind of like a check type form, decreasing the checking account here. So we have that item the other side going to equipment going back up top. If I close this back out, and go back then to my reports, then the other side is on the balance sheet not on the income statement.
This time, this is the new thing, it’s under the fixed assets, because we purchased a large thing that we need to allocate the cost over the useful life. So here’s going to be that side of things. Now once you look at this side of things, just note that when you work with the accounting department at the end of the period, then you’re going to want to be gathering up the this type of information not and give it some more detail exactly what I purchased, so that we can then put it on the books for the depreciation schedules.
And then I would suggest that your your tax preparer at the end of the year, then provide you the adjusting entries for the depreciation expense. And you know, the accumulated depreciation and the depreciation expense. So that’s why I would set up basically recommend talking to them, setting up your your fixed asset accounts to line up with what you expect to see on the depreciation schedules in that categorization.
then provide them the increases and decreases the purchases and disposals of equipment in detail, not just kind of like this line item, but maybe actually the purchase documentation, serial numbers and whatnot, so that when they create their depreciation schedule, they can break out and in as much detail as possible he actual pieces of equipment, not because it’s difficult to record the depreciation in the time of purchase. But because when you dispose of the equipment, you’re going to want to find it on the depreciation schedule so that you could take off the related accumulated depreciation properly.
And that’s easiest to do if it’s if it’s on there in detail. So there’s going to be probably less detail in our books possibly. And then the detail should be on the depreciation schedules often being done with the tax software. If we go to the income statement, there’s going to be no impact on the income statement here. Because we put it on the books as an asset, it will hit the income statement in the form of depreciation when we do the adjusting entries at the end of the year or the end of the month. And if I go back to the balance sheet, also just note that you might see a situation you might say, well, that’s great if I paid cash for it.
What if I didn’t pay cash for it? What if I financed it? What if I have a loan that’s going to be related to this? Then, when you see it go through the bank feeds like you might set up a system on the bank feeds. Well, first of all, if that were the case, if you had a full service bookkeeping system when you purchased it, you would record the loan on the books at the point in time of purchase, putting the equipment on the books at the purchase price, and then recording the cash payment and then the loan. But if you’re on like a cash basis system, then you and you’re working with an accountant at the end of the year, you might, you might just note that you might say, hey, look,
I’m going to save the documentation for the purchase of the equipment. So that we have that and we can provide it to the accountant. And we would basically tell them at the end of the year, look, I’m putting everything on there. Basically, with regards to the bank feeds, I’m relying on you to do the adjustments at the end of the year. So here’s a piece of equipment, we purchased it, this is how much cash we paid for it 1008 15.
And then when you make the payments on the loan of it, because we didn’t put the loan on the books, you might put the loan on the books, and just show the payments that you’re making, meaning you’ll have a you’ll have a liability here with negative amounts to it, because you’re going to record all the payment to include an interest in and principal, and then ask the accountant at the end of the year, I would like you to to then record the adjustment for this recording the full amount of the equipment during the adjusting entry with regards to the purchase documentation, recording the loan on the books, making the amortization table if necessary, and then apply out the interest in principle appropriately to tie out to the amortization table in that way.
And it might be easier to do that actually, because the like I said, the accountants gonna have to record the depreciation anyways. And it’s often the case that they’re gonna have to break out short term and long term loan principal, and they might have to make an amortization table anyways. So sometimes, you know, it would be easier than reversing what the bookkeeper has done and then doing it again, to just say, hey, look, I’m on I’m on a cash basis system.
Here’s the purchase for it, I would like you to just make the adjustment based on this purchase information, put in once again, the full price of the equipment on the books, the loan on the books, and then allocate the proper, you know, interest in principle with regards to the loan after you make an amortization schedule. So there’s different ways you can kind of work out that situation with your accountant for that, but just just some ideas that you can kind of mull over