User s Guide MBA Series 3 General Ledger for Windows

Transcription

1 User s Guide MBA Series 3 General Ledger for Windows

2 Technical Support Information For Technical Support or to purchase a yearly Support Contract for your MBA Series 3 product(s): Internet web site contacts: Sales: Technical Support: sales@mbasoft.com support@mbasoft.com Copyright Information in this document is subject to change without notice. Company names and data used in the examples herein are fictitious unless otherwise noted. No part of this document may be reproduced or transmitted in any form or by any means without the express written permission of MBA Software & Consulting, Inc MBA Software & Consulting, Inc. (MBA) All Rights Reserved MBA Series 3 Accounting Software User s Manual This document, the associated software, and the associated on-line documentation are the property of MBA Software & Consulting and are loaned to the user under the terms of the License Agreement. Unauthorized copying or use of the software or any associated materials is contrary to the property rights of MBA Software & Consulting and is a violation of state and federal law. This material must be returned to MBA Accounting Software upon demand. Trademarks MBA, MBA Software & Consulting, the MBA logo, and MBA Series 3 are trademarks of MBA Software & Consulting. TopSpeed is a registered trademark of Soft Velocity Inc. Clarion is a trademark of TopSpeed Corporation. Microsoft, Windows, and Windows NT are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. Other product names mentioned in this manual may be trademarks or registered trademarks of their respective companies and are hereby acknowledged. MBA Software & Consulting, Inc.

3 MBA Software & Consulting License Agreement The following states the license agreement that governs your use of this product. You acknowledge and accept this agreement by proceeding with the installation of this computer software from disks or CD- ROM. LICENSE PLEASE CAREFULLY READ THIS LICENSE AGREEMENT BEFORE CLICKING THE ACCEPT BUTTON BELOW. PROCEEDING WITH THE INSTALLATION OF THIS COMPUTER SOFTWARE INDICATES YOUR ACCEPTANCE OF THE TERMS OF THIS LICENSE. IF YOU DO NOT AGREE WITH THESE TERMS, YOU SHOULD CANCEL THE INSTALLATION PROCESS AND RETURN THE PACKAGE AND ITS CONTENTS TO MBA SOFTWARE & CONSULTING WITHIN THIRTY (30) DAYS. MBA Software & Consulting, Inc. (MBA), provides the computer software program(s) and documentation (printed manuals, guides, bulletins, and/or on-line Help) contained in the package and any modifications, updates, revisions, or enhancements received by you from MBA and licenses its use under the terms below. a. You are granted a nontransferable license to use the Program under the terms stated in this Agreement for personal use in your business or profession. Title and ownership of the Program and of the copyright in the Program remain with MBA. b. You may not make copies, translations, or modifications of or to the Program, except you may copy the Program into a machine-readable or printed form for backup purposes in support of your use of the Program. You must reproduce the copyright notice on any copy of the Program or portion of the Program merged into another program. All copies of the Program and any portion of the Program merged into or used in conjunction with another program are and will continue to be the property of MBA and subject to the terms and conditions of this agreement. c. If you purchased a single-workstation license of the Program, this license is for use of the Program on one workstation. You must purchase a license to use the Program dependant on the number of workstations on which the Program will be installed or accessed. d. Multiple User licensing of the Program is valid for a single site only. The Program may be placed on a local network system connecting up to and including the number of licensed workstations located on a single site. Use of the Program at additional sites requires the purchase of additional site licenses. e. You may not assign, sell, distribute, lease, rent, sublicense, or transfer the Program or this license or disclose the Program to any other person. You may not reverse-engineer, disassemble, or decompile the Program or otherwise attempt to discover the source code or structural framework of the Program. f. This license terminates if you fail to comply with any provision of this Agreement. You agree upon termination to destroy the Program, together with all copies, modifications, and merged portions in any form, including any copy in your computer memory or on a hard disk. Accounting Software

4 LIMITED WARRANTY MBA warrants that the Program substantially conforms to the specifications contained in MBA s packaging and promotional materials for a period of thirty (30) days from delivery as evidenced by your receipt, provided that the Program was used on the computer operating system for which it was designed. MBA further warrants that the media on which the Program is furnished will be free from defects in material or workmanship for a period of thirty (30) days from delivery. All warranties stated in this Agreement apply only when the Program is used within the United States of America and its territories. MBA s sole obligation and liability for breach of the foregoing warranties shall be to replace or correct the Program so that it substantially conforms to the specifications or to replace the defective media, as the case may be. Support MBA will support the current version of this software and any previous versions that MBA elects to support. However, due to the constantly changing environment of personal computer technology, previous versions may become inoperable or incompatible with current operating systems, hardware, or other technologies. For you to continue to operate successfully, it may be necessary to purchase an upgrade. Free support is provided for thirty (30) days from the delivery of the initial purchase, not including upgrades or updates. Any subsequent support requires the purchase of an annual support agreement or will be billed on a percall basis, as outlined in the package. Tax Updates Changes in state, federal, or local tax laws may render this software, or previous versions, obsolete. To continue to operate successfully, it may be necessary for you to purchase an update. MBA may not update versions of the Program that are not shipping at the time of a change in tax laws. RECOMMENDED ENVIRONMENT This Program has been designed to work optimally in the environment documented within the system requirements. Any defects, inconsistencies, or issues arising out of operating outside the parameters set forth therein may require the licensee to pay additional maintenance/upgrade costs to MBA to support and/or rectify. LIMITATION OF LIABILITY IN NO EVENT SHALL MBA S LIABILITY TO YOU FOR DAMAGES HEREUNDER FOR ANY CAUSE WHATSOEVER EXCEED THE AMOUNT PAID BY YOU FOR THE USE OF THE PROGRAM. IN NO EVENT WILL MBA BE LIABLE FOR ANY LOST PROFITS OR OTHER INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THE USE OR INABILITY TO USE THE PROGRAM EVEN IF MBA HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. This Agreement is governed by the laws of the state of Minnesota. In the event that any provision of this Agreement is found invalid or unenforceable pursuant to judicial decree, the remainder of this Agreement shall be valid and enforceable according to its terms. MBA Software & Consulting, Inc.

