Slideshow Slideshow 1B Creating the Chart of Accounts and Batch Processing in the General Ledger

List of Topics Slide No. Chart of Accounts3 Order of Entering Accounts 6 Printing the Chart of Accounts 9 Entering and Posting Opening Account Balances 10 Printing Financial Statements 14

Chart of Accounts When creating a Chart of Accounts, it is important to design it in order that you will be able to produce good financial reports and to allow for future growth of the business. Time spent in careful planning is worth it. To open the G/L Accounts window, remember that you need to double-click on the Accounts icon (NOT the Chart of Accounts icon) on the right-pane desktop. Click the ACCOUNTS icon now. In entering the Account Number, you must remember the Account Structure codes you have specified earlier: ACC - 4-digit number (xxxx) for regular accounts; DEPT- 6-digit number (xxxx-xx) for accounts specifying department. The two fields must correspond with each other; otherwise, you will get an error message. Click to continue.

Chart of Accounts (continued) Study the options for Account Type.Click. ACCPAC places debits on the left and credits on the right. If an account balance is zero, ACCPAC follows the Normal Balance Rule to determine which side to put it.Click. The use of Account Groups is optional; however, account groups are necessary if using the predefined specifications for financial reports. There are 16 pre-defined Account Group Names (see right). You may assign your own Account Number Ranges, normally in the same order as standard account classifications. Study a typical set of Account Group Names with the corresponding Account Number Range. Click to continue. Income Statement (I) – accounts that normally appear on the Income Statement. ACCPAC calculate totals in all I accounts to report the net income. Balance Sheet (B) – accounts that normally appear on the Balance Sheet. Retained Earnings (R) - the account to which Revenue and Expenses accounts are closed to at year-end. Even though the Retained Earnings account appear on the Balance Sheet, it must be specified as Retained Earnings in the Account Type field. Account TypeNormal Balance AssetDr LiabilityCr EquityCr RevenueCr ExpenseDr

Chart of Accounts (continued) You can post entries only to active accounts. Before a G/L account can be deleted, it must be made inactive.Click. If Detail is selected (preferred), all transaction details for every entry are maintained; if Consolidated, the posting from each batch is summarized into one line and transaction details are lost.Click. The Control Account box is checked only after the subsidiary ledger has been set up and the opening balances posted. Study the explanation.Click. You would select Auto Allocation only if an entry to the account is automatically reallocated to other G/L accounts; e.g., rent may be reallocated to the three depart- mental rent expense accounts. Click to continue. Control Accounts are general ledger accounts that have the balances for subsidiary legers. For example, ACCOUNTS PAYABLE is the control account for the A/P subledger.

Order of Entering Accounts At the right is COLLEGIATE’s Chart of Accounts. Because Retained Earnings needs to be entered before any other account and entering the various types of accounts (Balance Sheet, Income Statement, Auto Allocation) require slightly different procedure, a certain order must be followed. Below is one approach. Click each step below: 1. Enter Retained Earnings account. Notice that although Retained Earnings is found on the Balance Sheet, the account type for this account is Retained Earnings. 2. Assign Retained Earnings as the Default Closing Account. “Closing Account” refers to the account to which the balances in the revenue and expense accounts are transferred at the end of the fiscal year. 3. Define Segment Codes for Departmental Accounts. ACCOUNT page on the G/L Options window.

Order of Entering Accounts Segment Codes are used by COLLEGIATE to assign department numbers and descriptions for its three departments. Notice that accounts marked DEPT have 2 extra digits in the Account No. to designate specific departments. Continue to click each step below: 4. Enter Balance Sheet accounts. Study the example. 5. Enter Income Statement accounts. This is when you would use the Account Structure DEPT and the Segment Codes (10, 20, 30) that you defined earlier. 6. Define Auto Allocation accounts.

Order of Entering Accounts COLLEGIATE records the payment for rent to 6030 Rent Expense – Clearing. At period end, the balances in these accounts are reallocated to the three departments as per the table.Click. Notice that the Account Structure for the clearing accounts is ACC and not DEPT.Click. Study the Detail page for the Rent Expense – Clearing account. Click the ALLOCATION tab. Notice the Account numbers consisting of two segments.Click. Also notice the percent allocation. Click to continue.

Printing the Chart of Accounts Study how the printed Chart of Accounts would look like. Establishing the New Year When you activated the G/L, you specified 2009 as the current fiscal year; however, ACCPAC automatically backdated it to 2008 in case you wish to post entries to prior fiscal period. You need to advance to the new year to avoid the error message “Cannot post to a future year” when you start entering transactions for BE SURE TO BACK UP YOUR DATA before advancing to Click to continue.

Entering and Posting Opening Account Balances Time and effort should be spent to ensure that the balances forwarded are entered accurately. This involves creating and posting a batch in the G/L. One thing you need to remember when entering the opening account balances: You MUST enter the balances of ALL accounts in ONE ENTRY; otherwise, your credits and debits will not be equal. Your text will give you step-by- step instructions. Click each step below: 1. Establish the control total. In this case, use the current Trial Balance. Study it at the right. 2. Create a new batch.

Entering and Posting Opening Account Balances (continued) When you established the Fiscal Calendar, you entered 1/1/2009 as the start of COLLEGIATE’s fiscal calendar. You are, however, converting on October 31, 2009 One thing you need to remember when entering the opening account balances: You MUST enter the balances of ALL accounts in ONE ENTRY; otherwise, your credits and debits will not be equal. Your text will give you step-by- step instructions. Click the next step below: 3. Enter and save the batch data.

Entering and Posting Opening Account Balances (continued) Ensure that the batch total is equal to the debits and credits on the Trial Balance. Study the batch containing the opening account balances. 4. Print the batch listing and check accuracy.

Entering and Posting Opening Account Balances (continued) Study the next steps below (do not click until after you have studied the whole slide): 5. Edit the batch, if necessary. 6. Back up the data. 7. Set the batch Ready to Post. 8. Post the batch. 9. Print the posting Journal. The Posting Journal must be filed as part of the audit trail. Click to continue.

Printing Financial Statements General Ledger comes with a set of seven standard financial statements, which you can use as is or modify to suit your requirements. They include the following: QuikBal1.xls. Balance Sheet. QuikBal2.xls. Comparative Balance Sheet (Current Balance/Previous Year). QuikBal3.xls. Comparative Balance Sheet (Current Balance/Previous Period). QuikInc1.xls. Income Statement. QuikInc2.xls. Comparative Income Statement (Current Year/Last Year). QuikInc3.xls. Comparative Income Statement (Current Year/Budget). QuikInc4.xls. Comparative Income Statement (Current Year with Drilldown). Because statements are created in a spreadsheet, you can use any spreadsheet formulas and functions to perform relative-change calculations on General Ledger figures. For this course, you will be using modified versions of the Financial Reporter statements. Click to continue.

EXITMore… Go back to your text and proceed from where you have left off. Press ESC now, then click the EXIT button.