Chapter 5: General Ledger, Inventory, and Internal Control Chapter 5: General Ledger, Inventory, and Internal Control

©2008 The McGraw-Hill Companies, Inc. 2 of 29 General Ledger and Inventory In Chapter 5, you learn how to use the General Ledger chart of accounts. Peachtree comes with over 75 sample company charts of account. You can set up your own chart of accounts from scratch or select one of the sample companies’ charts of accounts. Chapter 5 also shows you how to use Peachtree’s inventory system. Peachtree lets you track inventory items both at the purchasing and sales level. Peachtree keeps track of cost of goods sold, stock levels, sales prices, and vendors. Another Peachtree feature is user security. On pages , Internal Control, you look at how Peachtree keeps company data secure.

©2008 The McGraw-Hill Companies, Inc. 3 of 29 Software Objectives, p Restore data from Exercise Enter a new account in the Chart of Accounts. 3. Look at Peachtree’s budget feature. 4. Make a General Journal entry to transfer funds. 5. Display the General Ledger Trial Balance. 6. Set up an Inventory Item. 7. Record an inventory adjustment. 8. Look at Peachtree’s internal controls and audit trail. 9. Make two backups: backup Chapter 5 data; and backup Exercise 5-2.

©2008 The McGraw-Hill Companies, Inc. 4 of 29 Web Objectives, p Use your Internet browser to go to the book’s web site at Complete the Internet activity for Ask Jeeves. 3. Complete the steps shown for this activity.

©2008 The McGraw-Hill Companies, Inc. 5 of 29 Peachtree Tip Peachtree Tip Peachtree uses a perpetual inventory system. See page 173 for a review of how Peachtree journalizes the purchase and sale of inventory items.

©2008 The McGraw-Hill Companies, Inc. 6 of 29 Backing Up Chapter 5 Backup Name KB Page Nos. Chapter 5 3,004 KB Exercise 5-2 3,000 KB 188 In Chapter 5, you make two backups. The Chapter 5.ptb backup is made on pp and the Exercise 5-2.ptb backup is made on page 188. Refer to the chart shown on page 2 in the textbook

©2008 The McGraw-Hill Companies, Inc. 7 of 29 Chapter 5 Topics 1. Software & web objectives, p Chart of Accounts, pp Getting started, pp Budgets, pp General Journal, pp Setting up an inventory item, p. 165 a. Inventory types, pp Inventory and purchases, pp Inventory and sales, pp Inventory Adjustments, p

©2008 The McGraw-Hill Companies, Inc. 8 of 29 Chapter 5 Topics (concluded) 9. Internal Control, p. 175 a.Setting up company users, passwords and access rights, pp a.Setting up company users, passwords and access rights, pp b.Audit trail report, p. 178 b.Audit trail report, p. 178 c.Displaying the Audit trail report & find transactions report, pp c.Displaying the Audit trail report & find transactions report, pp Backing up Chapter 5 data, pp Internet Activity, p Summary and review, pp a.Going to the Net, p. 184 b.Multiple choice questions, pp c. Exercise 5-1, p. 187 d. Exercise 5-2, p. 188 e. Chapter 5 index, p. 189

©2008 The McGraw-Hill Companies, Inc. 9 of 29 Peachtree Help window, p. 152 Click Help; Contents and Index. Select the Contents tab. Double-click on Help about Your Specific Type of Business. Double-click on A-Z List of Business Types. Then, double-click on List of Sample Chart of Accounts.

©2008 The McGraw-Hill Companies, Inc. 10 of 29 Maintain Chart of Accounts window, p. 155 From the Company Navigation Center page, click then select New Account. In the Account ID box, type In the Description box, type Money-Market Fund. Make sure Cash is selected as the Account Type. This window is shown on p. 155.

©2008 The McGraw-Hill Companies, Inc. 11 of 29 Budgets, pp From the Company page, click. Click either New Budget or Edit and View Budgets. This window is shown on p. 158.

©2008 The McGraw-Hill Companies, Inc. 12 of 29 General Journal Entry, pp Complete steps on pages to see this window. Select to post to the General Ledger.

