1. Chapter 9: Maintaining Accounting Records for Service Businesses Chapter 9: Maintaining Accounting Records for Service Businesses

2. ©The McGraw-Hill Companies, Inc. 2 of 50 Service Business Records Chapter 9 begins Part 2 of the book— Peachtree Complete Accounting 2005 for Service Businesses. In this part of the book, you are the owner of an accounting practice that does the monthly record keeping for several service businesses. In Chapter 9, you will maintain the accounting records for Jessica Wood Graphics. You will set up a business using one of the sample companies included in Peachtree. Then, you will complete the computer accounting cycle for the month of October.

3. ©The McGraw-Hill Companies, Inc. 3 of 50 Software Objectives, p. 239 Set up company information for Jessica Wood Graphics. Select a sample company. Edit the chart of accounts. Enter chart of accounts beginning balances. Use Windows Explorer to see the company’s file size. Record and post transactions in the cash receipts and cash disbursements journals. Complete account reconciliation. Preview the general ledger trial balance. Preview the cash account register. Print financial statements. Make four backups: 1) back up Chapter 9 beginning data; 2) back up October data; 3) back up Exercise 9-1; 4) back up Exercise 9-2.

4. ©The McGraw-Hill Companies, Inc. 4 of 50 Web Objectives, p. 247 Use your Internet browser to go to the book’s website. Go online to www.mhhe.com/yacht2005 www.mhhe.com/yacht2005 Go to the Internet Activity link on the book’s website. Then, select WEB EXERCISES PART 2. Complete the first web exercise in Part 2, Starting a Business. Use a word processing program to write summaries of the websites that you visited.

5. ©The McGraw-Hill Companies, Inc. 5 of 50 Peachtree Tips The chart of accounts beginning balances must be set for the preceding month—September 1 through 30, 2005. See Entering Chart of Accounts Beginning Balances text pages 255 through 261. Specifically, review steps 2, 3, and 4 on pages 257 and 258. The businesses that you set up in Chapter 9 are continued in Chapter 10. Remember to use a unique name for the businesses that you set up in Chapter 9. For example, you may use your first and last name to identify these businesses. When a company is set up in Peachtree, a shortened named is assigned for that company. The hard drive location of Jessica Wood Graphics is c:\Program Files\Peachtree\Company\jeswoogr. (If a unique name is used, the subdirectory will differ.) See detailed steps for Using Windows Explorer to see the file size on text page 261.

6. ©The McGraw-Hill Companies, Inc. 6 of 50 Peachtree Tips (concluded) Peachtree Tips (concluded) You can restore to an existing company—one that is previously set up—or restore to a new company, bypassing the process of creating a new company. The Restore Wizard includes two options on the Select Company window: An Existing Company and A New Company. If A New Company is selected, then the company will be named exactly as the backup file selected. Let’s say you want to restore a backup file for a company that is not set up in Peachtree; for example, a back up file exists but the company is not shown as a Peachtree company. If you start Peachtree and the appropriate company cannot be opened, use the Restore Wizard to select A New Company. Using the appropriate backup file, and the selection for A New Company, you can start where you left off the last they used Peachtree.

7. ©The McGraw-Hill Companies, Inc. 7 of 50 Backing Up Chapter 9 Backup NameKilobytesPage Nos. Chapter 9 Begin.ptb217 KB263-265 Chapter 9 Check Register.ptb October (optional) 227 KB276 Chapter 9 October232 KB289 Exercise 9-1216 KB296 Exercise 9-2227 KB299  The textbook steps show you how to back up to Peachtree’s default hard drive location at C:\Program Files\Peachtree\Company\ [shortened company name.]. You can also specify a hard drive location; or, back up to external media, such as, a floppy disk (a blank, formatted disk holds 1,440,000 bytes; or about 1440 KB); CD-R; DVD-R; USB drive; or Zip drive.

