Knowledge Recap: One More Step in The Process

One more step in the process
Importing bank feeds into QuickBooks Online is really easy. However, these transactions then need to be matched wi
How can QuickBooks Online help?
QuickBooks Online allows clients to set bank rules to speed up this process. The rule can identify repetitive bank feed
The QuickBooks Online ecosystem is constantly evolving to meet your needs.
Your current experience may differ from what you see here.
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Learning outcomes
In this lesson, we’ll cover:
Creating simple bank rules in QuickBooks Online
Make sure you cover the highlighted suggested learning material to pass your next exam attempt.
Topics
About bank rules

Knowledge
recap
Creating a rule
Ensure your clients know about
bank rules as a way of saving
themselves significant
ProAdvisor challenge
bookkeeping time. They’re easy to
set up and make everyone’s life
easier.
About bank rules

Bank rules automate the categorization of transactions in the bank feed, including assigning the transaction type, category, paye
Rules can be prioritized, copied, edited
They can also be used to automatically s
Continue training
Creating a rule
Let’s see how to set up a simple bank rule to automatically categorize a client’s equipment rental expenses.
Watch the video to see how it’s done. The individual steps are below for you to follow.
1. Go to the Rules tab in the Banking Center
2. Select New Rule
3. Give the rule a name
4. In the Apply this to transactions that are dropdowns, select either Money in or Money out and the bank a
5. Next, use the dropdowns to set the conditions for the rule. In this case, we want to automatically categor
6. Set the Transaction type from the dropdown. In this case, it’s Expense and the rule will create an expens
7. Then select the category
8. Select the payee. In this example, we select Add New and enter A Rental, then save the payee
Note that the Auto-add feature automatically applies the rule to the imported bank feed transaction without
9. Finally, select Save
Back in the Banking tab under the For review sectioKnowledge recap
Continue training
Ensure your clients know about bank rules as a way of saving
Take our ProAdvisor challenge
Ready to see how you’d do as a ProAdvisor?
Complete the following task and help a sample client, Craig’s Landscaping company, create a simple bank rule.
To complete the task, you need to:

Right-click on the Craig’s Landscaping
link
viewbelow and select copy
(Incognito in Chrome,link address
InPrivate in
Microsoft Edge, Private Window in Safari,
things without worrying about making a mistake
or breaking something. Once you close the
Craig’s Landscaping
Select the headings to find out more.
hen need to be matched with transactions in the client’s QuickBooks Online lists to reconcile their books.
dentify repetitive bank feeds and automatically suggest a match.

rental expenses.
oney out and the bank account. In this case, it’s Money out from the Checking account
to automatically categorize a client’s equipment rental expenses. We select Bank text from the first dropdown, and C
ule will create an expense transaction
save the payee
feed transaction without review. If you would like to review the transaction before it’s added, use the slider to turn it o
nk rules as a way of saving themselves significant bookkeeping time. They’re easy to set up and make everyone’s life easier.
the first dropdown, and Contains in the second. Finally, we enter A Rental in the last box. This means that anything
, use the slider to turn it off.
ke everyone’s life easier.

This means that anything with A Rental in the text of the transactions will qualify for this rule
Keeping things tidy
As a finance professional, you know that categorizing transactions in the correct accounts is vital for keeping the boo
However, clients aren’t always so careful. A common problem is when clients miscategorize credit card payments or
How can you and QuickBooks Online help?
With the Pay down credit card feature in QuickBooks Online, clients can easily categorize credit card payments in the
Continue training
Learning outcomes
Using the Pay down credit card feature in QuickBooks Online
Topics
Why use the Pay down credit card feature?

Paying down a credit card
Why use the Pay down credit card feature?

