Fundamentals

of Accountancy, Business
and Management 1
Using SAP Business One
(Student Guide)

Fasttrack IT Academy
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Mobile: 0917-8383-FIT (348)
Email: [email protected]
Table of Contents

Chapter 1: Introduction to Fundamentals of Accounting ....................................................................... 1

Special Features of Computerized Accounting ...................................................................................... 1

Advantages of Computerized Accounting ............................................................................................. 1

Accounting and SAP Business One ........................................................................................................ 2

Basic Navigation ..................................................................................................................................... 4

Logging into SAP Business One .......................................................................................................... 4

Menu Bar and Toolbar......................................................................................................................... 5

Main Menu .......................................................................................................................................... 5

Password Maintenance ....................................................................................................................... 6

Customization – Display Parameters .................................................................................................. 7

Functions in a Form ............................................................................................................................. 8

SAP Business One Modules ..................................................................................................................... 9

Exercises ................................................................................................................................................. 10

Chapter 2: Chart of Accounts .................................................................................................................. 12

Balance Sheet Accounts ......................................................................................................................... 12

Income Statement Accounts ................................................................................................................. 12

SAP Chart of Accounts.......................................................................................................................... 13

Balance Sheet Accounts ..................................................................................................................... 13

Profit and Loss Accounts .................................................................................................................. 14

Exercises ................................................................................................................................................ 16

Chapter 3: Subsidiary Ledgers ................................................................................................................ 17

Purpose of Control Accounts ................................................................................................................ 17

Purpose of Subsidiary Ledgers ............................................................................................................. 17

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Chapter 4: Accounting Cycle ................................................................................................................... 19

Journal ................................................................................................................................................... 19

General Journal .................................................................................................................................. 19

Special Journals.................................................................................................................................. 19

Ledger .................................................................................................................................................... 19

General Ledger .................................................................................................................................. 19

Subsidiary Ledger.............................................................................................................................. 19

Business Partner Master Data............................................................................................................ 19

Stock Cards ........................................................................................................................................ 19

Trial Balance .......................................................................................................................................... 19

Adjusting Entries ................................................................................................................................... 19

Financial Statements .............................................................................................................................. 20

Closing Entries ...................................................................................................................................... 20

Post-Closing Trial Balance..................................................................................................................... 20

Reversing Entries................................................................................................................................... 21

Chapter 5: Journalizing............................................................................................................................ 22

Special Journals ..................................................................................................................................... 22

Manual Journal Entry ............................................................................................................................ 23

Draft Journal Entry / Journal Voucher .................................................................................................. 25

Reversal ................................................................................................................................................. 27

Transaction Journal Report ................................................................................................................... 28

Exercises ................................................................................................................................................ 29

Chapter 6: Special Journal - Purchases ................................................................................................... 30

Special Journal – Purchases ................................................................................................................... 30

Procurement under SAP Business One ................................................................................................. 30

A/P Invoice ............................................................................................................................................ 31

Reversal of A/P Invoice ......................................................................................................................... 34

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Exercises ................................................................................................................................................ 35

Chapter 7: Special Journal Disbursements............................................................................................. 36

Disbursement Journal ........................................................................................................................... 36

Outgoing Payments in SAP Business One ............................................................................................ 36

Payment of Invoice from Suppliers ...................................................................................................... 37

Payment of Expenses ............................................................................................................................ 40

Reversal of Outgoing Payment ............................................................................................................. 42

Exercises ................................................................................................................................................ 43

Chapter 8: Special Journal – Sales........................................................................................................... 44

Sales Journal .......................................................................................................................................... 44

Credit Sales Transaction ........................................................................................................................ 44

Cash Sales Transaction .......................................................................................................................... 48

Exercises ................................................................................................................................................ 50

Chapter 9: Special Journal – Receipts ..................................................................................................... 51

Cash Receipts ........................................................................................................................................ 51

Incoming Payments in SAP Business One ............................................................................................ 51

Partial Payment ..................................................................................................................................... 52

Full Payment ......................................................................................................................................... 55

Exercises ................................................................................................................................................ 57

Chapter 10: Perpetual Inventory System ................................................................................................ 58

Perpetual Inventory System .................................................................................................................. 58

Advantages of Perpetual Inventory ...................................................................................................... 58

