QuickBooks Pro Plus desktop 2020 to rental income customer deposit. Get ready because we bookkeeping pros are moving up the hilltop with QuickBooks Pro Plus desktop 2022. Here we are in Alberta get great guitars practice file, go through the setup process with a view drop down the open windows list on the left hand side company drop down home page to the middle maximizing in the gray area reports drop down company and financial looking at that balance sheet standard customizing it up top with the range change.
00:32
Oh 1012 to 1231 to two fonts and the numbers bring it on up to 14. Okay, yes, please. And okay. Reports drop down company and financial profit and loss standard range change a 1012 to 1231 to two, customizing that report with the fonts and the numbers change in the font size up to 14. Okay, yes, please. And okay, reports drop down, again, going down to accounting and taxes with the trusty t be arranged change or 1012 to 1231 to to customize in that report with the fonts and the numbers change in the Font once again to 14. Okay, yes, please.
01:20
And okay. So if we go back to the home page, then last time, we imagined we’re setting up our process for our rental of equipment here. So we have a rental type of process that we set up, we went to our lists drop down, we went to our item lists, and we imagined we’re going to have a standard band set that we’re going to be renting out band set number one and then we had some add on band kind of stuff for extra guitars or something if they wanted to plus up their band set that we’re going to be renting out, we can now imagine that people are going to be calling in or possibly coming in and saying I want a band set at this time at this location because we’re going to be rocking and rolling at that point.
02:03
So that means that we’re going to have a security deposit that we want to be receiving up front. So we have the similar kind of thing that we saw in the past where we have this advanced payment situation because we would like to reserve that how many kinds of bands sets we can be given out at any particular point in time and reserve them and in order to lock down the date, we want to get the money in advance. And then when we provide the equipment at the later point, that’s when we will invoice and complete the transaction.
02:31
So that means that that when we have this first transaction with the with the deposit, that if I go to the trial balance, we expect to have an increase in in cash in essence undeposited funds, which will go into cash. And then the other side is going to go to the we’re going to have either a negative accounts receivable or undeposited funds depending on which method we’re going to use, we went over the two methods. Prior to this, I’m going to use the method of having in essence, a negative receivable here.
03:03
For the reasons we discussed before. If you’ve got questions about that, take a look at the prior presentations when we focus just on this process on the advanced payments. And we’ll give you the arguments as to why I would use this method versus the other. But that’s the one that we will then use. And so that’s going to be the idea. So we’re going to go back on over to the homepage, I imagine someone calls in we’re going to say alright, we’re going to receive the payment first before the invoice has happened. In this case, I’m going to record the receiving of the payment.
03:32
And I’m getting lazy with my customer names I know but I’m just going to call this customer number five. customer number five wants a guitar set. And so we’re going to say all right, we’re going to quick add that customer on the fly with customer number five. And so we’ll do the quick add. And let’s say that we’re going to have a down payment on the guitar set. And let’s say the standard down payment is going to be it’s going to be 200 $200. Let’s go $200 On the down payment,
04:01
and we’re going to make the down payment on 228. So we’ll keep it on 228. And we’ll say it’s just a cash, we’ll just keep it at cash, it’s going to go into undeposited funds. Now there’s nothing down here in terms of the invoice that’s the point at this point in time. That means that what is this going to do, it typically will decrease the accounts receivable, it will still decrease the accounts receivable, but it won’t be able to tie it to the sub ledger for an invoice it has nothing to match it to therefore, it will create an overpayment or like a credit kind of component.
04:33
That means that we owe the customer money, which is what we want it to do. Because when I create the invoice, I would like to apply that overpayment to the invoice and so the other side is going to go into the undeposited funds. Now obviously, as you note this down as well, you might want to note down you know the the actual set, you know the band set that’s going to be purchased and whatnot and you’d have to you know, reserve that information in our warehouse or whatever so that we don’t double book it, book this information. So those logistics would need to be taken care of as well.
05:05
But we’re gonna say that this is going to be rented for the band set for, we’re gonna say tomorrow in this case, so we can, we can collect on it within the same month. So I’m gonna save it and close it. So let’s save it and close it and check it out. So save and close. Now that button is small down here, it’s gonna say, Hey, I’m paraphrasing, there’s going to be a credit for the overpayment will remain with a customer’s account. And that’s what we want.
05:28
So we’re gonna say, Good, we’ll keep it there, we could print the credit memo, if we so choose, we could go over here and say this, check it out and print it and see, let’s take a preview of it if we so choose. Now we’ve got the credit credit memo, which we might provide, for example, to a customer, but I’m gonna close that out. Let’s see what happens with it, we’re going to close this out and go to our trusty trial balance. So on the trusty t be in the accounts receivable, double clicking on it Scrolling down, we got at the 27th, that we got that payment, which was for the 200.
06:01
So there it is their other side, going to not to income but to undeposited funds undeposited funds at this point in time, which we’re then going to put into the checking account the set up or backup for the accounts receivable being in the reports drop down, going down into the customers and receivables customer balance detail, then we have then that customer number five, there’s that negative receivable, which is is something that is weird, because it’s a negative receivable, you would rather have it be, you know, a liability for normal financial reporting purposes rather than a negative receivable.
06:43
But the negative receivable works quite well, once we complete the transaction, because I can then easily apply this payment to the invoice track it in this customer balance detail, the customer balance detail not having a connection to the liability account for unearned revenue. So that’s why we got that negative receivable that we have seen in the past there, the total adding up to the 21 976 50. If I go back then to the trial balance, there’s the 21 976 50 on it as well. Let’s go ahead and deposit the undeposited funds right now into the checking account, completing that transaction, going back to the homepage, and then going,
07:25
we got that one deposit there. I’m going to go back into it and make that deposit. And we’re going to put it into the checking account, I’m going to say okay, and it’s going to go in as of sep 227. That looks good. So that looks good. What’s this going to do? Increase the checking account, decrease undeposited funds, let’s do it, save it and close it, check it out on the trusty t be checking account, double click in the checking account, check it out, check out the checking willya it’s now got that amount in it from undeposited funds of the 200.
08:00
Other side closing this back out undeposited funds back down to zero. Notice undeposited funds, the train that goes up goes back down immediately. undeposited funds is a clearing account more temporary than a temporary account, because it doesn’t close out just on a normal monthly or yearly basis. But usually on a very much smaller basis.
08:24
As we can see here, just going up going right back down again. So next time, if I go back to the homepage, we’re going to be imagining that they’re going to we’re going to actually rent the equipment out when they come in and we’ll make the actual invoice at that point in time. And put the information on the invoice and collect the rest of the payment at that point. So we’ll create an invoice, apply the credit to it, and then we’ll receive the payment there and then we’ll make the deposit from that point.
08:52
Let’s go back to the trial balance if you’re following along this is where we are with the trial balance at this point in time you can check your numbers to your numbers if you so choose. If something’s not quite right try check changing the dates the dates are often an issue, especially with a practice problem. We’ll be going the full transaction detail report at the end of the practice problem which can help to find any problems and we’ll be trying to make those backup files if you’d like to rework any component from the backup point.