QB Session i September 12

Summary

The session introduces students to QuickBooks Online (QB Online), demonstrating how to create an account, configure the company, set up a chart of accounts, and enter opening balances.

1. Create and access a QB Online account

• Search for QuickBooks Online and choose the sign-up or free-trial option. The instructor demonstrates a 30-day trial.
• Choose Create an account if you have not registered yet.
• Provide an email address, password, and phone number. If applicable, select Sri Lanka as the phone country code.
• The password must meet the requirements shown onscreen, including being more than eight characters. Remember your login details.
• Enter a business name during setup. Some setup questions can be skipped.
• Sign out when finished, especially when using a shared computer. To return later, search for QB Online and sign in with your registered credentials.

2. Understand the QB Online workspace

The instructor points out that the Create area provides options for common transactions and records, including:

• Customers: invoices, estimates or quotations, receipts, and statements.
• Vendors: purchase orders, bills, bill payments, and vendor credits for purchase returns.
• Other tasks: bank deposits and journal entries.
• Products and services: including products used to track stock.

3. Set up the chart of accounts

• Open the chart of accounts through Apps → Accounting → Chart of accounts. The layout may vary by QB version.
• The chart includes balance-sheet and profit-and-loss accounts, as well as accounts supplied by the system.
• A parent account groups related detail (child) accounts. For example, a furniture-and-fixtures heading could group the cost account and its accumulated-depreciation account.
• Use existing accounts where appropriate. Edit or rename an existing account rather than creating a duplicate.
• Account names and options may differ between QB versions.

4. Understand accounts linked to transactions

Some accounts update automatically when transactions are entered through the relevant QB module:

• Accounts receivable is linked to customer activity. Invoices increase the amount customers owe; receipts reduce it.
• Accounts payable is linked to vendor activity. Bills and bill payments update vendor records and the payable balance.
• Retained earnings reflects accumulated profit-and-loss results in equity.

The instructor cautions students against unnecessary manual adjustments to these linked accounts. For some linked balances, transaction details must be entered through the relevant customer, vendor, or inventory workflow.

5. Enter opening balances

• Create or edit accounts and enter opening balances using the correct account type, detail type, amount, and opening date.
• The class uses 1 April 2026 as the opening date, corresponding to the financial year being set up.
• Check the date format carefully, as it can vary by user or system. If a date or amount is entered incorrectly, open the account’s register/history, edit the transaction, and save the correction.
• Run reports, especially the balance sheet, to check that entries have been recorded correctly.
• QB may place the balancing amount in Opening Balance Equity while opening balances are being entered. The instructor describes this as a temporary balancing account that should be cleared as the remaining balances and transactions are completed.
• One example gives Opening Balance Equity as 1,550,000, calculated from receivables of 800,000 plus inventory of 900,000 less payables of 150,000. The instructor uses the report to check whether the expected difference appears.

6. Inventory accounts

• The instructor distinguishes between the inventory account linked to stocked goods and other inventory-related accounts.
• Retain or rename the trading-goods inventory account as needed, using the appropriate inventory detail type. Establish its opening balance through the item-by-item inventory breakdown rather than entering it directly in the chart of accounts.
• A raw-materials account that is not used for item-level stock tracking can be set up as another current asset and given an opening balance.
• Some accounts, such as accounts receivable and accounts payable, can be left for later setup through their associated transaction details.

7. Fixed assets and depreciation

• Create fixed-asset accounts for items such as furniture and fixtures, office equipment, computers, vehicles, buildings, and land.
• For assets with accumulated depreciation, enter the asset’s original cost and use QB’s depreciation-tracking option to record accumulated depreciation. The example uses furniture and fixtures costing 400,000, with 40,000 accumulated depreciation, producing a net balance of 360,000.
• Land is entered without depreciation in the example. For an asset without a relevant depreciation figure, enter the cost alone.
• The instructor recommends using QB’s depreciation-tracking option because it groups cost and depreciation information together and reduces manual work.

8. Set the financial year

1. Open Settings → Account and settings → Advanced → Accounting.
2. Change the first month of the financial year from January to April, then save the setting.

The remaining opening balances—including profit-and-loss and customer, vendor, and inventory details—are left for the next session.

Speakers and sources featured

• Instructor: Unnamed teacher leading the QuickBooks Online demonstration.
• Students: Unnamed participants who ask questions and respond during the class.
• QuickBooks Online interface: The accounting software screens and system prompts shown during the demonstration.