Inventory Status .................................................................................................................................... 59

Stock Movements .................................................................................................................................. 60

Purchase of Items .................................................................................................................................. 60

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Exercises ................................................................................................................................................ 65

Sale of Items........................................................................................................................................... 67

Exercises ................................................................................................................................................ 71

Chapter 11: General Ledger ..................................................................................................................... 72

Generating the General Ledger Report ................................................................................................. 72

Chapter 12: Trial Balance ......................................................................................................................... 73

Generating the Trial Balance Report ..................................................................................................... 73

Chapter 13: Adjustments ......................................................................................................................... 75

Accruals ................................................................................................................................................. 75

Deferrals ................................................................................................................................................ 75

Completing the Adjusting of Entries .................................................................................................... 76

Chapter 14: Financial Statements ............................................................................................................ 77

Chapter 15: Closing Entries ..................................................................................................................... 78

Period End Closing................................................................................................................................ 78

Chapter 16: Post-Closing Trial Balance................................................................................................... 80

Generating the Trial Balance Report ..................................................................................................... 80

Additional Exercises ................................................................................................................................ 81

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Chapter 1

Introduction to Fundamentals of Accounting

Accounting is the systematic and comprehensive recording of

financial transactions pertaining to a business. It also refers to the process
of summarizing, analyzing and reporting these transactions to oversight
for almost any business. It may be handled by a bookkeeper or an
accountant at small firms or by sizable finance departments.

This is where a computerized accounting helps simplify, integrate,

and streamline all the business processes cost-effectively and easily.

Special Features of Computerized Accounting

1. It leads to quick preparation of accounts and makes the accounting

statements and records available on time.
2. It ensures control over accounting work and records.
3. Errors and mistakes would be at minimum in computerized
accounting.
4. Maintenance of uniform accounting statements and records is possible.
5. Easy access and reference of accounting information is possible.
6. Flexibility in maintaining accounts is possible.
7. It involves less clerical work and is very neat and more accurate.
8. It adapts to the current and future needs of the business.
9. It generates real-time comprehensive MIS reports and ensures access to
complete and critical information instantly.

Advantages of Computerized Accounting

1. Better Quality Work

The accounts prepared with the use of computers are usually uniform, neat, accurate, and more legible
than manual job.

2. Lower Operating Costs

Computer is a labor and time saving devise. Hence, the volume of job handled with the help of
computers results in economy and lower operating costs.
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3. Improved Efficiency
Computer brings speed and accuracy in preparing the records and accounts and thus, increases the
efficiency of employees.

4. Facilitates Better Control

From the management point of view, greater control is possible and more information may be
available with the use of computer in accounting. It ensures efficient performance in accounting work.

5. Greater Accuracy
Computerized accounting ensures accuracy in accounting records and statements. It prevents clerical
errors and omissions.

6. Relieve Monotony
Computerized accounting reduces the monotony of doing repetitive accounting jobs, which are
tiresome and time consuming.

7. Facilitates Standardization
Computerized accounting facilitates standardization of accounting routines and procedures.
Therefore, standardization in accounting is ensured.

8. Minimizing Mathematical Errors

While doing mathematics with computers, errors are virtually eliminated unless the data is entered
improperly in the first instance.

Accounting and SAP Business One

SAP software can help you become a best-run business – in fact, it's the choice of more than
80,000 small businesses and midsize companies.

SAP software is:

 Affordable for small businesses and midsize companies

Every business is unique, which is why we offer a complete portfolio of business management and
business intelligence solutions designed to fit the way you do business – and your budget.

 Designed with your company in mind

SAP solutions for small and midsize companies are designed to be complete – offering the breadth
and depth of functionality you need to run your business; easy to use – enabling quick adoption
with little training; and flexible – they can scale and adapt as you grow your business. Every
solution we offer is based on best practices learned from more than 35 years of SAP's experience
working with best-run companies.

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Did You Know

 SAP is the world's largest software company – in business for more than 30 years.
 SAP has more than 109,000 total customers – 80,000 of which are small and midsize enterprises.
 SAP has customers in more than 50 countries and more than 4,500 channel partners worldwide.

