do you need to make personal individual financial statements
well in that case you should start by looking at your profit and loss
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profit and loss statement sometimes called the income statement
shows how well you operated regarding how much of your earned money you were able to keep
it shows how well you did during a specific period of time
quickbooks gives you the ability to compare profit and loss statements of different time periods
you can judge your progress regarding how you are operating financially from one time period
compared to another time period for example let's compare how well we did in the first two months
meaning january and february compared to how well we did during the next two months march and
april well what i've done here in quickbooks online is open to the dashboard as i log in
now we click reports and profit and loss it's in the custom report section profit and loss
now before we set the from date and the to date we have to duplicate this tab up here
and you'll notice that this time i included the browser tabs in the video in the screen capture
so that i can show you what to do so after you open your profit and loss the way we memorized it
before with all dates you would then go to the tab and most browsers work this way i'm using firefox
but most browsers if you click on the tab and you right click and then you click duplicate tab
you should get a duplicate of the window you were in if you were using quickbooks
online and running the profit and loss now notice when i click from one tab to the other
you can see that both of them have the same content but let's click the tab
on the left now first let's temporarily remove the left panel of menu choices by clicking the
three lines here in the top left of the report window click and the left panel menu collapses
now let's go to the other tab click the other tab click the three lines and collapse it this
way we can more clearly see our profit and loss now when we click the left
tab let's make that one january and february the way to do that is to click the pull down arrow
and then go to custom which is the second choice down then click the calendar and put january 1
click the other calendar and put february 28 then click run the report now you can see this is the
total of the income category for all transactions during january and february and this is the total
of the expense category for all the expense transactions that were recorded with dates
during january and february and this is the net income the result of how well you earned and
how well you saved during those two months now let's click the other tab and do the same thing
click the pull down menu and choose custom and then there choose march 1
to april 30th
then click run report now you can see this is the total of the income category for march and april
and this is the total of the expense category for march and april and if you click the left
tab and the right tab you should be able to compare any two time periods you want
regarding how well you did and how well you saved now if you click here you can see that you
only earned four thousand dollars worth of income during january and february but on the other hand
you had much lower expenses and that's why your net income is three thousand two hundred fifty
between march and april you had much more income and that sounds good but you had much more
expenses and unfortunately you can see that the increase in your expenses was more than
the increase in your income so the actual net income for the second two months is more than
the net income from the first two months and line by line you can compare what the reason was
and the difference you paid and the difference in what you received in income for those two
separate time periods in our previous video we discussed the idea of net income from operations
this is how well you did regarding income and expenses that relate to how you operate or in
the case of an individual how well you're making a living regarding how much you're earning compared
to how much you're able to save sometimes your income changes for a reason that has nothing
to do with your normal income and expenses if something like that happens to you you should
be able to see your normal income or normal profit from your normal operations and be able to compare
that to your overall net income that includes the rare and unusual items of income or expense
and anytime you have an other income or other expense type of unusual situation
it will show up on the profit and loss below the normal net income from operations
this way you can see the normal operating income and the overall net income in the same place
so let's keep comparing these two income statements after this example issue
let's imagine back on january third we received a gift of seven thousand dollars
the money was deposited to chase bank and this is not a reoccurring source of income
obviously it's not really reflective of how efficiently you operated
if it's not in your control it should be put in the chart of accounts as other income so
i suggest that you close one of the two tabs if you're not comparing financial statements then
click the three lines to bring back the left panel then scroll down to accounting chart of accounts
now we have to click new to add a new account in the chart of accounts and the account type is not
income it's down here other income and there are detail types for other income the most appropriate
in this case would be other miscellaneous income and we will put gift income capital letters
okay click save and close and now we're ready to record january 3rd's gift
we know that it was recorded in the chase bank account so in the row of chase bank click view
register and we're going to add a deposit so in the pull down make sure you're choosing deposit
and we put the date a transaction we missed back on january 3rd and the account that we put is the
account that we just created the only account in the category of other income gift income
now this was a deposit of seven thousand dollars
and that's all you have to do you have to scroll to the bottom to scroll to the right
to be able to click save and now let's go back to the profit and loss reports profit and loss
and of course we'll modify the dates custom january 1 to january to february 28
and click run report and you can see that the gift income comes under the net operating income
so as far as earning and saving we still have the same result but we also have this
gift income that was out of our control that made our overall income for those two months
increase greatly now let's compare that to our second example let's imagine on march 5th 2021
someone broke in at night and stole 500 from the cash box that would be
an other expense type of account and it would be loss on theft and this is how you would record it
you know the cash on hand is the account that changed so you click accounting chart of accounts
and in the row of cash on hand click view register now you're not adding a deposit this is
obviously an expense but it's an other expense and we did not yet add that other expense to
the chart of accounts but that's okay because when you click the account pull down in the transaction
you can add an account at the moment you make the transaction
you go to this top of the scroll bar and click add new and you're in the add new account window
just as you would be as if you came there from the chart of accounts now this is obviously an
other expense type of account because it is not within your control and it's not part of
your net income from operations the detail type however can be just other miscellaneous expense
that would be the most appropriate in this case and the name of it will be loss on theft
click save and close now the amount obviously must be in the payment column of five hundred
dollars and the date that the money was taken i believe was march fifth so we go to march
5th and we now have to scroll to the right to be able to click save
now let's take a look at the profit and loss reports profit and loss
now we have to set the date range to the later date range custom march 1 to april 30
because that's the other date range we are comparing and click run report and now you can see
that this date range did not have the gain on the gift income but this time period did have the loss
on theft and notice the loss on theft comes under the net operating income because it's
not in your control and it does not reflect how much you've earned and how well you saved
to close let's compare this to the earlier time period again to see how the bottom looks different
right click the tab and click duplicate tab
and then of course change the time period of the second tab to january 1
to february 28th then click run report so in the first two months under net operating income you
had gift income of seven thousand dollars and in the latter two months under uh net operating
income you had loss on theft of 500 and one only appears in one profit and loss and the other
appears in the other profit and loss because they happened in two separate time periods
you