8. ©The McGraw-Hill Companies, Inc. 8 of 50 Chapter 9 Topics 1. Software & web objectives, p. 239 2. Getting started, New Company Setup Wizard, pp. 240-248. 3. Company maintenance information, pp. 247-248 4. Chart of Accounts, p. 248 a. Delete accounts, pp. 248-249 b. Change accounts, pp. 250-251 c. Add accounts, p. 251-253 d. Printing the chart of accounts, pp. 253-255 5. Entering chart of accounts beginning balances, pp. 255- 261 6.Using Windows Explorer to See the File Size, pp. 261-262 7.Backing up company data, pp. 262-265 8.Restoring company data, pp. 266-268

9. ©The McGraw-Hill Companies, Inc. 9 of 50 Chapter 9 Topics (continued) 9. Recording entries in the cash receipts journal and cash disbursements journal, pp. 269-276 10. Account reconciliation, pp. 276-279 11. Displaying the Cash Account Register, pp. 279-282 12. Printing the cash receipts journal, p. 283 13. Printing the cash disbursements journal, pp. 283- 285 14. Editing journal transactions, p. 285 15. Previewing the general ledger trial balance, pp. 286.

10. ©The McGraw-Hill Companies, Inc. 10 of 50 Chapter 9 Topics (concluded) 16. Printing financial statements, pp. 287- 288 17. Backing up Chapter 9 data, p. 289 18. Internet Activity, p. 289 19. Summary and Review, p. 290 a. Going to the net, p.291 b.Multiple choice questions, pp. 291- 293 c. Exercise 9-1, pp. 293-296 d. Exercise 9-2, pp. 296-299 e. Chapter 9 index, p. 300

11. ©The McGraw-Hill Companies, Inc. 11 of 50 New Company Setup – Introduction, p. 240 Start Peachtree in the usual way. From the startup window, click on Set up a new company. Read the information on this window. Click.

12. ©The McGraw-Hill Companies, Inc. 12 of 50 New Company Setup – Company Information, p. 241 Check the information you typed. Make sure you use your first and last name so that your name will appear on all printouts. Click on

13. ©The McGraw-Hill Companies, Inc. 13 of 50 New Company Setup – Chart of Accounts, p. 242 Accept the default for Set up a new Retail, Service, Construction, Manufacturing or Distribution company using a simplified chart of accounts is selected. Click on

14. ©The McGraw-Hill Companies, Inc. 14 of 50 New Company Setup – Chart of Accounts, p. 242 The Available Charts of Accounts list shows five business types. Click on Service Company to highlight it. Click on

15. ©The McGraw-Hill Companies, Inc. 15 of 50 New Company Setup –Accounting Method, p. 243 Accept the default for Accrual. Click on

16. ©The McGraw-Hill Companies, Inc. 16 of 50 New Company Setup –Posting Method, p. 243 Accept the default for Real Time posting. Click on

17. ©The McGraw-Hill Companies, Inc. 17 of 50 New Company Setup –Accounting Periods, p. 244 Accept the default for 12 monthly accounting periods. Click on

18. ©The McGraw-Hill Companies, Inc. 18 of 50 New Company Setup – Accounting Periods, p. 245 Complete step 14 on page 244. Make sure that your window matches the one shown below step 14 on page 244. The information cannot be changed later. Click on.

19. ©The McGraw-Hill Companies, Inc. 19 of 50 Defaults window, step 16, p. 245 When the Defaults window appears, click on. Complete steps 16 and 17 on page 245. Then, the Congratulations window appears.

20. ©The McGraw-Hill Companies, Inc. 20 of 50 New Company Setup – Finish, p. 245 Read the information on the Congratulations window. Click.

21. ©The McGraw-Hill Companies, Inc. 21 of 50 New Company Setup – Finish, p. 246 The Welcome to Peachtree Today! window and menu bar for Jessica Wood Graphics (or, your first and last name), On the left side of the Peachtree Today window, select Scroll down to the Start Up area. Click on the field next to Display Peachtree Today each time this company is opened to uncheck the field. Click on Peachtree Today’s title bar to close the window. The menu bar for Jessica Wood Graphics appears.

22. ©The McGraw-Hill Companies, Inc. 22 of 50 Subfolder for Jessica Wood Graphics, p. 247 A subfolder is set up on your hard drive for Jessica Woods Graphics—c:\Program Files\Peachtree\Company\jeswoogr

23. ©The McGraw-Hill Companies, Inc. 23 of 50 Company Maintenance Information, p. 247-248 From the menu bar, select Maintain; Company Information. Compare these fields to the company information set up on text page 241. They should agree. Notice that the Directory field shows you the directory where the currently opened company is stored. Make any needed corrections. Click OK to return to the menu bar. Continue with the Chart of Accounts section on text page 248.

