Chapter 11: YOU BE THE JUDGE A nurse had been working in a critical care unit for more than 25 years, gaining respect for her competence and dedication before suspicions began to gather that she was diverting narcotics for her own use. The acute care hospital had recently installed a “computerized medicine cabinet” for enhanced distribution and better monitoring of narcotics. The cabinet recorded the nurse’s per- sonal keypad code and the patient’s data before it could be unlocked and narcotics dispensed. The nurses were also required to document the narcotic usage by handwriting the patient’s name, medication, time, route, and dosage on a more traditional paper medication administration record (MAR). Discrepancies were noted between this nurse’s patients’ electronic data for narcotic administration and the handwritten notations made on the paper record. The nurse was first questioned by her supervisors and then she was suspended, as they did not find her explanations credible. Her grievance was upheld by the arbitrator assigned to the case and the hospital appealed. At trial, other nurses from the same unit testified that they frequently completed their paper record documentation during their breaks or at the end of the shift, often when they could not remember exactly what medications or dosages they had administered to patients. There was additional information that the nurses would electronically sign for narcotics, prepare IV drip bags in advance of when they were needed, and then discard these same IV bags when they were no longer required or the physicians had changed the medication orders. Additionally, these nurses testified that they often deviated from the physician’s order for an IM injection, electing to give the medication by an IV route. Finally, there was testimony that the hospital had no formal policy for which nurse was to document narcotics in the paper record when two nurses, such as a preceptor and a mentee, both had responsibility for the patient. The nurse who was suspended testified that she, too, frequently entered data into the paper record long after she had administered the medication and, in some rare instances, entered the data on the following day. QUESTIONS 1. Did the facility have sufficient evidence to suspend the nurse from their employee? 2. How should the testimony of the other nurses in the unit affect the outcome of this case? 3. What additional questions should the institution address before the court rules in this case? 4. How would you have ruled in this case? Chapter 12: YOU BE THE JUDGE A preschool teacher called child protective services about a child who appeared to have a vaginal infection and the child protective services worker instructed the mother to take her child to the emergency center at the local acute care facility. In the emergency center, the child was examined by an ANP who found a vaginal tear, which the ANP felt could have been ca.

1. Chapter 11: YOU BE THE JUDGE A nurse had been working
in a critical care unit for more than 25 years, gaining respect
for her competence and dedication before suspicions began to
gather that she was diverting narcotics for her own use. The
acute care hospital had recently installed a “computerized
medicine cabinet” for enhanced distribution and better
monitoring of narcotics. The cabinet recorded the nurse’s per-
sonal keypad code and the patient’s data before it could be
unlocked and narcotics dispensed. The nurses were also
required to document the narcotic usage by handwriting the
patient’s name, medication, time, route, and dosage on a more
traditional paper medication administration record (MAR).
Discrepancies were noted between this nurse’s patients’
electronic data for narcotic administration and the handwritten
notations made on the paper record. The nurse was first
questioned by her supervisors and then she was suspended, as
they did not find her explanations credible. Her grievance was
upheld by the arbitrator assigned to the case and the hospital
appealed. At trial, other nurses from the same unit testified that
they frequently completed their paper record documentation
during their breaks or at the end of the shift, often when they
could not remember exactly what medications or dosages they
had administered to patients. There was additional information
that the nurses would electronically sign for narcotics, prepare
IV drip bags in advance of when they were needed, and then
discard these same IV bags when they were no longer required
or the physicians had changed the medication orders.
Additionally, these nurses testified that they often deviated
from the physician’s order for an IM injection, electing to give
the medication by an IV route. Finally, there was testimony
that the hospital had no formal policy for which nurse was to
document narcotics in the paper record when two nurses, such
as a preceptor and a mentee, both had responsibility for the
patient. The nurse who was suspended testified that she, too,

