Maintain Chart of Accounts

Maintain Chart of Accounts Window

The Maintain Chart of Accounts window is used to enter new accounts, edit existing accounts, enter account beginning balances. Fields of interest are described below:

HEADER FIELDS

Account ID: Identifies the account in the chart of accounts, lookup lists, transactions, and reports. The ID can be up to 15 characters.

Description: Enter a description for the account. This description prints on reports and financial statements.

Inactive: Select this check box to make the ID inactive. Inactive records are deleted when the purge utility is run, if they have not been used in any transactions in an open fiscal year. Inactive records can be used in transactions, but a message appears, reminding you of the inactive status.

Account Type: Select a type from the drop-down list. Accounts are grouped by account type on financial statements. Accounts assigned to the account types of Income, Expenses, Cost of Sales, and Equity–Gets Closed will close to the account assigned to the Equity–Retained Earnings account type at the end of the fiscal year.

Account Numbering

Peachtree allows the use of both numbers and characters in an account numbering system. However, an account numbering system should be established so it can be understood by everyone, from new employees to accountants. In a traditional General Ledger, individual accounts are numbered and placed into ranges similar to those in the following table:

Account Range

 

Account Types

10000 Cash, Accounts Receivable, Assets
20000

 

Accounts Payable, Liabilities
30000

 

Equity
40000

 

Income
50000-70000

 

Cost of Sales, Expenses
80000

 

Other Income
90000 Other Expenses

Peachtree’s sample companies use numbering schemes similar to those in the table above.

Account Types

Account types are used to group similar accounts together. They also determine where the accounts will appear on financial statements, and whether the account typically carries a debit or credit balance. Peachtree has a wide variety of account types available:

•Accounts Payable •Expenses

•Accounts Receivable •Fixed Assets

•Accumulated Depreciation •Income

•Cash •Inventory

•Cost of Sales •Long Term Liabilities

•Equity – Doesn’t Close •Other Assets

•Equity – Gets Closed •Other Current Assets

•Equity – Retained Earnings •Other Current Liabilities

•Receivables Retainage •Payables Retainage

At the end of the fiscal year, the balances of the Income, Expense, Cost of Sales, and Equity–Gets Closed account types become zero. The net difference of these accounts is added to the Equity–Retained Earnings account.

Masking

The chart of accounts can be divided into departments. When printing certain reports, you can filter or mask the information that appears. In the window below, the “NU” in account 57000-NU is an example of an account mask.

Department masking is a powerful feature in Peachtree. Masking allows you to set up codes that, as part of your account number, represent a division or department for that account.

For example, if your company has two branches and each branch has two departments, you can establish accounts that differentiate the branches and their departments. An example of a seven-character account number is shown. The fifth character represents the location, and the sixth and seventh represent the department.

To view reports containing only data specific to a branch or department, use a department mask. For example, to view the totals for department 01, enter *****01, where asterisks represent any possible character or number. Shown below is an example of masking the General Ledger report to include transactions for department 01.

Quantum offers you the Account Segment feature, which allows you to segment your chart of accounts and filter reports using drop-down selection lists rather than the masking method using the asterisk.

ENTERING ACCOUNT BEGINNING BALANCES

Peachtree can record account beginning balances in any period in companies that have no posted transactions. After one or more transactions have been posted, Peachtree records account beginning balances as prior-period adjustments.To enter account beginning balances, click the Account Beginning Balances arrow button on the Maintain Chart of Accounts window. Select the accounting period to enter or adjust balances from the Select Period window.

When entering beginning balances, entries can be made in previous, current, or future periods. When entering prior period adjustments, entries can be made only in previous periods.

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