2. Chapter 9: New Company Setup and Beginning Balances Chapter 9: New Company Setup and Beginning Balances Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

3. New Company Setup and Beginning Balances Chapter 9 begins Part 2 of the book—Sage 50 Complete Accounting 2015 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 set up two service businesses—Dennis Westin Designer and the end-of chapter exercise, Art by Your Name. You set up a business using one of Sage 50’s sample companies. Then, you record October 1, 2015 beginning balances from Mr. Westin’s balance sheet. The chapters in Part 2 work together--the service businesses set up in Chapter 9 are continued in Chapters 10 and 11. 9-2

4. Sage 50 Tips Sage 50 Tips In Chapter 9, beginning balances are entered from the October 1, 2015 balance sheet. This means that the chart of accounts beginning balances must be entered as of September 30. The September 30 ending balances are the October 1 beginning balances. The businesses that you set up in Chapter 9 are continued in Chapters 10 and 11. Remember to use a unique name for the businesses that you set up in Chapter 9. For example, use your first and last name Designer to identify the chapter company and Art by (your first and last name) to identify the business set up in Exercise 9-1. When a company is set up in Sage 50, a shortened named is assigned to the company; for example, the shortened company name for Dennis Westin Designer is denwesde. When the student’s first and last name is used, the shortened company name differs. Use Windows Explorer to see the file size. 9-3

5. Sage 50 Tips (concluded) Sage 50 Tips (concluded) You can restore an existing company—one that is previously set up— or use the Restore Wizard to Create a new company using the restored data, bypassing the process of creating a new company. The Restore Wizard includes two options on the Select Company window: Overwrite existing company data and Create a new company using the restored data. If Create a new company using the restored data is selected, then the company will be named the same as the backup file. Let’s say you want to restore a backup file for a company that is not set up in Sage 50; for example, a back up file exists but the company is not shown as a Sage 50 company. If you start Sage 50 and the appropriate company cannot be opened, use the Restore Wizard to Create a new company using the restored data. Using the backup file, and the Create a new company using the restored data, you can set up a company and start at that point in the data. 9-4

6. Backing Up Chapter 9 Sage 50 Backup (.ptb) Excel (.xlsx) and Adobe (.pdf)KilobytesPage Nos. Chapter 9 Chart of Accounts.ptb948 KB274-275 Chapter 9 Beginning Balances.ptb952 KB289-290 Chapter 9_Chart of Accounts Beginning Balances.xlsx17 KB290-292 Chapter 9_Balance Sheet.pdf5 KB295 Chapter 9_Chart of Accounts.pdf98 KB295 Exercise 9-1.ptb908 KB299 Exercise 9-2.ptb912 KB302 Exercise 9-2_Chart of Accounts and Beginning Balances.xlsx 17 KB302 Chapter 9-2_Chart of Accounts.pdf8 KB302 Exercise 9-2_Balance Sheet.pdf5 KB302  In the textbook, detailed steps are shown for backing up to a USB drive. 9-5

7. Business Status Navigation Center Navigation Bar Period 10 - 10/01/15- 10/31/15 9-6

8. Shortened name for Dennis Westin Designer A folder is set up on the hard drive for Dennis Westin Designer— C:\Sage\Peachtree\Company\ denwesde. Sage 50’s shortened name is the first three letters from the first word (den), the second word’s first three letters (wes), the third word’s first two letters (de). If you used your first and last name, the shortened name will differ. 9-7

9. Entering Chart of Accounts Beginning Balances Select the beginning balance period. Make sure you have selected From 9/1/15 through 9/30/15. You cannot change the period later. Make sure that From 9/1/15 through 9/30/15 is selected. 9-8

10. Chart of Accounts Beginning Balances window Make sure that your beginning balances are as of September 30, 2015. 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 in Chapter 11. 9-9

11. Display the September 30, 2015 Balance Sheet Change the date on the Balance Sheet. September 30 ending balances are October 1, 2015 beginning balances. Display the balance sheet for September 30 so you can check that you entered chart of accounts beginning balances correctly. 9-10

12. Glossary of Terms Chapter 9 9-11

13. Posting, Part 2 introduction One of the best features of a computerized accounting system is how quickly posting is done. Once entries are recorded and checked for accuracy, posting is a click of the mouse. All entries are posted to accounts in the general ledger and account balances are calculated—fast, easy, and accurate. This diagram illustrates the process. Journalize and Post General Ledger Financial Statements 9-12

14. Sage 50 Accounting System Business Processes Software Installation Company Setup Journal entries, Posting to the General Ledger, Subsidiary Ledgers Reports 9-13

15. Double-Entry Accounting Sage 50 is a double-entry accounting system which means that the equation Assets = Liabilities + Equity is always in balance. Since a debit in one account will be offset by a credit in another account, the sum of all debits is equal to the sum of all credits. To guarantee double-entry accounting, Sage 50 includes accounting periods, the general journal and special journals, general ledger and subsidiary ledgers, account reconciliation, an audit trail, and financial reports. Sage 50 also includes closing the fiscal year. 9-14

16. Balance Sheet A Balance Sheet lists the types and amounts of assets, liabilities, and equity as of a specific date. The balance sheet is also called a statement of financial position. 9-15

17. Statement of Financial Position The statement of financial position is also known as a balance sheet. 9-16

18. Online Learning Center  Go online to www.mhhe.com/yacht2015 for additional resources. Link to Student Edition, select Chapter 9.www.mhhe.com/yacht2015 o Interactive Testing: Online multiple-choice and true and false questions. Tests are graded and can be emailed to instructor. o Glossary of Terms: Boldfaced/italicized words within chapter. o Feature Quizzes: Includes user interface questions, matching, and review of chapter concepts with immediate feedback. o Videos: Demonstration of setting up a new company. YouTube videos are also included. o PowerPoints: Narrated slides. o Assessment Rubrics: Reviews journal entries, reports, navigation centers, modules, and task windows. o Going to the Net: Internet research. o QA Templates: 10 multiple-choice questions and the analysis questions. 9-17

19. Going to the Net Access information about the chart of accounts at http://en.wikipedia.org/wiki/Chart_of_accounts. Read the information on Wikipedia’s chart of accounts website. http://en.wikipedia.org/wiki/Chart_of_accounts 1. What is the chart of accounts? 2. List four asset accounts, two liability accounts, two equity accounts, one revenue account, and three expense accounts. 3. What is the trial balance? 9-18

20. Analysis Questions 1. What chart of accounts beginning balance date is used for entering October 1, 2015 account balances in Sage 50? 2. How does the account beginning balance date affect the current month and year-to- date amounts on the financial statements? 9-19

21. Assessment Rubric TaskDateSelectionsWindow Shortened Company Name October 1, 2015 Beginning Balances 9-20