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Chapter 2. Double-Entry Bookkeeping > A Few Words about How QuickBooks Works

2.4. A Few Words about How QuickBooks Works

Before I end this chapter, I want to make just a few comments about how QuickBooks helps you. First of all — and this may be the most important point — QuickBooks makes most of these journal entries for you. For example, in Journal Entry 6, I show you how to record a $1,000 check written to pay supplies. However, you would never have to make this journal entry in QuickBooks. When you use QuickBooks to record a $1,000 check that pays Acme Supplies for some paper products that you purchased, QuickBooks automatically debits supplies expense (as long as you indicate that the check is for supplies) and then credits cash.

Similarly, in the case of Journal Entry 7 and Journal Entry 8, when you produce an invoice that records a sale, QuickBooks makes these journal entries for you. For example, if you sold $13,000 of hot dogs and buns, and those hot dogs and buns actually cost you $3,000, QuickBooks debits cash for $13,000, credits sales revenue for $13,000, debits cost of goods sold for $3,000, and credits inventory for $3,000. In other words, for most of your routine transactions, QuickBooks handles the journal entries for you behind the scenes.


  

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