Enter Journal Entries
CHAPTER THREE: TABLE OF CONTENTS
Learning Objectives 3
Introduction 3
Section 1: General Ledger Module Theory 4
L.O. 1 - Controlling vs Subsidiary 4
L.O. 2 - Stand - Alone vs Integrated 4
L.O. 3 - General Ledger vs General Journal 5
L.O. 4 - Main File Fields 6
L.O. 5 - Changes to the main file 8
L.O. 6 - Data Entry 9
L.O. 7 - General Ledger Reports 10
Section 2: Business Works User's Guide
L.O. 8 - Steps to perform data entry and complete accounting cycle 15
Section 3: Student Application
L.O. 9 - Enter data for three companies
SUSY'S BALLOON SERVICE
Summary 24
Key Terms 24
Review Questions 24
Self Examination Questions 24
DR. DETAIL PHD 26
ABC COMPANY 29
FIGURES
Figure 3.1 Stand Alone vs Integrated General Ledgers 4
Figure 3.2 General Ledger and General Journal 5
Figure 3.3 Hierarchy Chart of Accounts 7
Figure 3.4 Fields in Journal Entry Window 15
Figure 3.5 Journal Entries Pull Down Menu 16
Figure 3.6 Post to Journal Screen 16
Figure 3.7 Type of Entry Screen 17
Figure 3.8 Voucher # Screen 17
3
LEARNING OBJECTIVES
|After completing this chapter the student |Identify the fields of the main file (Chart of |List the steps required to enter data for the |
|should be able to: |Accounts). |accounting cycle using the General Ledger |
|Describe the function of the General Ledger and|Make changes to the main file. |module. |
|subsidiary ledgers. |Locate the fields for entering the daily |Enter data of a given problem using the |
|Explain the difference between a stand alone |transactions and adjustments. |techniques learned in this chapter. |
|and an integrated General Ledger |Explain the purpose of the various General | |
|Explain the difference between a General Ledger|Ledger reports. | |
|and a General Journal. | | |
|The General Ledger is the collecting point of all the information from the other modules. If you learn the |INTRODUCTION |
|General Ledger first, all the other modules will be easier. The user can learn the basics of the program in | |
|the General Ledger, which can then be transferred to the other modules. |================ |
|The General Ledger is the primary module and all the other modules are | |
|subsidiary modules. The detail data is retained in the subsidiary modules with the summary data being | |
|transferred to the General Ledger (G/L), much the same way as the manual method. For example, each line item| |
|in the Cash Receipt Journal is entered into the customer’s account in the Accounts Receivable (A/R) Ledger | |
|module while the totals of the journal are entered into the Cash and A/R accounts in the G/L when integration| |
|occurs. | |
|SECTION 1: |The Accounts Receivable, Account Payable, and Merchandise Inventory accounts in The General Ledger module |
|GENERAL |are called the controlling accounts. The detail of all the customer/vendor/item balances in each module is |
|LEDGER |carried in a separate or subsidiary ledger. The controlling and subsidiary amounts must always equal each |
|MODULE |other. In some cases the program will not allow data entry until these amounts are corrected. |
|THEORY | |
|________ |When an account is a controlling account, no general journal entries using this account should be made. |
|________ |Only subsidiary ledger total and the amount of the controlling account balance does not agree should there |
|L.O.1 |be a correcting journal entry. |
|Controlling | |
|Vs. Subsidiary | |
| |There are two approaches to the G/L module. One is to treat it as a stand-alone module that can perform all|
| |the necessary functions by itself. The other is an integrated G/L. Integrated means the modules talk to |
| |each other or put information into the G/L module through summary journal entries from the subsidiary |
|L.O.2 |modules. Figure 3.1 illustrates the stand-alone and integrated approaches. Business Works is an example of |
|Stand-Alone |an integrated approach. |
|Vs. Integrated | |
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FIGURE 3.1
Stand-alone vs.
Integrated
General Ledgers STAND ALONE
INTEGRATED
|A stand alone G/L would be used by a company on a cash or modified cash basis. It would include cash |Stand- alone |
|receipts and cash disbursements journal and allow checks to be written within the G/L module. It could even | |
|include a cash sales journal to record the daily totals from the cash register. | |
| | |
|If the company has only a few customers and vendors, use separate account numbers to keep track of individual| |
|balances. For example, If Accounts Receivable was 110, account number 1101 could be named A/R –Smith, 1102 | |
|-A/R-Jones, etc. All sales and cash receipts would use the number for each customer with the total A/R to be| |
|summarized in 110. A/P would work in the same manner but with vendors instead of customers. This is an | |
|example of manipulating the system requirements to meet the needs of the company. | |
| | |
|An integrated G/L uses other modules to enter the detail transactions. When transactions are entered into | |
|the other modules they must read the Chart of Accounts from the General Ledger. These transactions are | |
|posted to the accounts in the General Ledger either at the time of the transactions entry, at mid-month, or |Integrated |
|at the end of the month. Usually the posting will include only the totals for each account. For Example, in| |
|the A/P module, if there were three transactions to the office supplies expense account for $120, $150, and | |
|$130 the posting to the office supplies account in the G/L would be one figure for $400. A reference to the | |
|particular module providing the summary data would be listed in the G/L account so you could locate the | |
|detail transactions. | |
| | |
|Some programs allow the user to go from stand-alone one month, then to integrated the next month. This | |
|decision must be made at the beginning of the month before any transactions are entered. | |
| | |
|It would be wise to start with the stand-alone G/L to get to know the program. When the user is comfortable | |
|with the program, it is then time to change to the integration feature. | |
| | |
|Sometimes there is confusion in understanding the difference between the General Ledger and then General | |
|Journal. The General Journal contains the journal entries that are entered for the month. Each entry is | |
|given a number by the program. The General Ledger is where all this information is collected. It lists the | |
|beginning balance, all the transactions for the month (sometimes for the year or a specified period), and the|L.O. 3 |
|ending balances, all in account number order. Figure 3.2 shows examples of entries in the General Ledger and|General Ledger |
|General Journal. |Vs. General |
| |Journal |
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General Ledger FIGURE 3.2
General Ledger and
Account General Journal Number $Beg. Balance
Date Reference Dr Cr
XXXX XXXXXX XXXXX
XXXX XXXXXXX XXXXX $End. Balance
General Journal
Account # Acct Name DR
Account # Acct. Name CR
Reference (Description)
|L.O.4 |The main file of the General Ledger is the Chart of Accounts. Basically, the Account Number and Account |
|MAIN FILE |Name are the main fields. Other fields that could be included are Account Type, Beginning Balances, Current|
| |Balance, and prior year balance. |
| | |
| |One of the main functions of accounting is to collect data into accounts so the company knows how the money |
| |was spent and for what items. That is why the account number is the key number for entering transactions. |
|Account |The system will read the Chart of Accounts and then supply the account name to verify that the correct |
|Number |number was entered. It is important that the selected program automatically gives the account name when the|
| |account number is entered so the account number can be verified. Many transactions are entered into the |
| |wrong account because of one mis-entered number. |
| | |
| |In general, the account number can be from 3 to 5 digits. However, some companies use as many as 10 digits.|