2. frequently entered data into the paper record long after she had
administered the medication and, in some rare instances,
entered the data on the following day. QUESTIONS 1. Did the
facility have sufficient evidence to suspend the nurse from
their employee? 2. How should the testimony of the other
nurses in the unit affect the outcome of this case? 3. What
additional questions should the institution address before the
court rules in this case? 4. How would you have ruled in this
case?
Chapter 12:
YOU BE THE JUDGE A preschool teacher called child
protective services about a child who appeared to have a
vaginal infection and the child protective services worker
instructed the mother to take her child to the emergency center
at the local acute care facility. In the emergency center, the
child was examined by an ANP who found a vaginal tear,
which the ANP felt could have been caused by digital
penetration. The child would not talk about the injury with the
ANP. The ANP then discussed the child’s case with the child
protective services worker, and the child was admitted to the
facility. The parents were subsequently questioned regarding
potential abuse of the child. Charges of child abuse were filed
against the father, who is now a registered sex offender in the
state. The parents filed suit against the preschool teacher, the
case worker and the ANP. At trial, evidence was presented that
the ANP did not share her findings or impressions of possible
child abuse with the mother, the child’s primary pediatrician,
or other emergency center physicians. She also did not
recommend that the mother contact the child’s pediatrician for
an evaluation and a second opinion. The ANP also admitted
that it was possible that the child had scratched herself as a
result of the infection and that the child herself had caused the
vaginal tear. QUESTIONS 1. Did the ANP have a duty to
consult with the child’s physician or another emergency center
physician regarding the possibility of child abuse before she
reported her findings to the case worker? 2. What questions

3. would you anticipate might be asked regarding the injury itself
and the possibility that the child had caused her own injury? 3.
Did the ANP have a duty to report the injury, even though the
diagnosis was not absolutely conclusive at the point that the
child was initially examined? 4. How would you determine
liability in this case, assuming that the trial court found
liability against any of the three defendants?
Chapter 16 YOU BE THE JUDGE A licensed practical nurse
(LPN) employed by a nursing personnel agency worked one
evening shift at the Veterans Administration Hospital in a major
city. She cared for a patient who had recently undergone hip
replacement surgery. Since his surgery, the patient had
consistently spiked significant temperatures, and his
temperature generally responded well to oral Tylenol, 500 mg,
2 tablets, every 4 hours as needed. The change nurse explained
to the LPN that the patient was to continue on vital signs every
4 hours, including temperatures, and that he was to be
medicated if his fever increased, even if only at low-grade
levels. During the evening that she worked, the LPN obtained
the patient’s temperature at 4 p.m. and again at 8 p.m. He had a
lowgrade fever at the 4 p.m. hour and his temperature had risen
to 102 degrees orally at 8 p.m. At both intervals, the LPN
administered Tylenol as ordered. The charge nurse did not
assess the patient during the evening, nor did she inquire about
the patient’s condition. The nurse caring for the patient at
midnight noted that his temperature was still elevated (102.4
orally). When notified, the attending physician ordered blood
cultures, additional treatment for his ever-increasing fever, and
a change in antibiotic therapy. Despite this aggressive therapy,
the patient developed a fatal septicemia and the patient’s
family sued for wrongful death. At trial, the court determined
that the charge nurse had been derelict in her duty to supervise
this patient and assessed partial liability against the LPN and
the charge nurse. QUESTIONS 1. Did the nurse manager have
a responsibility to supervise the care of the patient? 2. Was the
care of this patient appropriately assigned to the LPN by the

4. charge nurse or could the charge nurse have more appropriately
delegated the care of the patient? 3. If the charge nurse
assigned the care of the patient to the LPN, did she retain any
supervisory responsibility that would result in her liability in
this case? 4. How do the principles associated with delegation
and supervision figure into this case? 5. How would you decide
this case?
Guido, Ginny Wacker, JD, MSN, RN. Legal and Ethical Issues
in Nursing (Legal Issues in Nursing ( Guido)) (p. 329). Pearson
Education. Kindle Edition.
Project 1: Small Business Accounting using QuickBooks
Online
I. Introduction:
Your good friend Kobe recently opened an art studio, Kobe’s
Krafts. He has been creating and selling artwork for years, and
subsequently already has a good customer base. In January of
this year he started the process of setting up a business and he
filed for an EIN in February. He found and rented a studio on
March 1st, and has been cleaning, painting, and setting up the
space ever since. The grand opening was April 1, 2019.
Here is a little background of what Kobe sells in his gallery.
Kobe paints and sells his original artwork. He also sells prints,
which are reproductions, of his original artwork that he
purchases from a print shop. His prints and original artwork are
considered his inventory. He also accepts custom orders from
customers, which are considered commissioned sales.
Commissioned artwork is artwork that is created for a particular
person based on their specification. He also has a few artist
friends that he agreed to let display and sell their original
artwork on consignment. That means the paintings that are not
his own, are not considered inventory for Kobe, they are
inventory for the artist that created the painting. However,
when a consignment artwork is sold, he keeps a percentage of

