S ETTING UP G ENERAL L EDGER
he General Ledger stores information relating to all financial activity for your company. All business transactions are eventually posted to the set of accounts that make up the General Ledger.
This set of accounts is called the chart of accounts. You can think of the chart of accounts as holding places for every item you want to keep track of in your business. Information about the chart of accounts is entered through the Maintain Chart of Accounts window.
When transactions are posted in Accounts Receivable, Accounts Payable, Inventory, and Payroll, the journals are updated. The journals in turn update the General Ledger. Entries made to the General Journal also update the General Ledger. The interaction between the General Ledger and the other sections in Peachtree is illustrated below:
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To access the default information window for the General Ledger, select Default Information, General Ledger from the Maintain menu.
R o u n d i n g A c c o u n t T a b
The Rounding Account is an account in your General Ledger used by Peachtree to store rounding differences on Financial Statements. This account can be either a balance sheet account or an income statement account. Typically, the Retained Earnings account is used.
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A c c o u n t S e g m e n t s T a b
On the Account Segments tab, you can create or change segments for your chart of accounts ID. This will allow you to take full advantage of the masking and filtering features of Peachtree when you print reports and financial statements. You can use this feature for printing reports that are filtered by department, division, account ID, or any other segment you create. When you initially create your company in New Company Setup, Peachtree gives you the opportunity to divide your Account ID into segments, but you can do it here as well. If your chart of accounts is already set up and you change the segment structure, Peachtree will scan your chart of accounts and inform you if any accounts do not fit the new segment structure. You can then print your Chart of Accounts report to identify those accounts.
You can segment your chart of accounts ID by creating descriptions, lengths, and separators for up to five segments.
A C T I V I T Y 2 - S E T T I N G U P G E N E R A L L E D G E R D E F A U L T S The only information we will set up in General Ledger defaults is the Rounding Account. This account is used by Financial Statements when they are designed to round dollar amounts to the nearest dollar. Any rounding differences are added to the Rounding Account on the Financial Statement. To verify the rounding account:
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1 Select Maintain, Default Information, General Ledger. The General LedgerDefaults window displays the Rounding Account.
2 Verify that the Rounding Account assigned is account 39005, which is Retained Earnings. If the account is correct, click OK. If the account is incorrect, enter 39005 and click OK.
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M O D I F Y I N G T H E C H A R T O F A C C O U N T S
If you chose to copy a chart of accounts while using the New Company Setup Wizard, you already have a full list of accounts available. This chart contains all the accounts necessary to run a business. However, since all businesses are different, it may be necessary to add, rename, or delete specific accounts in the chart of accounts.
In the Maintain Chart of Accounts window, you can add and edit existing accounts or delete accounts that have no activity. You can also enter beginning balances for the accounts.
The chart of accounts is explained on the following pages. To open the Maintain Chart of Accounts window, select Maintain, Chart of Accounts.
M a i n t a i n C h a r t o f A c c o u n t s Wi n d o w
The Maintain Chart of Accounts window is used to enter new accounts, edit existing accounts, enter account beginning balances. Fields of interest are described below:
H E A D E R F I E L D S
• Account ID: Identifies the account in the chart of accounts, lookup lists, transactions,
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• Description: Enter a description for the account. This description prints on reports andfinancial statements.
• Inactive: Select this check box to make the ID inactive. Inactive records are deleted when the purge utility is run, if they have not been used in any transactions in an open fiscal year. Inactive records can be used in transactions, but a message appears, reminding you of the inactive status.
• Account Type: Select a type from the drop-down list. Accounts are grouped by account type on financial statements. Accounts assigned to the account types of Income, Expenses, Cost of Sales, and Equity--Gets Closed will close to the account assigned to the Equity--Retained Earnings account type at the end of the fiscal year.
A c c o u n t N u m b e r i n g
Peachtree allows the use of both numbers and characters in an account numbering system.
However, an account numbering system should be established so it can be understood by everyone, from new employees to accountants. In a traditional General Ledger, individual accounts are numbered and placed into ranges similar to those in the following table:
Peachtree’s sample companies use numbering schemes similar to those in the table above.