5 Contents Contents Chapter One: General Ledger Introduction MBA Business Software Applications 2 Overview of the General Ledger Application 2 Overview of Basic Accounting 3 Computerized Debits and Credits 5 The Balance Sheet 5 The Income Statement 7 Fiscal Year-End Close 8 General Ledger Journal Entry 9 Financial Statements & Reports 10 Chart of Accounts 11 Chapter Two: General Ledger Set Up Journal Entry Transactions 14 Chart of Accounts 15 Financial Statements 15 Reports 16 Maintenance 17 Recurring Entries 17 General Ledger Setup Procedures 18 Set Up the Company File 19 Design the Chart of Accounts 21 Enter The Chart Of Accounts 24 Chart of Accounts Query Center 28 Modifying an Account 29 Deleting Accounts from the Chart 29 Creating Accounts for a New Department 29 Budget Account Maintenance 30 Net Change Verification Report 31

6 Contents Chapter Three: General Ledger Journal Entry & Posting General Ledger Journal Entry and Posting 34 Back Up Current Data 34 Code Transactions 35 Enter General Ledger Journal Transactions 36 Batch Entry Methods 36 Standard Entry Method 37 Creating a Batch Header 37 Entering the Batch Detail 40 Easy Journal Entry Method 42 Creating a Batch Header 43 Entering the Batch Detail 44 Recurring Entry Method 44 Creating a Recurring Entry Group 44 Print Recurring Entry Group 45 Transferring a Recurring Entry Group 45 Print Edit Journal 44 Post to the General Ledger 46 Modifying Posted Journal Entries 47 Unpost Posted Journal Entries 48 Modify Batch Notes 47 Create Reversing Batch 49 Print Net Change Verification Report 53 Chapter Four: General Ledger Reports General Ledger Reports 56 Display Monthly Trial Balance Totals 57 Monthly Trial Balance Report 58 Working Trial Balance Report 59 MTD/YTD General Ledger Report 59 Financial Statements 61 Cash Flow Statements 62 Posted Journal Entry Detail Report 63 Net Change Report 63 Posted Journal Entry Edit Journal 64

7 Contents Chapter Five: Financial & Cash Flow Statements Financial and Cash Flow Statements 66 Financial Statement Format Setup 66 How The Financial Statement Generator Works 66 Creating New Financial Statement Formats 67 Creating New Financial Statement Detail 69 Detail Types, Table & Explanations 70 Saving the Detail Record 76 Changing the Detail Record Order 76 Modifying Financial Statement Formats 76 Printing the Financial Statement Format 76 Copying Financial Statement Formats 77 Cash Flow Statement Setup 79 Create the Cash Flow Statement Format 79 Modify the Cash Flow Statement Format 80 Print the Cash Flow Statement Format 80 Cash Flow Statement Formulas 81 Chapter Six: General Ledger File Maintenance Year End Close 84 Year End Close Procedure 85 Perform Year End Close 86 Spreadsheet Interface 87 Import/Export Files 87 Appendix General Ledger Data Files 89

8 Contents

9 Chapter One In this chapter... General Ledger Introduction MBA Business Software Applications 2 Overview of the General Ledger Application 2 Overview of Basic Accounting 3 Computerized Debits and Credits 5 The Balance Sheet 5 The Income Statement 7 Fiscal Year-End Close 8 General Ledger Journal Entry 9 Financial Statements & Reports 10 Chart of Accounts 11

10 2 General Ledger MBA Business Software Applications MBA Accounting Software was designed to efficiently meet your unique business needs. The applications effectively interface with each other, or one application can be used as a stand-alone program. Each application is easy to use and easy to modify to fit your unique business needs, allowing you to be more efficient and productive. MBA Series 3 Accounting Software is a 32 bit PC compatible application, and may be installed on a network with an MBA Network System Manager package. Each application was designed with an ASCII interface that allows you to import data from MBA applications into word processing, spreadsheets and graphics software. Overview of the General Ledger Application MBA s General Ledger application performs general accounting and financial statement preparation. This application supports the following subsidiary ledgers automatically: Accounts Payable, Accounts Receivable, Payroll and Inventory applications. A general journal is also supported. Almost any existing account number structure can be adapted to the General Ledger s Chart of Accounts. The program automatically prepares and prints balance sheets and profit and loss statements for eighteen accounting periods, which may be processed concurrently. This allows you to post transactions for the current year while adjusting prior year s books for up to two full quarters after the end of the fiscal year. Prior year and budgetary data is also maintained to provide comparative management analysis reports. The spreadsheet interface provides access to General Ledger accounts for both month-to-date and year-to-date figures. It allows data to be imported into financial spreadsheet models. Each application provides extensive on-screen help. MBA Software & Consulting, Inc.