5. the sale as consignment income.
He knows you are going to school for your master’s degree in
accounting and has asked for your help setting up and using
QuickBooks Online (QBO). You agree to help set up his QBO
business account and complete the first month of transactions.
You are not familiar with QBO, but you know it will be
beneficial to your accounting career to learn it since QBO is the
most widely used accounting platform for small business in the
United States, so you agree.
Kobe has is interested in using the following QBO features:
· Sales Receipts/Invoices
· Purchase Orders/Inventory tracking
· Bills and Bill Pay
Eager to get started, you carefully read the Steps to Completion
below and review all QBO learning resources .
II. Steps to Completion:
For most of the steps below, you will have the option of
viewing a short video or referring to the Intuit Education PPT,
all page references given below.
Step 1 – Set up your QBO account.
Go to http://www.intuiteducation.com/ and follow the
instructions for student registration for QuickBooks online.
Step 2 - Download Intuit Education PPT
· Skim over the first part of the PPT to learn about navigating
QBO (the dashboard) (Pages 17- 23).
Step 3 – Set up the account and settings
· View the Video:
· “How to Navigate in QuickBooks” -
https://www.youtube.com/watch?v=vNdZmf_nLZs

6. · Review: Account and Setting, Intuit Education PPT, Pages 27
– 44. NOTE: the important information is how to get to account
and settings, which can be found on page 28. Appendix A
covers all the settings that you need to adjust for Kobe’s Krafts.
The purpose of the project is for you to become comfortable
with the program, not to become a QBO expert. However, if
you want to read all the details, feel free, but it is not required
for the purposes of this project.
· Using the information found in Appendix A, set up Kobe’s
Krafts account in QBO.
Step 4 – Set up and edit the Chart of Accounts (COA)
· View the Video:
· “How to Edit your Chart of Accounts in QuickBooks” -
https://www.youtube.com/watch?v=xp-rcPZtUc0
· Review: Chart of Accounts, Intuit Education PPT, Pages 51 –
56, 59 (subaccounts)
· See Appendix B.
Step 5 – Set up sales tax
· View the Video:
· “How to Set Up Sales Tax: Settings, Sales & More”
https://www.youtube.com/watch?v=CiIfTi0tSk0
· Review: Sales Tax Center, Intuit Education PPT, Pages 60 –
61.
· See Appendix C.
Step 6 – Set up product items and contributed inventory –
· View the Video:
· “Add Product Information”
https://quickbooks.intuit.com/tutorials/lessons/add-products-
information/
· Review: Products and Services, Intuit Education PPT, Pages
62 – 69
· See Appendix D.

7. Step 7 – Create journal entries for all other (non-inventory)
owner contributions
· View the Video:
· “Journal Entries in QuickBooks Online”
https://www.youtube.com/watch?v=Ud0de5gGJL8
· See Appendix E
Step 8 - Add customers and vendors
· View the Video:
· “How to Add Customers and Vendors into QuickBooks”
https://www.youtube.com/watch?v=MJK63XmrJ1E
· Review: Customer Center and Vendor Center, Intuit Education
PPT, Pages 95 – 99 (customers), Pages 121 - 124 (vendors)
· See Appendix F
Step 9 – Add invoices*, purchase orders (POs) and bills.
· View the Video:
· “How to Create A Purchase Order”
https://www.youtube.com/watch?v=lGGUSmFPJok -
(IMPORTANT NOTE: Create the bill directly from the PO.
Notice in the video where the presenter is showing the PO
summary screen, to the right of the PO there is a button to
“Create bill.” Click the Create bill button to create the bill for
the vendor.
· View the Video:
· “How to Enter Bills, Track Expenses, & Record What You
Owe” https://www.youtube.com/watch?v=PGbS7GpdNTo
· Review: Create Invoices and Create Bills, Intuit Education
PPT, Page 103 (create invoices), Page 127 (creating bills) -
NOTE: Do not spend time creating fancy invoices. Use the
basic form unless you want to play around with this feature.
· See Appendix G
Step 10 – Enter all transactions for the month of April
· View the Video:
· “Create Sales Receipts in QuickBooks”

