Slideshow 3 5.2 Slideshow 1B Creating the Chart of Accounts and Batch Processing in the General...

Slideshow 3

5.2

Slideshow 1BSlideshow 1B

Creating the Chart of Creating the Chart of Accounts and Batch Accounts and Batch

Processing in the Processing in the General Ledger General Ledger

List of TopicsList of Topics Slide Slide No.No.

Chart of Accounts 3

Order of Entering Accounts 6

Printing the Chart of Accounts 9

Entering and Posting Opening Account Balances 10

Printing Financial Statements 14

Chart of Accounts

When creating a Chart of Accounts, it is important to design it in order that you will be able to produce good financial reports and to allow for future growth of the business. Time spent in careful planning is worth it.

To open the G/L Accounts window, remember that you need to double-click on the Accounts icon (NOT the Chart of Accounts icon) on the right-pane desktop.

Click the ACCOUNTS icon now.Click the ACCOUNTS icon now.

In entering the Account Number, you must remember the Account Structure codes you have specified earlier: ACC - 4-digit number (xxxx) for regular accounts; DEPT- 6-digit number (xxxx-xx) for accounts specifying department. The two fields must correspond with each other; otherwise, you will get an error message.

Click to continue.Click to continue.

Chart of Accounts (continued)

Study the options for Account Type.

Click.Click.

ACCPAC places debits on the left and credits on the right. If an account balance is zero, ACCPAC follows the Normal Balance Rule to determine which side to put it.

Click.Click.

The use of Account Groups is optional; however, account groups are necessary if using the predefined specifications for financial reports.

There are 16 pre-defined Account Group Names (see right). You may assign your own Account Number Ranges, normally in the same order as standard account classifications.

Study a typical set of Account Group Names with the corresponding Account Number Range.


Income Statement (I) – accounts that normally appear on the Income Statement. ACCPAC calculate totals in all I accounts to report the net income.

Balance Sheet (B) – accounts that normally appear on the Balance Sheet.

Retained Earnings (R) - the account to which Revenue and Expenses accounts are closed to at year-end. Even though the Retained Earnings account appear on the Balance Sheet, it must be specified as Retained Earnings in the Account Type field.

Account Type Normal Balance

Asset Dr

Liability Cr

Equity Cr

Revenue Cr

Expense Dr

Chart of Accounts (continued)

You can post entries only to active accounts. Before a G/L account can be deleted, it must be made inactive.

Click.Click.

If Detail is selected (preferred), all transaction details for every entry are maintained; if Consolidated, the posting from each batch is summarized into one line and transaction details are lost.

Click.Click.

The Control Account box is checked only after the subsidiary ledger has been set up and the opening balances posted. Study the explanation.

Click.Click.

You would select Auto Allocation only if an entry to the account is automatically reallocated to other G/L accounts; e.g., rent may be reallocated to the three depart-mental rent expense accounts.


Control Accounts are general ledger accounts that have the balances for subsidiary legers. For example, ACCOUNTS PAYABLE is the control account for the A/P subledger.

Order of Entering Accounts

At the right is COLLEGIATE’s Chart of Accounts. Because Retained Earnings needs to be entered before any other account and entering the various types of accounts (Balance Sheet, Income Statement, Auto Allocation) require slightly different procedure, a certain order must be followed. Below is one approach. Click each step below:

1.1. Enter Enter Retained EarningsRetained Earnings account.account.

Notice that although Retained Earnings is found on the Balance Sheet, the account type for this account is Retained Earnings.

2. Assign Retained Earnings 2. Assign Retained Earnings as theas the Default Closing Account. Default Closing Account.

“Closing Account” refers to the account to which the balances in the revenue and expense accounts are transferred at the end of the fiscal year.

3. Define Segment Codes for 3. Define Segment Codes for Departmental Accounts.Departmental Accounts.

Account No. Description Structure Balance Type

1000 Cash ACC Dr B1010 Petty Cash ACC Dr B1200 Accounts Receivable ACC Dr B1300 Product Inventory ACC Dr B1400 Supplies on Hand ACC Dr B1500 Prepaid Expenses ACC Dr B1600 Service Equipment ACC Dr B1610 Office Equipment ACC Dr B1700 Accumulated Amortization - Service Equip ACC Cr B1710 Accumulated Amortization - Office Equip ACC Cr B1800 Incorporation Costs ACC Dr B2000 Bank Operating Loan ACC Cr B2200 Accounts Payable ACC Cr B2230 Accrued Liabilities ACC Cr B2250 GST Charged on Sales ACC Cr B2260 GST Paid on Purchases ACC Dr B2280 PST Payable ACC Cr B2350 CPP Payable ACC Cr B2360 EI Payable ACC Cr B2380 Income Tax Withholding Payable ACC Cr B2390 Payroll Clearing ACC Cr B2500 Suspense ACC Cr B2900 Note Payable ACC Cr B3000 Common Stock ACC Cr B3400 Retained Earnings ACC Cr R4000-10 Service Revenue DEPT Cr I4000-20 Product Sales Revenue DEPT Cr I4200-10 Sales Discounts - Service DEPT Dr I4200-20 Sales Discounts - Product DEPT Dr I4300-20 Sales Returns & Allowances - Product DEPT Dr I5000-20 Opening Inventory DEPT Dr I5100-20 Purchases DEPT Dr I5300-20 Purchase Returns & Allowances DEPT Cr I5500-20 Closing Inventory DEPT Cr I6000-10 Advertising Expense - Service DEPT Dr I6000-20 Advertising Expense - Product DEPT Dr I6010-10 Salary Expense - Service DEPT Dr I6010-20 Salary Expense - Product DEPT Dr I6010-30 Salary Expense - Office DEPT Dr I6020-10 Benefit Expense - Service DEPT Dr I6020-20 Benefit Expense - Product DEPT Dr I6020-30 Benefit Expense - Office DEPT Dr I6030 * Rent Expense - Clearing ACC Dr I6030-10 Rent Expense - Service DEPT Dr I6030-20 Rent Expense - Product DEPT Dr I6030-30 Rent Expense - Office DEPT Dr I6040 * Utility Expense - Clearing ACC Dr I6040-10 Utility Expense - Service DEPT Dr I6040-20 Utility Expense - Product DEPT Dr I6040-30 Utility Expense - Office DEPT Dr I6050-20 Delivery Expense - Product DEPT Dr I6060-10 Supplies Expense - Service DEPT Dr I7000-30 Insurance Expense DEPT Dr I7010-30 Bank Charges Expense DEPT Dr I7020-30 Amortization Expense DEPT Dr I7030-30 Bad Debt Expense DEPT Dr I7040-30 Office & General Expense DEPT Dr I7050-30 Telephone & Internet Expense DEPT Dr I7090-30 Miscellaneous Expense DEPT Dr I7095-30 Vendor Discounts Taken DEPT Cr I8000-30 Interest Expense DEPT Dr I