If you choose not to use a sample chart of accounts, there are a few rules and guidelines that should be followed when an account numbering system is established.
• Up to 15 alphanumeric characters can be used in an account ID.
• Asterisks (*), question marks (?), and plus signs (+) cannot be used in an account ID.
• Leading or trailing spaces are not permitted in an account ID. However, spaces between characters are allowed.
• Account numbers are sorted alphabetically, with numbers in the account ID sorted before letters. For example, account ID “2” lists after account ID “1000” and before an Account Range Account Types
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account ID starting with “AR.” Account numbers are not case sensitive; therefore, CASH and Cash are the same account ID.
• There can only be one account assigned an account type of Equity--Retained Earnings.
A c c o u n t T y p e s
Account types are used to group similar accounts together. They also determine where the accounts will appear on financial statements, and whether the account typically carries a debit or credit balance. Peachtree has a wide variety of account types available:
At the end of the fiscal year, the balances of the Income, Expense, Cost of Sales, and Equity--Gets Closed account types become zero. The net difference of these accounts is added to the Equity--Retained Earnings account.
A C T I V I T Y 3 - M O D I F Y I N G T H E C H A R T O F A C C O U N T S
Most of the accounts in the sample chart of accounts can be used by Abracadabra Web Services. However, there are a few account descriptions that need to be changed to more closely match the needs of the business. Also, a few accounts need to be deleted and a few new accounts need to be added.
CH A N G I N G AC C O U N T DE S C R I P T I O N S
Some account descriptions need to be changed to match the business needs. Follow these steps to change the descriptions of accounts:
1 Select Maintain, Chart of Accounts.
2 Enter or select account 10200 from the Account ID lookup list.
•Accounts Payable •Expenses
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3 Change the Description to National Bank Checking.4 Click the Save button.
5 Using these steps as a guide, change these account descriptions. Remember to click Save after changing each description:
DE L E T I N G AC C O U N T S
Some accounts are not needed, so they can be deleted. Follow these steps to delete accounts:
1 Enter account 15400 for the Account ID.
2 Click the Delete button.
3 Select Yes to confirm you want to delete the record.
4 Using these steps as a guide, delete these accounts:
AD D I N G AC C O U N T S
Abracadabra needs to track income from Web sites designed for companies separately from those designed for individuals. Web sites designed for companies will use the Commercial accounts, which end in the letter C. Web sites designed for individuals will use the Personal accounts, which end in the letter P. This will allow you to track the income for each category and use department-related features.
Follow these steps to add accounts:
1 Click the New button on the toolbar
2 Enter the Account ID 40200-C.
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4 Select the Account Type Income.
5 Click Save & New to add the account and clear the fields.
6 Using these steps as a guide, add these accounts. Remember to click Save &
New after adding each account:
7 You can view your changes on the Chart of Accounts report. To do so, click the Reports icon in the toolbar and, from the drop-down list, select Chart of Accounts. This will open the report on your screen.
8 Select Close to close the report when you are finished.
9 Select Close to close the window.
Account ID Description Account Type
40200-P Design-Personal Site Income
40400-C Programming-Commercial Site Income
40400-P Programming-Personal Site Income
40500-C Maintenance-Commercial Site Income
40500-P Maintenance-Personal Site Income
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M a s k i n g
The chart of accounts can be divided into departments. When printing certain reports, you can filter or mask the information that appears. In the window below, the “NU” in account 57000-NU is an example of an account mask.
Department masking is a powerful feature in Peachtree. Masking allows you to set up codes that, as part of your account number, represent a division or department for that account.
For example, if your company has two branches and each branch has two departments, you can establish accounts that differentiate the branches and their departments. An example of a seven-character account number is shown. The fifth character represents the location, and the sixth and seventh represent the department.
To view reports containing only data specific to a branch or department, use a department mask. For example, to view the totals for department 01, enter *****01, where asterisks represent any possible character or number. Shown below
4001M01
Account
Location
Department
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is an example of masking the General Ledger report to include transactions for department 01.
