Beruflich Dokumente
Kultur Dokumente
Bilal Raja
bill_raj@hotmail.com
Information 4 Everyone
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DESCRIPTION OF MINI-PRACTICE SET
Upon completion of chapter 5 of the text students are assigned a mini-practice set, which serves as a
comprehensive learning experience that simulates the accounting record-keeping system for an
imaginary company. The practice set familiarizes each student with all steps in the accounting process
(accounting cycle) as students "learn accounting by doing it." The mini-practice set has a manual
component that contains the journals, ledgers, and trial balance that will be completed by students
outside class. An equally compelling computerized version of this assignment will be completed in the lab
using the Peachtree Accounting software.
This assignment represents 15% of each student's grade. Each student is responsible for his/her own
performance. Because the manual version reinforces the Peachtree version, students first learn how the
steps in the accounting process works. Then students implement what they have learned in the manual
phase of this project using Peachtree Accounting.
To avoid last minute desperation, we will set up our Peachtree accounts before completing the assigned
readings. The first Peachtree assignment requires that we
Later, we will return to the Peachtree files created here to enter your accounting transactions.
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PEACHTREE - INITIAL SETUP
1. Peachtree has saved on your H:/drive the work that you previously entered.
2. Open the Peachtree file on your local computer:
Start Programs/Peachtree Complete Accounting /Peachtree Complete Accounting
3. Click to open Peachtree
4. Select "Open an existing company."
5. DO NOT TRUST THE RECENTLY OPENED COMPANIES THAT ARE LISTED! This shortcut
may not open the most current or the correct copy of your company. To find your company, click on
"Browse."
6. Select the H:/Drive from the pull down menu.
7. Select your company and click "Ok."
Chart of Accounts
Before any transactions are entered, we must enter the roster of financial statement accounts in
numerical order. That numerical listing of accounts is called a chart of accounts. For purposes of
our practice set, you will enter account numbers taken from the general ledger of your manual
practice set for the Stone Company.
In Peachtree:
2. The account ID is a 3-digit number. The description is the name of the account. The account type is
selected from a pull-down menu. Here is an example:
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Account Number Account Description Account Type
101 Cash Cash
112 Accounts Receivable Accounts Receivable
a. Note that the default account type is cash. You must manually change to any other
account type.
b. Below are listed the sixteen account types used by Peachtree to classify accounts in your
balance sheet and income statement. The order below is the order in which account
types appear on the financial statements.
The accounts names and numbers you will use for this assignment are:
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Account Types
You must choose one of these account types for each account in your chart of accounts:
1. Cash
2. Accounts Receivable
3. Inventory
4. Other Current Assets
5. Fixed Assets (another name for Property, Plant and Equipment)
6. Accumulated Depreciation
7. Other Assets
8. Accounts Payable
9. Other Current Liabilities
10. Long-Term Liabilities
11. Equity (doesn't close) Includes Common, Preferred Stock, Treasury Stock and related
accounts and Unrealized Losses on Market Decline
12. Equity - Retained Earnings
13. Equity - (gets closed) Includes all entries that are closed at year-end… dividends declared.
14. Income - all types including sales, service or fee revenue, rental income, dividends earned,
interest earned, sinking fund earnings, and contra sales accounts like Sales Return and
Allowance or Sales Discount.
15. Cost of Sales - Purchase related accounts (Purchases, Purchase Returns and Allowance,
Purchase Discounts, Freight-in.
16. Expenses - Includes operating expenses, selling general and administrative.
You can view your selection with the magnifying glass to the right of the textbox. It is important to define
your "account-type" correctly because your financial statements and other reports are generated based
upon this information. If you are not certain, refer to your textbook (or to other class mates) for assistance
in selecting the correct account type.
3. When you are satisfied with your entry, click "Save." Peachtree will automatically save the new
account even though it remains on your screen. Simply start typing in the next account or click
"Close."
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4. Enter Beginning Balances
1. Enter beginning balances from the general ledger accounts of your manual practice set (handout).
With your company open in the Peachtree Chart of Accounts menu, click on "Beginning Balances"
2. Select "From 01/1/99 to 01/31/99." (You will enter data for the month of January).
3. Beware that not every account has a beginning balance. If so, you need not enter a beginning
balance.
4. Note that contra account balances require a negative (-) entry to the account type associated
with that contra account. For example, Allowance for Doubtful Accounts requires a negative
(-) dollar amount in the Accounts Receivable account type.
5. Notice that a total balance appears at the bottom. If debits do not equal credits, an automatic
account balance will be created in an account called “Beginning Balance Equity.” Whenever there is
a balance in this account, it must be removed and placed in the correct general ledger account.
Journal Entries
1. To begin entering journal entries, click on "Tasks" and select "General Journal Entry."
2. Enter the date of the transaction. Hit the "Enter" or "Tab" key to move to the next line.
3. The reference section is used to make extra comments and to identify special journals, ledgers and
schedules. For our purposes it is not necessary to use a reference number in the general journal
transactions.
4. The account number can be selected from a drop-down menu that appears when you click on the
magnifying glass.
5. Use a description that briefly summarizes the transaction.
6. Enter the appropriate dollar amount as a debit or credit. Click "Post". Peachtree will not allow you to
post until the transaction is in balance.
Adjusting journal entries (AJEs) are made in the same manner as routine journal entries. However they
are made at the end of the accounting period (last day of the month or year). Identify them as adjusting
entries in your description section.