1. Chapter 5: General Ledger & Inventory Chapter 5: General Ledger & Inventory

2. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003 5-2 General Ledger and Inventory In Chapter 5, you learn how to use the General Ledger chart of accounts. This chapter provides you with an explanation of how to set up your own company. Peachtree comes with over 70 sample company charts of account. You can set up your own chart of accounts from scratch or select one of the sample companies’ charts of accounts. Chapter 5 also shows you how to use Peachtree’s inventory system. Peachtree lets you track inventory items both at the purchasing and sales end. Peachtree keeps track of cost of goods sold, stock levels, sales prices, and vendors.

3. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003 5-3 Software Objectives, p. 151 Restore data from Exercise 4-2. (This back up was made on p. 149.) Enter a new account in the chart of accounts. Enter a budget amount for an account. Make a general journal entry to transfer funds. Display the general ledger trial balance. Set up an inventory item. Record an inventory adjustment. Make two backups: one blank, formatted disk for Chapter 5; one blank, formatted disk for Exercise 5-2.

4. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003 5-4 Web Objectives, p. 151 Use your Internet browser to go to the book’s web site at www.mhhe.com/business/accounting/yacht2002. www.mhhe.com/business/accounting/yacht2002 Complete the Internet activity for Ask Jeeves. Complete the steps shown for this activity.

5. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003 5-5 Peachtree Tip Peachtree uses a perpetual inventory system. See page 172 for a review of how Peachtree journalizes the purchase and sale of inventory items.

6. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003 5-6 Backing Up Chapter 5 DisksBackup NameKBPage Nos. 10 of 18A:\Chapter 5764 KB174-175 11 of 18A:\Exercise 5-2767 KB180 Use one blank, formatted disk to back up Chapter 5 on pages 174-175. You will need another blank, formatted disk to back up Exercise 5-2 on page 180.

7. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003 5-7 Chapter 5 Topics 1. Software & web objectives, p. 151 2. Chart of Accounts, pp. 152-153 3. Getting started, pp. 154-158 4. General Journal, pp. 158-162 5. Setting up an inventory item, pp. 162-163 a. Inventory types, pp. 163-166 b. Inventory default accounts, pp. 166-167 6. Inventory and purchases, pp. 167-169 7. Inventory and sales, pp. 170-172 8. Inventory adjustments, pp. 173-174

8. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003 5-8 Chapter 5 Topics continued 9. Backing up Chapter 5 data, pp. 174-175 10. Internet Activity, p. 175 11. Summary and review, pp. 175-176 a. Going to the Net, p. 176 b.Multiple choice questions, pp. 176-179 c. Exercise 5-1, p. 179 d. Exercise 5-2, p. 180 e. Chapter 5 index, p. 181

9. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003 5-9 “Help Topic” window, p. 153 Click on Help, then Contents and Index. Select the “Contents” folder tab. Double-click on “Help for Your Specific Type of Business.” Double-click on “A-Z List of Business Types.” Then, double-click on “List of Sample Chart of Accounts.”

10. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003 5-10 Completed “Maintain Chart of Accounts” window, p. 156 Click on Maintain, then Chart of Accounts. In the “Account ID” box, type 10500. In the “Description” box, type Money-Market Fund. Select the “Budgets” folder tab.

11. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003 5-11 “Maintain Chart of Accounts,” p. 158 Complete steps 1- 3 on pages 157-158 to see this screen. Select the “Save” icon, then “Close” to return to the menu bar.

12. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003 5-12 General Journal Entry, p. 160 Complete steps 1- 9 on pages 159-160 to see this screen. Select “Save” to post to the General Ledger.

13. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003 5-13 General Ledger Trial Balance, p. 161 Click on Reports, then General Ledger. In the “Report List,” double-click on “General Ledger Trial Balance.”

14. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003 5-14 Completed “Maintain Inventory Items,” p. 166 Click on Maintain, then Inventory Items. Complete the steps shown on pages 162 through 166. The completed “Maintain Inventory Items” window appears.

15. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003 5-15 Completed “Purchases/Receive Inventory” window, p. 169 Click on Tasks, then Purchases/Receive Inventory. Complete steps 1 – 7 on pages 167-169. Post this purchase. Press to return to the menu bar.

16. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003 5-16 Completed “Sales/Invoicing” window, p. 171 Click on Tasks, then Sales/Invoicing. Complete steps 2 – 5 on page 171. Post the invoice. Close the window to return to the menu bar.

17. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003 5-17 Completed “Inventory Adjustments” window, p. 174 Click on Tasks, then Inventory Adjustments. Complete steps 2 – 4 on pages 173 and 174. Post this adjustment, then close the window to return to the menu bar.

18. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003 5-18 Chapter 5: Glossary of Terms

19. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003 5-19 Perpetual inventory, p. 151 In a perpetual inventory system, an up- to-date record of inventory is maintained, recording each purchase and each sale that occurs.

20. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003 5-20 Chart of accounts, p. 153 A list of all the accounts used by a company, showing the identifying number assigned to each account Peachtree has over 70 sample charts of accounts.

21. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003 5-21 Chapter 5, Internet Activity, p. 175 1 Go to the book’s web site at www.mhhe.com/business/accounting/yacht2002 www.mhhe.com/business/accounting/yacht2002 2In the “Student Center” list, link to Internet Activities. 3Link to WEB EXERCISES PART 1. 4Scroll down the screen to the Interest Activity labeled ASK JEEVES. 5.Use a word processing program to answer the questions in steps 1-4.

22. McGraw-Hill/Irwin © The McGraw-Hill Companies, Inc., 2003 5-22 Going to the Net, p. 175 Access the AccountantsWorld.com web site at www.accountantsworld.comwww.accountantsworld.com Put your cursor over “About Us.” Then, select “Mission” from the drop-down list. Read the mission statement. 1. What does the mission statement say the accounting firm of tomorrow will be like? 2. How will accountantsworld.com serve the needs of the accounting community?