Quantum offers you the Account Segment feature, which allows you to segment your chart of accounts and filter reports using drop-down selection lists rather than the masking method using the asterisk. For information on setting up your company with Account Segments, see the online Help in Peachtree, or page 23.
S E T T I N G U P G E N E R A L L E D G E R Entering Account Beginning Balances
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Peachtree can record account beginning balances in any period in companies that have no posted transactions. After one or more transactions have been posted, Peachtree records account beginning balances as prior-period adjustments.
To enter account beginning balances, click the Account Beginning Balances arrow button on the Maintain Chart of Accounts window. Select the accounting period to enter or adjust balances from the Select Period window.
When entering beginning balances, entries can be made in previous, current, or future periods. When entering prior period adjustments, entries can be made only in previous periods.
Typically, account beginning balances should be entered in the period previous to the first period in which transactions will be entered. For example, if transactions will be entered in Peachtree starting in June, the account beginning balances should be entered as of the end of May.
C h a r t o f A c c o u n t s B e g i n n i n g B a l a n c e s W i n d o w
The Chart of Accounts Beginning Balances window lists each account ID, description, and account type. Depending on the account, entries are made in the Assets, Expenses column or in the Liabilities, Equity, Income column. Peachtree indicates which column to use by making the other column unavailable. Positive amounts are entered in both columns unless one of the following apply:
• The balances are for contra accounts other than accumulated depreciation.
• Your company is operating “in the red” and has a negative retained earnings account balance.
• You are converting mid-year and are recording dividends paid. The balance of this equity account would be entered as a negative value.
• Any time an account has a balance that is the opposite of its normal balance.
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Fields of interest are described below:
• Assets, Expenses: Enter the balance of the account if the account typically carries a debit balance. If the account is a contra account other than accumulated depreciation or currently carries a credit balance, enter a negative amount.
• Liabilities, Equity, Income: Enter the balance of the account if the account typically carries a credit balance. If the account is a contra account or currently carries a debit balance, enter a negative amount.
• Trial Balance: Shows the result of the Assets, Expenses column minus the Liabilities, Equity, Income column. This value should be zero before you click OK. If this value is non-zero, the amount shown will post to a Beginning Balances Equity account.
O u t - o f - B a l a n c e S i t u a t i o n
If the Trial Balance shown at the bottom of the Chart of Accounts Beginning Balances window is not zero, then there is an of-balance situation. If you click OK with an out-of-balance situation, the following message appears:
If you click OK to this message, a Beginning Balance Equity account will be created in the equity section of your chart of accounts. The total out-of-balance amount will post to this account. Your books will be in balance, and you can enter and post transactions.
However, this account appears on General Ledger reports and on the Balance Sheet until
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Peachtree suggests you click Cancel to return to the Chart of Accounts BeginningBalances window. Then, locate and correct errors made when entering account beginning balances. When the Trial Balance is zero, you can click OK.
A C T I V I T Y 4 - E N T E R I N G B E G I N N I N G B A L A N C E S
Abracadabra has created a list of their ending balances for each account as of January 31, 2008. These balances will be entered in Peachtree as the chart of accounts beginning balances. These balances will update the General Ledger when saved.
Follow these steps to enter account beginning balances:
1 Select Maintain, Chart of Accounts.
2 Click the Account Beginning Balances button. Select the period From 1/1/08 through 1/31/08 on the Select Period window and click OK.
This period is selected because the balances for each account are as of January 31, 2008.
3 The Chart of Accounts Beginning Balances window displays the ID,
description, and type for each account. Accounts with a zero balance can remain blank.
4 Enter the account beginning balances listed on the next page. Not every account is listed, so use caution and enter the balance for the correct account.
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5 When finished, click OK to save the balances, then click Close.
