1. Account Receivable & Account Payable
CLASS 2
Account Receivable
&
Account Payable
ACC1215 Accounting Simulation

2. A/P- Case: Chai Tea Room
Business Background
Chai Tea Room serving specialty teas from all around world, also provides light lunches and superb dessert,coffee and other beverage
Chai Tea Room does not pay HST on its food purchase, but its other purchases subject to HST, and HST 13% is charged to customer on all good and service in cafe.
To keep the cafe clean, their supplier “Sudbury Cleaning” do clean and wax the floor, and steam clean the carpets and furniture once a week.
Instruction:
Supplier Information
Accounting Procedures
Open Invoice Accounting for Payable, not using General Journal
Discount: when payment term are set up correctly for supplier, and the date are entered correctly, discount are calculated automatically and credit to “ purchase discount”, contra expense account with credit balance and reduce overall expenses
Purchase of Inventory Item and Cost of Good Sold
Food purchased are recorded in inventory asset account, usually at month end, manager will count inventory and determine the value of item remaining in inventory. Then, manger will issue the memo to reduce the inventory (assets account) and charge the cost price to Cost of Good Sold (expenses account).

3. Chai Tea Room (1) Session Date: August 7,2013#
Input Date
Source Type
Source Code
Description
Accounting Prodedure 1
August 1,2013
Purchase Invoice
FG-642
Purchase from Fundy Gift House, $800 plus $104 HST for eight tea services set, invoice total $904, term net 30
Open-Invoice Accounting 2
BF-1243
From Bathurst Food Supplies, $800 for bread, there is no HST on food products, term 1/10,n/30.
Store as weekly recurring entry
Open Invoice Accounting,
Recurring entry
“ Recall Tool”
August 7, 2013
SC-701
From Sudbury Cleaning Company, $250 plus $32.5 HST for weekly cleaning of store premise, purchase invoice total $282.5.
Recurring Entry

4. Chai Tea Room (1) Session Date: August 7,2013
Input Date
Source Type
Source Code
Description
Accounting Prodedure 3
August 2,2013
Payment Cheque
#171
To Fundy Gift House, $700 in payment, to reference invoice #FG-361
Accounting for Payment 4
August 3, 2013
Cash Purchase Invoice
ACA-3492
From All Campus Ads, $200 pluse $26 HST for advertising brochures, term: due on receipt, paid by cheque #173
Adding a New Supplier Record

5. Chai Tea Room (1) Session Date: August 7,2013
Input Date
Source Type
Source Code
Description
Accounting Prodedure 5
August 4,2013
Memo
#13
From Owner, adjust purchase invoice FG-642, the order recieved from Fundy House was 10 tea services, not 8 services, the invoice amount is $900 plus $117 HST.
Change purchase invoice by open invoice method 6
August 4, 2013
Payment Cheque
#174
The payment to Bathurst Food Supply, $792 in payment, including $8 discount for early payment, reference invoice BF-1044
Accounting for earlier payment

6. Chai Tea Room (1) Session Date: August 14,2013
Input Date
Source Type
Source Code
Description
Accounting Prodedure 7
August 8,2013
Purchase Invoice
#BF-2100
From Bathurst Food Supplies, $800 for bread, there is no HST on food products, term 1/10,n/30.
Recall restored entry
Recall Restored entry 8
August 9, 2013
Memo
#14
From Owner: Edit the supplier record for NB Gas to include the default expenses account, create a new Group account 5110 Heating expenses
Set up or change supplier’s information

7. Chai Tea Room (1) Session Date: August 21,2013
Input Date
Source Type
Source Code
Description
Accounting Prodedure 9
August 21,2013
Purchase Invoice
SC-1790
Cleaning company “ Sunbury Cleaning” $300 plus $39 HST for weekly service, purchase invoice total $339.
Restore the changed entry
Change a Stored Entry 10
August 21, 2013
Memo
#17
From Owner: making adjusting entry to reflect inventory used in tea room during August, inventory was sold as following:
Beverage inventory: $2200
Food inventory: $3300
All used inventory is charged to COST OF GOOD SOLD.
Record month end inventory count and journal entry for COGS.

8. Chai Tea Room (1) Session Date: August 21,2013
Report:
Display Supplier Aged Report
Display purchase journal
Display payment journal
Recurring Transactions Report

9. A/R- Case: AirCare Services
Business Background: providing solar energy. Revenue come from installation, repair and subcontracting.
Instruction:
Customer Information
Accounting Procedures:
Open Invoice Accounting for receivables
Discount for earlier payment
NSF Cheques
Cash & Credit Card Sales of Services

10. AirCare Services (1) Session Date: May 8, 2013
Input Date
Source Type
Source Code
Description
Accounting Prodedure 1
May 1, 2013
Sales Invoice
A-710
Sales To Selkirk Community Centre, $1800 plus $90 GST & $126 PST for removing and reapplying solar panels for roof replacement, term: 1/10, n/30
Create a new account 4120 Repair revenue
Open Bill method
Customize the Sales Invoice
Previewing Invoice 2
May 2, 2013
Cash Receipt
#20
From Grande Pointe Tower, cheque#3499 for $8662 including $6662 in full payment of invoice #A-696 AND $2000 partial payment of invoice #A-698.
Allowing $138 discount for earlier payment.
Customize the journal by changing tabbing orders
Customer Payment

11. AirCare Services (1) Session Date: May 8, 2013
Input Date
Source Type
Source Code
Description
Accounting Prodedure 3
May 3, 2013
Cash Sales Invoice
A-711
Sales to Midwestern Funeral Home, $19000 plus $950 GST and $1330PST for installation solar panel.
Term: cash on completion of work
Received cheque #394 for full payment
payment 4
Sales Invoice
A-712
To Hazel Estates, $1200 plus $60 GST & $84 PST for one year service contract
*use Full Add fro new customer
Add new customer

12. AirCare Services (1) Session Date: May 8, 2013
Input Date
Source Type
Source Code
Description
Accounting Prodedure 5
May 4, 2013
Bank Debit Memo
14321
From Flatlands Credit Union, cheque #3499 for $8662 from Grande Pointe Tower has been returned because of non-sufficient fund
Reverse the payment and notify customer of outstanding charge
NSF cheque 6
Credit Card Sales Invoice
A-713
Sales Summary from various customer
Repair revenue: $3600
Service contract revenue: $2800
HST charge: $320 GST & 448 PST
Credit Card Sales

13. ASSISGNMENT 2- Due: Oct 17/18
Format: In Class Group Project
Requirement: review the cases of today
Chai Tea Room
Aircare Services
Complete all entries as per request
Submission methods
Submit in class with instructor’s review
Submit in backup format with your USB.

14. Midterm – Oct 17/18 Multiple Choices: 18x 4marks/question=72
Short Answers: 4x7marks/question=28
Total Marks 100
How to prepare?
Install the Simply Accounting Software
Do sample exams, get yourself familiar with the each modules: General Journal, A/R, A/P
Find your sample exam attached in your student account in Words Doc.
Answers to Sample exam are blue colored.