In the past, clients could record their credit card payments in a few ways:
By creating a transfer transaction and matching it from the bank feed
By writing a check
However, they aren’t always sure how to categorize the payment correctly. A common mistake is categorizing payme
The Pay down credit card feature uses client-friendly language to help them make the right choices and it’s a simple w
Clients still have the choice to pay by check if that’s what they prefer.
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Paying down a credit card

Let’s see how to use the Pay down credit card feature.
1. Select + New, then select Pay down credit card
2. Select the credit card account to pay down. In our case, we select Mastercard
3. In the Payee field, select the right option. In our case, we select Mastercard again
4. Next, in the How much did you pay box, enter the amount
5. Enter the date of payment
6. Then, select the account that the payment was made from.
Notice that there is an option to record making the payment by check. Clients can also add memos and att
7. Select Save to record the transaction
8. Once it’s saved, you or your client can select the More button at the bottom of the transaction and choos
That’s it!
Continue training

Complete the following task and help a sample client, Craig’s Landscaping company, pay down a credit card.
Right-click on the Craig’s Landscaping link below and select copy link address
Open a new browser window in private view (Incognito in Chrome, InPrivate in Microsoft Edge, Private Window in S
Craig’s Landscaping is a practice account and a safe space for you to explore and try out new things without worrying about ma
The task
Your client, Craig, has paid his Visa credit card today, but he’s asked you to help him record the transaction in Quick
Here is some useful information:
The payment was $500
Craig used his Checking account to pay off his Visa card
Here’s what you need to do:
Use the Pay down credit card feature to record the transaction
How did you do?
Our solution
Having trouble?
Continue training
Summing up
Learning outcomes
Well done. In this lesson, we covered:

Using the Pay down credit card feature in QuickBooks Online
Make sure you have covered the highlighted suggested learning outcomes before moving on.
ProAdvisor tip
Knowledge recap
The Pay down credit card feature is a simple and user-friendly workflow to help avoid duplicate or miscategorized tra
is vital for keeping the books tidy and financial statements accurate.
ize credit card payments or add them via their bank feed.
e credit card payments in the correct account, keeping their balances and reports tidy and accurate.
istake is categorizing payments from a credit card to an expense account rather than to the credit card liability account. This lead
ht choices and it’s a simple workflow to follow. Coaching your clients in this workflow can help avoid duplicate or miscategorize
n also add memos and attachments
the transaction and choose the Transaction journal to see if the right accounts have been debited and credited
ord the transaction in QuickBooks Online.
plicate or miscategorized transactions and keep all credit card transactions tidy.
liability account. This leads to incorrect balances in the Banking Center, the Profit and Loss, and the Balance Sheet.
d duplicate or miscategorized transactions that you need to tidy up for them at month-end.
ebited and credited
e Balance Sheet.
When one size doesn’t fit all
Clients normally use sales and purchase forms to record income and expenses in QuickBooks Online. However, some
Your clients can use journal entries as another way to adjust account balances.
Journal entries in QuickBooks Online is a way to post debits and credits directly to accounts in the General Ledger. L
Continue training
Learning outcomes
Using journal entries and adjusting journal entries in QuickBooks Online
Topics
When to use journal entries

Creating a journal entry
About adjusting journal entries
When to use journal entries

A journal entry is an accounting transaction that posts directly to the General Ledger.
Here are some rules regarding Journal Entries:
Total debits must equal total credits in order to save the journal entry
You can’t use Products and Services items in a journal entry
When posting to accounts receivable, you must specify a customer
When posting to accounts payable, you must specify a vendor
Your client may use multiple accounts receivable and/or accounts payable accounts in the same journal en
Your client can’t mark an amount as billable to a customer
Continue training
Creating a journal entry

Let’s see how to create a journal entry for the depreciation of equipment that was donated to the business by the owne
1. Select + New, then select Journal entry
2. Set the Journal date
3. Enter or accept the Journal number
4. In the Account column, select Add new
5. In the pop-up Account window, add the Account Type. In our case, it’s Fixed Assets
6. Next, select the right Detail Type. Because we’re creating a Journal Entry for equipment depreciation, w
7. If the client wants to track depreciation, check the Track depreciation of this asset box and leave the Orig
8. Then select Save and Close
9. Back in the Journal Entry window, in the Debits box, enter a debit amount
10. Add a description in the Description column. In our case, it’s the contribution of the equipment
11. In the next row, under the Account column, we select Owners Equity from the dropdown. Notice that Q
12. Next, select Save and close
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About adjusting journal entries

