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(Quicken
2002 Deluxe Version 9.0 for Windows 95/98/2000/Me/XP)
[1]
This workshop is designed to introduce basic concepts that will help you in adapting Quicken [2] in the organization of your financial records for your farm business. A hypothetical case farm with a cow/calf herd and wheat for grain and pasture is used in this manual. The mechanics of record keeping outlined here, however, could always serve as a good reference when working with other types of farm enterprises and when working on computerized personal records at home. This basic course is divided into six (6) major sections:
o Quick Keys o File Set-up o Preliminary Account Categories
o Asset Accounts o Liability Accounts
o Expanding categories o Adding and Deleting o Subcategories o Setting up classes
o Recording o Splitting
These topics will be discussed in detail in the sections that follow. Throughout this manual, specific instructions written in bold fonts will require you to either choose a button (or menu item) or provide a response. A. INTRODUCTION
1.
Quick Keys, Keyboard Shortcuts and Desktop Set-up
q
Quick Keys and Shortcuts Ø The 2002 version of Quicken allows you to choose an item from the Quicken menus in three different ways: o Through the <Alt> and the letter key underlined in the menu line (this letter will also be underlined in this manual) o Mouse clicking on specialized “buttons” o Moving cursor using the mouse to appropriate line in the drop-down menu and clicking using the left button. Ø Within Quicken, after you have responded to a particular data request or selected a menu item, you may use the following optional keyboard shortcuts: o Press <Tab> to move forward to the next field; o Press <Shift><Tab> to move back one field; o Press <Esc> if you want to cancel a particular action Ø Other Keyboard shortcuts you may want consider are: To Press Decrease date or check number - (Minus key) Increase date or check number + (Plus key) Go to register Ctrl R Go to Write Checks Ctrl W Go to Financial Calculator Ctrl K Go to View Loans Ctrl H Go to Currency List Ctrl Q (only if multi-currency support
is enabled) Quick Zoom a report amount Ctrl Z Get Help on the current window F1 Dates Press To switch to Today t First day of this month m Last day of this month h First day of this year y Last day of this year r Go to date Ctrl G
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Desktop Set-up The desktop set-up in the 2002 version is slightly different from those of the earlier versions. The corresponding number labels in the captured screen image indicate the locations of the following available desktop navigation options: 1) Using the mouse, move the cursor to the appropriate item in the menu line and click using the left button. 2) Buttons provide quick access to options such as returning to the previous screen (back), accessing the internet (online), a calculator, and the print feature. An action button with a drop-down list of actions can be added by choosing: Edit Options Quicken Program General Options Ö Show Action Buttons Ö OK 3) The “My Finances” view displays as Quicken account summary in one easy-to-read place. You can customize what appears on the My Finances Center by deleting, rearranging, or adding new components up to a total of 34 different snapshots. You can also create up to 11 different views of the My Finances Center. When an option such as “Banking” is opened, the banking center will occupy the desktop. 4) Quicken does not have an activity bar or icon. Every major area of personal finance has its own Quick Tab. When you open a new feature, Quicken places a feature tab under the appropriate area, giving you one-click access to the features you use most. When you become familiar with Quicken 2000, you may want to try using these quicker features, but for now we will use the drop-down menu bar for navigation.
2.
File Set-Up Let’s start from scratch and set up a file for your farm enterprise. To do this, click on:
File New And the following screen appears:
Indicate that you intend to “Create a New Quicken File” and then click on Ö OK (or press <Enter>).
Provide a name for your Quicken file by typing the name on the space for “File name:” For this session, we will simply call our sample farm “Georgia Ag Enterprises” owned and managed by a certain couple Ron and Lily Turner. Then click OK and a series of set-up windows will open one after the other. Click Next in each window after you have provided the information being requested.
Your answers to the above questions will determine the standard Quicken categories that will initially be made available to you as you work on your farm account. Details of these category lists are provided at the end of this manual for your reference. When setting up your personal file, you may choose none, one or more of these lists. These lists are only built-in or preliminary categories that may or may not apply to your situation. A later section will illustrate how these built-in categories could be expanded with suggested new entries designed for a specific farming enterprise. The important point to remember is that category lists can always be modified anytime by either deleting or adding categories.
Click Done. B. SETTING UP ACCOUNTS
1.