11 Chapter One -- Introduction Overview of Basic Accounting This section explains the basic principles of General Ledger accounting. It is intended for those readers having little or no background in accounting. Accounting is the recording of all of the events that affect the financial condition of a company. These events include the accounting for all cash receipts and cash disbursements. The purpose of accounting is twofold: to reflect the financial health of a company through the preparation of financial reports, and to fulfill federal, state, and local government requirements. Accounting events are called transactions and are maintained in both summary and detail form by classification. All transactions that involve cash, for example, are recorded in the Cash account; all transactions that affect Inventory are recorded in the Inventory account. Traditionally, accounts have been written in a format known as the T Account. The left side of the T Account is called the debit side and the entries here are referred to as debits. The right side of the T Account is called the credit side and these entries are known as credits. Accounts can generally be divided into five categories: Assets, Liabilities, Capital (Net Worth), Income, and Expense Accounts. Debit refers to an increase in any Asset or Expense Account and a decrease in any Liability, Capital or Income Account. Credit refers to an increase in any Liability, Capital, or Income Account and a decrease in any Asset or Expense Account. Assets Asset accounts represent valuable property that a company owns (cash, receivables, inventory, buildings and equipment) and usually have a normal debit balance. There are two major classifications of assets: Current Assets and Property, Plant & Equipment. Current Assets Current Assets are assets that will be converted into cash within one year. These assets include Cash, Inventory and Accounts Receivable. Property, Plant, And Equipment Property, plant, and equipment is comprised of assets of a durable nature that are to be used in a production, sales, or service capacity rather than being held for sale. Machinery and equipment, buildings, furniture and fixtures, and land are examples of assets that would be classified as PP&E. 3 Accounting Software

12 4 General Ledger Liabilities Liability accounts represent claims of creditors against a company s assets. Liabilities indicate how much a company owes. Accounts Payable and Notes Payable are two examples of liability accounts. Liabilities, like assets, fall into two major categories: Current and Long Term. Current Liabilities Liabilities which fall into this category are those which will be eliminated within a few accounting periods. Accounts Payable is an example of a Current Liability. Long Term Liability A Long Term Liability is an account that is active for a long period of time, usually over 90 days. An example of a Long Term Liability is Notes Payable. Transactions that increase liabilities are credits, whereas transactions that decrease liabilities are debits. Liability accounts usually have a credit balance. Capital The investments of owners in a company are represented by Capital (Net Worth) accounts. Capital (Net Worth) accounts include the amounts invested along with Retained Earnings, which are profits that have been reinvested in the business. Transactions that increase the net worth of the company are credits; transactions that decrease the Capital accounts are debits. Capital accounts usually have credit balances. Income Accounts Income accounts represent revenue that is realized from the company s operations. The income that is derived from the sale of goods or services to a customer is posted in an Income account, such as the Sales account. Transactions that increase Income accounts are credits, and transactions that decrease Income accounts are debits. Income accounts usually have a credit balance. MBA Software & Consulting, Inc.

13 Chapter One -- Introduction Computerized Debits and Credits We have described the impact of debits and credits on the various categories of accounts. Manual procedures for handling accounting information have been developed over hundreds of years into these generally accepted standard formats. Automating an accounting system requires that the computer application be able to determine the difference between debits and credits. A computerized accounting system treats all debit amounts as positive values, and all credit amounts as negative values, in order to balance the Asset, Liability, Capital, Income, and Expense accounts. The Balance Sheet Assets, Liability and Capital accounts are included in a company s Balance Sheet. The Balance Sheet is a statement of condition showing the financial position of a company at any point in time. It is based on the following formula: Assets = Liabilities + Capital (Net Worth) This statement of condition shows the balance for all Asset, Liability, and Capital accounts as of a particular date. Accounts appearing on the Balance Sheet are known as permanent accounts. The ending balance at the end of one fiscal period is the beginning balance for the next fiscal period. Following are five transactions, which illustrate the development of a Balance Sheet. These transactions are typical of a company s operation. GENERAL LEDGER TRANSACTIONS: 1. John Doe invests $100,000 in the company. The money is posted as a debit to the Cash account (asset) and as a credit to the Capital Stock account (capital). 2. The company purchases $20,000 worth of furniture for cash. This is debited to the Furniture account (asset) and credited to the Cash account (asset). 3. The company buys $10,000 in Inventory for cash. Debit the Inventory account (asset), credit to the Cash account (asset). 5 Accounting Software

14 6 General Ledger 4. Additional Inventory of $15,000 is purchased on credit. Debit the Inventory account (asset), credit the Accounts Payable account (liability). 5. The company borrows $50,000 for working capital. Debit the Cash Account, credit the Notes Payable (liability) account. The following illustrates the Balance Sheet developed from the sample transactions. Current Assets Cash 120, Inventory 25, Total Current Assets 145, Property, Plant, & Equipment Furniture 20, Total PP&E 20, TOTAL ASSETS 165, Current Liabilities Accounts Payable 15, Total Current Liabilities 15, Long Term Liabilities Notes Payable 50, Total Long Term Liabilities 50, Total Liabilities 65, Capital Common Stock 100, TOTAL LIABILITIES & CAPITAL 165, MBA Software & Consulting, Inc.