ACCOUNT page on the G/L Options window.


Segment Codes are used by COLLEGIATE to assign department numbers and descriptions for its three departments. Notice that accounts marked DEPT have 2 extra digits in the Account No. to designate specific departments.

Continue to click each step below:

4. Enter 4. Enter Balance SheetBalance Sheet accounts.accounts.

Study the example.

5. Enter 5. Enter Income StatementIncome Statement accounts.accounts.

This is when you would use the Account Structure DEPT and the Segment Codes (10, 20, 30) that you defined earlier.

6.6. Define Auto Allocation Define Auto Allocation accounts.accounts.




COLLEGIATE records the payment for rent to 6030 Rent Expense – Clearing. At period end, the balances in these accounts are reallocated to the three departments as per the table.

Click.Click.

Notice that the Account Structure for the clearing accounts is ACC and not DEPT.

Click.Click.

Study the Detail page for the Rent Expense – Clearing account.

Click the ALLOCATION tab.Click the ALLOCATION tab.

Notice the Account numbers consisting of two segments.

Click.Click.

Also notice the percent allocation.




Printing the Chart of Accounts

Study how the printed Chart of Accounts would look like.

Establishing the New YearWhen you activated the G/L, you specified 2009 as the current fiscal year; however, ACCPAC automatically backdated it to 2008 in case you wish to post entries to prior fiscal period. You need to advance to the new year to avoid the error message “Cannot post to a future year” when you start entering transactions for 2009.BE SURE TO BACK UP YOUR DATA before advancing to 2009.Click to continue.Click to continue.

Entering and Posting Opening Account Balances

Time and effort should be spent to ensure that the balances forwarded are entered accurately. This involves creating and posting a batch in the G/L.

One thing you need to remember when entering the opening account balances: You MUST enter the balances of ALL accounts in ONE ENTRY; otherwise, your credits and debits will not be equal.

Your text will give you step-by- step instructions.

Click each step below:Click each step below:

1.1. Establish the control Establish the control total.total.

In this case, use the current Trial Balance. Study it at the right.

2. Create a new batch.2. Create a new batch.

Entering and Posting Opening Account Balances (continued)

When you established the Fiscal Calendar, you entered 1/1/2009 as the start of COLLEGIATE’s fiscal calendar. You are, however, converting on October 31, 2009

One thing you need to remember when entering the opening account balances: You MUST enter the balances of ALL accounts in ONE ENTRY; otherwise, your credits and debits will not be equal. Your text will give you step-by- step instructions.Click the next step below:Click the next step below:

3.3. Enter and save the batch Enter and save the batch data.data.


Ensure that the batch total is equal to the debits and credits on the Trial Balance.

Study the batch containing the opening account balances.

4. Print the batch listing 4. Print the batch listing and check accuracy.and check accuracy.


Study the next steps below (do not click until after you have studied the whole slide):

5. Edit the batch, if 5. Edit the batch, if necessary.necessary.

6. Back up the data.6. Back up the data.

7.7. Set the batch Ready to Set the batch Ready to Post.Post.

8.8. Post the batch.Post the batch.

9. Print the posting 9. Print the posting Journal.Journal.

The Posting Journal must be filed as part of the audit trail.


Printing Financial StatementsGeneral Ledger comes with a set of seven standard financial statements, which you can use as is or modify to suit your requirements. They include the following:

QuikBal1.xls. Balance Sheet.

QuikBal2.xls. Comparative Balance Sheet (Current Balance/Previous Year).

QuikBal3.xls. Comparative Balance Sheet (Current Balance/Previous Period).

QuikInc1.xls. Income Statement.

QuikInc2.xls. Comparative Income Statement (Current Year/Last Year).

QuikInc3.xls. Comparative Income Statement (Current Year/Budget).

QuikInc4.xls. Comparative Income Statement (Current Year with Drilldown).

Because statements are created in a spreadsheet, you can use any spreadsheet formulas and functions to perform relative-change calculations on General Ledger figures.

For this course, you will be using modified versions of the Financial Reporter statements.


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Slideshow 3 5.2 Slideshow 1B Creating the Chart of Accounts and Batch Processing in the General...

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