The COMPANY Module

1. The COMPANY Module Slideshow 1B

2. The COMPANY Module - 3 • Date Information – 4 • Transaction Date - 5 • The COMPANY Module Window 6 • Journalizing Transactions in the GENERAL Module 7 • Viewing the Journal Entry 8 • Entering Comments 9 • Types of Transactions in the COMPANY Module 10 • Journalizing Owner Investments/Drawings 11 • Journalizing Bank Reconciliation Items 12 • Recurring Entries 13 • Correcting an Entry After Posting 15 • ADJUST ENTRY Method - 15 • The REVERSE ENTRY Method 16 • Verifying the Results of ADJUST or REVERSE Entry 17 • Displaying Reports 18 • Income Statement 19 • Balance Sheet 20 • Other Financial Reports 21 • Converting Reports to Excel 22 • Accountant’s Copy 23 • Why are Adjustments Necessary? 24 • ? - 26 Contents Slideshow 1B

3. The COMPANY Module The GENERAL LEDGER in the COMPANY Module contains company information and the company Chart of Accounts. When transactions are entered in the various modules, the accounts in the GENERAL LEDGER are automatically updated. Click. At any time, you can print financial statements in the COMPANY module. Click to continue. Financial Statements Receivables Payables Projects COMPANY G/L Inventory & Services Payroll

4. More Sage 50 Accounting Basics: Date Information Date format in Sage 50 Accounting is consistent with the conventions used in Windows. Click. You may select any of the Short Date format, or one of the Long Date format. Click. You can also specify the day the company’s week begins. It does not matter which date format you use, as long as you are consistent. Study the available formats on the screen and in reports. The text uses the MMM dd yyyy long date format. Click to continue.

5. Transaction Date Transaction Date and Session date must not be confused with each other. Session Date is the date when you are recording transactions (work session); Transaction Date is the date when a transaction actually occurred, which is usually before or on the Session Date. Click. When you open a company file, Sage 50 Accounting asks you for the date of the work session. Click. When you open a journal, the current session date automatically appears in the Transaction Date field; however, you can change it to an earlier date. Click. Future dates (e.g., on post-dated cheques) can be used if Allow transactions in future has been checked in the System Settings. Always use the proper transaction date, as calculation of sales or purchase discounts, aging of accounts, etc. are based on the Transaction Date. Click to continue.

6. The COMPANY Module Window This is a typical COMPANY Module window. Click the numbered items below in proper sequence for more information on the basic parts of the module. You will learn more about this window later in this slideshow. When you click GENERAL JOURNAL, a General Journal window appears Where you can enter and post a transaction. You will learn more about using the General Journal later in this slideshow. When you click the arrowhead beside CHART OF ACCOUNTS, you will be able to do the following tasks: The Report Centre allows you to view, print, and/or modify related financial reports. You will be using the Report Centre quite a bit in this course. Click to continue.   

7. Journalizing Transactions in the COMPANY Module Transactions are entered in the General Ledger using double-entry accounting. In this method, at least two accounts are entered… Click. …and debit entries should equal credit entries. Click. When there are only two accounts in the entry, it is referred to as a simple entry. Click. When there are more than two accounts, it is called a compound entry. Make sure debit(s) = credit(s); otherwise, Sage 50 Accounting will not allow you to post the transaction. Click to continue. Simple Entry Debit = Credit Debit = Credit Compound Entry

8. Journalizing Transactions in the COMPANY Module (continued) Viewing the Journal Entry After you have entered a transaction in any module, it is best to view the resulting journal entry before posting by clicking Report, Click REPORT on the Main Menu (see red arrow). …then click Display General Journal Entry. Click Display General Journal entry. Study the resulting General Journal Entry. Notice where the Comment would appear. After verifying that the entry is correct, you can then click the POST button. Clicking POST would update the corresponding ledgers and subledgers. Click to continue.

9. Journalizing Transactions in the COMPANY Module (continued) Entering Comments Your journal entries should provide a means for tracing items of data back to the original source data. This is particularly important to an audit trail or audit log required in specific financial matters that require evidence directly pertaining to and resulting from the execution of business transactions of a company. It is therefore important to enter notes or comments when making journal entries. Click and study where the comments will display on the General Journal Entry Report. If relevant, you may also enter Additional Date or Additional Field by clicking the Additional Information icon. Click. Click to see where additional information show on the general journal entry. Click again to continue.