15 Chapter One -- Introduction The Income Statement Income and Expense accounts are included in a company s Income Statement. The Income Statement, sometimes called the Profit and Loss, or Financial Statement, identifies Income and Expense account activity that results in either a profit, or loss for the company. The statement is based on the operations of the company and is often referred to as the Statement of Operations. The Income Statement is based on the formula: 7 Income - Expenses = Profits (Loss) Income and Expense accounts are operating accounts that are closed out at the end of every fiscal year. The closing of Income and Expense accounts involves the transfer of either a profit, or loss to the Balance Sheet Retained Earnings Account. Income accounts are closed by debit and credit entries to the Income account and the Retained Earnings account respectively equal to the balance of the Income account. Expense accounts are likewise closed by entering a credit to the Expense account equal to the entire balance and a debit to the Retained Earnings account. Following are four transactions that illustrate the development of the Income Statement. GENERAL LEDGER TRANSACTIONS: 1. Goods costing $4,000 are sold for $5,000 cash. The Inventory account (asset) is credited for $4,000, and a debit of $4,000 is posted to the Cost of Goods Sold account (expense). A credit of $5,000 is posted to the Sales account (income), and the Cash account (asset) is debited for $5, Rent of $1,200 is paid. The Rent account (expense) is debited for $1,200, and the Cash account (asset) is credited for $1, Goods costing $5,000 are sold on account for $8,000. A credit of $5,000 is posted to the Inventory account (asset), and a $5,000 debit to the Cost of Goods Sold account (expense). The Sales account (income) is credited for $8,000, and an $8,000 debit is posted to the Accounts Receivable account (asset). Accounting Software

16 8 General Ledger 4. A telephone bill for $150 is paid. A debit of $150 is posted to the Telephone account (expense), and a credit of $150 is posted to the Cash account (asset). The Income Statement developed from the sample transactions is shown below. This statement summarizes the Income and Expense accounts and calculates the profitability of the company. Gross Sales 13, Less: Cost of Goods Sold 9, GROSS PROFIT 4, Less: Operating Expenses Rent 1, Telephone TOTAL OPERATING EXPENSES -1, NET PROFIT/(LOSS) $ 2, Fiscal Year-End Close Fiscal year-end transactions are entered to close Income and Expense accounts into Retained Earnings. The Sales Account total of $13,000 is closed with a debit to Sales Income and a credit to Retained Earnings. The Cost of Goods Sold total of $9,000 is closed with a credit to Cost of Goods Sold and a debit to Retained Earnings. The Expense accounts are closed with a credit to the Expense account and a debit to Retained Earnings, which, in the above example, would reflect a net profit of $2,650. MBA Software & Consulting, Inc.

17 Chapter One -- Introduction General Ledger Journal Entry The General Ledger application emphasizes simplicity and speed of data entry. The General Ledger application is batch oriented with a detailed audit trail to the source of original entry. The General Ledger permits you to enter data into current and prior accounting periods through batch control. While the program is extremely flexible in entering transactions that affect prior accounting periods, it does offer management control to close and/or reopen specific periods. Transactions not yet realized may be accrued by the program (such as payroll transactions not yet disbursed). The application allows you to identify both the accounting period that you would like to charge the transactions to and the accounting period that you anticipate the disbursement to occur. The program automatically generates the reverse entry. Transactions are entered into MBA Accounting Applications through a uniform procedure of processing. This procedure ensures that you maintain balanced accounts. The following is a summary of the procedure: 1. Batch Identification The Batch Identification number establishes an audit trail by identifying the source of entry, date of entry, and posting period. 2. Data Input When you input data, the program edits and verifies the accuracy of all your data. You may also add to a current batch. 3. Edit Journal The Edit Journal prints a detailed listing of all journal entries. 4. Modify Journal Entries The Modify Journal Entries option allows you to change or delete the data entered. 5. Post Journal Entries The Post Journal Entries option updates all the files associated with a program and prints a detailed audit journal of the transactions entered. 9 Accounting Software

18 10 General Ledger Financial Statements & Reports Six types of financial statements are predefined and may be used as a template for designing your own reports. These statements are the Balance Sheet, Income Statement, Prior Year, Budget Comparison, Prior Year Balance Sheet, and the Budget and Prior Year Comparison. If your Chart of Accounts follows the structure listed below, the statements may be used without requiring any specific set up (if you employ the GL05MBA3.TPS file provided in the sample data). The statements assume that the Chart of Accounts was designed with this general structure: Account Number Range Current Asset Accounts 100 through 149 P P & E Accounts 150 through 179 Other Asset Accounts 180 through 199 Current Liability Accounts 200 through 259 Long Term Liability Accounts 260 through 299 Capital Accounts 300 through 399 Income Accounts 400 through 499 Cost of Goods Sold Accounts 500 through 599 Expense Accounts 600 through 799 Other Income Accounts 800 through 899 Other Expense Accounts 900 through 999 All reports can be user-defined through the MBA General Ledger Statement Generator. Multiple formats may be generated for each type of report, and you can custom design reports. In addition to Financial Statements, a number of General Ledger reports are available through menu selections. MBA Software & Consulting, Inc.