24. ©The McGraw-Hill Companies, Inc. 24 of 50 Chart of Accounts, p. 248 Click on Maintain; Chart of Accounts. In the Account ID field, click on the magnifying-glass icon. Double-click on Account No. 1150 Allowance for Doubtful Account. Click on the Delete icon. Then, select. Complete the steps on pages 249 through 253 to delete, change, and add accounts. Compare your chart of accounts to the one shown on text page 254.

25. ©The McGraw-Hill Companies, Inc. 25 of 50 Entering Chart of Accounting Beginning Balances, pages 255-259 Follow steps 1-3 on pp. 256 and 257 to select the beginning balance period. (This window illustration is below step 3 on p. 257). Make sure you have selected From 9/1/05 through 9/30/05. You cannot change this later. Then, click on.

26. ©The McGraw-Hill Companies, Inc. 26 of 50 Chart of Accounts Beginning Balances window, p. 258 Make sure that your beginning balances are as of September 30, 2005. If you enter your balances for the wrong month (period), your financial statements will not show the current month and year-to-date amounts correctly. Complete steps 7 and 8 on page 259.

27. ©The McGraw-Hill Companies, Inc. 27 of 50 Balance Sheet, p. 260 The balance sheet shown on page 260 represents the beginning balances for Jessica Wood Graphics. Compare these balance sheet amounts to those shown on page 260.

28. ©The McGraw-Hill Companies, Inc. 28 of 50 Using Windows Explorer to See the File Size, pp. 261-262 Go to Windows Explorer. Double-click on the folder for Peachtree. The default program and data path is c:\Program Files\ Peachtree \Company. Right-click on the subfolder for jeswoogr. Left-click on Properties. This window is shown on p. 261.

29. ©The McGraw-Hill Companies, Inc. 29 of 50 Backing up company data, p. 262-265 After you set up your company and modify the chart of accounts, you should back up your data. Read the information on pages 262 and 263. Then, follow the steps on pages 263-265 to back up your Chapter 9 beginning data. The suggested file name for backing up is Chapter 9 Begin. This is shown on page 264.

30. ©The McGraw-Hill Companies, Inc. 30 of 50 Restoring company data, p. 266 After completing new company setup and editing the chart of accounts, you backed up (saved) company information. In order to start where you left off the last time you backed up, you use the Restore Wizard. Read the information on page 266 about restoring data. Then, complete the steps on pages 266 through 268 to restore data.

31. ©The McGraw-Hill Companies, Inc. 31 of 50 Maintain Global Options, p. 269 Click on Options, Global. Make sure the box next to Recalculate cash balance automatically in Receipts, Payments, and Payroll Entry has a check mark next to it. Click on. When you use the Receipts, Write Checks, and Payments tasks, you will see that your check register’s balance agrees with the cash balance on these windows.

32. ©The McGraw-Hill Companies, Inc. 32 of 50 Select a Cash Account, p. 270 Click on Tasks, then Receipts. Click on the down arrow, then select Checking Account from the drop-down list. Click. The Receipts window appears.

33. ©The McGraw-Hill Companies, Inc. 33 of 50 Steps 3 – 13, pp. 270-272 Complete steps 3 through 13 on pages 270-272. Then compare your window to the to shown after instruction 13 on page 271. This is also the next slide.

34. ©The McGraw-Hill Companies, Inc. 34 of 50 Receipts window, p. 271 After completing steps 3-13 on pp. 270 and 271, your window should look like the one below. Click Save to post. Read steps 14 and 15 on page 272.

35. ©The McGraw-Hill Companies, Inc. 35 of 50 Select a Cash Account, p. 272 Click on Tasks, then Write Checks. Make sure that the Regular Checking Account is shown on the Select a Cash Account window. If not, select it. Click. The Write Checks window appears. Complete steps 3 through 10 on pages 272-274.

36. ©The McGraw-Hill Companies, Inc. 36 of 50 Write Checks window, p. 273 After completing steps 1 – 8 on pages 272 and 273 the completed Write Checks window appears. Click Save to post. Read steps 9, 10, and the Comment on page 274. Then, continue with the work on pages 275 and 276.