8. https://quickbooks.intuit.com/tutorials/lessons/sales-receipts/
· Review: Create Sales Receipt, Intuit Education PPT, page 102
· View the Video:
· “Receive Payments in QuickBooks”
https://quickbooks.intuit.com/tutorials/lessons/receive-
customer-payments/
· Review: Receive Payments, Intuit Education PPT, pages 104,
106 -NOTE: make sure you are ,
· View the Video:
· “How to Record & Print Checks”
https://www.youtube.com/watch?v=eNSPai2twcM
· Review: Create Check, Intuit Education PPT, page 126 (&
debit charges) –NOTE: Be sure to change the check number to
Debit or EFT or something else. QBO will accept duplicate
words so pick one and stick with it for consistency. However,
make sure that checks are numbered correctly.
· View the Video:
· “How to Record Bill Payments”
https://www.youtube.com/watch?v=zan6MC0zSYY
· Review: Create Check, Intuit Education PPT, page 128 –
NOTE: Make sure you document the check number used to pay
the bill.
· See Appendix H
Step 11 – Reconcile April Bank Statement –
· View the Video:
· “Reconcile your accounts”
https://quickbooks.intuit.com/tutorials/lessons/reconcile-
accounts/
· Review: Intuit Education PPT, pages 142 – 144.
· See Appendix I
Step 12 – Review and Revise Financial Statements
· View the videos:

9. · “Understanding Profit & Loss Statement: Income, Cost of
Goods” https://www.youtube.com/watch?v=nSGeKUO4HHE
· “How to Customize Reports: Basics, Sorting & Date Ranges
https://www.youtube.com/watch?v=Hy5MQAPDa-U
· Intuit Education PPT, page 77 – 84.
· See Appendix J
Step 13 – Print Reports
· P&L and Balance Sheet for the current month. Make sure the
report basis is .
· Print the General Ledger for “all time”
· Intuit Education PPT, pages 77 – 84
Step 14 – Create a Bank to Book Reconciliation
· Using MS Excel, create a bank reconciliation that explains /
reconciles any differences between the bank and book balances
of cash.
III. Deliverables:
1. Submit 1 PDF file by combining multiple PDF documents
into 1 PDF file that contains the following files generated from
QuickBooks:
A. Profit & Loss, accrual basis for April 2019,
B. Balance Sheet, accrual basis ending April 30, 2019, and
C. General Ledger Report for all time.
2. Submit 1 Excel file that contains the following:
The April bank reconciliation with formulas embedded into all
cells that require calculations.
IV. Hints and Tips:
General Hints and Tips:
· Read the entire Project before beginning the project

10. · Read the Rubric before beginning the project
· Read the Competencies Assessed before beginning the project
· Do not track Classes
· Do not track Locations
· The beginning balance in the Equity account is $0 because the
business was just opened.
· Submit the Project deliverables on or before the due date.
1. Review the Late Policy in advance of the due date
· Ask your supervisor (professor) questions as needed.
Inventory Hints and Tips:
· When first setting up the inventory account, Associate each
inventory item with the correct Sales account.
· The Inventory account includes two types of inventory:
· Original artwork created by Kobe
· Prints of Kobe’s original artwork
· When inputting the print inventory items, record the costs
incurred to make the prints
Non-Inventory Hints and Tips:
· Kobe’s commissioned (custom) artwork does not pass through
the inventory account because these paintings are from custom
orders.
· Kobe’s Krafts also sells artwork created by other artists. The
items belong to the other artists and therefore do pass through
the inventory account of Kobe Krafts.
Chart of Accounts:
· Do not create account numbers for the accounts
V. Rubric:
Top of Form
You will find the rubric in LEO under Contents>Course
Resources>Projects & Rubrics

11. VI. Competencies Assessed by Project:
Communication Competencies:
1.1 Organize document or presentation clearly in a manner that
promotes understanding.
1.2 Provide sufficient, correctly cited support that substantiates
the writer’s ideas.
1.3 Tailor communications to the audience.
1.7 Create and employ multimedia supports, visual aids and/or
documents appropriate to the needs of the project, the message,
and the audience.
1.8 Create clear oral messages.
Critical Thinking Competencies:
2.1 Articulate and frame the issue.
2.2 Collect and evaluate information.
2.3 Evaluate the underlying causes or conditions of elements
contributing to issue.
2.4 Use systems thinking to arrive at a decision in the context
of an issue.
2.5 Apply ethical principles when determining actions.
Accounting Competencies:
5.2 Measure, analyze and interpret: measure, analyze, and
interpret accounting data and information
5.3 Report: report accounting information
5.6 Technology and Tools: Identify and use relevant
technology and tools to analyze data, perform requisite tasks
efficiently and effectively, and support other competencies
required in the profession.
Bottom of Form