19 Chapter One -- Introduction Chart of Accounts The Chart of Accounts is the heart of the General Ledger. It contains all of your accounts, their descriptions, account numbers, and associated financial data. The Chart of Accounts structure divides your records into the following categories: Assets, Liabilities, Capital, Income, and Expenses. These categories directly affect your balance sheet, income statement, and prior year, or budget comparison reports. Net Change Amount Types The Chart of Accounts is maintained in a file that keeps track of account numbers, account descriptions, and maintains balances and Current net change amounts for each account. The Chart of Accounts file contains the Budget, Prior Year, and Memo net change amount information as well. Current Net Change Amounts Current net change amounts are the only amounts to which you can post General Ledger transactions. Asset, Liability, Capital, Income, and Expense accounts are all Current net change amounts. They are all used in developing your current period balance sheet and income statement report. Budget Net Change Amounts Budget net changes are used to carry month-to-date budgetary figures for the corresponding current net change amounts. The budget net changes are not used in generating the Trial Balance or Detailed General Ledger report. They are only used for comparison purposes on the Budget Comparison report and the Budget Prior Year Comparison report. 11 Prior Year Net Change Amounts Prior year figures are not presented in either the Trial Balance or Detailed General Ledger reports. These net changes are used to carry monthly comparison figures for the prior year for the Current Net Change amounts. These comparison figures are used in the Prior Year Comparison report, the Budget Prior Year Comparison report, and the Prior Year Balance Sheet. The year-end roll function automatically updates the balances in the prior year net change amounts. Accounting Software

20 12 General Ledger Memo Net Change Amounts The Memo net change amounts are used to hold financial information that is not necessarily related to any particular account. It can represent the amounts that you want to compare with your accounting transactions on special management reports. Reports using the memo net change amount information can be defined with the General Ledger Financial Statement Generator. Like the budget and prior year net changes, memo net changes are not included in either the Trial Balance Report or Detailed General Ledger. Memo net changes are useful for printing certain financial statements. These net changes could identify the amount of outstanding common stock, or the ending balance for the cash account. Using memo net changes, you can easily create a statement of change in stockholder s equity, a statement of change in financial position, or even show the number of employees in each department. MBA Software & Consulting, Inc.

21 Chapter Two General Ledger Set Up In this chapter... The General Ledger menu Journal Entry 14 Chart of Accounts 15 Financial Statements 15 Reports 16 Maintenance 17 Recurring Entries 17 General Ledger Setup Procedures 18 Set Up the Company File 19 Design the Chart of Accounts 21 Enter The Chart Of Accounts 24 Account Maintenance Account Masks 27 Chart of Accounts Query 28 Perform Account Maintenance 29 Modifying an Account 29 Deleting Accounts from the Chart 29 Creating Accounts for a New Department 29 Budget Account Maintenance 30 Net Change Verification Report 31

22 14 General Ledger The General Ledger Menu Options There are six main General Ledger menus, each with further sub-menus. Each menu has a hot-key, shown as the underlined letter. The menus are, in order: 1) Journal Entry Enter/Modify Journal Entry Batches Allows you to enter and change debit and credit transactions. Enter/Modify Easy Journal Entry Batches Allows you to enter and change Easy Entry batches. Print Edit Journal Allows you to produce an audit trail to verify the accuracy of the journal entry batches. Post Journal Entry Batch Allows you to post a journal entry batch to the General Ledger. Modify Journal Entry Detail Allows you to change the date and line descriptions of posted entries. Modify Batch Notes Allows you to enter or modify notes for batches posted to regular accounts. Modify Batch Notes for Special Accounts Allows you to enter or modify notes for batches posted to budget or memo accounts. Unpost GL Posted Journal Entries Allows you to unpost batches posted to regular accounts. Unpost Special Account Batches Allows you to unpost batches posted to budget or memo accounts. Create Reversing Batch Creates a batch to offset any posted batches. MBA Software & Consulting, Inc.

