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How to Add a Service Item to the Item List in QuickBooks 2012

You use service items in QuickBooks 2012 to purchase or bill for items that represent service. For example, a CPA prepares tax returns for individuals and businesses. When they bill a client for preparing his or her tax return, the line item that appears on the invoice for Tax Return Preparation is a service item.

In your business, you probably have service items, too. For example, a healthcare provider, such as a dentist or doctor, provides treatment or performs procedures. These activities represent services.

Even retailers and contractors — businesses that you typically think of as selling tangible physical goods — often sell services. For example, a retailer may gift-wrap a purchase, which is a service. A contractor may provide services such as painting or cleanup.

To add a service item, display the New Item window. When QuickBooks displays the New Item window, select Service from the Type drop-down list. Then use the Item Name/Number box to give the service a brief code or name. If the service is a subitem, select the Subitem Of check box and identify the parent item.

Select the This Service Is Used in Assemblies or Is Performed by a Subcontractor or Partner check box if the service is provided by, as the window suggests, a subcontractor, owner, or partner. You indicate which services are performed by subcontractors, owners, and partners because these parties are subject to different tax accounting rules.

Finally, use the Description box to describe the service. Your description appears on invoices and purchase orders, so you want to be thoughtful here. Use the Rate box to describe the price or rate per unit of service. Use the Tax Code box to indicate whether the service is taxable. Finally, use the Account box to identify which Income account should be credited when the item is sold to some customer, client, or patient.

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