How to Use the QuickBooks 2010 EasySetup
After you install QuickBooks 2010, you run an interview to set up QuickBooks for your firm’s accounting. The installation program may start QuickBooks automatically and then start the EasyStep Interview. You can also start the EasyStep Interview by choosing the File→New Company command.
1
The Welcome screen of the EasyStep Interview appears (either automatically or when you choose the New Company command).
The screen provides some general information about setting up a new company within QuickBooks. The screen also provides links — such as the link you can click to get help from a QuickBooks certified advisor.
2
Read through this screen’s information, and then click the Start Interview button.
The Enter Your Company Information page appears.
3
Enter general information about your business in the text boxes.
This information includes your company name and the firm’s legal name, your company address, your federal tax ID number, the first month in the fiscal year (typically January), the type of income tax form that your firm uses to report to the IRS, and the industry or type of company that you are operating (retail, service, and so forth).
The Filename for New Company dialog box opens, which suggests a filename for the company data file QuickBooks has created from your firm’s financial information. QuickBooks suggests a default name or a QuickBooks data file based on the company name.
5
Accept the suggested name and the suggested folder location by clicking Save.
Alternatively, you can save the data file into the My Documents folder, which isn’t a bad idea.
6
Answer the series of very specific questions that appear in the EasyStep Interview window, clicking Next after each one.
These questions relate to how you run your business so that QuickBooks can set the appropriate preferences. For example, does your firm maintain inventory? Do you collect sales tax from your customers? Do you want to use QuickBooks to help with your employee payroll? After you answer these questions, the Select a Date to Start Tracking Your Finances page appears.
7
Select a radio button to identify when you want to start tracking your finances.
The day on which you begin using your new system is called the conversion date. Typically, you want to begin using an accounting system on either the first day of the year or the first day of a new month.
The Add Your Bank Account page appears.
9
Select the Yes radio button and click Next.
Based on the information that you supply about your type of industry and the tax return form that you file with the IRS, QuickBooks suggests a starting set of accounts — accountants call it a chart of accounts. These accounts are the categories that you use to track your income, expenses, assets, and owner’s equity.
10
(Optional) Remove a suggested account by clicking the check mark to remove it, or add an account by clicking it to make a check mark appear.
You can click the Restore Recommendations button at the bottom of the list to return to the initial, recommended chart of accounts (if you made changes you later decide you don’t want).
11
When the suggested chart of accounts looks okay to you, click Next.
It’s fine to just accept what QuickBooks suggests because you can later change the chart of accounts.
Accounting Glossary
accounting equation
The equation Assets = Liabilities + Equity, which demonstrates the two-sided nature of accounting and is useful for explaining the concept of double-entry accounting (or double-entry bookkeeping).
Accounting Glossary
accounting period
The time period for which financial information is being tracked in a business, such as monthly, quarterly, or annually.
Accounting Glossary
accounts receivable
An account that records the amounts that customers owe to a business.
Accounting Glossary
adjusting entry
A correction made to a bookkeeping account that adjusts for accounting errors or other necessary changes at the end of the accounting period.
Accounting Glossary
cash flows
Used to describe the source or sources of cash or how cash is used.
Accounting Glossary
Chart of Accounts
A list of all the accounts used by a business, including what types of transactions go into each account.
Accounting Glossary
debit
An accounting entry that increases an asset or expense account, and decreases a liability or income account.
Accounting Glossary
dividends
A portion of a company’s profits paid by share of common stock on a quarterly or annual basis.
Accounting Glossary
FASB
Financial Accounting Standards Board. FASB is the highest-ranking authority in the private (non-government) sector of the U.S. for making pronouncements on GAAP and for keeping accounting standards up-to-date.
Accounting Glossary
Federal Unemployment Tax
In the U.S., the fund that used to be known simply as Unemployment. Employers contribute to the fund, and states also collect taxes to fill their unemployment fund reserves. (The acronym FUTA means Federal Unemployment Tax Act.)
Accounting Glossary
fidelity bonds
A type of insurance — typically carried by employers for their employees — that helps guard against theft and reduce the risk of loss.
Accounting Glossary
FIFO
First-in, first-out. A method for costs of goods sold in which a business charges out product costs to cost of goods sold expense in the chronological order in which the goods were acquired.
Accounting Glossary
fungible
Describes a product that is interchangeable and virtually indistinguishable from another product.
Accounting Glossary
General Ledger
A summary of all of a business’s accounts and transactions.
Accounting Glossary
IASB
International Accounting Standards Board. The IASB (based in London) is the main authoritative accounting standards setter outside the U.S.
Accounting Glossary
Journals
The location in which bookkeepers keep records (in chronological order) of daily company transactions.
Accounting Glossary
LIFO
Last-in, first-out. A method for costs of goods sold that selects the last item you purchased first, and then works backward until you have the total cost for the total number of units sold during the period.
Accounting Glossary
LLP
Limited liability partnership. A legal structure that state laws offer to qualified professionals in which all the partners have limited liability.
Accounting Glossary
PC
Professional corporation. A legal structure that state laws offer to qualified professionals who otherwise would have to operate as an unlimited partnership liability.
Accounting Glossary
petty cash
A cash account that businesses keep on hand for unexpected expenses.
Accounting Glossary
revenue
Monies that are collected in the process of selling a company’s goods and services.
Accounting Glossary
salvage value
The amount that an asset is worth after it has been fully depreciated.
Accounting Glossary
statement of cash flows
A financial statement that summarizes a business’s cash inflows and outflows during an accounting period.
Accounting Glossary
transactions
Economic exchanges between a business or other entity and the parties with which the entity interacts and makes deals.
Accounting Glossary
worker’s compensation insurance
A type of insurance carried by employers that covers its employees in case they are injured on the job.
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