our QuickBooks file is now ready to receive transactions now you may well ask what is a
transaction well for our purposes in this set of videos a transaction is an event a transaction is
a moment in time where our company buys or sells a product or service now that is a very limited
definition because our introductory videos are very basic if you study a little more accounting
you will learn that the event of borrowing money is actually a transaction and the moment that you
make a payment to pay back the money is also a transaction if you think about this this will
give you some idea about what a transaction is when we experience a transaction we need proof we
need some kind of physical proof that the event happened so each different kind of transaction
needs a different document as proof for example if we made a cash sale we would physically give
the customer a sale receipt and the sale receipt would be the proof of that transaction if we're
if we're a customer a service and at the moment we give the service the customer only promises to
pay well in that case we would give an invoice or a bill if we give a service the customer owes us
money and therefore that's a transaction and the proof of that transaction would be the invoice or
bill the customer signs if we deposit money in a bank that's a transaction the proof of that
transaction is the document called a deposit slip if we pay money directly from the bank
account and give it to someone the proof of that transaction is a check all of these documents that
prove a transaction actually happened have a special name these documents are called
source documents they are called source documents because they are the first place that the infra me
about the transaction is recorded on every source document has the same fields of information that
are on every single transaction every single transaction has a date when the event happened
every single transaction has a person or a company involved in the transaction every transaction has
an item of product or service that's being sold or purchased and every transaction has a money amount
these are all things that must be written on the document regardless of what type of transaction or
regardless of what type of document you're making as proof of the transaction every source document
must have a unique specific number that identifies that document and identifies that transaction many
of you have seen invoices before you notice that it says invoice number 3 invoice number 10 many of
you have seen checks before and in the top right corner of the cheque it says cheque number 60
cheque number 70 if you did the transaction then you might not have a physical document but every
transaction whether it's online or done with a document has a unique specific number that
identifies the transaction usually if you pay online or get paid online the merchant service
or the customer gives you a confirmation number to make sure that you can identify that specific
transaction the confirmation number is the number that would go into the field of the document like
cheque number or invoice number some people like to take a screenshot push print screen and take a
picture of the screen when the confirmation number is displayed then they print that picture and file
it as the source document for that transaction in our company it's going to be much more simple
than that when you record a transaction in QuickBooks you open up a window that looks
like the source document for that transaction for example if you have to write a check you
would open up a window in QuickBooks that looks like a check if you made a deposit and you want
to record the deposit in QuickBooks you would open up a window in the computer that looks like
a deposit slip regardless of the transaction type and regardless of the source document every time
you record a transaction there will be a field in the window for the date every time you record
a different type of transaction there will be a field to tell QuickBooks who is the other person
or company involved in the transaction there will always be a space in any source document and in
any window for transactions and QuickBooks to record the money amount that's what the windows
look like when you record the transactions and QuickBooks knows what information will be there
because it will be the same information for every transaction in our example company it will be even
easier to record transactions in our example company we will record all of our transactions
in this window this window is called the register window we can record both bank deposits and check
payments to vendors here in this very same window not all companies are able to use this window our
company is able to use this window because we only have a cash company we pay our bills immediately
we don't owe money customers pay us immediately they do not owe us any money and we don't have
any other records to keep but the money that's coming in and the money that's going out that's
why in our videos we will use just this window to record transactions we know from previous
videos that transactions are recorded into the general ledger that means that after we record
the transactions in the register window QuickBooks will automatically copy those transactions to the
appropriate account in the list of the Charter accounts that we created when we set up the file
after the transactions are recorded into the proper account QuickBooks will make a special
report that summarizes and organizes all of the accounts and shows you--i lists of the name of
each account and the total remaining balance the name of that report is called the trial balance
the trial balance is the first report that we will learn about the trial balance shows
the accumulated totals of all of the general ledger accounts that means whenever you have
a transaction QuickBooks automatically posts and copies the transactions to the appropriate account
in the chart of accounts when that happens the balance of the account changes that means the
face of the trial balance will change whenever you look at the trial balance you'll see all of
the accounts that we had put in the chart of accounts but you will not only see their name
you will see the ending balance which is the accumulated results of all the transactions to
prepare for our first transaction we will open the register window from the main menu click banking
use register and then click OK a window opens up that looks just like the checkbook register that
our parents used to record their bank transactions in and in the next video we'll demonstrate how to
record the transactions but at the very same time that you're looking at the register you should
also look at the report that will show the results of your transactions that's the trial balance from
the main menu you should click reports accountant in taxes trial balance it's good to position the
trial balance and the register window in such a way that you can change from one to the other your
screen will have much more room than mine I'm recording the video but on your screen you can
keep them a little bit further apart or even put them next to each other we're almost ready to go
to the next video and start recording transactions however we must establish a rule that we will use
for every future video in this class anytime we open a report in this class we immediately change
the date range of the report to all this means we need to see this means we are able to see the
results of all transactions regardless of date the way to do that is to click in the top left of the
report where it says days you get a pull down menu and you will scroll up and you will push click on
the all which is the very top choice then you will see the date ranges change in the top and you will
know that we have the results or at least we're showing the results of all transactions regardless
of a date when we go back to QuickBooks you can see all reports in the top left have a
date pull down menu choice you can click on it to get all of the different date choices and
scroll all the way up to the top this way you can click on the choice all and you can see the from
and to disappear because now the trial balance is showing you the results of all transactions
regardless of date you should get in that habit every time you do an exercise in this course