A.4.5 Recording a Vendor Prepayment
- 32 steps
Start in the Sample company.
1
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 is hoping to land other large contracts like this and hire them in the future.
You will need to set up Craig with a vendor prepayment account and pay the Excavating Excellence downpayment so they can get started.
First, create the vendor prepayment asset account.
2
Click "Accountant Tools", then select "Chart of accounts".
3
Click "New".
4
Click "Assets".
5
In the Save account under field, select "Other Current Assets".
6
In the Tax form section, select "Other Current Assets".
7
In the Account name field, type "Vendor Prepayment".
8
Click "Save".
Next, create an Expense for the 30% deposit.
9
Click the "+New" button, then select "Expense".
Since Excavation Excellence is a new vendor, we will need to set them up, which can be done directly within the Expense transaction.
10
In the Payee field, type "Excavation Excellence", then select "+ Add new Excavation Excellence".
11
Click "Save".
12
On the first line, in the Category field, select "Vendor Prepayment".