| |The last two digits usually represent departments. For example, a company has an ice cream department, a |
| |topping department, and an ice cream equipment department. The account number for supplies expense—ice |
| |cream would be 6521. The last digit, 1, would represent the ice cream department. The account number for |
| |supplies expense—topping would be 6522. If 5 digits were available, a more elaborate structure with the |
| |number of departments could be set up. |
| | |
| |Some programs have a simple Chart of Accounts giving the numbers for assets, liabilities, owner’s equity, |
| |sales, cost of goods, and expenses. This is called a Standard Chart of Accounts. There might be a few |
| |adjustments in account numbers but it is easier to set up with a simple Chart of Account. Other programs |
| |give you a chance to create your own structure or hierarchy of accounts and let you identify each level of |
| |account.(See the structure in Figure 3.3) Each level must be identified as a type, such as heading, |
| |subheading, detail, subtotal, or total. Detail accounts would be the only accounts able to receive |
| |transactions. |
| | |
| |The hierarchy type of Chart of accounts gives you more flexibility to structure your statements the way you |
| |want but the setup is more complicated. If the account is not identified as the correct type or if there is|
| |one level missing, if could create a big headache in one of the first steps in computerizing your accounting|
| |system. |
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| | |
| |The account name or description can usually be 25 to 35 characters. This limitation might cause you to |
| |shorten the manual name. If using the hierarchy system you will need to add the names for the headings, |
| |subheadings, subtotals, and totals. |
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|Account Name | |
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| |Hierarchy Type of Chart of Accounts |
| |1 ASSETS Heading |
| |11 Current Assets Subheading |
|Figure 3.3 |111 Operating Cash Posting -Detail |
|Hierarchy Chart of Accounts |1111 Bank of America Posting -Detail |
| |1112 Wells Fargo-Payroll Posting -Detail |
| |1113 Wells Fargo-Petty Cash Posting Detail |
| |11111 Total Current Assets Subtotal |
| | |
| |12 FIXED ASSETS Subheading |
| |121 Equipment Posting-Detail |
| |1211 Accumulated Depreciation-Equip Posting-Detail |
| |122 Automobile Posting-Detail |
| |1221 Accumulated Depreciation-Auto Posting-Detail |
| |123 Building Posting-Detail |
| |1231 Accumulated Depreciation-Building Posting-Detail |
| |124 Land Posting-Detail |
| |12111 Total Fixed Assets Sub Total |
| |121-124 |
| |19999 TOTAL ASSETS Total 1xxx |
|The account type can be in three formats. One accounting system format requires the accounts to be listed by|Account Type |
|where they appear in the fundamental accounting equation, such as Assets, Liabilities , Owner’s Equity, | |
|Revenue, Cost of Goods Sold, and Expense. The second format lists them by what financial statement they | |
|appear on, such as Income/Expense, Balance Sheet, or Retained Earnings. The third, as described previously, | |
|has the account type by where the account appears in the Chart of Accounts hierarchy: subheading, detail, or | |
|total. | |
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|Beginning, Initial, or Opening Balances are the dollar amounts accumulated in the accounts for an existing | |
|company. If the data is being set up in the first month of the fiscal period, all that needs to be entered |Beginning, |
|are Assets, Liabilities, and Owner’s Equity accounts. However, if the data represents months during the |Initial or Opening |
|fiscal period, Income and expense accounts will also need to be added. Opening Balance or Beginning Balances|Balances |
|are entered in two basic ways. One way is to create a journal entry in the General Ledger. This is nice if | |
|you are at the beginning of a fiscal period. It tends to be lengthy and tedious if you must also add the | |
|Revenue (Income) and Expense accounts. | |
| | |
|The other way is to have a special command or submenu to enter the opening balances. First, enter the | |
|account number, the balance in the account, and whether the balance is a debit or credit. Once all accounts | |
|are entered and the debit balances equal the credit balances, the beginning balances are accepted. In both | |
|systems you cannot change the balances once they have been entered and accepted. Accepting the balances | |
|means either using the closing date in which they were entered or saying ”yes” to the prompt that asks if the| |
|balances are to be accepted. Once accepted they cannot be changed without setting up the accounting system | |
|again. This method is easier and fewer errors are made. | |
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|If the program has the capability of showing comparative statements, prior years’ balances will need to be | |
|added. These can be entered much the same way as beginning balances but with a different entry option from | |
|the menu, or by entering the balance in a different field of the Chart of Accounts entry screen. The balance| |
|for the prior year is kept in memory to be supplied when comparative statements are desired. When the | |
|current year is closed the balance in these accounts will become the prior year balance. | |
|As stated in previous chapters, in any main file the activities are Add, Modify, Delete or View. It is | |
|always wise to do this type of housekeeping (editing) chores in the beginning of the month so the main file |Prior Year |
|is up to date. You can always make these changes during the month as they are identified. |(historical) |
| |Balances |
| | |
|A company adds new accounts when it is necessary to identify certain groups of expenditures. When adding an | |
|account, beginning balances will not need to be entered because a new account should not have any accumulated| |
|cost. Be careful if using the hierarchy method to put it in the correct order then double check that the |L.O. 5 |
|account appears on the proper financial statement. |Changes to main |
| |file |
| | |
|The account name can only be changed or modified. If it is necessary to change the account number, it must | |
|be deleted, then added again with the new number. If there is a balance in the account when changing the |Add |
|account number, the new account must be opened. The balances must be transferred from the old account to the| |
|new account. In the next month the old account should be deleted. | |
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| |Change/Modify |
|DELETE |Accounts can be only deleted if the following conditions exist: |
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| |There must be no transactions for this account. |
| |There must be no balance, either current or historical, for this account. In|
| |other words, it needs a zero balance. |
| |The account number cannot be a controlling account or a specified account for|
| |the configuration. |
| | |
| |Note that in some programs if an account is deleted it will still how up in |
| |the Chart of Accounts for the reports for the current month because if was |
| |active during that month. It will then be removed from the reports in the |
| |following months if there are no historical balances. |
| | |
| |Sometimes a look at the Chart of Accounts will be all that is needed to |
| |answer the question at hand, be it, “do we have an office furniture account?”|
| |or “ What is the account number for gasoline expense?” You can either view |
|View |the Chart of Accounts or print a report. The display of the main file Chart |
| |of Accounts could include just the name and number or it could also have the |
| |beginning balance, list each transaction, and give the ending balance. |
| |Always keep an updated hard copy of the current chart of accounts close by |
| |for reference purposes as the transactions are entered. |
| | |
