Computer Accounting with QuickBooks Online - Chapter 4 - Key Terms and concepts – Banking

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Computer Accounting with QuickBooks Online - Chapter 4 - Key Terms and concepts – Banking
Susan Esch
Flashcards by Susan Esch, updated about 1 month ago
Susan Esch
Created by Susan Esch about 1 month ago
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Question Answer
Check Register Is a record of all transactions affecting the Checking account
Date column Lists the date of the transaction in the check register
Ref No. Type column Lists the reference number, suck as check number, and type of transaction, such as Deposit
Payee Account column Lists the payee and the account used to record the transaction
Payment column Lists the amount of money out of the Checking account
Deposit column Lists the amount of money into the Checking account
"Check mark" Column Indicates whether the bank transaction is C (Cleared), R (Reconciled), or blank (Uncleared, Unreconciled)
Balance column Displays the running balance for the Checking account, updating the balance with each new transaction in the account
Three main ways to use QBO to record money coming in 1. Customer Sales using Sales Receipts, 2. Customer Sales using Invoices > Receive Payments, 3. Bank Deposit
Bank Deposit Form Is used to record money coming in that is not a customer sale
Examples of money coming in that is not a customer sale include: • Investments from company owners • Cash received from loans • Interest earned • Other income, such as rental income when primary business is not a rental business
Examples of money going out which a business needs to track include: • Purchases of inventory • Purchases of office supplies • Employee salaries • Rent payments • Insurance payments
Supporting documents (source documents) for payments include: • Canceled checks, receipts, and paid invoices
Four main ways to use QBO to record money out include: 1. Expense, 2. Check, 3. Bill > Pay Bills, 4. Purchase Order > Bill > Pay Bills
Expense, or Check, onscreen form Is used to record money going out which is paid at the time the product or service is received (instead off later)
Examples of money going out that could be recorded using the Expense or Check onscreen form include: • Rent expense • Utilities expense • Insurance expense • Office supplies expense • Services expense, such as accounting or legal services
Examples of money going out that should not be recorded using a Check or Expense onscreen form include: • Paychecks to employees for wages and salaries • Payroll taxes and liabilities • Sales taxes • Bills already entered using the Bill onscreen form
Two objectives of the bank reconciliation 1. To detect errors 2. To update your accounting records for unrecorded items listed on the bank statements (such as service charges)
Two reasons there are difference between the balance on the bank statement and the balance the business shows in its accounting records 1. Errors 2. Timing differences
Timing differences include: 1. Items the bank has not recorded yet 2. Items the company has not recorded yet
Items the bank has not recorded yet which fall under timing differences include: 1. Deposits in transit 2. Outstanding checks
Items the company has not recorded yet which fall under timing differences include: 1. Unrecorded charges 2. Interest earned on the account
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