23 Chapter Two -- General Ledger Set Up 15 2) Chart of Accounts Account Inquiry Allows you to review the Chart of Accounts. Enter/Modify the Chart of Accounts Allows you to enter and change the Chart of Accounts. Chart of Accounts Query Center Allows you to create Chart of Account Queries based on custom designed lookup criteria. Print Chart of Accounts Allows you to print the Chart of Accounts. Create Accounts for New Departments Allows you to create a new department account category. Budget Account Maintenance Allows you to perform maintenance on the budget accounts. Net Change Verification Report Allows you to view and print the net change verification report. 3) Financial Statements Enter/Modify Financial Statement Formats Allows you to enter and change the financial statement formats. Copy Financial Statement Formats Allows you to copy financial statement formats from one company code to another. Print Financial Statement Formats Allows you to view and print the financial statement formats. Cash Flow Statement Maintenance Allows you to perform maintenance on existing cash flow statement formats. Print Cash Flow Statement Format Allows you to view and print the cash flow statement format. Accounting Software

24 16 General Ledger 4) Reports Display Monthly Trial Balance Totals Allows you to view the monthly trial balance totals on the screen. Monthly Trial Balance Report Allows you to print a monthly trial balance report. Working Trial Balance Report Allows you to print a trial balance report worksheet. MTD/YTD General Ledger Report Allows you to print ledger reports by date range. Financial Statements Allows you to print financial statements. Cash Flow Statement Allows you to print cash flow statements. Posted Journal Entry Detail Report Allows you to print a detailed report of the posted journal entries. Net Change Report Allows you to view and print a report of the net changes. Running Balance Report Allows you to view account balances for each month. Posted Entry Edit Journal For Regular Accounts Allows you to view and print an edit journal of posted journal entry batches. Posted Entry Edit Journal For Special Accounts Allows you to view and print an edit journal of posted journal entry batches for memo and budget accounts. MBA Software & Consulting, Inc.

25 Chapter Two -- General Ledger Set Up 17 5) Maintenance Easy Journal Entry Screens Allows you to enter or change easy journal entries. Company Information Allows you to modify the company information. Monthly Net Change Amounts Allows you to view the net change figures by account. Financial Statement Series Allows you to group financial statements together for printing purposes. Perform Year End Close Allows you to close out the year of transactions posted to months 1 through 12. Spreadsheet Interface Allows you to export Chart of Account information into a spreadsheet format. Import/Export Files Allows you to bring certain files into the General Ledger or to write certain General Ledger data files into a variety of formats for transferring to another program. This menu is discussed in the System Manager Manual. 6) Recurring Entries Enter/Modify Recurring Journal Entry Group Allows you to enter or change the recurring entry groups. Print Recurring Journal Entry Group Allows you to print the recurring journal entry groups. Transfer Recurring Group to Journal Entry Allows you to transfer a recurring journal entry group to a batch for posting. Accounting Software

26 18 General Ledger General Ledger Setup Procedures To begin using the General Ledger, you must perform the procedures listed below. The sections following will show you how to complete each of these procedures. 1. Set up the Company File 2. Design the Chart of Accounts 3. Enter the Chart of Accounts into the General Ledger 4. Print the Chart of Accounts report 5. Perform necessary account maintenance, such as creating departmental accounts, entering budget account net changes, and entering prior year and memo account information. Note: MBA ships with a pre-defined Demonstration Company, which will be the default company when you first enter MBA. Before entering your company specific information, you must first setup your own company code. To do so, use the Multi - Company option within the Utilities Quick Menu Setup Wizard. MBA Software & Consulting, Inc.

27 Chapter Two -- General Ledger Set Up 19 Note: The processes listed on the following pages can be performed step by step using the General Ledger Setup Wizard, found in the Utilities Quick Menu. Set Up the Company File Before performing any other General Ledger function, you must set up the company information. Select the Company Information option from the Maintenance Drop-Down or Quick Menus. Company Name The name entered here is the name that will appear on any reports printed in the General Ledger. The name can be up to 40 characters in length. Fiscal Year-End Month A two-digit number must be entered in this field to indicate the last calendar month of the fiscal year. The General Ledger uses this number to order year-todate reports and when transferring post months 13 through 18 to the appropriate months during the year-end close. First Income and Last Expense Accounts These account numbers define the range of accounts that make up the income and expense accounts, from the lowest account number to which revenue transactions are posted to the highest expense account number used for posting expense transactions. Accounting Software

28 20 General Ledger This account number range is very important during the year-end close, as it determines which accounts will be used to calculate the current net profit/loss that is then divided among the retained earnings accounts. The net changes of this account range are zeroed out during the year-end close. These fields can be left blank until the year is to be closed. Retained Earnings Accounts Up to six account numbers can be entered for the posting of net profit or loss during the year-end close procedure. Each account number must be assigned a percentage of the total profit/loss; the percentages must total 100%. Are Balanced Batches Required for Posting? This field allows you to require that all batches are balanced prior to posting. It is recommended that you keep the default value, Y. Requiring balanced batches ensures that the posted debits will equal the posted credits. One-sided or unbalanced batches can be posted if this field is changed to N. This field can be changed at any time. MBA Software & Consulting, Inc.