37. ©The McGraw-Hill Companies, Inc. 37 of 50 Account Reconciliation, pp. 276-279 After following steps 1- 6 on page 278, account reconciliation is completed. (This window is shown on p. 279.) Click OK when you are finished.

38. ©The McGraw-Hill Companies, Inc. 38 of 50 Displaying the Cash Account Register, p. 279 After following steps 1 and 2 on pages 279 & 280. The Account Register appears showing all your entries. The Account Register lists payments and receipts similarly to the check register on page 275. Read a., b., and c. on pages 280 and 281 to use drill-down.

39. ©The McGraw-Hill Companies, Inc. 39 of 50 Cash Account Register, p. 282 After completing the steps shown on pages 280 and 281, the Cash Account Register is shown. Read the information and follow the steps on page 282.

40. ©The McGraw-Hill Companies, Inc. 40 of 50 Printing the Cash Receipts Journal, p. 283 Click on Reports, the select Accounts Receivable. Highlight Cash Receipts Journal. Click on the Print icon. Make the selections to print. Compare your printout to the Cash Receipts Journal shown on page 283.

41. ©The McGraw-Hill Companies, Inc. 41 of 50 Printing the Cash Disbursements Journal, pp. 283-284 The Select a Report window should be displayed. In the Report Area, highlight Accounts Payable. Scroll down the Report List. Click on Cash Disbursements Journal to highlight it. Click on the Print icon. Make the selections to print. Compare your printout to the Cash Disbursements Journal shown on page 284.

42. ©The McGraw-Hill Companies, Inc. 42 of 50 Editing Journal Transactions, p. 285 Click on Tasks, then Receipts. Click on the Abc Open icon. Highlight the journal entry that you want to edit. Highlight the journal entry that you want to edit, then click on OK. Make any necessary changes, then click on Save to post.

43. ©The McGraw-Hill Companies, Inc. 43 of 50 Previewing the General Ledger Trial Balance, p. 286 Follow the steps on page 286 to preview the general ledger trial balance. Compare your display with the general ledger trial balance shown on page 286.

44. ©The McGraw-Hill Companies, Inc. 44 of 50 Printing Financial Statements, p. 287 Follow the steps on page 287 to print the balance sheet and income statement. Compare your printouts with the balance sheet shown on p. 287 and the income statement shown on page 288. To print an income statement without zero balances, uncheck the Show Zero Amounts box on the Income Statement Options window. Follow steps 1-6 on page 289 to back up Chapter 9 data. The suggested filename is Chapter 9 October.

45. ©The McGraw-Hill Companies, Inc. 45 of 50 Glossary of Terms Chapter 9

46. ©The McGraw-Hill Companies, Inc. 46 of 50 Source Documents, p. 240 Source documents are used to show written evidence of a business transaction. For Jessica Wood Graphics, the source documents used are his checkbook register and bank statement.

47. ©The McGraw-Hill Companies, Inc. 47 of 50 Printout of Chart of Accounts, p. 254 The chart of accounts is a list of General Ledger accounts, which are used to classify transaction information for reporting purposes. Peachtree includes numerous sample charts of accounts.

48. ©The McGraw-Hill Companies, Inc. 48 of 50 Bank reconciliation, p. 279 Peachtree’s Account Reconciliation feature allows you to adjust Ms. Wood’s bank statement. Bank reconciliation is the process of bringing the balance of the bank statement and the balance of the cash account into agreement.

49. ©The McGraw-Hill Companies, Inc. 49 of 50 Internet Activity, p. 289 1 Go to the book’s website at www.mhhe.com/yacht2005www.mhhe.com/yacht2005 2 In the Student Edition list, link to Internet Activities. 3 Link to WEB EXERCISES PART 2. 4 Scroll down to STARTING A BUSINESS – Chapter 9. Read steps 1-7. 5 Follow the steps shown on the book’s website to complete this Internet activity. 6 Use a word processing program to write a summary for each website visited (maximum length: 75 words).

50. ©The McGraw-Hill Companies, Inc. 50 of 50 Going to the Net, p. 291 Access the chart of accounts website at www.allianceonline.org www.allianceonline.org In the site search field, type chart of accounts, then click. Link to What Should Our Chart of Accounts Include?, then link to What are the Features of a Simple Chart of Accounts? 1. List the standard order that accounts are presented on the balance sheet and income statement. 2. How are account numbers organized? Why are they organized that way?