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Basic Navigation

Logging into SAP Business One

1. Double click on the SAP Business One logo on your desktop.

2. In the Login Window, choose “Change Company”.

3. The Choose Com pany window will pop up.

4. Enter and select the following information:

User ID m anager
Password m anager
Company Name Abakada Enterprise
Database Name ABKD

5. Click ‘OK’.

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Menu Bar and Toolbar

The SAP Business One menu bar displays at the top of the screen. The menu bar contains the
Windows standard menu (File, Edit, Window, Help), as well as the generic SAP Business One
functions.

The toolbar displays under the menu bar. The toolbar is a collection of icon buttons that grant
you easy access to commonly-used functions. The functions represented by the buttons are also
available in the menu bar.

Main Menu

Navigation in SAP Business One is done using the Main Menu. It arranges the functions of the
individual applications in a tree structure. The company name and the name of the current user
display at the top left.

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There are three tabs under the Main Menu:

1. Modules

The Modules menu contains a list of all modules with their related options. The menu options:
 Are arranged in the same order as the menus in the Main Menu
 Cannot be modified
 May be inactive for unauthorized users

2. Drag and Relate

Drag and Relate is an interactive tool based on predefined system queries. You use it to create
reports and to display information about business processes. Its user-friendly interface helps you
find important information quickly and locate different objects or documents in SAP Business One.
For example, you can generate a report on all items or item groups, or all purchase orders that you
created for a particular vendor.

The Drag & Relate queries allow you to search for data both in reports and in the master data,
such as G/L accounts and business partners.

3. My Menu

Use the My Menu tab in the Main Menu to customize a personal menu to include windows,
menu options, and queries you use most frequently.

Password Maintenance

The users of SAP Business One are defined in the User-Setup window .The requirements for
user password can be managed by using the Change Password window.

1. To access the Change Password

window, choose Administration >
Setup > General > Security > Change
Password.
2. Take note of the Password and
the minimum characters allowed by Minimum Length

the system.
3. Type in your desired password
in the password field.
4. Re-type the chosen password
in the confirm tab and click OK.

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Customization – Display Parameters

The General Settings in the Administration module enables the user to define variables or set
fonts and place images as background in the Main SAP Business One window.

To define the language and how different variables (dates and numerical values) are displayed:
1. Go to Administration > System Initialization > General Setting.
2. Click on the Display tab and check the following settings:
Language : English (United States)
Time Format : 24H
Date Format :MM/DD/YY
3. Click UPDATE to save the settings. Click OK to exit the window.

To set the font you use for displaying texts in SAP Business One and to place your company
logo or other graphic as the background image in the main SAP Business One window:

1. Go to Administration > System Initialization > General Setting.

2. Click on the Font & Bkgd tab and change the following settings:
Font: <any font>
Font Size: <any size>
Background: <any
picture file>
Image Display: <any
option>
3. Click UPDATE to save
the settings. Click OK to
exit the window.

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Functions in a Form

SAP Business One offers two input tools:

 Selection list: Choose the icon left of the field to open a new window with a list of all possible
entries.
 Dropdown list: Choose the icon to the right of the field to open a dropdown list with all possible
entries.
The link arrow is a very powerful tool. It allows you to open windows with related information.

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Exercises

I. Identify the following:

____________1. It is the method in which financial information is gathered, processed, and

summarized into financial statements and reports.
____________2. It provides reliable, integrated solution to streamline your financial operations.
____________3. It is a feature of computerized accounting, adapts to the current and future needs of
the business, irrespective of its size or style.
____________4. Generates real-time, comprehensive MIS reports and ensures access to complete and
critical information, instantly.
____________5. Computerized accounting has the ability to handle huge volumes of transactions
without compromising on speed or efficiency.
____________6. Displays at the top of the screen and contains the Windows standard menu (File,
Edit, Window, Help) as well as generic SAP Business One functions.
____________7. It is a collection of icon buttons that grant you easy access to commonly-used
functions.
____________8. It arranges the functions of the individual applications in a tree structure.
____________9. Choose this icon to open a new window with a list of all possible entries.
____________10. Choose this icon to to open a dropdown list with all possible entries.
____________11. It allows you to open windows with related information.
____________12. You use it to create reports and to display information about business processes.
____________13. This is use to customize a personal menu to include windows, menu options, and
queries you use most frequently.
____________14. Contains the basic system settings for currency exchange rates, system setup, and
authorizations.
____________15. Handles all aspects of the sales process.
____________16. Stores the master data for all your business partners.
____________17. Manages all your accounting data and chart of accounts, general ledger, current
accounting posting, and reporting.
____________18. Lets you manage all your vendor transactions.
____________19. Handles full range of monetary transactions.
____________20. Manages your inventory, including warehouse stocks, price lists, etc.