29 Chapter Two -- General Ledger Set Up 21 Modify A/R and A/P Account Tables? A Y in this field will automatically update the descriptions in the Accounts Receivable and Accounts Payable account tables any time the General Ledger Chart of Accounts is changed. Closing Months At the bottom of the Company information window is where individual months can be closed. Clicking on the check box below the month will enter a check mark, which keeps batches from being posted to that month. Clicking a second time will remove the check. It is recommended that months 1 through 6 be closed at the end of the fiscal year if you are not going to close the fiscal year immediately to avoid posting to those months in the new fiscal year; these entries should be posted to 13 through 18. To save any changes that are made, click the OK button. Cancel will close the window without saving any changes. Design the Chart of Accounts Designing the Chart of Accounts is a very important step. You should have planned out the entire Chart before attempting to enter it into MBA s General Ledger. Good planning at this step means you won t have to revise the entire chart to include anything you may have forgotten. MBA also offers a number of predefined charts that can be copied into your company code (please also refer to the section on Copying Chart of Accounts in ch. 2 of the System Manager manual). The following checklist can be used to guide you through the planning process. Chart of Accounts Design Checklist [ ] The Account number. The Chart of Accounts must be designed with a unique account number for each account. The proper structure, sequence, and any subaccount numbers must be taken into consideration. [ ] The Account description. [ ] The Beginning Balance figures [ ] Any ledger subtotal flags that you want to set. Accounting Software

30 22 General Ledger Account Number Sequencing The sequence of account numbers becomes important when you are using a range of account numbers in various reports. There are some rules to remember when sequencing the accounts: All account numbers are left-justified, as there may be an alphabetic element to the account number. Numbers are sorted from left to right. This means that account number 1001 would be before 101. Numeric characters precede alphabetic characters when sorted. It is recommended that you arrange your account numbers in the sequence of your Balance Sheet and Profit & Loss Statements. A common method of assigning a block of numbers to each classification is identified as follows: Account Number Range Current Asset Accounts 100 through 149 P P & E Accounts 150 through 179 Other Asset Accounts 180 through 199 Current Liability Accounts 200 through 259 Long Term Liability Accounts 260 through 299 Capital Accounts 300 through 399 Income Accounts 400 through 499 Cost of Goods Sold Accounts 500 through 599 Expense Accounts 600 through 799 Other Income Accounts 800 through 899 Other Expense Accounts 900 through 999 MBA Software & Consulting, Inc.

31 Chapter Two -- General Ledger Set Up 23 If your company s divisions and departments must be identified, such identification should precede the account number. Special consideration must be given to the effect this will have on the sorting, or sequencing of your numbers. If you want to retain only numeric characters in your account numbers, and if you do not want department, or division identification in your balance sheet accounts (accounts 001 through 399), you should use the following structure to preserve the account orders: Cash in Bank Accounts Receivable Accounts Payable Capital Stock Sales Income Department Sales Income Department Office Expense Department Office Expense Department 2 If the 00- prefix were omitted from the non-department specific account numbers, they would actually appear after the 01- and 02- department accounts. If you were to use alphabetic characters to identify the department/division (A1 instead of 01 or 02), you would not be required to use the numerical prefix (00, 01, or 02). Your accounts, then, would look like this: 101 Cash in bank 111 Accounts Receivable 210 Accounts Payable 301 Capital Stock A1-401 Sales Income Department 1 A2-401 Sales Income Department 2 A1-601 Office Expense Department 1 A2-601 Office Expense Department 2 With the General Ledger Statement Generator, you can define your Financial Statements (Balance Sheets, Income Statements, Prior Year, and Budget Comparisons) regardless of the sequence of your Chart of Accounts. However, the Chart of Accounts, Working Trial Balance, Monthly Trial Balance, Month-to- Date General Ledger and Year-to-Date General Ledger reports all print in account number sequence. Accounting Software

32 24 General Ledger The General Ledger application performs a year-end roll that closes out the profit and loss accounts into retained earnings. In order for this to work correctly, your Company File Maintenance Record must identify the beginning income account number, the last expense account number and retained earnings account numbers (retained earning accounts must not fall within the range of income and expense accounts). Through this range of numbers, the system can identify all income and expense accounts. Your numbering system must isolate this range of numbers. Enter The Chart Of Accounts Once you have written a draft of a Chart of Accounts, you are ready to enter it into the General Ledger. Follow the steps below, beginning with the Chart of Accounts menu: 1. Select Enter/Modify the Chart of Accounts and click the Insert button to begin entering new accounts. 2. Fill in the fields on the screen. Refer to descriptions of the fields if necessary. 3. Click Next to coninue adding Accounts, and OK when you are finished. MBA Software & Consulting, Inc.

33 Chapter Two -- General Ledger Set Up 25 Account Number Field You can enter an account number up to 15 characters in length. Account Description Field You may enter up to 30 characters of descriptive information into the Account Description field in the account record. The description or title of the account is printed on the Chart of Accounts, Trial Balance, Detailed General Ledger and supporting Financial Statements. Ledger Subtotal Flags Field The Ledger Flag field in the account record is an optional feature that allows you to flag the account for a subtotal control break. Each time an account with a flag is encountered, a subtotal is printed after the account information on the Month-to-Date and Year-to-Date General Ledger reports. The program allows you to maintain up to four levels of subtotals. The amounts are automatically added to all four levels of totals. The subtotal level is indicated by entering a number (1 through 4) in the Ledger Flag field. It is important to remember that when a particular level of subtotal is printed, that level and all lower levels are cleared (if level 3 is chosen, levels 1, 2, and 3 are set to zero). The following is an example of using the Ledger Subtotal Flags: Acct No. A1-601 A1-602 A1-603 Description Amount Ledger Flag Office Expense Telephone Expense Sales Expense A2-601 A2-602 A2-603 A2-999 Office Expense Telephone Expense Sales Expense Total Expenses Remember that you must set up account number A2-999 to trigger the $ total. Accounting Software