10. Types of Transactions in the COMPANY Module In Sage 50 Accounting, you would enter the following types of transactions in the General Ledger: Click and study the list of transactions. You will learn how to process some of these types of transactions in this chapter, and the others when you do the exercises for the various modules. Click to continue. Types of Transactions entered in the COMPANY module: • Transactions pertaining to BANK accounts • Bank Reconciliation adjustments • Equity Items • Owner investment by bank transfer • Owner drawing(s) of non-cash items • Retained earnings (for corporations) • Period-End Adjustments • Accruals and reversals • INVENTORY adjustments (periodic inventory system)

11. Journalizing Owner Investments/Drawings As per the preceding slide, you would enter owner investment and owner drawings in the General Ledger. Click and study the journal entry for additional investment and the corresponding GJ entry report. Whether it’s initial or additional investment, the entry is the same, with appropriate comments. Drawings Drawings can be in the form of a cash withdrawal or in kind, such as office equipment, supplies, tools, etc. If not cash, the value entered in the journal should be the current value of the asset in the company books. Click and study the appropriate entry if the owner takes home an equipment for personal use. Click to continue.

12. Journalizing Bank Reconciliation Items Anything that has to do with the bank should also be recorded in the General Ledger. A good example is entering monthly bank charges. Click and study the journal entry for bank charges and the corresponding GJ report.. The entry should be dated when the bank debited the charges according to the bank statement. Click and study the resulting GJ entry report. Click to continue.

13. Recurring Entries When you enter a transaction repeatedly, Sage 50 Accounting allows you to create an entry and store it by clicking on the Store Recurring Transaction button. This type of entry is called a recurring transaction. This feature not only saves time but also helps minimize keystroking errors. Click OK. At a later time, you can recall the entry using the Recall Recurring Transaction button. Click the RECALL button now. You can select the particular recurring entry you wish, which generates a copy of the original journal entry. You may then make necessary changes, and then post. If you wish to remove a recurring entry, you would recall the entries and delete the unwanted entry. You can use this feature in most Sage 50 Accounting transactions. Click to continue.

14. Recurring Entries When you enter a transaction repeatedly, Sage 50 Accounting allows you to create an entry and store it by clicking on the Store Recurring Transaction button and giving the transaction a name and selecting a frequency. This type of entry is called a recurring transaction. This feature not only saves time but also helps minimize keystroking errors. Click OK. At a later time, you can recall the entry using the Recall Recurring Transaction button. You can select the particular recurring entry, which generates a copy of the original journal entry. You may then make necessary changes on the general journal, and then post. To remove a recurring entry, you would recall the entries and delete the unwanted entry. You can use this feature in most Sage 50 Accounting transactions. Click to continue.

15. Correcting an Entry after Posting(continued) • If after you have posted a transaction you realize you have made an error, you can adjust the entry using one of two methods: • The ADJUST ENTRY method. • The REVERSE ENTRY method. • ADJUST ENTRY METHOD • Study the case scenario (right). • Click. • On a blank General Journal you would click the ADJUST button. • Click the ADJUST button. • Study the SEARCH criteria. Since you know the exact amount, you can enter it in the search criteria to narrow down the search. • Click OK. • The original entry appears on edit mode. You can then make necessary corrections, then POST. • You will learn how to check if proper adjustment is made later on this slideshow. • Click to continue. Case scenario: On April 23, Mrs. Chikowski, the proprietor, advised you by phone that she is making a $2,000 additional investment to the business the following day. On April 24, you recorded the additional investment. On April 25, you received a bank transfer document from Mrs. Chikowski regarding her additional investment of $3,000 instead of the $2,000 she said she would deposit in the bank.

16. Correcting an Entry after Posting The Reverse Entry Method Study the scenario at right. Click. To start using the Reverse Entry method, you would click the LOOKUP icon on a blank General Journal. Click the LOOKUP icon now. Study the SEARCH criteria (top right). It will display the relevant entry (bottom right). If there is more than one entry, you would double-click on the desired entry. When the G/L entry displays, click the REVERSE ENTRY icon. Click the Reverse Entry icon (bottom right). If you Click YES on the Confirmation box, a blank General Journal appears, which means that the entry has been reversed. You can then make a new correct entry if necessary. In the next slide. You will be shown how to confirm that the entry is reversed. Click to continue. Case scenario: On April 23, Mrs. Chikowski, the proprietor, advised you by phone that she is making a $2,000 additional investment to the business the following day. On April 24, you recorded the additional investment. On April 25, you received another call from Mrs. Chikowski that she was not able to make the additional investment after all. You will then have to reverse your entry made on April 24.

