2.EV.3.1b Recording a Vendor Prepayment (accounts payable method) | Scribe

    2.EV.3.1b Recording a Vendor Prepayment (accounts payable method)

    • 0 step
    • Fast & Easy QBOFast & Easy QBO
    • QuickBooksQuickBooks
    • IntuitIntuit
    Start in the Sample company.
    To complete this exercise, you must be in the Sample company. From your QBOA account, click on the Gear icon on the top right corner of the screen, then select Sample company.
    Note that you will be logged out of your current account. If you are sure, click "Continue" to confirm.
    Now let's get started with the exercise.

    Scenario, Part 1

    Scenario: Craig just landed a contract to build a football field for the new high school. Because it is so large, he has hired Excavation Excellence to prepare the field before his landscapers can get to work. The estimate from Excavation Excellence is $120,000, and they require a 30% deposit to secure the contract. Craig doesn't use prepayments often, and he doesn't anticipate that it will become a regular part of his business. You will use the Accounts Payable method to record this prepayment.
    First, record the prepayment. Craig paid with a check.
    Click "New"
    Click "Check"
    In the Payee field, type "Excavation Excellence". Then, click "+ Add new Excavation Excellence"
    A pop-out drawer will appear to create a new vendor. Click "Save"
    In the Category field, select "Accounts Payable (A/P)Accounts Payable"
    In the Description field, type "Field Prep deposit"
    In the Amount field, type "120000\*.3". This will have QBO calculate 30% of the total $120,000 for you.
    When you click out of the field, notice that the amount has updated to $36,000 which is 30% of 120,000.
    Click "Save and close"
    Now take a look at how this is reflected on the Vendor account.
    From the Left Nav Bar, hover over "Expenses" and click "Vendors"
    Click "Excavation Excellence"
    The balance on the account is "-$36,000" indicating a credit balance.
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