| |“On the fly” is the ability to add a file while in the data entry mode. |
| |Selecting the maintenance command will place the data entry mode in a back |
| |window on the screen or on the toolbar. Addition of the new file can then be|
| |made. Once the file is added simply click on the data entry screen or the |
| |icon on the toolbar to return to the same field in the data entry mode. The |
| |new file is now available. This ability reduces the amount of frustration in|
| |entering transactions. |
|"On The Fly" | |
| |Without on-the-fly ability you would have to take the following actions: |
| | |
| |Stop the data entry. |
| |Select the file maintenance command. |
| |Add a record to the file. |
| |Exit the file maintenance. |
| |Reenter the Data Entry command. |
| |Enter the transaction with the new file item. |
| | |
| |An example of on-the-fly ability would be the process of entering a cash |
| |disbursement. Suppose several transactions have been entered. The next |
| |transaction requires a new account that was not entered previously. The |
| |account is added and then used with the current transaction. |
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| |The Journal Entry is the main transaction in the General Ledger, especially |
| |if it is integrated. The fields for the journal entry are account number, |
| |account name (automatically entered by the program), debit or credit, amount |
| |($), then the reference for this entry. The reference could be as little as |
| |25 characters or as many as for lines. Most accountants prefer more |
| |characters for the reference, as 25 letters do not give adequate room to |
| |enter the full description of the journal entry. |
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|Data Entry | |
|(Monthly | |
|Transactions) | |
|L.O.6 | |
|_____ | |
|JOURNAL ENTRIES | |
| | |
| | When entering the journal entry a few fields use a default or assumed |
| |value. For example, if a debit is entered, most programs will assume the |
| |next entry is a credit. If it is another debit, use the shift tab to go |
| |backwards or click on the field to enter the debit amount. This will erase |
| |the credit automatic amount. This is called overwriting. |
| | |
| |Another assumed value is the amount. If the first line of the journal entry |
| |is a debit for $100, the program will assume the next line will be a credit |
| |for $100. Again, overwrite the dollar amount if it is a compound (or more |
| |than one debit or credit) entry. An accounting program will not allow an |
| |unequal amount for a journal entry. If there is a total debit of $100 there |
| |must also be a total credit for $100 or else the journal entry cannot be |
| |entered. |
| |Some programs have a special command to allow for unbalanced journal entries |
| |to help solve some problems in controlling accounts such as Accounts |
| |Receivable and Accounts Payable. Consult your instructor should you have a |
| |problem. |
| | |
| |Automatic or reoccurring journal entries are included in some programs. |
| |Automatic journal entries are entries that will be occurring each month with |
| |the same amount and accounts. Adjusting entries such as depreciation, and |
| |accrued salaries are usually the most common automatic journal entries. |
| |The first step in using automatic journal entries is to build a file of all |
|AUTOMATIC |the necessary entries. The program should have a special command to make a |
|(REOCCURRING) |list of all the entries. It should also be possible to modify and delete |
|JOURNAL ENTRIES |these entries. Once the entries are entered it is important to print a list |
| |to make sure all the entries are correct. At the end of the month all that |
| |is necessary to do is to enter the command that will process the journal |
| |entries. In processing the entries, the program enters the entries into the |
| |general journal, then assigns journal entry numbers to each of the automatic |
| |entries starting with the number of the last regular entry. With one command|
| |several entries have been entered without having to enter them one at a time.|
| | |
| |Business Works has this capability under Entries - Recurring Entries. |
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| |The most common reports that can be printed from most General Ledger modules |
| |are discussed here. |
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| |A Chart of Accounts is a list of the accounts. This report gives the |
| |account numbers to use when entering transactions. |
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| |A Trial Balance provides balances in each account. It shows that the debits |
| |equal total credits. |
| | |
|REPORTS |This report is helpful in giving the total amount spent or received in that |
|L.O.7 |particular account for the month and year to date. It is also helpful in |
| |locating possible errors and the effect of the correction. |
| | |
|CHART |The General Ledger gives the account’s prior month beginning balance, a list |
|OF ACCOUNTS |of all the transactions for each account for the month, and the ending |
| |balance. Sometimes the program will allow the General Ledger to list as much|
| |as a year of transactions. However, this function takes up a large amount of|
|TRAIL BALANCE |space on the data disk. It also makes the report hard to read because of all|
| |the detail included. |
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|GENERAL LEDGER | |
|DETAIL AND | |
|SUMMARY | |
|` | |
| |This report can be printed for the entire ledger, for a continuous group of accounts, or for one account. |
| |Use this report to see if a particular transaction has been entered or to see if a correction has the desired|
| |effect. |
| | |
| |The General Ledger can be entitled General Ledger or be the detailed Trial Balance. |
| | |
| | |
| |The Account Detail Report is just what its title indicates—a report that shows the detail of an account. It |
|ACCOUNT DETAIL REPORT |usually lists the beginning balance, every debit and credit, and the new ending balance. It is basically a |
| |portion of the General Ledger detail. It is helpful if you want to see what transactions have affected a |
| |particular account. |
| | |
| |A good use of an activity report would be to see the balances in certain accounts. For example, the cash |
| |account in a stand-alone General Ledger could be used to provide the data for a bank reconciliation. An |
| |activity report for the Suspense Account prior to month-end closing could be used to verify the zero balance |
| |or to determine transactions requiring coding. |
| | |
| |The General Journal lists all the journal entries for the month. This report can be used to find the journal|
| |entry number if the entry is to be deleted, to see if all the necessary entries have been made, and to review|
|GENERAL JOURNAL |journal entries that were entered. |
| | |
| | |
| |The standard financial statements that can be printed are the Balance Sheet, Owner’s Equity, and Income |
| |Statement. Sometimes a Cash Flow statement is included. These statements can compare the current year |
| |balances with the prior year’s Comparative Statement or compared to the budget. The Income Statement can |
|FINANCIAL |also be printed by departments. Another way the Income Statement can be printed is as a percentage of sales.|
|STATEMENTS |Depending on the reports needed an appropriate program can be selected that will provide these reports. |
| | |
| |The Income Statement is the first report to be printed because the net income(loss) is used to update the |
| |balance of the Capital account for the Statement of Owner’s Equity. The new Capital balance is entered in |
| |the Balance Sheet. |
| | |
| |Some low-level accounting programs provide only the year-to-date revenue/expense balances. Others give |
|INCOME STATEMENT |month-to-date and year-to-date figures. Still others provide a percentage of sales figure. The user must |
| |configure the company data to reflect the type of income statement to be printed. |
| | |