An adjusting journal entry is an entry in a company’s General Ledger that occurs at the end of an accounting period b
Only users with access to QuickBooks Online Accountant can create adjusting journal entries.
To mark a journal entry as adjusting, just enter the journal entry as normal and check the Is adjusting journal entry?
There are a few scenarios where QuickBooks Online would mark journal entries as adjusting journal entries.
Accrued expenses
Deferred expenses
Accrued revenues
Deferred revenues
Non-cash transactions
Not all expenses are cash expenses. Some things represent expenses that don’t have a cash effect on your client’s bus
If regular adjustments aren’t recorded to reflect these activities, it’s easy to get a skewed picture of a company’s finan
For example, a client that has no liability accruing for their annual loan interest might overestimate how much cash th
ProAdvisor tip
As an accountant, you can set adjusting journal entries to post automatically using the Recurring transactions feature
Continue training
Knowledge check
Which of these are true about journal entries in QuickBooks Online? Select all that apply.
You can’t use Products and Services items in a journal entry

Total debits must equal total credits in order to save the journal entry
You can’t use multiple accounts receivable and/or accounts payable accounts in the same journal entry
Check Answer
Continue training
Complete the following task and help a sample client, Craig’s Landscaping company, create a journal entry.

The task
Your client, Craig, donated his personal laptop to the business and asked you to help him enter this transaction for him
Here are some useful details:
Craig is donating his laptop to his business
Its value is $500
It should be tracked for depreciation
Here’s what you need to do:
Create a journal entry and name the account Laptop
Record the contribution by creating a debit of $500 to a new Fixed Assets Account type with the Detail Typ
Create a new Owner’s Equity account, and credit the amount to it. Make the Account Type Equity and the
How did you do?
Our solution
Having trouble?
Continue training
Summing up
Learning outcomes

Using journal entries and adjusting journal entries in QuickBooks Online
Knowledge recap
A journal entry in QuickBooks Online is a way to post debits and credits directly to accounts in the General Ledger. A
ooks Online. However, sometimes these forms just aren’t appropriate for the client’s purpose.
nts in the General Ledger. Let’s see how it works.
nts in the same journal entry
to the business by the owner.

quipment depreciation, we select Machinery & Equipment
et box and leave the Original cost and Depreciation fields blank
of the equipment
dropdown. Notice that QuickBooks Online automatically populates the credit matching the debit and the description
nd of an accounting period before the company produces its financial statements.
Is adjusting journal entry? checkbox.

ing journal entries.
h effect on your client’s business. Depreciation and allowance for doubtful accounts are two examples of common non-cash tran
picture of a company’s financial position.
restimate how much cash they have. Without ensuring that they keep track of their growing current debt, they will have incorrec
curring transactions feature in QuickBooks Online. That way, you know that most (if not all) of the necessary adjusting entries ar
that apply.
journal entry
enter this transaction for him to ensure it’s recorded correctly.
nt type with the Detail Type as Fixed Asset Computers

ount Type Equity and the Detail Type Owner’s Equity
unts in the General Ledger. An adjusting journal entry, by contrast, is only accessible to users with QuickBooks Online Accounta
debit and the description in the line above
es of common non-cash transactions.
debt, they will have incorrect information about the profit they make each month. Also, when they make the annual business insu
ecessary adjusting entries are reflected when viewing monthly financial reports.
uickBooks Online Accountant and it’s an entry in a company’s General Ledger that occurs at the end of an accounting period bef
ake the annual business insurance payment and it’s not accrued, they will have the monthly insurance expense reflected in the wr
of an accounting period before the company produces its financial statements.
e expense reflected in the wrong accounting period.
The need for categorizing deposits
Sometimes clients may receive deposits that are not related to customer transactions. Adding these along with the rest of their i
Clients can easily categorize deposits in QuickBooks Online. This way, they can separate deposits like refunds or proceeds from
Continue training
Learning outcomes
Recording deposit transactions in QuickBooks Online
Topics
Understanding deposit transactions

