What does it tell you?
Other than the records you need to maintain and the transactions you need to run, reports are kind of the whole point of QuickBooks, especially if you’re the company owner and/or manager. To be effective, accounting software needs to be able to provide you with a great deal of specific information on the financial state of your company.
They’re so critical, in fact, that it would be well worth your time to complete a QuickBooks training course that just focused on understanding, creating and customizing reports. You should definitely understand what the standard financial reports are and when/why you might need them.
Before calculators and computer-based accounting software like QuickBooks, the Trial Balance report could point out underlying problems in your bookkeeping, since it presents the totals of all transactions in every account in your Chart of Accounts, with debits in the left column and credits on the right.
To see one in QuickBooks, go to the Reports menu and select Accountant & Taxes | Trial Balance. The bottom of the report should look something like this:
The total of all debits and credits in your Trial Balance report must match exactly.
The Trial Balance is a critical element of double-entry accounting. When you use QuickBooks, you don’t have to worry about credits and debits, since the software posts those behind the scenes for every transaction you complete.
There are some ways you can see them though. Click Company | Make General Journal Entries. If you advance backward through the list, you can see those that were previously entered, like this:
QuickBooks stores the data about debits and credits in the General Journal. Unless you are an accounting professional, you should not be making entries here.
You can also display debits and credits in reports, should you be so inclined. Open a report and click the Customize Report button in the upper left. The Modify Report dialog box opens with the Display tab open.
Scroll down in the box below Columns. Find Amount and click the check mark to de-select it. Then find Debit and Credit (they should be nearby) and click in the columns to their left to enter a check mark. Click OK. Your report now has two new columns that display debits and credits.
An accurate Trial Balance does not mean, though, that there are no errors in your bookkeeping. Transactions may be missing, for example, or they may have been posted to the wrong account.
QuickBooks classes may or may not cover debits and credits and how they’re used in accounting, but they’re concepts that you should understand, even if QuickBooks handles them automatically and your accountant does any maintenance that’s necessary.