| |If the Income Statement does not appear to be correct, check the company configuration and the hierarchy of |
| |accounts. The accounting program uses the accounts specified in the configuration to know where to put the |
| |difference, or profit/loss, between the revenue and expense. |
| | |
| |The Cost of Goods Sold section can be included as an option for the Income Statement. This option is used |
| |for companies with inventory and purchases as opposed to service companies. |
| | |
| |The Income Statement should be viewed on the screen before printing the other reports. If something is |
| |wrong, it can be corrected before wasting time printing incorrect reports. |
| | |
| |The Balance Sheet shows the assets, liabilities, and owner’s equity of a particular company. Whether to list|
| |the classifications with sub-classifications is determined in the company configuration menu. Some programs |
| |define the sub-classifications and some allow the user to define them. If the company subdivides its assets |
| |and liabilities in a particular way, the ability to change the configuration is necessary. |
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|BALANCE SHEET | |
|The Statement of Cash Flow informs the reader what activity occurred in the cash account. Each transaction |STATEMENT |
|that occurs in the cash account is placed in one of three categories: OPERATING, INVESTING, or FINANCING. |OF CASH FLOW |
|Net Income starts the operating category and changes to current assets and current liabilities are placed in | |
|this category. Other categories can be checked by asking the questions: Did the owner invest additional | |
|cash? Get a loan from the bank? Pay off a loan? Sell or buy assets? It is important to provide the system | |
|with the proper cash account number as it will look at this account to provide the detail for the report. | |
|The Cash Flow Statement or Statement of Cash Flow is a required report under generally accepted accounting | |
|principles. Be sure to check that the selected program has this capability. This report is currently | |
|included in the Business Works Program. | |
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|Basic and high end accounting programs allow the user to create custom reports. The user needs to add the | |
|fields to be included in the report, decide how it will be viewed, the name of the report and how the data | |
|will be sorted. The custom reports allows the user to make the program fit the company. | |
| | |
| |CUSTOM REPORTS |
|Posting is the process of transferring the data from the journals to the accounts in the General Ledger and | |
|calculating a new balance in the account. | |
| | |
|In the manual method of accounting, posting means copying the totals from the journals (Cash Receipts, Cash | |
|Disbursements, Sales, and Purchases) and placing them into the correct accounts in the General Ledger. The | |
|next step is getting a new up-to-date balance in each account by adding or subtracting all the transactions |POSTING |
|from the beginning balance. Doing this process manually takes a great deal of time and has the potential for| |
|many errors. The computer’s greatest help is to do this process automatically with just the selection of the| |
|proper command. | |
| | |
|With the manual method, all the transactions are carried in the ledger throughout the entire year. Some | |
|computer programs require that the prior month’s transaction be dropped due to lack of space on the hard | |
|drive. However, most programs will allow 2 years of data to be kept on the hard drive. The two years of data| |
|provide a historical report for the account(s) with all the transactions listed. | |
| | |
|To perform the posting in a Stand-Alone General Ledger all that is needed is to select the command “Post the | |
|General Ledger” The computer will then perform the posting process without any additional input from the | |
|user. | |
| | |
|In an Integrated General Ledger the other modules must be posted to the General Ledger module before the | |
|General Ledger is closed. | |
| | |
|Be careful not to post or close the General Ledger for the month until all the other modules are posted and | |
|everything balances. If errors are still in the accounting system after posting it is much harder to correct| |
|the next month. | |
| | |
|There are two types of posting or closing. One is month end, where the revenue-expense (profit/loss) for the| |
|month are determined. The other is year end, where not only the profit/loss is determined but the Income | |
|Statement accounts are closed. | |
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|The month end is performed at the end of each month once all the transactions are entered into the batches | |
|and the correct reports are printed. The current month activity field is cleared of information when posting| |
|the month end. The year-to-date data is updated by the current month activity. | |
| |MONTH END |
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|YEAR END |The year-end is performed after the end-of-month posting is finished. At year-end a sole proprietorship would |
| |close revenue and expense accounts to income summary and then income summary account to Capital. A corporation |
| |would close their revenue and expense accounts to the Retained Earnings account bypassing the income summary |
| |account. Most accounting software programs use the title "retained earnings" to represent the closing account. |
| |This provides the flexibility to handle the different company organization. There are four activities for year |
| |end closing (1) determine the difference between the revenue and expenses (net income), (2) zero or close the |
| |revenue and expense accounts to the income summary or the retained earnings account, (3) if not a corporation, |
| |close income summary to the capital account and lastly,(4) close drawing or dividends to capital or retained |
| |earnings. |
| | |
| |Determined before performing year end if the End of Year command will perform one or all of the four activities.|
| | |
| |An audit trail in a computer system lists all the activities that have been performed by the users. For |
| |example, it will show when a batch has been posted, or when the problem occurs. The user can view the list of |
| |commands entered and can determine what to do to correct the problem. An audit trail is fast becoming a |
| |standard feature on all accounting programs. |
|User’s Audit Trail | |
| |For Business Works the audit trail includes all the activity for the program not for the company. |
| | |
| |Errors can occur at any time with any computer. When errors occur they must be corrected or reversed. |
| | |
| |The following error types have special meaning when correcting transactions. |
| | |
| |Correction Changing a field. Some programs put restrictions on the fields that can be changed. Others allow|
| |all fields to be changed. |
|Error Handling | |
| |Error checking Allows verification of each field immediately after entry. Usually found in programs using |
| |immediate access. |
| | |
| |Void Cancels the entry by preparing a reversing entry. |
| | |
| |Delete Removes the transactions though it was never in the system. The accounting profession does not like |
| |this option because the audit trial is interrupted. |
| | |
| |The following are steps to help the user identify and correct transactions. |
| | |
| |Determine and WRITE DOWN what the entry should have been, using your accounting knowledge: What are the debits |
| |and credits? |
| |Write down the correct and incorrect entry. |
| |Print the General Ledger Detail Report to see how the entry has affected the accounts. |
| |Using the manual method, figure out what the balance in the account should be. |
| |Make a correcting entry in the G/L module if the A/R and /or A/P module is not affected. It is always best to |
| |reverse the incorrect transaction (make the debit a credit and the credit a debit) and reenter the correct entry|