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II. Identify the following icons:

1. 9.

2. 10.

3. 11.

4. 12.

5. 13.

6. 14.

7. 15.

8.

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Chapter 2

Chart of Accounts

Chart of Accounts is a financial organizational tool that provides a complete listing of every
account in an accounting system. An account is a unique record for each type of asset, liability, equity,
revenue and expense.

The chart of accounts consists of balance sheet accounts (assets, liabilities, stockholders' equity)
and income statement accounts (revenues, expenses, gains, losses). The chart of accounts can be
expanded and tailored to reflect the operations of the company.

Within the chart of accounts, you will find that the accounts are typically listed in the following
order:

Balance Sheet Accounts

Assets
Liabilities
Owner's (Stockholders') Equity

Income Statement Accounts

Operating Revenues
Operating Expenses
Non-operating Revenues and Gains
Non-operating Expenses and Losses

Within the categories of operating revenues and operating expenses, accounts might be further
organized by business function (such as producing, selling, administrative, financing) and/or by
company divisions, product lines, etc.

A company's organization chart can serve as the outline for its accounting chart of accounts.
For example, if a company divides its business into ten departments (production, marketing, human
resources, etc.), each department will likely be accountable for its own expenses (salaries, supplies,
phone, etc.). Each department will have its own phone expense account, its own salaries expense, etc.

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SAP Chart of Accounts

The Chart of Accounts is organized by drawers and levels. The organization of the chart of
accounts follows GAAP (Generally Accepted Accounting Principles) in which there is a separate
“drawer” for accounts representing: Assets, Liabilities, Equity (Capital and Reserves), Revenues
(Turnover), Cost of Sales, Expenses (Operation Costs), Financing (Non-Operating Income and
Expenditure), and Other Revenues and Expenses (Taxation and Extraordinary Items). These drawers,
which have been defined by SAP and cannot be changed, organize your accounts by level in a logical
fashion appropriate to your financial accounting and reporting processes.

In the General Ledger, we distinguish between Balance Sheet Accounts and Income Statement
Accounts, also called Profit and Loss Accounts.

Balance Sheet Accounts

 The first 3 drawers: Assets, Liabilities, Equity (Capital and Reserves) hold the Balance Sheet
Accounts, such as the Sales Tax account and the Accounts Payable Account.
 The bookkeeping balance of these accounts is kept from one fiscal year to the next.
 The Balance Sheet Accounts – reflect the monitory value of the company - stock, assets, debt, etc.

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Profit and Loss Accounts

 The last 5 drawers: Revenues (Turnover), Cost of Sales, Expenses (Operation Costs), Financing
(Non-Operating Income and Expenditure), and Other Revenues and Expenses (Taxation and
Extraordinary Items) hold the Profit and Loss Accounts, such as the Income Accounts. Note that in
some localizations, the lower drawers are not all profit and loss account drawers.
 The bookkeeping balance of these accounts has to be cleared at the end of each fiscal year – this is
the Period End Closing process (will be discussed in Unit 4: Financial Periods Process).
 The Profit and Loss Accounts - reflect the changes in the company value, such as: sell stock – cost
of goods sold, increase revenues.

A chart of accounts arranges a company's general ledger accounts in a hierarchical structure.

The top level in the structure (level 1) consists of sections or groups for different type of accounts
(assets, liabilities, capital and reserves, turnover, and so on). The system displays the section as a
cabinet drawer (see figure). Each drawer has a section title, which you cannot change. The system
displays lower-level titles in blue and normal active accounts in black. Accounts that you have entered
in the G/L Account Determ ination (default accounts) are displayed in green. Levels 2 through 4 can
contain either active accounts or titles that combine several active accounts. Level 5 only contains
active accounts. Because only active accounts can be posted to in SAP Business One, it is a good
practice to have all your active accounts at the same level. In reports, a title account summarizes all the
balances of each active account below it.

Two functions for maintaining the chart of accounts:

1. Choose Financials > Chart of Accounts to:

 View the chart of accounts.