12. Appendices
· Appendix A: QBO – Account and Settings
Appendix B: Chart of Account Changes
· Appendix C: Overview of Sales Tax
· Appendix D: Overview of Inventory
· Appendix E: Owner Contributions
· Appendix F: Customers and Vendors
· Appendix G: Invoices, POs, and Bills
· Appendix H: April Transactions
· Appendix I: Bank Statement
· Appendix J: Financial Statement Review
Appendix A: QBO – Account and Settings
Remember - “QuickBooks is a very forgiving program. Most
mistakes can be fixed as you have the ability to go back and
make historical changes, however a correct setup will prevent
the need in most cases.” (Intuit Education PPT).
The following are the important pieces of information you need

13. to set up Kobe’s Krafts in QBO. Each of the Bolded items are
Categories in the page.
COMPANY:
· Company Name: Kobe’s Krafts_YOUR name
· Your name must be part of the Company name
· There are no exceptions
· Example: Kobe’s Krafts_Sharon Levin
· Email: that appears in our classroom
· Telephone: Enter associated with your UMGC profile
· EIN: - LEAVE BLANK. EIN not received yet
· Company Type: Sole proprietor
· Address: 2150 Martin Luther King Jr Blvd, Panama City, FL
32405
· Website: Enter UMGC.edu
· Tax form: Sole Proprietor (Form 1040)
· Method of Accounting: Accrual
· Kobe’s Krafts will not be using track classes or track
locations.
SALES:
· Kobe’s Krafts sales terms are Net 30, unless otherwise stated
· Shipping is available for a fee
· Discounts are offered occasionally
· Kobe’s Krafts requires a 50% deposit on all commissioned
artwork / custom orders
· Track the quantity and price/rate for all sales
· Track inventory quantity on hand for the art prints.
EXPENSES:
· Kobe’s Krafts wants to use purchase orders, so make sure you
check the box.
· All other default settings are fine.
PAYMENTS:

14. · This setting is used to allow clients to pay an invoice through
their system. Although Kobe’s Krafts is possibly be
interested in this feature in the future, he has no current
interest.
ADVANCED:
· Kobe’s Krafts is a calendar year taxpayer, but he hasn’t
received an EIN yet.
· (The first month of the fiscal year is January).
· Use the tax form: Sole proprietorship Form 1040
· Do not use account numbers
· Do not track classes or track locations.
back
Appendix B: Chart of Account Changes
Add:
Name:
Account Type
Detail Type
Subaccount of:
Kobe's Krafts Bank
Bank
Checking
Refundable Deposits
Other Current Assets
Other Current Assets
Art Displays
Fixed Assets
Furniture & Fixtures

15. Consignments
Payable
Other Current
Liabilities
Other Current Liabilities
Art Sales
Income
Sale of Product Income
Original Artwork Sales
Income
Sale of Product Income
Art Sales
Print Sales
Income
Sale of Product Income
Art Sales
Commission Sales
Income
Sale of Product Income
Art Sales
Consignment Income
Income
Service/Fee Income
Discounts Given
Income

16. Discounts/Refunds Given
Group Art Classes
Income
Service/Fee Income
Print Expense
Cost of Goods Sold
Supplies & Materials – COGS
Art Supplies Expense
Expenses
Supplies & Materials
Shipping Expense
Expenses
Shipping, Freight & Delivery
Gain on Sale of PP&E
Other Income
Other Miscellaneous Income
Loss on Sale of PP&E
Other Income
Other Miscellaneous Income
Edits:
Change from:
Change to:

17. Owner's Pay &
Personal Expenses
Owner Distributions
Equity
Owner's Equity
Opening Balance
Equity
Opening Balance
Equity
Equity
Opening Balance Equity
NOTE: the opening balance = $0
Rent & Lease
Rent Expense
Expense
Rent or Lease of Building
Office Supplies &
Software
Office Supplies
Expense
Office/General
Administrative Expense
Delete:
Job Supplies
back
Appendix C: Overview of Sales Tax
NOTE: Sales Tax must be set up in the “TAXES” area in QBO.