Asset Accounts At this point, we are now ready to set up accounts. To be able to do this you must be at the My Finances section (available as an option under the Finance pull-down menu). The My Finances section has two windows: Setup and Main View windows. i) The Setup window (actually a more user-friendly new feature in Quicken 2002) conveniently allows you to set up accounts, bills, scheduled transactions and the owners’ paycheck easily. ii) The Main View window presents a summary of your account balances, a one-step (software) update summary, a stock watch list, alerts and reminders for bills and scheduled transactions, an overview (numerical and graphical) of your financial position (assets, liabilities and net worth) and a help section. We need to be at the Setup window of the My Finances section to be able to set up our first accounts.
The first account we would like to set up is the checking account since it will be useful for illustrating several applications on entering transactions (such as recording cash payments and deposits). Click on the box Create New Account.
Select Checking and then click on ► Next. The next window requests for information on the names of the account and the financial institution where the checking account is maintained. There is a drop down menu of financial institutions that are in the current Quicken database. You might opt later to set up an on-line connection with the financial institution you have selected to facilitate easy, automatic reconciliation of your accounts and other convenient online transactions such as paying bills, checking account balances, etc. You may also want to provide some description for the account that might help you in remembering certain details important to the account. Click on ► Next once you’re done.
The next window then requests for starting point information for the account such as the ending date and balance indicated in the last bank statement (if available)
Click Done. Aside from the account setup options in the My Finances (setup) window, there is an alternative way of setting up accounts. Let us use this procedure to set up the savings account. Click on Finance Account List New (This is located in the “My Finances: Account List” menu). These commands will bring you to this window. At this point, we are going to set up the Savings account so click on the “Savings” option under Banking and Cash.
Click on ► Next. As in the checking account, use the drop-down menu to choose the financial institution with whom you are maintaining your savings account.
Click on ► Next. Then enter the required information.
Click on Done. This will lead you to the savings account summary screen. Actually each account that you set up will have an account summary window. The white arrow pointing downward beside Savings on the upper left hand corner of your screen leads you to a drop down menu listing all the accounts that you have set up. Clicking on an account name in this list will lead you to that account’s summary screen. You can also access the account summary screen through:
Finance
Account List
You can then select the account name from that list. The Account Summary screen actually has two windows (found at the upper right corner of your screen): Register and Overview. You will be frequently using the Register window when recording transactions. This window also enables you to set up online connections with the financial institution servicing your account. The Overview window provides a summary of your account status.
IMPORTANT: To close this window and all other similar windows without intending to close the entire Quicken program, DO NOT click on the topmost X at the upper right hand corner of your screen. Instead click on the second X below (right next to How do I in this case). Now try to set up a cash account, given the following information, using either of the two procedures: Account Name: Cash Account Balance: 200.00 as of After you have done this, the “My Finances” section of your screen should already contain all three accounts.
2.
Liability Accounts We will now look at how liability accounts are set up. In this section, we will consider two types of liability accounts: a one-time payment (un-amortized) loan and an amortized loan. The Georgia Ag
Enterprises business of the Turners has two outstanding loans on 1) An automobile (pick-up) loan of $1,455 that has to be fully repaid during the current year (so does not need to be amortized); and 2) A land note for $94,936 at origination date (August 15, 1995) that has to be repaid over 15 years (i.e. with a remaining term of about 8.5 years at the start of 2001) at 10.5% interest.
a.
A One-Time Payment (Un-amortized) Loan Let us first set-up
the pick-up liability since it is a simpler (non-amortized) transaction. Let’s use the easier method available in the
My Finances-Setup window. Go
down to the section on Setup Property and Loan Accounts and
click on Create New Account.
Then provide the following information when requested in the
succeeding windows: Account Type: Liability Account Name: Pick-up Note
Description: Bank of number of characters you could use so try to provide very brief descriptions.)
Balance: 1455
as of:
Then press Done (or press <Enter>). At this point, this window shows up:
Since we will not amortize this loan (to be fully paid this year), we will choose No.
To set up the Land Note, we will go through the same initial process used in the previous section but this time use the other setup procedure under Finance-Account List menu: New
·
Liability ► Next Then choose provide the following information in the appropriate line in the next two windows in the same way the former (pick-up note) account was setup. Account Name: Land Note
Description: FLB –
Balance: 73126.01
as of: Then press Done (or press <Enter>). When asked, Would
you like to set up an amortized loan to be associated with this account? Click on Yes. This will lead you to the loan setup window where two optional procedures are made available to you: Easy Step and Summary. The Easy Step option runs you through each aspect of the set-up procedure one at a time while the Summary option lets you fill in all required information in less number of screens/windows. Let us choose the Summary option
and enter the information shown in the next three screens:
Click
on ► Next.
