2. Setting up the business General Ledger
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1. Definitions
General Ledger:
Contains summary-level data for every asset, liability, equity, revenue,
and expense.
Subsidiary Ledger:
Records all the detailed data for any general ledger account that has
many individual subaccounts. This will be used for account
receivable and account payable.
Accounts receivable Subsidiary Ledger:
Records detailed data for customers buying product on credit
Accounts payable Subsidiary Ledger:
Records detailed data for the individual supplier or vendor credit
purchases of merchandise
3. 3
A chart of accounts:
It is a list of all general ledger accounts an organization uses , with
each GL account there is assigned number according to the
adapted coding technique.
Coding:
Is the systematic assignment of numbers or letters to items to
classify and organize them.
1) Sequence codes
Items are numbered consecutively
2) Block code
Blocks of numbers within a numerical sequence
4. 4
Organization company chart of accounts is equivalent to
organizing business, because what the business sees on
financial statements depends on what is set up in chart of
accounts.
The business chart of accounts is the underlying system for
all the work done in Peachtree.
Each time a transaction is saved or entered, the accountant
ensure that the business books are always in balance.
5. Setting up the business General Ledger
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1) Initial decisions
While creating new company you choose a business type
Such as Using a sample business type offered by Peachtree.
Each business type has a recommended chart of accounts which
is the list of accounts (general ledger).
6. Entering or Modifying Accounts
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Maintain menu – select chart of accounts.
The maintain chart of accounts windows is used to :
1) Add new accounts (new – tool bar )
2) Modify the description of an existing account
3) Delete an existing account (delete in tool bar)
4) Make an account inactive (check it)
5) Change the account type for an account
6) Change account ID ( tool bar)
7. Entering beginning balances or prior-
period adjustments
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prior-period adjustments are corrections to the beginning balance
of retained earnings.
Maintain – chart of accounts – account beginning
balances, then select the accounting period in
which the business wants to enter or adjust
balances of an account – ok
8. Maintain Budgets
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The maintain budgets window lets the business builds a
forecast of dollar amounts for selected accounts.
The business can filter the accounts it budget for by
account type or by account segment.
Maintain- budget
9. Building a Budget
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When creating a new budget, the business can use actual data
to quickly building a budget and then adjust a mounts as
necessary.
Maintain –budget-
From tool bar select- Autofill then the window asks you
how would you like to fill in this budget:
- Use actual amounts from Peachtree
- Copy amounts from the open budget
From tool bar select- Excel to copy the business budget to
Microsoft Excel to manipulate data to perform
calculations, then copy sections backs to Peachtree.
10. Entering General Ledger Default
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In General Ledger Default, the business sets the account that
Peachtree will use for rounding any odd amounts on financial
statements.
Set up the rounding account
From maintain menu – default information – General Ledger
from the displayed submenu
Then the Peachtree collects all rounding amounts and prints the
collected amount in the rounding account on the business
financial statements.
The account the business selects can be any account since it is
temporary holding area,
we recommend that the business uses an equity account
(retained earnings)
