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  1. 1. M.Com, B.Com
  2. 2. Maintaining Accounting RecordsMaintaining Accounting Records for Service Businessesfor Service Businesses Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/IrwinMcGraw-Hill/Irwin
  3. 3. Peachtree Diagram, p. 263,Peachtree Diagram, p. 263, Part 2 IntroductionPart 2 Introduction  This diagram illustrates how Peachtree processes data. After journalizing and posting, ledgers and financial statements follow. 9-9-33
  4. 4. Service Business RecordsService Business Records  Chapter 9 begins Part 2 of the book—Peachtree Complete Accounting 2009 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 maintain the accounting records for two service businesses—Daniel Mason Designer and the end-of chapter exercise, Your Name, Design. You set up a business using one of PCA’s sample companies. Then, you complete the computer accounting cycle for the month of October. 9-9-44
  5. 5. Software Objectives, p. 267Software Objectives, p. 267  Set up company information for Daniel Mason Designer.  Select a sample company.  Edit the chart of accounts.  Enter chart of accounts beginning balances.  Use Windows Explorer to see the company’s file size.  Record and post deposits (cash receipts journal) and checks (cash disbursements journal).  Complete account reconciliation.  Display the general ledger trial balance.  Display the cash account register.  Print the financial statements.  Make four backups: 1) back up Chapter 9 beginning data; 2) back up October data; 3) back up Exercise 9-1; 4) back up Exercise 9-2. 9-9-55
  6. 6. Web Objectives, p. 267Web Objectives, p. 267  Use your Internet browser to go to the book’s website. (Go online to  Go to the Internet Activity link on the book’s website. Then, select WEB EXERCISES, PART 2. Complete the first web exercise in Part 2, Starting a Business.  Use a word processing program to write summaries of the websites that you visited. 9-9-66
  7. 7. Peachtree TipsPeachtree Tips The chart of accounts beginning balances must be set for the preceding month—September 1 through 30, 2009. See Entering Chart of Accounts Beginning Balances text pages 283 through 288. Specifically, review steps 2, 3, and 4 on pages 285-286. The businesses that you set up in Chapter 9 are continued in Chapter 10. Remember to use a unique name for the businesses that you set up in Chapter 9. For example, you may use your first and last name to identify these businesses. When a company is set up in Peachtree, a shortened named is assigned for that company; for example, the shortened company name for Daniel Mason Designer is danmasde. The hard drive location of Daniel Mason Designer is C:Program FilesSage Software Peachtree Companydanmasde. (If a unique name is used, the shortened company name will differ.) See detailed steps for Using Windows Explorer to see the file size on text pages 291 and 292. 9-9-77
  8. 8. Peachtree Tips (concluded)Peachtree Tips (concluded)  You can restore to an existing company—one that is previously set up—or restore a new company, bypassing the process of creating a new company. The Restore Wizard includes two options on the Select Company window: An Existing Company and A New Company. If A New Company is selected, then the company will be named the same as the backup file selected.  Let’s say you want to restore a backup file for a company that is not set up in Peachtree; for example, a back up file exists but the company is not shown as a Peachtree company.  If you start Peachtree and the appropriate company cannot be opened, use the Restore Wizard to select A New Company. Using the appropriate backup file, and the selection for A New Company, you can start where you left off the last time Peachtree was used. 9-9-88
  9. 9. Backing Up Chapter 9Backing Up Chapter 9 Backup Name Kilobytes Page Nos. Chapter 9 Begin.ptb 1,487 KB 293-295 Chapter 9 Check Register.ptb October (optional) 1,500 KB 307 Chapter 9 October 1,519 KB 321 Exercise 9-1 1455 KB 329-330 Exercise 9-2 1470 KB 333-334  In the textbook, detailed steps are shown for backing up to Peachtree’s default hard drive location: C:Program FilesSage SoftwarePeachtreeCompanydanmasde [or, your company’s shortened name]. The chart on pages 264-265 shows the size of the backup files. The textbook steps explain how to backup to external media such as CD-Rs, DVD-Rs, and USB media. 9-9-99
  10. 10. Chapter 9 TopicsChapter 9 Topics 1. Software & web objectives, p. 267 2. Getting started, pp. 268-276. 3. Company maintenance information, p. 276 4. Chart of Accounts, p. 276 a. Delete accounts, pp. 276-278 b. Change accounts, pp. 278-279 c. Add accounts, p. 279-281 d. Printing the chart of accounts, pp. 281-283 5. Entering chart of accounts beginning balances, pp. 283-290 6. Using Windows Explorer to See the File Size, pp. 290-291 7. Backing up company data, pp. 292-296 8. Restoring company data, pp. 296-299 9. Recording Deposits and Checks, pp. 299-307 9-9-1010
