ACCT 100 – INTRODUCTION TO ACCOUNTING
MINI-PRACTICE SET 2 USING QUICKBOOKS
THE FASHION RACK
(Pages 453 - 457)
The purpose of this document is to provide instructions for completing the mini-practice set for “The Fashion Rack” using the Quickbooks accounting software program. Follow the steps in the textbook on the pages shown above, but instead of recording the transactions manually, you will record the transactions in Quickbooks, make the necessary adjusting and closing entries and print the resulting financial statements.
It will be much easier for you if you prepare a solution to the problem in pencil first. Then, you can better understand how the computer program is recording and summarizing the information. Remember, the financial statements you prepare manually, should be exactly the same as the financial statements generated by Quickbooks.
1. Retreive the quickbooks file from my website at www.cerritos.edu/mfronke and click on “Accounting 100 stuff”. In order to save the file to your flash drive, right-click on the link and choose “save target as”. Designate the correct drive and click save.
2. Open the Quickbooks program by double clicking the icon on the desktop. From the menu on top, choose ‘file’, ‘open company’ and then find the file on your flash drive. Click ‘open’. When the file is opened, you should see a list of open windows on the left side. Click on the ‘Chart of Accounts’ and you should see a list of all of the accounts for “The Fashion Rack”. All of the balances for September 30, 2013 have been entered for you including the customer and vendor balances shown on page 457.
3. In order for your reports to have your name at the top, you need to change the company name to include both your first and last name. Go to “Company” and then “Company Information” on the menu. Change the name to include both your first and last name. You can make up a fictitious company like “The Matt Barkely Sports Bar” or “The Jennifer Lopez Underwear Boutique”, but it must include you’re your first and last name. Click “OK” when done.
4. Analyze and record each transaction listed on pages 455 and 456. Although you should try to use each module of the program (ie, Customer Center, Vendor Center, Banking, Write Checks, etc.), you can always record the transactions via general journal entry. To access the journal entry function, go to “Company” and then “Make General Journal Entries”. Assign each journal entry with a letter. Begin with the letter A and end with LL for 38 transactions. Be very careful that the dates you use match the date of the transaction in the book. Use October 2013 for all dates.
5. Once all the transactions have been recorded, print a trial balance by selecting “Reports”, then “Accountant and Taxes” and “Trial Balance”. Change the date to October 31 2013 and click refresh. Check the amounts with your manual trial balance to make sure all amounts are correct.
6. Record the adjusting entries in Quickbooks by entering journal entries for each adjustment. Your adjusting entries should all be dated October 31, 2013. Label the entries AJE1 through AJE7 to include all the adjustments.
7. Print a new trial balance and compare to your manual worksheet for accuracy.
8. Print an income statement from the “Reports” menu under “Company and Financial” and then “Profit and Loss Standard”. Make sure the dates are correct to include October 31, 2013.
9. Print a balance sheet from the “Reports” menu under “Company and Financial” and then “Balance Sheet Standard”. Make sure the dates are correct to include October 31, 2013.
10. Print a Schedule of Accounts Receivable from the “Reports” menu under “Customer and Receivables” and then “A/R Aging Summary”. Make sure the dates are correct to include October 31, 2013.
11. Print a Schedule of Accounts Payable from the “Reports” menu under “Vendors and Payables” and then “A/P Aging Summary”. Make sure the dates are correct to include October 31, 2013.
12. Record the four closing entries to close the revenue, expense, income summary and drawing accounts. These entries should be dated October 31, 2013
13. Print a new trial balance and compare to your manual post-closing trial balance.
Submit the following reports for credit:
a. Trial balance before adjustments
b. Trial balance after adjustments
c. Income Statement
d. Balance Sheet
e. Schedule of Accounts Receivable
f. Schedule of Accounts Payable
g. Trial balance after closing entries
Have fun!