| |because this provides a good audit trail. Void or delete the entry in the A/R and/or A/P module if the error |
| |affected these accounts. |
| |Display the General Ledger Detail Report to see if you have corrected the error. |
| |Error can occur in any processing environment and must be corrected or offset (the net correction). You are |
| |expected to correct your errors in this project. The idea of the project is not to complete every step without |
| |making any mistakes. Rather, it is to complete the project and properly correct or handle any mistakes that do|
| |occur. |
|There are two basic types of errors, each requiring different handling: (1) Account distribution errors | |
|happen when the wrong account is used in the transaction. (2) Open item errors, probably the most varied, are| |
|errors that happen when inputting transactions in accounts receivable and accounts payable. | |
| | |
|The simplest error to deal with occurs when something is coded to the wrong G/L account. For instance, | |
|someone entering an accounts receivable invoice might post the credit to Purchase, rather than Revenue. In | |
|this case, there is not an error in the A/R subsidiary ledger (open item file)—it holds the invoice amount, |ACCOUNT |
|date, customer code, etc. So the only error is in the Sales Journal, or it has “moved on” to the General |DISTRIBUTION |
|Ledger if the Sales Journal has been posted already. |ERRORS |
| | |
|The correction, then is simple. Use a General Journal entry to debit Purchases (thereby negating the | |
|mistake) and balance it with a credit to Revenue, which is where the credit should have gone in the first | |
|place. Use a description for the Journal Entry that clearly indicates why the entry was make, | |
| | |
|A more complicated option that has the same effect is 1) reenter the invoice correctly, and (2) enter | |
|another invoice using the same accounts as the incorrect entry, except with a negative amount (this reverses | |
|the incorrect invoice). Although this clutters up the open item file a little it has the advantage of | |
|keeping all sales transactions in the Sales Journal, and offers a clearer audit trail. | |
| | |
|An error made in a journal entry can always be cleared up with another journal entry. Note: If you made an | |
|entry backwards (you entered credits as debits and debits as credits), don’t forget that it will now take two| |
|correct debits and two correct credits to record the entry. The first set just offsets the wrong entry. The| |
|second set records it correctly. | |
| | |
|Unlike the distribution error just discussed, some errors do affect information in the subsidiary ledger, | |
|which is referred to as the open item file. When a sale occurs an item is placed in the accounts | |
|receivable—an open item. It is closed by the customer paying for the invoice. When a purchase invoice is | |
|entered, it places or opens an item in the accounts payable. It is removed by paying for the purchase | |
|invoice. | |
|Since open item errors occur in the A/R and A/P modules, this subject will be discussed in those chapters. | |
| |OPEN ITEM ERRORS |
Section 2: Business Works- User's Guide General Ledger
JOURNAL Entries
Journal entries are used to enter transactions directly into the General Ledger. Most entries are summarized and posted from journals in subsidiary ledgers: purchases, cash disbursements, cash receipts, sales, and payroll. Some transactions do not fit into any of these categories, such as transferring costs from one account to another and adjusting entries, so the General Journal in the General Ledger is used.
There are several steps to record a journal entry:
1. Enter the journal entry(ies) using the entry program.
2. Print a list of all the entries.
3. Use the change routine in the entry program to correct errors in any of the entries.
Remember, sometimes journal entries are made in a subsidiary module and other times these entries are entered directly in the General Ledger Module.
Figure 3.4 Fields in the Journal Entry Window
Entering a Journal Entry
1. Select General Ledger Module.
2. Select Entries from Pull Down Menu.
3. Select Post to Journals
4. Post to Journals Screen appears
5. Check transaction date. Change if incorrect.
6. Enter voucher # or reference.
7. Select the down arrow under account number to get a selection of accounts. Highlight the account to be debited then double click. To add an account on the fly simply enter the new account number. If the program can't recongize it will ask if you want to add the account. Respond yes and you will be able to enter the fields of an account.
1. Enter the debit amount and press enter.
2. Enter the next accounts #, press enter.
3. The credit amount is automatically entered. If you want to enter anouther debit, press shift + tab to go back to the debit. Enter the debit amount, this will eliminate the automatic credit. Press enter and this puts the amount in the body.
11. Enter the credit amount.
12. To delete a line in the body of the journal entry you need to highlight the incorrect line, press the delete key.
13. To add a line enter a new account # and the amount.
14. Double Click on Post
15. Close-bring a journal detail report to the screen to double check your entry.
Steps to change a Journal Entry
1. Select the down arrow to select the type of correction.
2. Select the down arrow in Voucher Ref # field. This will show you the posted journal entries to choose.
3. Make the necessary changes.
4. Select the POST button.
5. After you have entered the rest of the journal entries print the General Journal.
6. View the Trial Balance-Summary.
7. Enter the adjusting entries.
8. View the Trial Balance - Summary --- this is the adjusted Trial Balance.
9. Print Financials - Income Statement and Balance Sheet
Steps to Void a journal Entry
A journal entry cannot be deleted but must be voided to maintain the audit trail. To void a journal entry do the same method as changing the entry but select the type of entry as VOID. See Figure 3.7 above. Then enter the journal entry number.
Close G/L - Month -
Note: Don't worry about the initial account balance note. It is because Susy is a new company. This note will show up for Dr. Detail but not for ABC Company.
1. Select G/L - Close
2. Select Close Current Month.
3. "Closing the month" note, Select OK.
4. Confirm the closing by typing the month: JULY
5. Don't worry about Final Audit Trial note: It just seems the program wants to give you this message.
6. Yes to continue.
7. Message about Future, Current, Reversing Entries. Be sure all your entries are current and not in future periods.
8. Print the Income Statement to show the month is closed.
Name _____________________________ Date_____________
Susy's
Balloon
Service
Cover Sheet
Chapter Three
Order of Reports to be attached :
Journal Entry Batch Report for all batches
Journal Detail Report 7/31
Trial Balance- Summary
General Ledger- Detail
Income Statement 7/31
Balance Sheet 7/31
Income Statement date 8/01
Did you make a back-up/archival copy?
Section 3: Student Application: Susy's Balloon Service
Basic Instructions
1. Enter the July daily transactions and adjusting entries as Journal Entries.
Use the 2002 year .
2. Print the Journal Report to the screen to review it for accuracy.
3. Correct any incorrect Journal Entry by changing or deleting.
4. Print a Summary Trial Balance.
5. Print an Income Statement- Budgeted. Be sure you have a 7/31 date.
6. Print a Balance Sheet. Be sure to use the end of month date 7/31 or your report numbers will be incorrect.
7. Print a new Chart of Accounts with all the active accounts.
8. Make an archival disk.
9. Print the General Ledger (Trial Balance-Detail)
10. Close the month.
11. Print an August Income Statement that shows July was closed. Zeros should be in the current period column.
12. Compile all reports and attach them to the cover sheet in the order given on the cover sheet.
OVERVIEW OF JULY TRANSACTIONS:
Original Investment
a. July 1, 2002 Susy Casey invested $1,000 cash, $500 equipment, $4,000 truck.