  11. 11. Chapter 9 Topics (continued)Chapter 9 Topics (continued) 10. Account reconciliation, pp. 308-310 11. Displaying the Cash Account Register, pp. 311-314 12. Printing the cash receipts journal, p. 314 13. Printing the cash disbursements journal, pp. 314-316 14. Editing journal transactions, p. 316-317 15. Displaying the general ledger trial balance, pp. 317-318. 9-9-1111
  12. 12. Chapter 9 Topics (concluded)Chapter 9 Topics (concluded) 16. Printing financial statements, pp. 318-320 17. Backing up Chapter 9 data, p. 321 18. Internet Activity, p. 321 19. Summary and Review, p. 322 a. Going to the net, p. 323 b. Multiple choice questions, pp. 323-325 c. Exercise 9-1, pp. 326-330 d. Exercise 9-2, pp. 330-334 d. Analysis questions, p. 334 e. Chapter 9 index, p. 335 9-9-1212
  13. 13. New Company Setup – Introduction, p. 268New Company Setup – Introduction, p. 268  Start Peachtree. (If a company opens, click File; Close Company.) At the Peachtree Accounting startup window, click Create a new company. Read the information on the Create a New Company - Introduction window.  Click <Next>. The Company Information window appears. Type the company information shown on page 269. 9-9-1313
  14. 14. New Company Setup – Company Information, p. 269New Company Setup – Company Information, p. 269  Check the information you typed. Make sure you use your first and last name so that your name will appear on all printouts.  Click on <Next.> 9-9-1414
  15. 15. New Company Setup – Chart of Accounts, p. 270New Company Setup – Chart of Accounts, p. 270  Accept the default for Use a sample business type that closely matches your company.  Click on <Next.> 9-9-1515
  16. 16. New Company Setup – Chart of Accounts, p. 270New Company Setup – Chart of Accounts, p. 270  Read the information about selecting a business type. If necessary, select Service Company (in the Simplified types list).  Click <Next.> 9-9-1616
  17. 17. New Company Setup –Accounting Method, p. 271New Company Setup –Accounting Method, p. 271  Accept the default for Accrual.  Click on <Next.> 9-9-1717
  18. 18. New Company Setup –Posting Method, p. 271New Company Setup –Posting Method, p. 271  Accept the default for Real Time posting.  Click on <Next.> 9-9-1818
  19. 19. New Company Setup –Accounting Periods, p. 272New Company Setup –Accounting Periods, p. 272  Accept the default for 12 monthly accounting periods.  Click on <Next.> 9-9-1919
  20. 20. New Company Setup – Accounting Periods, p. 272New Company Setup – Accounting Periods, p. 272  Complete step 10 on page 272. Make sure that your window matches the one shown after step 10 on page 272. The information cannot be changed later.  Click on <Next.>. 9-9-2020
  21. 21. New Company Setup – Finish, p. 273New Company Setup – Finish, p. 273  Read the information on this window.  Click <Finish>. 9-9-2121
  22. 22. New Company Setup – Finish, p. 273New Company Setup – Finish, p. 273  The Setup Guide window appears.  Click on the box next to Don’t show this screen at startup to put a checkmark in it - .  Click . The Peachtree Accounting: Daniel Mason Designer window opens. Review the information on the Business Status page which is also called Peachtree’s dashboard. The Peachtree Accounting: Daniel Mason Designer, Business Status page is shown on slide 23. 9-9-2222
  23. 23. Change Accounting Periods, pp. 273-274Change Accounting Periods, pp. 273-274  On the Business Status’s toolbar, check the Period button. Period 10, October 2009, is the first month that transactions are recorded for Daniel Mason Designer.  On the toolbar, click . The Change Accounting Period window appears. Refer to step 15, on page 273. 9-9-2323
  24. 24. Business Status – Peachtree’s Dashboard, p. 275Business Status – Peachtree’s Dashboard, p. 275 9-9-2424
  25. 25. Shortened name for Daniel Mason Designer,Shortened name for Daniel Mason Designer, p. 275 (Read me box)p. 275 (Read me box)  A folder is set up on the hard drive for Daniel Mason Designer— C:Program FilesSage SoftwarePeachtree Companydanmasde.  Peachtree’s shortened name is the first three letters from the first word (dan), the second word’s first three letters (mas), the third word’s first two letters (de).  If you used your first and last name, the shortened name will differ. 9-9-2525
  26. 26. Company Maintenance Information, p. 276Company Maintenance Information, p. 276  From the menu bar, select Maintain; Company Information.  Compare the fields shown to the company information entered on text page 269. They should agree.  Notice that the Directory field on the Maintain Company Information window shows the program and data path where the company is located on your computer— C:Program FilesSage SoftwarePeachtreeCompany danmasde. (If you used your first and last name, Peachtree’s shortened name will differ.)  Click OK to close the Maintain Company Information window. Continue with the Chart of Accounts section on p. 276. 9-9-2626