18. Proceed with this section carefully. QBO is very user friendly
for the most part; however, there are areas that are hard to fix
should you set it up incorrectly and Sales Tax is one of those
areas so do not rush here. Read all the way through this
appendix, watch the how to videos and then proceed with
caution.
Kobe’s new art studio is located in Panama City Florida. He is
required to pay 7% in sales tax to the State of Florida. Of that
7% state tax, the state of Florida disburses 1% to Bay County.
The State of Florida requires most taxpayers to file monthly
sales tax returns, Kobe’s Krafts falls into this category. As of
April 1st, Kobe’s Krafts must start collecting taxes and the first
return is due no later than May 20th (QBO knows when it is
due) for the reporting period of April 1 – April 30.
Kobe’s Krafts needs to make sure he charges customers and
remits sales tax for everything he sells except for the group art
classes. Florida does not collect taxes on the sale of services.
Address: 2150 Martin Luther King Jr Blvd
Panama City, FL 32405
Go to the “TAXES” area and set up sales tax for the state of
Florida. If you entered the business address when you were
setting up the account, QBO should suggest the correct tax
agency(s). If not, it should ask you for an address here. Make
sure you select Florida Department of Revenue from the
dropdown list. Again, make sure you find the taxing agency in
the dropdown list to select. Do NOT manually add any taxing
body. QBO already has all the information it needs to correctly
tax products and it will automatically update taxes should laws
change but only if it is set up correctly from the beginning.
back

19. Appendix D: Overview of Inventory
The setup of Inventory will be done in the
“INVOICING/SALES” area of QBO. Once in SALES, go to the
Products and Services tab.
Then click “New” in the upper, right corner. Next click
“Inventory” and fill in the name, category, and:
· Fill in the name of the first inventory item.
· Select the category. The first time you will have to add a new
category.
· You will be adding these categories: Kobe’s Originals, Prints,
and Non-inventory items
· The “initial quantity on hand” will be the owner contributed
inventory, see the table below.
· As of date will be 4/1/2019.
· Do not enter a quantity in the “Reorder Point” field for any
items.
· The Inventory asset account is “Inventory asset”
· Do not use product codes aka SKU numbers.
· For all items that have a fixed sales price associated with it,
enter the Sales price for each item
· Also, make sure you associate the correct Income Account
with the correct product.
· i.e. All sales of original artwork should be recorded to Income
account: Art Sales: Original Artwork Sales
· Enter the costs to have the prints made.
· Remember, all sales are taxable EXCEPT FOR Group Art
Classes.
· Be sure to select “Taxable Standard” under “Sales tax
category” for all sales other than group art classes, which will
be “Nontaxable.”
Kobe’s Krafts primarily sells 3 types of original artwork and

20. prints - Large, Medium, and Small.
Pricing and Cost of Original Artwork:
Pricing:
Standard pricing for Kobe’s original artwork:
Size of Artwork
Sales Price
Number of Pieces Contributed
Total Value
Large
$1,700
5
$8,500
Medium
$600
12
$7,200
Small
$100
32
$3,200
Sales of Kobe’s original artwork should set the product Income
account to: Art Sales: Original Artwork Sales.
Cost:
Kobe was instructed years ago by his tax accountant that his
original artwork inventory should not have a COGS associated
with it. Instead he needs to expense all of his art supplies
purchases. However, the prints in inventory are classified as
inventory until sold and then those costs will be classified as
COGS. So, although the original artwork inventory will have
zero costs associated with it, you will be able to enter the sales

21. price of the inventory Kobe transfers in to the business.
Cost and Pricing of Prints:
He transfers all his print inventory (reproductions of original
artwork) to the business April 1st, as follows:
Size of Prints
QTY
Cost per Unit
Sales Price per Unit
24 x 36 Print
10
$80
$210
11 x 14 Print
50
$25
$75
5 x 7 Print
110
$4.50
$12
All of the prints in the table above should have the following
setting:
1. Income account to: Art Sales: Print Sales
2. Expense account to: Print Expense, which is a COGS account
In addition to original artwork and prints, Kobe has several non-
inventory items that you need to add.
Description
Sales Price
per Unit (student)