Purchased Supplies with Cash
b. July 1, 2002 Purchased decorating supplies from Target Store for $65, Check #101
Sale on Account
c. July 2, 2002 Susy decorated for Marshall’s Open House, $1,000 Net 30.
Purchases for Cash
d. July 10, 2002 Purchased balloons and string for resale from Balloons, Inc., $250, Check #102
(use Balloons & Accessories Expense).
Received Payment on Account
e. July 12, 2002 Received $1,000 from Marshall’s, Inc., Check #15123.
Owner Withdrawals
f. July 15, 2002 Susy withdrew $300, Check #103.
Purchase on Account
g. July 15, 2002 Purchased balloons for resale on account from Carbonics Co, $500 2/10 net 30
Cash Sale
h. July 16, 2002 Decorated for Smith Wedding. Received full payment at the end of the day,
$750, Check # 760.
Paid Vendor on Account
i. July 30, 2002 Paid Carbonics, Check #104.
Owner Withdrawals
j. July 31, 2002 Susy withdrew $300, Check # 105.
Adjusting entries
k. July 31, 2002 Truck Depreciation, $100.
l. July 31, 2002 Equipment depreciation, $75.
m. July 31, 2002 Decorating supplies on hand, $25 (adj. $40).
Add Supplies Expense Account 512
STEP BY STEP INSTRUCTIONS:
Instruction 1: Enter July Daily Transactions
Original Investment
a. July 1, 2002 Susy Casey invested $1,000 cash, $500 equipment, $4,000 truck.
1. From the General Ledger Main Menu select Entries from Pull Down Menu.
2. Select Post to Journals
3. Post to Journals Screen appears. See above.
4. Check transaction date. Change if incorrect.
5. Enter voucher # or reference. After the first JE it will increase the number by one.
6. Enter 111 in the Account field. Press enter. Cash account appears automatically. Enter 1000 in the debit field and press enter.
7. The line you just entered has been entered in the white square below the line.
8. Enter the next account 150. Press enter. Enter the 500 in the debit field. Press enter This line now appears with the cash line.
9. Enter the next line for account 160 in the same manner.
10. Enter 311 and press enter. The credit amount should automatically entered.
11. Double Click on Post.
12. The screen is cleared ready for the next entry.
13. Continue entering the remaining journal entries from the previous pages.
Instruction 2: Print the journal report to the screen, once correct print a hard copy.
1. Select Reports- journal report.
2. Verify this data in each field:
Report Device: Screen
Include what entries: All current journal entries
Month: July 02
Date Range: 1 to 31
Type of Report: Detail
3. Click on OK.
4. Review the report.
5. If OK, Click on printer Icon. Make sure the Printer is the correct one. If not, select setup to change the printer.
6. Once it is correct select OK.
7. Also note that the date and time are printed at the top of each report. This is helpful if you print more than one copy of the report.
Instruction 3: Correct any incorrect journal entry by changing or deleting.
1. NOTE: Once a journal entry is entered and posted it cannot be changed. It must be voided or a correcting entry made. It is important to learn to correct your entries. Now is a good time to learn as it does not affect your job. Do not be upset if you need to make corrections. Use this safe environment to find the type of errors you normally make.
2. If a journal entry is incorrect identify the ref # from the journal report. The best method to correct an incorrect entry is to void and reenter the entry.
3. To void select Entries--post to journal then select VOID in the type of entry. Use the entry # from the journal report. The program will mark this entry as voided and place it next to the orignial entry.
Instruction 4: Print Summary Trial Balance
1. Select Reports - Trial Balance. The Type of Report is Summary. Compare to the reports attached.
Instruction 5: Print Income Statement- Budgeted
1. Select Reports - Income Statement- Budgeted, Month to date Variance
Instruction 6: Print Balance Sheet
1. Select Reports - Balance Sheet . Date is for July 2002. If you use As of date make sure the date is the end of the month not the beginning of the month.
Instruction 7: Print New Chart of Accounts.
1. Select Accounts - Print Chart of Accounts
Instruction 8: Make Archival Disk
1. Make sure the figures are correct.
2. Leave the program when your numbers are correct.
3. The program will ask you to make a back-up copy. Select yes. Make sure your company name is in the middle of the screen. Be sure the copy is made on a blank formatted disk.
4. Boot up the program again.
Instruction 9: Print General Ledger also called Trial Balance-Detail
1. Select Reports - Trial Balance. The Type of Report is Detail. Compare to the reports attached.
Instruction 10: Close the month.
1. Select Close, then Close the month.
2. Select OK at the note.
3. Closing the month, select OK
4. Type in July and press OK.
Instruction 11: Print August Income Statement.
1. Select reports-Income Statement-Standard
2. What totals: Month and Quarter to date
3. Period Ending: August 1, 2002
4. The month should be $0 and the Quarter to date should be the amount of July.
|SUMMARY |In this chapter the two types of General Ledger program were discussed: stand-alone and integrated. The|
| |main parts of a general Ledger module were also discussed: the Main file (Chart of Accounts), entering |
| |transactions, and the reports that could be printed from the General Ledger module. The chapter |
| |covered posting the entered transactions at the end of month and end of the year. The need for an audit|
| |trail or a list of the activity that occurred in the batches during the lab session was stressed. A |
| |"User's guide to the General Ledger" was included. |
Key Terms ---------------------------------------------------------------------------------------------------------------------
|Account Activity Report |Current Ratio |Opening Balances |
|Account Number |Debt to Total Assets |Posting |
|Account Name |General Ledger |Quick Ratio |
|Account Type |General Journal |Return on Assets |
|Archival Copy |Historical Balances |Standard Chart of Account |
|Audit Trail |Integrated Programs |Stand-Alone General Ledger |
|Automatic Journal Entries |Journal entries |Statement of Cash Flow |
|Chart of Account |Journal Entry Number |Subsidiary Account |
|Controlling Account |Main file |Trial Balance |
| |Month End |Year End |
| |On-the-Fly Entry | |
|CHAPTER 3 REVIEW QUESTIONS |What is the difference between a stand-alone General Ledger and an integrated General Ledger? |
| |What is the difference between the General ledger and the General Journal? |
| |What is the difference between opening balances and historical balance? |
| |What does an existing company have that a new company does not have? |
| |What are the four activities you can perform on the Chart of Accounts? |
| |What activity does year-end perform that month-end does not perform? |
| |Why is a printout of the Journal Entries required when you post? |
| |List the five steps to correct a transaction. |
|SELF-EXAMINATION QUESTIONS |Determine if the modules are controlling (C) or subsidiary (S). |
| |__________ Accounts receivable |
| |__________ General Ledger |
| |__________ Accounts Payable |
| |What is the main file of the General Ledger? |
| |Name two transactions that are likely to be automatic journal entries. |
| | |
| |TRUE/FALSE |
| |_________ 4. A hierarchy Chart of Accounts is a simple Chart of Account |
| |________ 5. Chart of Account numbers can be four digits. |
| |________ 6. You can delete an account when using the-on-the-fly feature. |
| |________ 7. The journal entry is the main transaction in the General Ledger. |
| |________ 8. Input forms help the user organize the data entry. |
Match the Financial Statement with its description:
