Reference no: EM132926981

Project - Small Business Accounting using QuickBooks Online

Introduction - Project Objectives

a. Measurement, Analysis, and Interpretation: Accurately measure, record, and interpret transactions using General Ledger software.

b. Reporting: Prepare an accrual basis Income Statement for "all time".

c. Reporting: Prepare an accrual basis Balance Sheet for "all time".

d. Data Analytics using Technology and tools - Identify and utilize financial accounting technology to analyze data efficiently and effectively perform assigned tasks.

e. Measurement, Analysis, and Interpretation: Accurately prepare a bank reconciliation using Excel.

Scenario - Your good friend Kobe has always expressed interest in opening his own art studio. He has been painting and selling his artwork for years and already has a good customer base. In January of this year, he started the process of formally setting up a business named Kobe's Krafts; he filed for an Employee Identification Number (EIN) in February. Kobe found and rented an art studio on March 1st, and has been cleaning, painting, and setting up the space ever since. The grand opening was April 1, 2021. Kobe's Krafts sells Kobe's original artwork and prints of his original artwork that he purchases from a print shop. The original artwork and prints are inventory items. Kobe also accepts custom orders from customers, which are referred to as Commissioned artwork sales. Commissioned artwork involves Kobe painting a picture for a particular customer based on the customers' specification. Oftentimes, his commissioned artwork is a family portrait. Also, Kobe agreed to allow a few of his artist friends to display and sell their artwork from the Kobe's Krafts shop.

These sales would be classified as Consignment Sales. Artwork on consignment is owned by the artist who created the painting and therefore is not recorded as inventory on the Kobe Kraft's accounting records. It is customary for the consignee (i.e. the business owner) to retain a percentage of all consignment sales as payment for allowing the consignor (other artists) to display his or her artwork.

Kobe knows you are going to school for your master's degree in accounting and has asked for your help setting up and using QuickBooks Online (QBO). You agree to help set up the QBO business account and complete the first month of transactions. You are not familiar with QBO, but you know it will be beneficial to your accounting career to learn QBO because it is the most widely used financial accounting platform for small business in the United States. To feel more confident with QBO, you decide to seek guidance and collaborate with some of your classmates in your MS degree program at UMGC. You recall a few mentioned working as an accountant for small business clients.

Kobe has is interested in using the following QBO features:

- Sales Receipts/Invoices

- Purchase Orders/Inventory tracking

- Bills and Bill Pay

Eager to get started, you carefully read the Steps to Completion and review all QBO learning resources before beginning.

Steps to Completion -

For most of the steps below, you will have the option of viewing a short video or referring to Intuit Education PowerPoint Presentations (PPT), all page references are given below.

Step 1 - Begin communicating with your study group members, which is a requirement of this project. You will discuss the project together but will submit individual deliverables.

Step 2 - Set up your QBO account.

Step 3 - Download Intuit Education PPT

Step 4 - Set up the company account and settings

Step 5 - Set up and edit the Chart of Accounts (COA)

Step 6 - Set up the sales tax

Step 7 - Set up product items and contributed inventory

Step 8 - Create journal entries for all other (non-inventory) owner contributions

Step 9 - Add customers and vendors

Step 10 - Add invoices*, purchase orders (POs) and bills

Step 11 - Enter all transactions for the month of April

Step 12 - Reconcile April Bank Statement

Step 13 - Review and Revise Financial Statements

Step 14 - Print and save the following reports: P&L, Balance Sheet, and General Ledger in PDF format

Step 15: Combine the three (3) PDF report files into one PDF. If you do not have Acrobat Pro, you may use the free APP: CombinePDF.com to combine the report files listed below and in Table II.

a) Profit & Loss, accrual basis for report period All dates

b) Balance Sheet, accrual basis report period All dates, and

c) General Ledger accrual basis for report period All dates.

Step 16 - Create a Book to Book and Bank to Bank Reconciliation in Excel

Using MS Excel, create a book to book and bank to bank reconciliation that explains each uncleared item between the bank and book cash account balances. Hint: the ending balance of the book and bank balance should be equal. Use formulas in all cells with calculations and provide written explanations for each line item.

Prepare the Deliverables -

1. Submit the one (1) PDF Reports file you created in Step 15 above. Professors will ask students who fail to combine the three report files into one (1) PDF to do so before they begin the grading process.

2. Submit one (1) Excel file that contains the Book to Book and Bank to Bank reconciliation.

The April bank reconciliation must contains formulas embedded into all cells that require calculations.

Attachment:- Project File - Small Business Accounting.rar