  27. 27. Chart of Accounts, pp. 276-277Chart of Accounts, pp. 276-277  From the Business Status page, link to View Account List. In the Account ID field, click on the magnifying-glass icon. Double-click on Account No. 1150 Allowance for Doubtful Account.  Click on the Delete icon. Then, select <Yes>. Complete the steps on pages 276 through 282 to delete, change, and add accounts. Compare your chart of accounts to the one shown on page 282. 9-9-2727
  28. 28. Entering Chart of AccountsEntering Chart of Accounts Beginning Balances, pages 283-288Beginning Balances, pages 283-288  Follow steps 1-3 on pp. 284 and 285 to select the beginning balance period. (The Select Period window is shown below step 3 on p. 285).  Make sure you have selected From 9/1/09 through 9/30/09. You cannot change this later. Then, click on <OK>. 9-9-2828
  29. 29. Chart of Accounts BeginningChart of Accounts Beginning Balances window, pp. 286-287Balances window, pp. 286-287  Make sure that your beginning balances are as of September 30, 2009. 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 10.  Complete steps 6 -8, pp. 286-287. 9-9-2929
  30. 30. Balance Sheet, p. 289Balance Sheet, p. 289 The balance sheet shown on page 289 represents the beginning balances for Daniel Mason Designer. Compare your balance sheet amounts to those shown on page 289. 9-9-3030
  31. 31. Using Windows Explorer to See the File Size,Using Windows Explorer to See the File Size, pp. 291-292pp. 291-292  Go to Windows Explorer. Double-click on the folder for Peachtree. The default program and data path is C:Program FilesSage SoftwarePeachtree Company.  Right-click on the folder for danmasde. Left-click on Properties. This window is shown on p. 291.  Read p. 292. 9-9-3131
  32. 32. Backing up company data,Backing up company data, pp. 292-293pp. 292-293  After setting up a company and modifying the chart of accounts, back up the data.  Read the information on pages 292 and 293. Then, follow the steps on pages 293-295 to back up Chapter 9’s beginning data.  The suggested file name for backing up is Chapter 9 Begin. 9-9-3232
  33. 33. Restoring company data, pp. 296-299Restoring company data, pp. 296-299 After completing new company setup, editing the chart of accounts and recording beginning balances, you backed up (saved) company information. In order to start where you left off the last time you backed up, use the Restore Wizard. Review the information in the Read Me box on page 297 about restoring data. Then, complete the steps on pages 299 through 302 to restore. 9-9-3333
  34. 34. Maintain Global Options, steps 1-2, pp. 299-300Maintain Global Options, steps 1-2, pp. 299-300  From the menu bar, click on Options, Global. Make sure the box next to Recalculate cash balance automatically in Receipts, Payments, and Payroll Entry has a check mark next to it.  Click <OK>. When you use Receipts and Write Checks, make sure that the check register’s balance agrees with the cash balance shown on the check register. Refer to the partial check register on p. 299. 9-9-3434
  35. 35. Select a Cash Account, p. 300Select a Cash Account, p. 300  From the menu bar, select Tasks, then Receipts. Click on the down arrow, then select Checking Account from the drop-down list.  Click <OK>. The Receipts window appears. 9-9-3535
  36. 36. Steps 3 – 13, pp. 300-302Steps 3 – 13, pp. 300-302 Complete steps 3 through 13 on pages 300-302. Then compare your window to the one shown after instruction 13 on page 302. This is also the next slide. 9-9-3636
  37. 37. Receipts window, p. 302Receipts window, p. 302  After completing steps 3-13 on pp. 300-302, the completed Receipts window appears.  Click Save to post. Read steps 14 and 15 on page 302. 9-9-3737
  38. 38. Write Checks window, pp. 303-304Write Checks window, pp. 303-304  After completing steps 1 – 8 on pages 303 and 304 the completed Write Checks window appears.  Click Save to post. Read steps 9 and 10, and the Comment on page 305. Then, continue with the work on pages 306 and 307. 9-9-3838
  39. 39. Account Reconciliation, pp. 308-310Account Reconciliation, pp. 308-310  After following steps 1- 6 on pages 309-310, account reconciliation is completed. (The Account Reconciliation window is shown on p. 310.)  Click OK when you are finished. 9-9-3939
  40. 40. Displaying the Cash Account Register, p. 311Displaying the Cash Account Register, p. 311  After completing steps 1 and 2 on page 311, the Account Register appears showing all your entries.  The Account Register lists payments and receipts similarly to the check register on pages 306-307. Read a., b., c and d. on page 312 to use drill-down. 9-9-4040
