QuickBooks Other Accounts and How to Work with Them

Posted by on Jul 15, 2011 in Other Accounts | 0 comments

This article starts a series with other accounts and how to use them in QuickBooks. Since I have already covered Inventory and Banking (cash) in a previous series (see Categories) , let’s turn our attention to some of the Other Current Assets.

These might include, but not limited to, term deposits, GIC’s, Money Market Paper, T-Bills, Advances and Prepaid Deposits or Expenses. As noted in a previous article on reconciliation, you will want to reconcile these accounts to any monthly quarterly or annual statements that you receive.

When setting these accounts up you will find this type of account in Chart of Accounts/right click on your mouse/New, which will open up the Add New Account window as shown above. From there you click on the Other Account Types field button and choose from the drop-down box – Other Asset.

I am going to set up a common other asset account called Prepaid Insurance, which is used by most companies, and then Save & Close.

Moving to the Write Cheques icon, I will enter a cheque in the amount of $6,000, dated December 31, 2008 and in the account field, choose Prepaid Insurance. In the Memo field I will explain what this cheque is for, which will be the Annual Premium.

This takes me to the next step, which will be to recognize the monthly insurance expense, thus decreasing the Prepaid Insurance account. I will divide the 6,000 by 12 months, which equals 500.00 for the monthly amount.

In order for this entry to be posted into QuickBooks, the easiest way is to enter in a journal entry and memorize that transaction. QuickBooks will then automatically record the monthly insurance expense once I have set this up.

To do this I go to the Menu Bar/Company and from the drop-down box, choose Make General Journal Entries. I will then proceed to enter in that amount as shown below.

Now before I Save & Close this entry, I will memorize it. Just leave this screen open and click on Edit on the Menu Bar and then Memorize General Journal.

When the Memorize Transaction window opens I will perform the following.

In the Name field type in Prepaid Insurance and then click the button in front of Automatically Enter. From the drop-down box in the How Often field, I choose Monthly.

The first month that I want this entry to record is 01/31/2009, which goes in the Next Date field. This then leaves 10 more months to record this entry, so I key in 10 in the Number Remaining field. To save this I will click on the OK tab.

At the end of the 10 journal entries, QuickBooks will stop recording this memorized transaction.

After clicking on the OK tab that window will close and take me back to the Make General Journal Entries window, where I need to Save & Close this entry dated, December 31, 2008. This is the first month of the insurance expense to be recorded.

Each new month that I open up my QuickBooks, a message will appear telling me that I have a new memorized transaction to post and will give me the opportunity to choose Yes or No. I will choose Yes, which will automatically record that memorized journal transaction for the insurance expense.

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