 Change the properties of an account.

 To view and change some of the account properties, choose the Accounts Details button

 Add a new G/L account to an existing title.

 To add a new account, switch to Add mode by clicking the Add button in the toolbar

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2. Choose Financials > Edit Chart of Accounts to:

 Add a new title

 To add new account, click Add Same-Level Acct or Add Sub-Level Acct

 Delete an account
 To delete an account, right-click on the account you would like to delete > Advanced >
Delete Account
 Take note: You can only delete an account that has no postings.

 Move title and accounts within the structure of the chart of accounts

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Exercises

Add the following accounts:

G/L Account Name Level Title / Active

ASSETS
A2400 Office Furniture - net 3 Title
A2410 Office Furniture 4 Active
A2420 Accum. Dep. - Furniture 4 Active
LIABILITIES
L6000 SSS Payable 2 Active
L7000 Philhealth Payable 2 Active
L8000 Pag-ibig Payable 2 Active
OPERATING COSTS
OC15000 Depreciation – Furniture 2 Active
OC16000 Representation 2 Active
OC17000 Repairs & Maintenance 2 Active
OC18000 Professional fee 2 Active

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Chapter 3

Subsidiary Ledgers

What is the purpose of control accounts?

The purpose of the control account is to keep the general ledger free of details, yet have the
correct balance for the financial statements. For example, the Accounts Receivable account in the
general ledger could be a control account. If it were a control account, the company would merely
update the account with a few amounts, such as total collections for the day, total sales on account for
the day, total returns and allowances for the day, etc.

What is the purpose of subsidiary ledgers?

A subsidiary ledger is a ledger designed for the storage of specific types of accounting
transactions. Once information has been recorded in a subsidiary ledger, it is periodically summarized
and posted to an account in the general ledger, which in turn is used to construct the financial
statements of a company.

By having the details of the accounts receivable activity in a subsidiary ledger, a company can
better control its financial information. For example, the credit manager and others in the credit
department of a company will have access to any and all of the credit sales information through the
subsidiary ledger without having access to any other account in the company’s general ledger.

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In SAP Business One, outstanding balances of customers or vendors can be retrieved through
the Account Balance field. Once the navigation arrow is clicked, details of the debits and credits are
shown.

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Chapter 4

Accounting Cycle

Let’s tour the accounting cycle of the system.

Steps SAP Business One

1. Journal General Journal Financials > Journal Entry

Special Journals
a. Sales Journal Sales - AR
b. Purchases Journal Purchasing - AP
c. Cash/Check Receipts Banking - Incoming
d. Cash/Check Disbursements Banking - Outgoing

2. Ledger General Ledger Financials > Financial Reports > Accounting

>General Ledger

Subsidiary Ledger Financials > Financial Reports > Accounting

>GL Accounts and Business Partners

Business Partner > Business Partner Master Data

Stock Cards Inventory > Inventory Reports

> Inventory Posting

Inventory > Item Master Data

3. Trial Balance Financials > Financial Report > Financial

> Trial Balance

4. Adjusting Entries Financial > Journal Entry

Click Adjustment box

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5. Financial Statements Financial > Financial Report > Financial

> Profit and Loss Statement (Income Statement) or

Balance Sheet

6. Closing Entries Administration > Utilities > Period End Closing

7. Post-Closing Trial Balance Financials > Financial Report > Financial

Trial Balance > Check Add Closing Balances

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8. Reversing Entries Financials > Journal Entry
Click Reversal box

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Chapter 5

Journalizing

In accounting and bookkeeping, a journal is a record of financial transactions in order by date.

A journal is often defined as the book of original entry. The definition was more appropriate when
transactions were written in a journal prior to manually posting them to the accounts in the general
ledger or subsidiary ledger. Manual systems usually had a variety of journals such as a sales journal,
purchases journal, cash receipts journal, cash disbursements journal, and a general journal.

With today's computerized bookkeeping and accounting, it is likely to find only a general
journal in which adjusting entries and unique financial transactions are entered. The recording and
posting of most transactions will occur automatically when sales and vendor invoice information is
entered, checks are written, etc. In other words, accounting software has eliminated the need to first
record routine transactions into a journal.