  41. 41. Cash Account Register, p. 313Cash Account Register, p. 313  After completing the steps shown on pages 311 and 312, the Cash Account Register is shown.  Read the information and follow the steps on pp. 312-313. 9-9-4141
  42. 42. Printing the Cash Receipts Journal, p. 314Printing the Cash Receipts Journal, p. 314  From the menu bar, select Reports & Forms; Accounts Receivable.  Double-click Cash Receipts Journal.  Compare your cash receipts journal to the one shown on p. 314. 9-9-4242
  43. 43. Printing the Cash Disbursements Journal, pp. 314-316Printing the Cash Disbursements Journal, pp. 314-316  The Select a Report or Form window should be displayed. In the Report Area, highlight Accounts Payable.  Scroll down the Report List. Click on Cash Disbursements Journal to highlight it.  Click on the Print icon. Make the selections to print.  Compare your printout to the Cash Disbursements Journal shown on page 315. 9-9-4343
  44. 44. Editing Journal Transactions, pp. 316-317Editing Journal Transactions, pp. 316-317  Click on Tasks, then Receipts. Click on the icon. Double-click the deposit you want to edit  Make any necessary changes, then click on Save to post. 9-9-4444
  45. 45. Displaying the General Ledger TrialDisplaying the General Ledger Trial Balance, pp. 317-318Balance, pp. 317-318 Follow the steps on p. 317 to display the general ledger trial balance. Compare your display with the general ledger trial balance shown on p. 317. Read page 318. 9-9-4545
  46. 46. Printing Financial Statements andPrinting Financial Statements and Backing Up, pp. 317-318Backing Up, pp. 317-318  Follow the steps on p. 318 to print the balance sheet and income statement.  Compare your printouts with the balance sheet shown on p. 319 and the income statement shown on page 320.  To print an income statement without zero balances, uncheck the Show Zero Amounts box on the <Standard> Income Statement Options window.  Follow steps 1-6 on page 321 to back up Chapter 9 data. The suggested filename is Chapter 9 October. 9-9-4646
  47. 47. Glossary of TermsGlossary of Terms Chapter 9Chapter 9 9-9-4747
  48. 48. Source Documents, p. 268Source Documents, p. 268 Source documents are used to show written evidence a business transaction. For Daniel Mason Designer, the source documents used are his check register and bank statement. 9-9-4848
  49. 49. Transaction Register, p. 268Transaction Register, p. 268 In the textbook, the term check register is used for checkbook transactions. Some banks call the check register a transaction register. 9-9-4949
  50. 50. Printout of Chart of Accounts, p. 282Printout of Chart of Accounts, p. 282 The chart of accounts is a list of General Ledger accounts, which are used to classify transaction information for reporting purposes. Peachtree includes numerous sample charts of accounts. Daniel Mason Designer chart of accounts is shown on p. 282. 9-9-5050
  51. 51. Balance Sheet, p. 319Balance Sheet, p. 319 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. Daniel Mason’s October 1, 2009 balance sheet is shown on page 319. [Hint: Peachtree dates reports the last day of the month.] 9-9-5151
  52. 52. Bank reconciliation, p 310Bank reconciliation, p 310 Peachtree’s Account Reconciliation feature allows you to adjust Mr. Mason’s bank statement. Bank reconciliation is the process of bringing the balance of the bank statement and the balance of the cash account into agreement. 9-9-5252
  53. 53. Internet Activity, p. 321Internet Activity, p. 321 1 Go to the book’s website at 2 Link to Student Edition. 3 In the Course-wide Content list, link to Part 2 Internet Activities for Chapters 9-10. Open or save. (You can also choose Chapter 9, then link to Internet Activities. If you Choose a Chapter, observe that other chapter-specific links are available; for example, Quizzes, PowerPoints, and Going to the Net Exercises.) 4 Scroll down the window to STARTING A BUSINESS – Chapter 9. Read steps 1, 2 and 3. 5 Follow the steps shown on the textbook’s website to complete this Internet activity. 6 Use a word processing program to write a summary for each website visited. Your summaries should be no more than 75 words. 9-9-5353
  54. 54. Going to the Net, p. 323Going to the Net, p. 323 Access information about the chart of accounts at In the Search field, type chart of accounts; click . Link to What should our chart of accounts include?, and then link to What are the Features of a Simple Chart of Accounts? The URL for this website is 1. List the standard order that accounts are presented on the balance sheet and income statement. 2. How are account numbers organized? Why are they organized that way? 9-9-5454