©2008 The McGraw-Hill Companies, Inc. 13 of 29 General Ledger Trial Balance, p. 163 Click on Reports, then General Ledger. In the Report List, double- click on General Ledger Trial Balance.

©2008 The McGraw-Hill Companies, Inc. 14 of 29 General Ledger Trial Balance (concluded), p. 164

©2008 The McGraw-Hill Companies, Inc. 15 of 29 Completed Maintain Inventory Items, pp From the Navigation Bar, select ;, New Inventory Item. The completed Maintain Inventory Items window appears on p. 168.

©2008 The McGraw-Hill Companies, Inc. 16 of 29 Completed Purchases/Receive Inventory window, pp Complete Inventory and Purchases, steps 1-7, pp The Purchases/Receive Inventory window is on page 170. Post this purchase.

©2008 The McGraw-Hill Companies, Inc. 17 of 29 Completed Sales/Invoicing window, pp Complete Inventory and Sales, pp , steps 1-7. The Sales/Invoicing window is shown on page 172. Post the invoice.

©2008 The McGraw-Hill Companies, Inc. 18 of 29 Completed Inventory Adjustments window, pp From the Navigation Bar, click then select. Complete steps 2 – 5 on pages This window is shown on page 174. Post this adjustment.

©2008 The McGraw-Hill Companies, Inc. 19 of 29 Internal Control, pp Read pages This window is shown on page 178.

©2008 The McGraw-Hill Companies, Inc. 20 of 29 Audit Trail Report, p. 181 Read pages This window is shown on page 181.

©2008 The McGraw-Hill Companies, Inc. 21 of 29 Backing Up Chapter 5 Data, pp Complete steps 1-6 on pp The suggested file name is Chapter 5.

©2008 The McGraw-Hill Companies, Inc. 22 of 29 Chapter 5: Glossary of Terms

©2008 The McGraw-Hill Companies, Inc. 23 of 29 Perpetual inventory, p. 151 In a perpetual inventory system, an up-to- date record of inventory is maintained, and the inventory account is revised each time a purchase or sale is made.

©2008 The McGraw-Hill Companies, Inc. 24 of 29 Chart of accounts, p. 152 A list of all the accounts used by a company, showing the identifying number assigned to each account Peachtree has over 75 sample charts of accounts.

©2008 The McGraw-Hill Companies, Inc. 25 of 29 HTML, p. 152 HTML stands for Hypertext Markup Language. Peachtree’s Help windows display in HTML format.

©2008 The McGraw-Hill Companies, Inc. 26 of 29 Internal Control, p. 175 Internal control is an integrated system of people, processes, and procedures that minimize or eliminate business risks, protect assets, facilitate reliable accounting, and promote efficient operations.

©2008 The McGraw-Hill Companies, Inc. 27 of 29 Audit Trail, p. 175 If changes are made to company records, Peachtree’s audit trail provides documentation. An audit trail records all entries and changes related to the company’s data, including actions by specific users.

©2008 The McGraw-Hill Companies, Inc. 28 of 29 Chapter 5, Internet Activity, p From your Internet browser, go to the book’s website at Link to Student Edition. 3 In the Course-wide Content list, link to Internet Activities. 4 Link to Part 1 Internet Activities. Open or save this page. 5. Scroll down the window to the Internet Activity labeled ASK JEEVES – Chapter 5. Read steps Follow the steps shown on the textbook’s website to complete this Internet activity. 7. Use a word processing program to answer the questions in steps 1-4.

©2008 The McGraw-Hill Companies, Inc. 29 of 29 Going to the Net, p. 184 Access the Yahoo small business website at link to Ten Tips for New Small Businesses. The complete website address is a m-1-sc-12-ten_tips_for_new_small_businesses-i. (Hint: If this article is no longer available, link to another area from Yahoo’s small business page and write a brief essay—no more than 125 words— describing the link.) a m-1-sc-12-ten_tips_for_new_small_businesses-i a m-1-sc-12-ten_tips_for_new_small_businesses-i 1. List the 10 tips for starting a new business. 2. Link to one additional site from this page.