Special Journals

Sales Journal - A special or specialized journal to record sales of merchandise to customers. In a manual
system this saves a significant amount of recording time. In today's computerized environment, sales
are recorded automatically when the sales invoice is generated.

Cash Receipts Journal - A special journal (or specialized journal) used to record money received. In a
manual system this will allow one entry to the Cash account for the month (or shorter periods) instead
of debiting the Cash account for every receipt.

Purchases Journal - A purchases journal is a record of all acquisitions made on credit during a period. In
other words, this is a journal that keeps track of the orders placed using vendor credit or accounts
payable as well as the current balance owed to each vendor.

Cash Disbursem ents Journal - A cash disbursement journal is a record kept by accountants to record all
financial expenditures made by a company. Cash disbursement journals serve a number of functions,
such as a source for recording tax write-offs and the categorization of other expenses. This journal
essentially functions as a checkbook ledger, for all practical purposes.

General Journal - The general journal is the master journal that all company transactions or journal
entries are recorded in. A typical general journal has at least five columns: one for the date, account
titles, posting reference, debit, and credit columns.

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The majority of journal entries in SAP Business One come from one of the other modules; sales,
purchasing, payment, and inventory documents post transactions automatically to the G/L. However,
in GAAP accrual-based accounting, you sometimes need to make manual journal entries in the G/L,
such as depreciation entries, accrual entries, correcting entries, and the like—anything, in other words,
that would not come from one of the other SAP Business One modules. When a journal entry is added
manually, it is recorded immediately and cannot be deleted—only reversed.

The purpose of manual journal entries is to record transactions that are not automatically
initiated from a sub ledger or from another process within SAP Business One. For example, a manual
journal entry might be used to record a finance charge to a customer account or a service fee to a bank
account.

Manual Journal Entry

To post a manual journal entry, choose Financials > Journal Entry.

The screen for entering journal entries manually is divided into three areas: document header
data, extended editing mode for an item, and the items table.

The three dates in the header default to the current system date but you can change them:
 Posting Date. This date determines the posting period, and therefore the fiscal period for financial
reporting. You can post to an earlier or later date if the posting period is Unlocked for posting.
 Due Date. The date the transaction is due.

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 Document Date. The date used for tax reporting purposes.

You can use the Ref. 1 and Ref. 2 fields to enter references to associated actual documents.

To add a debit account and debit amount, in the table, click the first field under the column G/L
Account / BP. A selection list will appear. This list is the Chart of Accounts. For the debit amount, click
the field under the column Debit and enter the amount in figures. The system will just automatically
put in currency.

Example:

On January 1, 20XX, Bea Diokno invests P200,000 to start a business.

A1120 Cash in Bank 200,000

CR1000 Diokno, Capital 200,000

Note: The default of the system is that the list of account titles is sorted according to the account codes. You
cannot type account title in the Find field to search for an account title. To sort it according to their account
codes, double-click Account Nam e. You will notice that the sm all triangle is transferred from the Account
Num ber to the Account Nam e.

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Draft Journal Entry / Journal Voucher

To create, change, and post journal vouchers, choose Financials > Journal Vouchers.

When the user is creating a journal voucher, it is used for storing several journal entry drafts.
You can change journal voucher as long as they have not been posted yet. Then, you can access the
journal voucher, make any necessary corrections, and post the entire journal voucher. You do not have
to post each journal entry individually. If you do want to post the journal entries individually,
however, you must create a separate journal voucher for each journal entry draft. You can save an
unbalanced journal vouchers as long as it is in the draft mode.

To add a journal voucher:

a. Go to Financials > Journal Vouchers.
b. When the Journal Vouchers window appears, click Add Entry to New Voucher.

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c. Set the date.
d. Click the first field under the column G/L Account / BP Name so that a selection list will appear.
e. Click the selection list so that the Chart of Accounts will appear and choose or double-click the
account.

You can remove a journal voucher or delete an entry from a journal voucher, as long as they
have not been posted yet. Choose the Data menu or, right-click the journal voucher row.

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Reversal

Users can make input errors. As a result, the journal entry created may contain incorrect
information. To provide an audit of the correction, the user must first reverse the journal entry in error,
and then capture the document correctly.