Click
on ► Next.
Click on Done. You will then be asked the following question:
Click on OK and you are brought back to the previous screen that now includes a calculated amortization amount to be paid at a specified date. Note: When Quicken is asked to automatically calculate for you the amortization amount for principal and interest tied up with a particular liability account, Quicken calculates the amount based on the remaining term, the outstanding principal balance and the given interest rate. Quicken assumes that the given interest rate is fixed until maturity and calculates an equal annual amortization amount (principal and interest) that is not necessarily equal to the original (equal) annual amortization value calculated at loan origination. In case a loan follows a predetermined loan amortization schedule that has a stipulated annual amortization payment, you should input this amount in blank provided for “Payment Amount (P+I) instead of electing the “Calculate” option.
Click on Done. After you’ve done this, the following Set Up Loan Payment screen appears to prompt you to specify details of the payment. Enter the additional information, including the name of the payee and making sure that the proper category for interest expense is selected. For now, this category for interest payments is limited to the available default category provided by Quicken. But in the later section, we will be expanding the category list with some customized categories and subcategories (for example, you may decide that a more appropriate label should be more specific, i.e. containing a sub-category that labels interest expenses attributed to farm mortgages alone, such as the suggested “MortInt:FarmMInt” included in the category list to be imported in the next section). It is important that the category of your choice has been properly established at the outset since this attribute of the account could hardly be modified later.
Click
on OK.
Click on No. The loan is now a memorized transaction. This means that the information for the check register and loan register can be recalled whenever the payment comes due. The loan payment requires a split transaction (to be discussed in a later section): the principal paid is applied to the loan balance in the appropriate loan liability account while interest paid is appropriately recorded as an interest or mortgage interest expense. We are finally finished with the basic procedures for setting up accounts. In the future, you will need only to select the account for which transactions are to be recorded. We will do this is a later section when we learn how to record transactions such as entering payments and deposits in the checking account. C. CATEGORIES AND CLASSESIt is important to understand the concepts of category and class when using the Quicken register. In recording each transaction, you may want to provide as much detail as you want to later help you sort information for reports. Categories and classes may capture these details. A category is a type of income or expense designed to be useful for both tax purposes and financial analysis. A subcategory is one level beyond the main category that enables the user to note more detail while keeping the information grouped. For example, you may want to track fuel costs separately from vehicle repairs instead of just lumping all these expenses under the auto category so you end up with Auto: fuel (for gas and diesel costs) and Auto: repairs (for cost of repairs such as tires, starter, fuel pump or v-belt). A class is used to identify a transaction independent of the income or expense label. The class specified the where, what or to whom the transaction applies. In farm financial record keeping, the class feature of Quicken may be attributed to the type of farm enterprise the activities belong to (such as cow/calf, wheat or corn operations.) This will enable you to generate separate financial reports for each enterprise (class) instead of just one whole farm financial report.
1.
CATEGORIES
a.
Importing a farm income and expense category list Up until this point, all we have are the default Quicken category lists we selected at the time we set up this account. Details of these lists (standard categories for married people, with and without children, for homeowners and for small businesses) are included in these handouts (at the end of this manual). Within a file, these default categories selected can be merged into a common list. In this list, income categories are listed first in alphabetical order, followed by the expense categories also in the same order. In addition, we could introduce a set of new categories that facilitate farm financial record keeping and develop the framework for Schedule F tax reports. This list can be imported into Quicken files from a file named FARMCAT on the diskette you received with this notebook. By importing this file, the resulting category list will be a merger of the farm income and expense categories and the Quicken default category list(s) selected. To import these farm income and expense categories to our current file, be sure the disk with the FARMCAT file is in drive A. From the main menu, choose:
File Import
► QIF File Then complete the QIF Import screen. Make sure that drive A is specified. If the FARMCAT file is not yet specified, click on Browse and choose the appropriate file (Farmcat.qif) among the files in drive A. Important: Be sure to remove the check marks on Transactions and Special handling for transfers by clicking on the check mark. Category list should be the only item selected.