Recording a deposit transaction
Understanding deposit transactions

Simply put, deposit transactions are for any money coming into the business that is not subject to sales tax or income tax, and th
However, clients need to record and categorize these transactions to the appropriate account on the chart of accounts.
Have a look at some cases when clients would use deposit transactions:
When the client receives funds from loan proceeds or contributions of cash from owners
When the client receives a refund from a vendor and wants to record it directly against the expense account or to a R
When the client doesn’t record income using sales transactions (invoices or sales receipts) and wants to record depos
When an employee reimburses the client’s company, and the client needs to record the reimbursement against the E
When the client receives a tax refund. This screen is where you record it in the Tax Refunds account
ProAdvisor tip
Your client can add multiple funds to the same deposit. For example, they might include both customer payments and other fun
Continue training
Recording a deposit transaction

Let’s see how to record a deposit transaction for a bank loan.
1. Select + New, then select Bank deposit
2. Specify the Account, and set the Date
3. Select the Add funds to deposit grid
4. In the Received From column, enter where the payment is from. In our case, it’s from a bank
5. Next, select the right account in the Account column. In our case, it’s SBA Loan Payable. This is a liability account, s
6. Add the description if necessary
7. Then enter the Payment Method, the payment’s Reference Number, and the Amount
8. Finally, select Save and close
Continue training
Knowledge check
Which of these situations would call for a deposit transaction? Select all that apply.
Your client receives a payment from a customer, but it’s not a check
Your client receives a tax refund from the IRS
Your client receives a cash back payment from a vendor for ordering in bulk
Check Answer
That's right.
A tax refund or a cash back payment are perfect examples of money coming in that isn’t matched to an existing payment. They
Continue training

Ready to
test how
you
would do
as a
ProAdvis
or?
Complete
the
following
task and
help a
sample
client,
Craig's
Landscapi
ng
company,
record a
deposit
transacti
on.
To complete the
task, you need to:
Right-click on
Craig's
Landscaping link
below and
select copy link
address
Open a new
browser window
in private view
(Incognito in
Chrome, InPrivate
in Microsoft Edge,
Private Window
in Safari, etc.)
then right-click
and paste the full
link
Craig's Landscaping
is a practice account
and a safe space for
you to explore and
try out new things
without worrying
about making a
mistake or breaking
something. Once you
close the window,
the account is
completely
refreshed, so you can
start over again.
Craig's Landscaping
The task
How did you do?
Our solution
Having trouble?
Continue training
Summing up
Learning outcomes

Recording deposit transactions in QuickBooks Online
Knowledge recap
Your client should use deposit transactions to keep non-sales-related payments they receive separate from their usual income.
Next
steps
In the
next
lesson,
we’ll
look at
QuickBo
oks
Payment
s and
setting
up
payment
links in
QuickBo
oks
Online.
e along with the rest of their income deposits would lead to confusion and inaccuracies with future tax payments.
s like refunds or proceeds from loans so that they’re not confused with sales income, and taxable and nontaxable income are kept separate.
sales tax or income tax, and that doesn’t have to be matched to a sales receipt or invoice in QuickBooks Online.
he chart of accounts.
the expense account or to a Refunds Received income account

pts) and wants to record deposits directly to income accounts
e reimbursement against the Employee Loan receivable account
unds account
tomer payments and other funds in a single deposit.

ble. This is a liability account, so QuickBooks Online won’t classify it as income
to an existing payment. They need to be be recorded as deposit transactions.

ate from their usual income.
ble income are kept separate.
Returning items
Sometimes, clients might have to return items to the vendor, who, instead of refunding the cost, may decide to credit
As a ProAdvisor, you can help your client follow the right workflow and record a credit to vendors’ accounts payable
Continue training
Learning outcomes
Using Vendor Credits in QuickBooks Online
Topics
About Vendor Credits