To cancel manual journal entries, locate the journal entry you wish to cancel and choose Cancel
from the Data menu. Approve the system message, enter any necessary changes and then click Add. In
the Remarks field, you will see the word “Reversal” followed by the number of the journal
entry/entries you cancelled.

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Transaction Journal Report

Transaction Journal Report displays a list of transactions according to a selected transaction

type.

To access, go to Financials > Financial Reports > Accounting > Transaction Journal Report.

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Exercises

Create the following entries in journal entry:

Date Particulars Amount

January 01, 20XX Ms. Diokno invested capital to start- Php 500,000
up a business.
January 01, 20XX The owner advanced cash for Php 10,000
purchases of furniture (table and
chairs)
January 02, 20XX Paid rent Php 7,000
January 02, 20XX Paid business registration and Php 3,000
municipal tax
January 02, 20XX Paid printing of Official Receipts and Php 4,000
various office forms
January 03, 20XX Bought office supplies Php 2,000
January 03, 20XX The owner invested additional capital Php 200,000

View the transaction journal report for January 1 – 3, 20XX and submit to your instructor.

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Chapter 6

Special Journal - Purchases

Special Journals

A special journal is any accounting journal in the general journal that is used to record and post
transactions of similar types. In other words, it’s a place where similar transactions can be recorded
and organized, so bookkeepers and accountants can keep track of different business activities.

Although companies create special journals for other types of repetitive transactions, almost all
merchandising companies use special journals for sales, purchases, cash receipts, and cash
disbursements.

Special Journal – Purchases

The purchases journal lists all credit purchases of merchandise. Entries in this journal usually
include the date of the entry, the name of the supplier, and the amount of the transaction. Some
companies include columns to identify the invoice date and credit terms, thereby making the
purchases journal a tool that helps the companies takes advantage of discounts just before they expire.
The purchases journal to the right has only one column for recording transaction amounts. Each entry
increases (debits) purchases and increases (credits) accounts payable.

Each day, individual entries are posted to the accounts payable subsidiary ledger accounts.
Creditor account numbers (or check marks if the creditor accounts are not numbered) are placed in the
purchases journal’s reference column to indicate that the entries have been posted. At the end of the
accounting period, the column total is posted to purchases and accounts payable in the general ledger.

Procurement under SAP Business One

“The flow of inform ation between purchasing, sales, and accounting is m uch sm oother now. . . . With
SAP Business One, we have achieved m ajor savings in term s of tim e and m oney.”

Sunday Odubote, Financial Accountant,

City Business Computers Limited

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“With SAP Business One, you gain a detailed view of your vendors and support for an integrated,
centralized vendor data repository so you can m ake m ore effective purchasing decisions, identify opportunities for
cost savings, and better m anage supplier relationships.”

“Master data m anagem ent is a cornerstone of process integration in SAP Business One. Item and
vendor m aster records are m aintained centrally in the system and integrated in all necessary business
transactions.

In SAP Business One, the document to use for credit purchase transaction is A/P Invoice.

A/P Invoice

An A/P invoice is entered into SAP Business One when you receive an invoice from the vendor.
It will be used to trigger a payment to the vendor.

Data entry tip. Use the Docum ent Date field in the A/P invoice header to enter the vendor’s invoice
date. This is important for accounting and auditing reasons as the invoice date and the posting date
may differ. You may also wish to change the name of the Vendor Ref. No. field in the document header
to Vendor Invoice No. This field prints on the check and allows your vendor to tie the payment to their
invoice.

Accounting Impact of an A/P Invoice: The posted A/P invoice generates entries in the general ledger
and updates the vendor account with the amount owed to the vendor.

Inventory Impact: In those

cases where a vendor’s
invoice arrives at the time
the items are received, the
resulting A/P invoice also
increases inventory
quantities and values.

To access: Go to
Purchasing A/P > A/P
Invoice.

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Example:

On January 5, 2015, the enterprise bought two Personal Computer at Silicon Bali for P70,000 (vat
not yet included). Credit term is n/30. Expected life is five years with a salvage value of P10,000.

 Click the vendor field. Click the selection list.

 Choose Silicon Bali.
 Type 01.05 (Jan 5, 20XX) in the Posting Date field.
 Press tab. The system automatically assigns the due date field which is 30 days after the posting
and document dates. The reason for this is that during the creation of the subsidiary ledger for
Silicon Bali, the payment term chosen was n/30.