Click on Ö OK. Then wait while categories are imported. Afterwards, a message appears informing you that items have already been successfully imported. Click on Ö OK. To verify your category list, click on Finance, then Category and Transfer List to reveal your new set of categories that should now include such items as CCCPay, CCCRec and other farm categories in addition to the original default list. Close
the category list by clicking on the X in the upper right
corner of the Category and Transfer List window.
b.
Adding New and Deleting Unnecessary Categories The farm income and expense category list provided to you contain merely suggested categories that may provide the basis for your own personalized list of categories applicable to your farm business situation. In other words, you are always free to modify the list by adding new ones that you feel must be included in the list or deleting those that do not apply to your business. Let’s assume for instance that you want to add a category that is associated with subscribing to a computerized data network (let’s call this category CDN). To do this, access the category list by choosing: Finance
Category & Transfer List New (from the top left portion of the Category & Transfer List window) Then enter the following information:
Place a check in the box for Tax related by hitting the space bar or clicking on the box. Then select the appropriate tax form by choosing Schedule F: Other farm expenses. You can do this by clicking on the ▼ at the right and scroll down through the list until you find this item. Or, type S for schedule, then F which takes you to Forms and the bottom of the Schedule F list, then scroll up to the appropriate Schedule F line. Click on Ö OK. The new category has now been added to your list. You can verify this by scrolling down in the Category & Transfer List on your screen to find this item. Do
not worry about making mistakes in setting up categories. You can always change information in the categories
any time and all transactions will be immediately updated. If you need to make any corrections, highlight
the category name and click on Edit. You can easily remove unused categories. For example, let us delete Bonus (Bonus income) category. Move the cursor to this item in your list. You can delete this category in one of two ways: 1. Press Ctrl D and <Enter> or 2. Click on Delete at the top left section of the window.
Select ● Delete Category. Then click on Ö OK.
c.
Subcategories The procedure involved in setting up sub-categories is the same as the one we used for categories. Let us say that we would like to another layer of detail to our fertilizer purchase records so that, for instance, we would be able to track nitrogen, phosphorous, potash and boron separately rather than lumping all these details under the fertilizer/lime category. To do this, click New assuming that you are now in the Category & Transfer List window.
Quicken automatically fills in the tax information since FertLime is already set up in the data files. However, one must be careful to note that sometimes changes need to be made when the subcategory has a different tax attribute than the parent category. An example is when the parent category is mortgage interest and the subcategory is farm mortgages and personal mortgages. Then click on Ö OK. Now
repeat the same process for setting up the subcategories for Phosphorous,
Potash and Boron. Once
you’re done, close the Category & Transfer List window by clicking
on the X in the upper right corner of the window.
2.
CLASSES A class adds another dimension to reports. As explained earlier, we may use classes to sort income and expenses by enterprise. This means that by recording the class along with the category for each transaction, you will be able to generate reports that would summarize income and expenses associated with a specific component of the farm operations. As you may recall, we earlier imported a set of custom-made categories that apply to a sample farm with a cow-calf herd and produces wheat for grain and pasture. Along with those financial categories were several classes that were set up for you to account for such enterprises as CowCalf, Oats and Wheat. Let us learn how to set up a class by adding an Alfalfa class to our set-up. To do this, choose:
Finance
Class List
New
“Copy Number” is used only if you are filing multiple copies of a tax form. Then click on Ö OK. D. ENTERING TRANSACTIONSNow that we have already set up the accounts, categories and classes, we are ready to start recording transactions. The following points are important to consider in recording transactions:
1)
Specifying Categories and Classes The general format for labeling a transaction is “Category:Subcategory/Class:Subclass.” Notice that a slash “/” separates categories from classes while a colon “:” indicates a second (and subsequent) dimension(s) to either a class or category. Thus, for example, at the Category prompt for a transaction involving the purchase of nitrogen for the alfalfa enterprise, the proper entry should be “Fertlime:Nitrogen/Alfalfa” where Fertlime is the category, Nitrogen is the subcategory and Alfalfa is the class name. Let us now record a particular transaction involving a payment for repairs to Yukon John Deere for a winch on a pick-up used for the cow-calf operations. Make sure you are in the Checking Account by choosing Finance, Account List and Checking. Then enter details of the transaction that should include date, check number, payee, amount of payment, category and, if you wish, a short memo. Remember that you may use the <Tab> key to move from one field to another.
Once you’re
finished typing the information, click the Enter button
or press Ctrl Enter.
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