Creating a Vendor Credit
About Vendor Credits

Vendor Credits are for returns of products or services, or discounts received on account after the vendor has issued th
A Vendor Credit can then be:
Applied to an existing bill
Held as open and applied to a future bill
ProAdvisor tip
In the Advanced tab in Account and Settings, clients can select Automatically apply credit to automatically apply Ven
Continue training
Creating a Vendor Credit
Let’s see how to record a Vendor Credit.
1. To access the Vendor Credit screen, select + New, and then Vendor Credit. Alternatively, select New tra
2. In the Vendor Credit screen, from the Vendor dropdown, select the vendor the credit is from
3. Next, set the Payment date of the credit
4. In the Item details grid Product/Service column, select the item the vendor credit is for
5. In the Description column box, add a note explaining the credit
6. Set the Rate and the Quantity of the credited item
7. In the Customer column, add the customer the item was ordered for
8. In the Memo field, your client can add additional notes
9. Then select Save and close
Now let’s go and see the Vendor Credit and apply it to a bill.
1. From the left-hand navigation, select Expenses.
Here, your client can see the vendor credit and the original bill
2. Find the original bill of the returned item. Select the dropdown icon in the Action column and select Mar
In the Bill Payment screen, we can see that QuickBooks Online has already applied the Vendor Credit, red
Continue training
Knowledge check
Which of the following statements is true about Vendor Credits in QuickBooks Online?
Vendor Credits can’t be applied to a bill that has already been received
Vendor Credits post as a debit to decrease accounts payable

A Vendor Credit can be linked to a cash refund, when the cash is deposited
Vendor Credits post as a debit to increase accounts payable
Check Answer
Continue training

Complete the following task and help a sample client, Craig’s Landscaping company, record a Vendor Credit.

The task
How did you do?
Our solution
Having trouble?
Continue training
Summing up
Learning outcomes

Using Vendor Credits in QuickBooks Online
Knowledge recap
Vendor Credit makes it easy for clients to record credits on returned items and apply them to existing or future bills.
e cost, may decide to credit your client’s account. Your client can then use this credit against future purchases, but needs to recor
o vendors’ accounts payable. This way, your client can apply it to an existing open bill or the next bill received from a particular
fter the vendor has issued the bill and the client has recorded it in QuickBooks Online. They post as a debit to decrease accounts
t to automatically apply Vendor Credits to existing open or future bills.
ernatively, select New transaction from the Expenses Center and then select Vendor Credit
credit is from
n column and select Mark as paid
ed the Vendor Credit, reducing the amount payable.

m to existing or future bills.
urchases, but needs to record the credit and adjust the original expense.
l received from a particular vendor.
a debit to decrease accounts payable.

Knowledge Recap: One More Step in The Process

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One more step in the process

How can QuickBooks Online help?

About bank rules

About bank rules

To complete the task, you need to:

dentify repetitive bank feeds and automatically suggest a match.

save the payee

, use the slider to turn it off.

ke everyone’s life easier.

How can you and QuickBooks Online help?

Why use the Pay down credit card feature?

Why use the Pay down credit card feature?

Paying down a credit card

Take our ProAdvisor challenge

To complete the task, you need to:

Well done. In this lesson, we covered:

How can you and QuickBooks Online help?

When to use journal entries

When to use journal entries

Creating a journal entry

About adjusting journal entries

You can’t use Products and Services items in a journal entry

To complete the task, you need to:

Select the headings to find out more.

Well done. In this lesson, we covered:

nts in the General Ledger. Let’s see how it works.

nts in the same journal entry

to the business by the owner.

nd of an accounting period before the company produces its financial statements.

Is adjusting journal entry? checkbox.

nt type with the Detail Type as Fixed Asset Computers

es of common non-cash transactions.

How can you and QuickBooks Online help?

Understanding deposit transactions

Understanding deposit transactions

Recording a deposit transaction

Take our ProAdvisor challenge

Well done. In this lesson, we covered:

the expense account or to a Refunds Received income account

tomer payments and other funds in a single deposit.

to an existing payment. They need to be be recorded as deposit transactions.

How can you and QuickBooks Online help?

About Vendor Credits

About Vendor Credits

Vendor Credits post as a debit to decrease accounts payable

Take our ProAdvisor challenge

To complete the task, you need to:

Well done. In this lesson, we covered:

t to automatically apply Vendor Credits to existing open or future bills.

ed the Vendor Credit, reducing the amount payable.

l received from a particular vendor.

a debit to decrease accounts payable.

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