17. Correcting an Entry after Posting (continued) Verifying Results of ADJUST or REVERSE ENTRY Procedure To confirm that the correction of an error is properly done, use the REPORT CENTRE to display All Journal Entries. Click ALL Journal Entries. When the report appears, you would then click Modify Report (see right), then select Report Options. Click REPORT OPTIONS now. Be sure to click the CORRECTIONS box (see arrow). Click. Study the report. This is the result for the ADJUST entry method. J3 is the original entry; J4 is the reversal; J5 is the correct entry. Study the result for the REVERSE entry method in the red frame. Click to continue.

18. Displaying Reports The quickest way to display reports is through the REPORT CENTRE. If you click the drop-down arrow for the Reports field, Click the drop-down arrow now. …you can choose from the list of reports by clicking on it. The name of the report will appear in the Reports box (in this case Income Statement). You would then click Display. Click DISPLAY. It will then display the current Income Statement. Click. If you wish to change the date(s) of any of the financial statements, you can do so by using the CALENDAR(s) beside the start/finish date field(s). Click to continue.

19. Financial Statements: • Income Statement • When someone refers to financial statements, it usually means two main documents: • Income Statement, and • Balance Sheet • Other financial statements are available in Sage 50 Accounting. • Study the Income Statement at the right. • Click. • The Income Statement shows Revenue and Expenses, and indicates whether or not the company earned a profit (also referred to as net income). • Click. • The Income Statement heading indicates the relevant range of dates. You will learn more about income statements later. • Click to continue.

20. Financial Statements:Balance Sheet The Balance Sheet heading, on the other hand, indicates the as at date to which the statement refers. The purpose of the Balance Sheet is to provide information that helps users understand a company’s financial status as of a given date. It is also referred to as a Statement of Financial Position. It is divided into Assets, Liabilities and Equity. Click. As per the Accounting Equation, Assets = Liabilities + Equity. Study the Balance Sheet. Click to continue. =

21. Other Financial Reports in the COMPANY Module There are several reports available under various categories in Sage 50 Accounting. You can access them by clicking REPORTS on the Main Menu. Note the list of report categories that are available under FINANCIALS. Study the other report categories Click to continue.

22. Converting Financial Reports into Excel Format Sometimes, it is necessary to convert your financial statements into Excel format in order to manipulate the data for a more meaningful presentation. In your course, there may be times when you need to convert your required reports in order to prepare them for submission. Click. To convert a report into Excel format, display it, From the Main Menu, click OPEN IN EXCEL (see red arrow) Click. Indicate the destination folder , the filename  and the Excel version that you wish to save the file, then click SAVE. . Click. The Excel file will display. If you see a line of ######### simply widen the column. Click to continue.   

23. Accountant’s Copy • The accountant's copy feature allows you to create and give to your accountant to make General Journal entries while you continue to work with your original company data. Your accountant must use the Sage 50 Accounting Accountants' Edition in order for you to be able to continue working. • It is a good idea to back up your company data before creating an accountant's copy. You should not do any of the following while your accountant is working on an accountant’s copy: • Delete/renumber any accounts • Delete/rename any projects • Delete/renumber any departments • Delete/renumber any tax codes • Delete/modify any currency information • .Click to continue.

24. Accountant’s Copy (continued) While your accountant has a copy of your company data, there are no restrictions on what you can do, but performing any of the actions listed in the Warning Screen (see right, below) may prevent some of your accountant's entries from importing into your company data. Read the Warning screen at bottom right. When your accountant finishes working with the accountant's copy, you can import the file into Sage 50 Accounting. Important: You can only have one accountant's copy at any given time. If you create another accountant's copy, the existing copy will be cancelled. If you cancel an accountant's copy that your accountant is working on, you will not be able to import any entries made by your accountant using that copy. Click to continue. Read You would specify the location where your Accountant’s Copy will be saved.

25. Why are adjustments necessary? Most adjustments are entered in the General Journal. Why would you need to do adjustments? During an accounting period(GAAP: Time Period Concept),the company records the financial events during that time and produces financial statements. At the end of the accounting period, adjustments are necessary before producing financial reports for a number of reasons. For example, if services are performed before the end of one month and would not be completed until the following month, fees earned until the end of the current month should be recorded(GAAP: Revenue Recognition and Realization Principle).Similarly, office supplies used up for the month should result in a reduction in PREPAID OFFICE SUPPLIES(GAAP: Matching Principle). You will learn more about adjustments later in your course. Click to continue. Time Period Concept The economic life of a business can be divided into time periods. Revenue Recognition and Realization Principle Revenue should be recognized in the period in which it is earned. Matching Principle Expenses are matched with revenues in the period when efforts are made to generate the revenue.

26. More… Go back to your text and proceed from where you have left off. Review this slideshow when you finish the chapter to better prepare yourself for the next chapter. Press ESC now, then click the EXIT button. EXIT