22. Income Account
Service (non-taxable)
Group Art Classes*
$35
Group Art Classes
Non-Inventory Sale
Commission Work (i.e. custom orders)
N/A
Art Sales: Original Artwork Sales
Non-Inventory Sale
Consignment Artwork**
N/A
Consignment Income
Non-Inventory Sale
Unusual Sales PP&E***
N/A
Gain on sale of PP&E
For all commission artwork, Kobe’s Krafts requires a 50%
deposit at time of order and the balance when the buyer picks
up the artwork.
* Remember, this is the only non-taxable item.
** Kobe also displays and sells consignment pieces. He earns a
25% commission on each piece sold. The consignee sets the
price, so Kobe keeps those records on an Excel spreadsheet and
does not enter the prices in QBO until he sells the pieces. In
other words, the consignment inventory is not an inventory
item, but you need to set up a product item to handle the
transaction. However, make note of all consignment sales
because in order to complete the sales transaction, you need to
make a journal entry (JE) to move 75% of the sale from the
P&L to the balance sheet as Consignments Payable.

23. *** Sales of PP&E will also require a JE to remove the item
from the balance sheet and reduce the gain (or increase the loss)
on the sale. The transaction is not complete until this JE is
made.
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Appendix E: Owner Contributions
To enter all owner contributions, you may create one or
multiple JEs. Determine the correct account to debit from the
list below and credit: Owner’s Investments. Also remember to
put the description of each item in the JEs.
Date
Description
Account
Amount
3/1
Owner’s deposit to open a business bank account
Kobe’s Krafts Bank
$10,000
3/1
*Electricity Deposit (refundable)
Refundable deposits
800
3/1
*Phone Company Deposit (nonrefundable)
Utilities
200
3/1
*Rental Deposit (Refundable)
Refundable deposits
2,500
3/1
*1st month rent - March

24. (prior to opening)
Rent expense
2,000
3/4
*Gallery set up supplies –
paint for walls, cleaning supplies, lumber for
building shelves/racks
Office Supplies
450
3/8
*Miscellaneous art supplies for classes
Art Supplies
expense
749.99
3/10
4 large Art displays
(fair market value at time of contribution = $450 each)
Art Displays
1,800
Total
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Appendix F: Customers and Vendors
Enter all customers in the “SALES” area and all Vendors in the
“EXPENSES” area.
Customers:
Name
Phone Number
Email
Address

25. Candy Thomas
898-474-1111
Kids Love Art
898-474-1111
1173 Front Beach Rd
Panama City, FL 32412
Shawn Baylor
898-747-5200
LeBron Barry
897-872-2152
Kareem Bird
899-421-1478
Customers
Kobe uses this “Customer” account to record sales to non-
recurring customers and Daily Sales Receipts
Vendors:
Name of company/account managers
Phone Number
Email

26. Address
Ace Real Estate –
Laurie is manager
850-393-5555
[email protected]
3630 Bay Avenue
Panama City, FL 32542
Salem Prints
Sasha Levin
850-981-0000
Dish Network
Ron Primo
850-424-7900
78-541 Wildcat Drive
Dade City, FL 33624
Kobe
USA Art Supply
Jenny
813-771-3161
714 Rose Lane
Brandon, FL 33617
Consignment Vendors:

27. Name
Phone Number
Email
Address
JoAnne Lopez
Original artwork
904-546-7300
[email protected]
415 Orange Avenue Tampa, FL 33616
Michael Koltes
850-778-2211
[email protected]
857 Rose Lane Panama City, FL 32551
backAppendix G: Invoices, POs, and Bills
INVOICES – Purchases from Customer
Date
Customer
Terms
Discount*
Product Purchased
QTY
Amount
1-Apr
Kids Love Art
Net 30
10%
Art Classes
10
$315
2-Apr
LeBron Barry

28. Due on receipt
Commission Work
1
$4,500
+ tax
30-Apr
Kids Love Art
Net 30
10%
Art Classes
45
$1,417.50
*Kids Love Art is the only customer that receives a
discount because they buy individual art classes in bulk and pay
within 15 day.
PURCHASE ORDERS – Orders to Vendor
Purchases:
Description
QTY
Each Price
Totals
Salem Prints* order 4/1/2019
24 x 36 prints
5
$80
$400
11 x 14 prints
10
$25
$250