A. Chart of Accounts
B. Trial Balance
C. General Ledger
D. Account Activity Report
E. General Journal
F. Income Statement
G. Balance Sheet
H. Statement of Cash Flow
_________ 9. First financial statement to be printed because it updates the Capital account.
_________ 10. Tells the total value of each account and that the debits equal the credits.
_________ 11. Lists the accounts that are available to use.
_________ 12. Shows the transactions for a group of accounts.
_________ 13. Lists the beginning and ending balance for every account.
_________ 14. States the effect of the cash transactions on the cash account
_________ 15. Lists all the Journal Entries for the batch or month
_________ 16. Shows the value of the Assets, Liabilities, and the updated Capital accounts
Identify the result of the error-handling technique:
A. Correction
B. Error checking
C. Void
D. Delete
_________ 17. Checks to make sure the transaction is OK before pressing Enter.
_________ 18. Reverses the incorrect entry.
_________ 19. Erases the transaction as though it was never there.
_________ 20. Asks what field you want to change.
Name __________________________ Date __________
DR. DETAIL, PHd
Cover Sheet Chapter 3 General Ledger
Order of Report to be attached:
Journal Entry Batch Report for all batches
Journal Detail Report
Trial Balance- Summary
General Ledger - Detail
Income Statement 7/31
Balance Sheet 7/31
Income Statement date 8/01
Did you make your archival disk and a backup disk?
Chart of Accounts
Dr. Detail, PhD
Assets Revenue
Current Assets 4010 Detailing Revenue
1101 Operating Cash—Bank of Expense
America Administrative Expense
1102 Saving—Well Fargo 6001 Wage Expense
1110 accounts Receivable 6002 Pager Rent
1201 Cleaning Supplies 6003 Office Supplies
Fixed Assets Selling Expense
1601 Truck 7101 Cleaning Supplies Expense
1602 Accum. Depr.--Truck 7102 Depreciation Expense
1701 Vacuum Cleaner 7103 Misc. Expense
1702 Accum. Depr.—Vac.Clean 9990 Suspense
Liabilities
Current Liabilities
2010. Accounts Payable
Owner’s Equity
3010. Robert Hawk, Capital
3020. Robert Hawk, Drawing
3990. Retained Earnings
|Enter the July daily transactions as Journal Entries. |Instruction |
|Print the Journal Entries edit list to the screen to review for accuracy. |Dr. Detail, PhD |
|Correct any incorrect Journal Entry by changing or deleting. | |
|Post Journal Entries after all journal entries are correct. |GENERAL LEDGER LAB WORK |
|Print trial Balance. (This will help with the adjusting entries). | |
|Enter and Post adjusting entries. | |
|Print the Journal Entries Edit list to the screen. | |
|Post Journal Entries.’ | |
|Print an Adjusted Trial Balance | |
|Print a General Journal Report. | |
|Print an Income Statement. | |
|Print a Balance Sheet. | |
|Print a new Chart of Accounts. | |
|Make an archival disk. | |
|Close the month and print the General Ledger (Trial Balance Detail). | |
|Print an August Income Statement that shows zeros in the current period column. | |
|Compile all reports and attach them to the cover sheet in the order given on the cover sheet. | |
| |DR. DETAIL, PHD JULY |
|Follow the instructions to enter the following transactions. Print reports and place in the order listed on the |TRANSACTIONS |
|cover sheet. | |
| | |
|a. July 1, 2002 Original Investment. Robert Hawk is investing $200 cash, and old ’76 mini truck (Blue Book | |
|value $1500), cleaning supplies (rags, cleaners--$100), and an old vacuum cleaner ($25) into the business. | |
|July 2, 2002 Robert detailed (fine cleaning) 2 cars at $75 each and 2 vans at $125 each. Received cash. $400. | |
|July 2, 2002 Purchased cleaning supplies from Target using a Visa card, $165. | |
|July 3, 2002 Weekly detailing receipts for 4 cars @$75, receiving cash, $300. | |
|July 5, 2002 Rented a pager to make sure he gets all his calls, $100 plus $25/month starting in July, Ck#1001, | |
|$125 | |
|July10, 2002 Weekly detailing receipts, $2,500 cash. | |
|July10, 2002 Bought supplies with cash from Office Products, $400. (Create the office supplies account 1200) CK | |
|#1002. | |
|July10, 2002 Signed a contract to detail Pasadena police cars. | |
|July10, 2002 Vacuum cleaner died, bought a new one on account at Vacuum and Sewing Shop, $700 net 30. | |
|Note: Write off old vacuum cleaner to Misc. Expense, $25 | |
|July12, 2002 Purchased cleaning supplies with cash, from Hi Line Co, $1000, CH #1003. | |
|July12, 2002 Billed Pasadena police for 12 cars @75, $900. | |
|July 17, 2002 Weekly detailing receipts, $2,010 cash. | |
|July 20, 2002 Paid for supplies purchased on July 2, $165,CK#1004. | |
|July 22, 2002 Received $900 from Pasadena police for July 12 bill, CK # 13459. | |
|July23, 2002 Paid $350 on account for the vacuum cleaner purchased on the 10th, CK # 1005. | |
|July 26, 2002 Robert Hawk withdrew $2,000, CK #1006. | |
| | |
|Adjusting entries | |
|July 31, 2002 Cleaning supplies used, $600. | |
|Depreciation on vacuum cleaner, $50. | |
|Depreciation on truck, $50. | |
Name __________________________ Date________
[pic]
COVER SHEET
Chapter Three
General Ledger Setup
Order of Reports to be attached:
Journal Entry Batch Report
Journal Detail Report
Trial Balance- Detail
General Ledger - Summary
Profit and Loss Statement 7/31
Statement of Financial Position 7/31
Profit and Loss Statement date 8/01
Did you make an archival disk and a back-up copy?
