2. Chapter 12: Vendors & Purchases Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

3. Vendors & Purchases Chapter 12 begins Part 3 of the book: Sage 50 Complete Accounting 2015 for Merchandising Businesses. Merchandising businesses are retail stores that resell goods and services. In Chapter 12, you set up two merchandising businesses: Cindy’s Service Merchandise, a partnership owned by Eric Lanning and Cindy Barton ; and Student Name [use your last name] Sales and Service, a sole proprietorship. 12-2

4. Accounts Payable Transactions Vendor sends Cindy's Service Merchandise an invoice. You enter the invoice as a purchase. When it is time to pay the invoice, you select the invoice(s) from the vendor you want to pay and print a check. 12-3

5. Sage 50 Tips Sage 50 Tips In Chapter 12, you set up two merchandising businesses: Cindy ’s Service Merchandise and the end- of-chapter exercise, Student Name Sales and Service (Exercises 12-1 and 12-2). The companies that you set up in Chapter 12, continue in Chapters 13, 14 and 15. If the general ledger account (GL account field) is not displayed on the Purchases/Receive Inventory window or Payments window, check the global options. In the Hide General Ledger Accounts section, all boxes must be unchecked. 12-4

6. Sage 50 Tips (continued) Sage 50 Tips (continued) What if you want to use Cindy ’s Service Merchandise on a computer that does not have this company set up in Sage 50? What if you want to use Cindy ’s Service Merchandise on a computer that does not have this company set up in Sage 50? If you start Sage 50 and the appropriate company cannot be opened, use the Restore Wizard to select Create a new company using the restored data. The Create a new company using the restored data selection allows you to restore your backup data, and set up the company. If Cindy’s Service Merchandise (or another name Service Merchandise) is not listed either on the Open an Existing Company window or when you select, click Cancel; then Close. From Sage 50’s startup window, there are four menu bar options— File; Options; Services; Help —. Select File; Restore. Restore the appropriate backup file using the Create a new company using the restored data selection. This allows you to bypass creating a new Sage 50 company and restore the company data from a backup file (.ptb extension). 12-5

7. Backing Up and Saving Files in Chapter 12 Part 3 Introduction Backup (.ptb) Excel (.xlsx) and Adobe (.pdf) Kilobytes Page Nos. Chapter 12 Chart of Accounts.ptb 953 KB 414 Chapter 12 Starting Balance Sheet.ptb 959 KB 417 Chapter 12 Begin.ptb 974 KB 431 Chapter 12.ptb 1,051 KB 454 Chapter 12_CofA_PJ_CDJ_VL_GLTB.xlsx 29 KB 455-457 Exercise 12-1 Chart of Accounts.ptb 911 KB 460 Exercise 12-1_Starting Balance Sheet.ptb 917 KB 461 Exercise 12-1.ptb 925 KB 465 12-6

8. Backing Up and Saving Files Chapter 12 (concluded) Adobe (.pdf) Kilobytes Page Nos. Exercise 12-2.ptb 941 KB 466 Exercise 12-1_CofA_PJ_CDJ_VL_GLTB.xlsx 28 KB 466-468 Exercise 12-2_Chart of Accounts.pdf 58 KB 467 Exercise 12-2_Purchase Journal.pdf 48 KB 467 Exercise 12-2_Cash Disbursements Journal.pdf 49 KB 467 Exercise 12-2_Vendor Ledgers.pdf 48 KB 467 Exercise 12-2_General Ledger Trial Balance.pdf 49 KB 467 12-7

9. How the purchases and payments tasks work together Purchases/Receive Inventory Enter the Vendor Invoice Payments Apply the Vendor Invoice as a Check Print Checks Print the Disbursement Check 12-8

10. Accounting Software Sage 50 and QuickBooks Desktop and QuickBooks Online are used by small companies. As the company grows to mid- size, Sage 50 and Microsoft Dynamics GP can be used. Large companies use MS Dynamics GP. As companies grow in size, their accounting software needs change. QuickBooksSage 50 Microsoft Dynamics GP Small companies to Large companies Company size No. of employees Small1-50 Medium50-500 Large500+ 12-9

11. Glossary of Terms Chapter 12 12-10

12. Vendors Merchandising businesses purchase the merchandise they sell from suppliers known as vendors. Cindy’s Service Merchandise vendors are shown below. 12-11

13. Accounts payable transactions Purchases of merchandise for resale, assets, or expenses incurred on credit from vendors. When Cindy’s Service Merchandise makes purchases on account from vendors, the transactions are known as accounts payable transactions. 12-12

14. Accounts payable The money a company owes to a supplier or vendor. 12-13

15. Database An organized body of related information. As the database gets larger, the depth of processing increases and more features and functions are available. 12-14

16. Purchase Journal In Sage 50, the Purchases/Receive Inventory window is the purchase journal. In the Purchase Journal, or Purchases/Receive Inventory window, you can enter invoices from vendors or enter and print purchase orders. 12-15

17. Purchases/Receive Inventory window is Sage 50’s Purchase Journal 12-16

18. Accounts payable ledger Shows the account activity for each vendor. Same as vendor ledger. 12-17

19. Vendor ledger Shows the account activity for each vendor. The vendor ledger is also called the accounts payable ledger. 12-18

20. Average cost A method of computing inventory. See weighted-average method on the next slide. 12-19

21. Weighted-average method This method of inventory pricing divides the cost of the inventory purchased by the quantity of merchandise purchased. This unit cost is multiplied by the ending inventory. 12-20

22. Cash disbursements journal All payments of cash are recorded in the cash disbursements journal. In Sage 50, the Write Checks and Payments tasks are recorded in the cash disbursements journal. 12-21

23. Payments window Cash Disbursements Journal The payments window shows a payment to a vendor minus a return and purchase discount. 12-22

24. Online Learning Center  Go online to www.mhhe.com/yacht2015 for additional resources. Link to Student Edition, select Chapter 12. 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 Two Videos: Demonstrations of purchases and payments. 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: End-of-chapter summary and review questions and analysis question. 12-23

25. Going to the Net Watch two Sage 50 YouTube videos at http://sagecity.na.sage.com/support_communities/sage50_accounting_us /m/sage50us_videos/default.aspx http://sagecity.na.sage.com/support_communities/sage50_accounting_us /m/sage50us_videos/default.aspx http://sagecity.na.sage.com/support_communities/sage50_accounting_us /m/sage50us_videos/default.aspx 1.30_inventory_reports. 30_inventory_reports 2.Saving Time with the Vendor Management Center. Saving Time with the Vendor Management CenterSaving Time with the Vendor Management Center Briefly describe the features shown. 12-24

26. Analysis Question What is the balance in the Accounts Payable account, Cindy’s Service Merchandise? Why? 12-25

27. Assessment Rubric DateTransaction Navigation Center/Module Task Window Journal Dr./Cr. 1/3Invoice No. 480CP was received from Carson Phillip Tools for the purchase of 10 tool kits for a unit cost of $30. 1/6Returned two tool kits to Carson Phillip Tools, Invoice No. 480CP. Paid $30 for each tool kit: VCM480CP. 1/10Issued Check No. 2021 to Carson Phillip Tools for merchandise purchased on January 3, less the January 6 return, Invoice No. 480CP. 12-26