29. 5 x 7 prints
20
$4.50
$90
Shipping expense
$20
Tax (non-taxable online purchase)
$0
Total Order
$760
* NOTE: Make sure you create the bill for the Purchase Order
from the Purchase Order.
It is very easy make sure the dates are correct, see table below.
BILLS – Payable to Vendors
Received
Due
To
For
Amount
1-Apr
1-Apr
Ace Real Estate
April Rent
$2,000
1-Apr
16-Apr
Dish Network

30. Utilities: Telephone and
internet bill
$285.64
4-Apr
19-Apr
Salem Prints
Print order 4/1
$760
24-Apr
9-May
USA Art Supply
Purchased large glass art display
$4,001.99
30-Apr
30-Apr
Ace Real Estate
May Rent
$2,000
* Make sure you create the bill from the P.O.
$9,047.63
back
Appendix H: April Transactions
Make sure you pay all bills through the EXPENSES area and
receive all invoice payments in the SALES area.
Make sure you pay the sales tax through the TAXES area. If
your sales taxes due for the period of April is different than the
transaction amount below, there is a problem with your sales tax
somewhere along the way.
All receipts that were not invoice payments will require a Sales
Receipt. You will create Sales Receipts in the SALES area. All
sales should be considered cash sales. Just make sure the dates

31. are correct and the account the money is deposited to is Kobe’s
bank account.
Unless Kobe does recurring business with a customer, or it is a
special sale, all Sales receipt transactions will be from customer
“Customers."
Write checks for all expenses that are not bill payments.
However, if there is no check number associated with the
transaction, that means it is a debit card transaction so change
the check number to EFT in place of the check number.
Small inexpensive purchases, under $500, should be expensed.
Make sure you select the appropriate account for each
transaction. Do not add any more accounts as you enter these
transactions. Think macro instead of micro. For example,
paying for a PO Box or purchasing small, inexpensive items,
such as a lamp, should be considered an Office Expense.
QBO is limited in what you can record in a single transaction.
This is where journal entries (JEs) will be necessary. Hint:
transactions where JEs will be necessary include sale of fixed
assets and sale of consignment artwork. I suggest you make the
JEs as you go to complete the transactions.
Date
Description
Expenses
Deposits
Method of Entry into QBO
1-Apr
Owner deposit to open bank account

32. (this was already done in Appendix E as
long as your debit entry was to Kobe’s Krafts Bank)
10,000.00
J/E
1-Apr
Paid April rent (bill) check #1001
(2,000.00)
Bill Payment
1-Apr
Sold one 11 x 14 print
80.25
Sales Receipt
1-Apr
Coffee and fingers foods for grand opening –
Kroger Grocery Store using a debit card (Add Kroger payee
while writing check) use Office Supplies account
(180.54)
Check
2-Apr
Sold medium original artwork
642.00
Sales Receipt
2-Apr
Deposit to complete a commissioned piece –
LeBron Barry (Paid ½ of Invoice. Receive partial payment)
$2,407.50
Receive Invoice payment
4-Apr
Sold 4 24 x 36, 2 11 x 14 and 9 5 x 7 prints at art fair

33. 1,174.86
Sales Receipt
5-Apr
USA Art supplies (art supplies) DEBIT
(187.21)
Check
5-Apr
Paid phone bill received 4/1 check# 1002
(285.64)
Bill Payment
12-Apr
Sold 4 5 x 7 art prints
51.36
Sales Receipt
12-Apr
Paid for Post Office box through 4/11/2020 (1 year) using
debit card (Add USPS as a vendor and use
Office Supplies account)
(80.00)
Check
13-Apr
Sold a consignment piece for Lopez $1000 to
Shawn Baylor
1,070.00
Sales Receipt
14-Apr
Received payment from Kids Love Art
for invoiced amount
315.00
Receive Invoice payment

34. 14-Apr
Paid Lopez for consignment sale to Shawn Baylor
check # 1003 (to account Consignment Income)
(750.00)*
Check
14-Apr
Sold 1 large original artwork
1819.00
Sales Receipt
15-Apr
Purchased shelving from IKEA using a debit card
record to office supplies and add IKEA vendor)
(285.24)
Check
19-Apr
Withdrew cash for personal use using a debit card
(This is an Owner Distribution transaction)
(1,500.00)
Check
19-Apr
Paid bill for prints to Salem Prints 4/4 bill check # 1004