Chart of Accounts
ABC Company
1010 Cash 5000 Purchases
1110 A/R 5010 Purchase Return & allowance
1200 Supplies 5020 Purchase Discounts
1300 Prepaid Insurance 5030 Freight-In
1501 Building 6010 Utilities Expense
1502 Accum Depr – Bldg 6020 Insurance Expense
1600 Land 6030 Printing Expense
2010 A/P 6040 Advertising Expense
2501 Mortgage Payable 6050 Postage Expense
3010 Minor, Capital 6060 Supplies Expense
3011 Minor, Drawing 6070 Depreciation Expense
3990 Retained Earnings 8100 Rent Income
4011 Korean Sales 9101 Interest Expense
4012 Japanese Sales 9102 Property Taxes
4013 African Sales 9103 Repair & Maintenance
4200 Sales Return & Allowance 9990 Suspense
4300. Sales Discounts
4400 Freight Out
|Enter the July daily transactions as Journal Entries. |Instructions--ABC Company |
| | |
|ABC Accounting Procedures. |GENERAL LEDGER LAB WORK |
| | |
|When ABC receives an order it deposits the check, records the sales, and makes a purchase on account. This procedure| |
|is called drop ship. An order is received, then merchandise is purchased on account and it is delivered directly to | |
|the customer. For the sake of simplicity the journal entry is: | |
| | |
|CASH | |
|KOREAN SALES | |
| | |
|PURCHASES | |
|A/P | |
| | |
|However, note that the standard practice to record a drop ship transaction is: | |
|First – record the cash received as a liability: (CASH-Dr, DEPOSITS PAYABLE-CR). | |
|Second—When the item is shipped by the company’ vendor to the customer, the cash sale and the purchase is recorded: | |
|(DEPOSITS PAYABLE-Dr, SALES-Cr ) and (PURCHASES-Dr, A/P-Cr ). | |
| | |
|Print Journal Entries Edit list to screen to review for accuracy. | |
|Correct any incorrect Journal Entry by changing or deleting. | |
|Post Journal Entries after all monthly transactions are correct. | |
|Print trial Balance. (This will help with the adjusting entries). | |
|Enter adjusting entries. | |
|Print the Journal Entries Edit list to the screen. | |
|Post Journal Entries | |
|Print an Adjusted Trial Balance | |
|Print a General Journal Report. | |
|Print a Profit/Loss Statement (an Income Statement). | |
|Print a Statement of Financial Position (Balance Sheet). | |
|Make an archival disk. | |
|Close the month and print the General Ledger (Trial Balance Detail). | |
|Print an February Income Statement that shows zeros in the current period column. | |
|Compile all reports and attach them to the cover sheet in the order given on the cover sheet. | |
|ABC COMPANY JULY TRANSACTIONS|a. July 3, 2002 Received order from Jane Smith for a Korean Flower Pot, $150, CK #401. |
| | |
| |Ordered the flower pot for Smith from Korean Sales Co., $75 on account. |
| |____________________________________________ |
| |CASH 150 |
| |KOREAN SALES 150 |
| | |
| |PURCHASES 75 |
| |A/P 75 |
| |___________________________________________ |
| | |
| |July 5, 2002 Paid for 2000 copies of ABC Catalogue from TH Printing Service $55, CK #5201. |
| | |
| |July10, 2002 Paid phone bill, $155, CK #5202. |
| | |
| | |
| |July 12, 2002 Purchased supplies with cash, $320, CK #5203. |
| | |
| |July 15, 2002 Received rent from both tenants, $2,000, CKs #501,7221. |
| | |
| |July 17, 2002 Received order from J.H. Persons Co. for 1000 Japanese hats for his employees, $2,500. CK #178923 |
| | |
| |Ordered the 1000 hats on account from Mitsui Co. $1,000 N/30 |
| | |
| |July 22, 2002 Make mortgage payment, $2,000. CK #5204;$550 interest,$1,450 principal. |
| | |
| |July 25, 2002 Received a cash order for a total of 20 African feather dusters. From Tom Jensen, $200, CK#165. |
| | |
| |Ordered 20 dusters on account from Sulu Supplies $100 n30 |
| | |
| |July 29, 2002 Received a bill from Thomas Ad Agency, $300. |
| | |
| |July 30, 2002 Paid post office for bulk mail permit and for mailing the catalogue, $225, CK#5205. |
| | |
| | |
| |July 31, 2002 Adjusting Entries: |
| |Supplies used $250 |
| |Ppd Insurance Expired 100 |
| |Building Depreciation 555 |
| | |
A U D I T T E S T - Susy
Chapter 3
Susy
1. How much cash was received by the company? ________
(How much is on the debit side of the cash account)
2. How much cash did the company pay out? ________
(How much is on the credit side of the cash account)
3. What is the balance in A/R? ________
4. What is the balance in A/P? ________
5. Balance in Owner's Equity? ________
6. Total Sales or Service Income? ________
7. Total Advertising Expense, if any ________
8. What is the account number for Cash? ________
9. What is the account number for A/P? ________
10. What is the Total Expense for the month? ________
11. What is the total Net Income for the month? ________
12. How much is the total assets? ________
A U D I T T E S T - Detail
Chapter 3
Detail
1. How much cash was received by the company? ________
2. How much cash did the company pay out? ________
3. What is the balance in A/R? ________
4. What is the balance in A/P? ________
5. Balance in Owner's Equity? ________
6. Total Sales or Service Income? ________
7. Total Advertising Expense? ________
8. What is the account number for Cash? ________
9. What is the account number for A/P? ________
10. What is the Total Expense for the month? ________
11. What is the total Net Income for the month? ________
12. How much is the total assets? ________
A U D I T T E S T - ABC
Chapter 3
ABC
1. How much cash was received by the company? ________
2. How much cash did the company pay out? ________
3. What is the balance in A/R? ________
4. What is the balance in A/P? ________
5. Balance in Owner's Equity? ________
6. Total Sales or Service Income? ________
7. Total Advertising Expense? ________
8. What is the account number for Cash? ________
9. What is the account number for A/P? ________
10. What is the Total Expense for the month? ________
11. What is the total Net Income for the month? ________
12. How much is the total assets? ________
-----------------------
A B C
COMPANY
General Ledger
[pic]
[pic]
[pic]
[pic]
GENERAL LEDGER
[pic]
[pic]
Type of Journal
Standard, recurring, correcting, reversing, edit description, void
Date of Transaction
Journal Entry Number
Actual Journal Entry
[pic]
Figure 3.5
Journal Entries Pull Down Menu
Figure 3.6
Post to journal Screen
Figure 3.7
Type of Entry
Figure 3.8
Voucher #
(Also JE#)
Cash Receipt
Cash Disbursement
Enter Sales Invoice
Purchase Order
Reports
Posting
System
General
Ledger
Module
A/R
Module
A/P
Module
P/R Module
Inventory Module
(Periodic)
Cash,A/R, Discounts
Cash,A/P, Assets, Expense,Disc
Cash, Salary X, Tax X, Taxes Payable
Purchases, Items, Stock
S
U
B
S
I
D
I
A
R
Y
L
E
D
G
E
R
S
2002
07/01/02
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