34 26 General Ledger Beginning Balance Figure Fields The Beginning Balance figure represents the account balance at the beginning of the fiscal year. Only balance sheet accounts (Assets, Liabilities, and Capital) contain a balance at the beginning of the year. All profit and loss accounts (income and expense) are closed out into retained earnings at year end and start the new year with zero balances. Beginning account balances can also be entered or modified for Prior Year Balance, Budget Balance (to be used as a yearly budgetary amount), and Memo Balances. The beginning balance may be represented as either a debit or credit by entering a positive or negative number, respectively. The program assumes a debit balance if you enter a positive number. The beginning balance total for the entire Chart of Accounts should equal zero when you are finished entering the accounts. Print The Chart Of Accounts Report Once you have entered your accounts into the Chart of Accounts, you should print the Chart of Accounts report to verify its accuracy. The Chart of Accounts report contains a list of all account numbers based on the selected report order, along with the account descriptions and the ledger subtotal flags. No balance figures are printed on this report. This is also useful for coding transactions that are posted to the General Ledger. To print the Chart of Accounts report, select Print the Chart of Accounts from the Chart of Accounts menu. The following information will be requested: MBA Software & Consulting, Inc.

35 Chapter Two -- General Ledger Set Up 27 The only required item is the report order, which defaults to Account number. The report can also be ordered by Account description by selecting that option from the Report Order list box. The account range and mask are optional. Click the Print button to create a hard copy, Preview if you wish to look over the report before printing it, or PDF if you d like to save the output to a PDF document. Account Masks In later sections of this manual, we will be referring to Account Masks, which are used in various operations throughout the General Ledger. Account masks are simply a way for you to filter out unwanted information. An example of how this works is as follows: The? s shown in the Account Mask field are used as wild-cards. For instance; if you use the top example from page 22, all accounts would be printed, except for the Accounts Payable (00-210) and Accounts Receivble (00-111) Accounts. The filter in the above illustration would filter out all accounts that don t end in 01. The masking option can be a very helpful tool, provided your initial setup of the Chart of Accounts follows a logical pattern. Accounting Software

36 28 General Ledger Chart of Accounts Query Center The Chart of Accounts Query Center allows you to print custom designed account reports based on criteria of your choice. For example: If you only wish to view account numbers between , you would enter the query below. Multiple operators can be used to further refine your search, and each query can be saved for future use. MBA Software & Consulting, Inc.

37 Chapter Two -- General Ledger Set Up 29 Account Maintenance You may want to change an account s beginning balance or some other field at some point in time. All the account information except the account number can be changed. Accounts can also be deleted. Select Enter/Modify the Chart of Accounts from either the Chart of Accounts Drop-Down or Quick Menus. Modifying an Account Highlight the account to make the changes to and click the Change button to make modifications to the account description, subtotal flag, or beginning balance. The OK button must be clicked to save the changes. To make account-by-account changes to the net change figures in any account category, click the Update Net Changes button. Any changes made to the Current net change figures will affect many of the reports run in the General Ledger. Note: Unless used as a temporary adjustment for reporting purposes, it is not recommended that you modify your net change figures manually. If your account balances need to be modified, it is recommended that you call and speak with one of our support technicians. Deleting Accounts from the Chart Accounts can be deleted from the Chart of Accounts by clicking the Delete button when the account you wish to delete is highlighted. Note that only accounts with no current activity and zero beginning balances can be deleted. Creating Accounts for a New Department Once the Chart of Accounts has been set up, you may need to add a series of new accounts. This may occur, for example, if your Chart of Accounts is departmentalized and you need to add a new department. Rather than enter each new account separately, you can use masks to create a whole new subset of accounts. For example, if your accounts for department 01 all end in the suffix -01, and you want to create accounts for department 02, you would use -01 in the appropriate position of the from mask and -02 in the corresponding position of the for mask. Select Create Accounts For New Department from either the Chart of Accounts Drop-Down or Quick Menus to begin adding the new department accounts. Accounting Software

38 30 General Ledger Enter the department designation from which you are copying the accounts. This department must already exist before copying the account format to another department. Enter the new department designation in the Create Accounts For: field. Click the Process button to create the new department accounts. Note: The descriptions will be copied from the original accounts to the new accounts. If you need to change the descriptions in the new accounts, simply modify those accounts. Budget Account Maintenance At the beginning of each year, or even at points during the year, you may wish to modify the budget net change amounts. You may want to zero out certain budgets, make them equal to actual or prior year figures, and/or increase them by a set percentage. You can make these adjustments for particular months, or for the entire year. You may need to make the adjustments several times, by using different options to reach your desired combination. For example, you may want to set the budgets to prior year figures, and then increase the result by 10%. Begin by selecting Budget Account Maintenance from either the the Chart of Accounts Drop-Down or Quick Menus and perform the following steps: MBA Software & Consulting, Inc.