Chapter 5: General Ledger, Inventory, and Internal Control Chapter 5: General Ledger, Inventory, and Internal Control Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

2 of 16 General Ledger and Inventory In Chapter 5, you learn about the General Ledger chart of accounts. Sage 50 includes over 75 sample charts of accounts. You can set up your own chart of accounts, copy a chart of accounts used by another company, or use one of the samples. Chapter 5 also shows you how to use Sage 50’s inventory system. Sage 50 lets you track inventory items both at the purchasing and sales level. Sage 50 keeps track of cost of goods sold, stock levels, sales prices, and vendors. Another Sage 50 feature is user security. On pages , Security and Internal Control, you learn about how Sage 50 keeps company data secure.

3 of 16 Sage 50 Tip Sage 50 Tip Sage 50 uses a perpetual inventory system. See the tables on page 176 to review how Sage 50 journalizes the purchase and sale of inventory items.

4 of 16 Backing Up Chapter 5 Backup File (.ptb) Excel (.xlsx) and Adobe (.pdf) KB Page Nos. Chapter 5.ptb 3,852 KB 186 Exercise 5-2.ptb 3,815 KB 188 Exercise 5-2_General Ledger Trial Balance.xlsx 15 KB 188 Exercise 5-2_General Ledger Trial Balance.pdf 63 KB 188 In Chapter 5, you make two backups, export the General Ledger Trial Balance to Excel, and save one PDF file.

5 of 16 Sage 50 Help: Chart of Accounts, pp Topic pane Navigation pane Toolbar

6 of 16 Chapter 5: Glossary of Terms

7 of 16 Perpetual inventory, p. 153 In a perpetual inventory system, an up-to- date record of inventory is maintained. The inventory account is revised each time a purchase or sale is made.

8 of 16 Chart of accounts, pp A list of all the accounts used by a company, showing the identifying number assigned to each account. Sage 50 has over 75 sample charts of accounts.

9 of 16 HTML, p. 154 HTML is an acronym for Hypertext Markup Language. Sage 50’s Help windows display in HTML format.

10 of 16 Inventory System, p. 166 Sage 50’s Inventory & Services Navigation Center shows the inventory system, which includes information and access points related to the company’s inventory items. The Inventory & Services selection shows Sage 50’s inventory module or inventory system. Workflow diagram

11 of 16 Internal Control, p. 178 Internal control is an integrated system of people, processes, and procedures that minimize or eliminate business risks, protect assets, facilitate reliable accounting, and promote efficient operations. (Refer to pages )

12 of 16 Audit Trail, pp If changes are made to company records, Sage 50’s audit trail provides documentation. An audit trail records all entries and changes related to the company’s data, including actions by specific users.

Online Learning Center  Go online to for additional resources. Link to Student Edition, select Chapter 5. o Interactive TestingAppendix A: Troubleshooting o Glossary of TermsAppendix B: AIS o Feature QuizzesAppendix C: Review of Acctg. o Narrated PowerPointsAppendix D: Glossary o Assessment Rubrics o Going to the Net o QA Templates 13 of 16

14 of 16 Going to the Net Access this website accounting-basics htmlhttp:// accounting-basics html. Read the Bookkeeping and Accounting Basics article. accounting-basics html 1. List the three steps for keeping your small business accounting records. 2. From this website, link to another area.

Analysis Questions 1. List four ways that Sage 50 includes user security and internal control. 2. How is the audit trail associated with user security? Provide an example. 3. How does user security address the purpose of internal control? 15 of 16

Assessment Rubric 16 of 16 DateTransaction Navigation Center/Module Task Window Journal Dr./Cr. 3/18Transfer $1,200 from the Regular Checking Account to the Payroll Checking Account. 3/19Purchased two (2) Oriole Feeders from DeJulia Wholesale Suppliers, Invoice No , $14.