6 To view your trial balance, select Reports & Forms from the menu bar, then General Ledger.
23100 Sales Tax Payable Other Current Liabilities 532.44
23400 Federal Payroll Taxes Payable Other Current Liabilities 1969.24
23500 FUTA Tax Payable Other Current Liabilities 81.60
23600 State Payroll Taxes Payable Other Current Liabilities 328.42
23700 SUTA Payable Other Current Liabilities 306.00
39005 Retained Earnings Equity-Retained Earnings 83814.69
40200-C Design-Commercial Site Income 4890.92
40400-C Programming-Commercial Site Income 2553.68
50000 Cost of Services Sold Cost of Sales 1877.52
65000 Employee Benefit Programs Exp Expenses 30.54
72000 Payroll Tax Expense Expenses 1581.00
77500 Wages Expense Expenses 5529.04
Total: 105083.99 105083.99
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7 From the Report List section of the Select a Report & Form window, doubleclick General Ledger Trial Balance.
8 When you are done viewing the report, click Close.
9 Click Close on the Select a Report or Form window.
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E N T E R I N G A C C O U N T B U D G E T S
Budgets can be entered for each account using the Budgets feature under the Maintain menu. These budget amounts appear on Financial Statements that compare actual activity to the budget assigned to the account.
M a i n t a i n B u d g e t s W i n d o w
The Maintain Budgets window is used to enter and update budget information for accounts. You can enter data for up to four fiscal years. In addition, you can print a budget variance report from this window. Peachtree Quantum allows you to track multiple budgets. Fields of interest are described below.
• Account Filters: Use these filters to select ranges of accounts that you want to view.
Use the Department Mask field to filter your budget by department mask. You can select to filter by Account Segment, in addition to Type.
• View Fiscal Year: Use this field to select which fiscal year you want to view. You can select from up to four fiscal years.
C R E A T I N G A B U D G E T
You can create a budget by selecting Maintain, then Budgets. On the Maintain Budgets window, enter a Budget Name and Description. Then, select your Account Filter and
S E T T I N G U P G E N E R A L L E D G E R
You can quickly copy a cell on the grid from one cell to another cell or multiple cells. To do so, enter an amount in a cell. When you select a cell, a small toolbar will appear with options for copying, pasting, and adjusting. (If you do not see the small toolbar, select Edit on the menu bar and select Quick Action Buttons to make it appear. You can also select Copy, Paste, and Adjust from the Edit menu if you do not want to use the Quick Action buttons.) After you enter the amount, click another cell to save the amount. Then click the first cell again and click Copy. Then, select the cell that you want to paste the amount into, and select Paste. The amount is copied. If you want to paste the amount into multiple cells, click and drag the cursor over those fields. The cells will be highlighted in blue to indicate they are selected. Then, click Paste. The amount will be pasted into all of the selected cells.
You can also copy an amount into an entire row in the following way: select an amount, and then click Copy on the small toolbar. Next, select Edit from the menu bar at the top of the window. Then, choose Select, and Entire Row. The row will now be highlighted in blue. Click Paste on the small toolbar in the grid.
C O P Y I N G A C O L U M N
You can copy a column of your budget by using the Autofill button. Once you have completed a column for a fiscal period, click the Autofill button.
Select Copy amounts from the open budget, and click Next. Then, complete the fields, indicating that you want to copy from the completed column into another column. Then click Finish.
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A D J U S T I N G A M O U N T S
You can adjust the amount of a single cell or many cells by using the Adjust option. To do so, select the cell or cells that you want to adjust. You can select a single cell by clicking it, or you can select an entire row, column, or even the entire budget by clicking and dragging the cursor over the cells you want to adjust. Once you have highlighted the amounts you want to adjust, click Adjust on the small toolbar. This will open the Adjust Budget Amounts window.
Enter the dollar amount or percentage that you want to adjust the amounts by, and then specify a rounding figure, if necessary. Finally, click OK. The amounts highlighted will be adjusted.
If you want to adjust the amounts up, enter a positive number for the dollar amount or percent; if you want to adjust the amounts down, enter a negative number.
A C T I V I T Y 5 - E N T E R I N G B U D G E T S
Budgets have been determined for the income and expense accounts used by the
Budgets have been determined for the income and expense accounts used by the