 In the Item/Service Type field, change Item to Service by clicking the dropdown list.
 In the first line of the table under the column G/L Account, choose office equipment. In the column
Total (LC) of the same line, type 70,000.
 Press tab. Document total is now at P78,400 since VAT is added.
 Click Add or press Enter.
 Click Yes when System Message prompts: You cannot change this document after you have added
it. Continue?
 The system has just posted AP Invoice document 1.

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To view the journal entry made in AP Invoice:

 AP Invoice must still be open.

 Click the last data record icon in the toolbar.
 Click the Accounting tab.
 Click the golden or navigation arrow after Journal Remark.

 You are led to Journal Entry of the Financials module.

 Click OK or Cancel to exit.

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Reversal of A/P Invoice

If a document is added in error, has become invalid, or has no concrete transactions associated
with it, you can cancel the document but still store it in the database.

To cancel a document, go to Purchasing A/P > A/P Invoice.

 Change to find mode by clicking the Find icon in the Toolbar
 Input the document no. and click Find or Enter
 The document you would like to cancel will appear.
 In the lower right side, click Copy to > A/P Credit Memo
 Click Add in the A/P Credit Memo window and confirm the system message.
 View the Journal Entry made by the A/P Credit Memo, it is the reversal of the entry made in the
A/P Invoice.

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Exercises

Enter the following purchases on the account:

Date Particulars Amount

January 05, 20XX Bought computer peripherals at Php 20,000
Silicon Bali
January 07, 20XX Bought machinery to be used in Php 100,000
servicing clients at Espil
January 07, 20XX Bought additional personal computer Php 45,000
(35,000) and computer peripherals
(10,000) at Silicon Bali
January 08, 20XX Bought additional machinery at Espil P 100,000

View the transaction journal report for January 5 – 8, 20XX and submit to your instructor.

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Chapter 7

Special Journal – Disbursements

Cash disbursements occur in business when a company makes a payment. A number of

different transactions can incur a cash disbursement. Companies record these transactions, as every
disbursement results in a lower cash balance. Disbursements will either result in a use or exchange of
assets. Many companies report disbursements in a separate accounting journal.

Disbursement Journal

Companies usually will maintain a cash disbursement journal as part of their general ledger.
Frequent cash disbursements can quickly fill the general journal, resulting in this subunit of the overall
accounting ledger. Only cash disbursements go in this journal. Companies that initially purchase
goods on credit will record the entry into the purchases journal. Once the payable is due, the company
must disburse cash. This entry is part of the cash disbursements journal.

Outgoing Payments in SAP Business One

Use this window to create a record each time your company issues a payment to a customer,
vendor or account.

The outgoing payment document can be created for the following payment means:

 cash
 check
 credit card
 bank transfer

Once the outgoing payment is added, an appropriate journal entry is created. When creating an
outgoing payment to clear (fully or partially) a specific document or transaction, an internal
reconciliation automatically takes place.

To access, go to Banking > Outgoing Payments > Outgoing Payments.

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Payment of Invoice from Suppliers

On January 10, 20XX, the enterprise paid the amount due to Silicon Bali amounted to 78,400.
Check no. 001

 In the Code field, click the Selection List and choose Silicon Bali.
 Set the posting date, document date and due date as Jan. 10, 20XX.

 Select the invoice you would pay.

 In the Total Payment column input the amount to be paid.

 Select the payment means by clicking the icon in the toolbar or right-click in the outgoing
payments window and choose the Payment Means

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 In the Payment Means window, set the due date as Jan 10.
 Right-click in the amount and choose Copy Balance Due.

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 To enable the Check No. column, check the checkbox in the Manual column.
 Input the check no.

 Click OK.
 Click Add.
 A system message will appear: You cannot change this document after you have added it
Continue?
 Click Add.

To retrieve the journal entry made in Outgoing Payment:

 Still in Outgoing Payment window, click the Last Data Record icon in the toolbar.
 To view the journal entry made, click the golden arrow after Transaction No.

 You will be led to the next screen.

 Click OK or Cancel to exit from the current screen.

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Payment of Expenses

On January 10, 20XX, payment was made to the City Treasurer, amounting to P4,000 for licenses
and registration fees, with check no. 002.

 From Vendor, click Account.

 Set the posting date, document date and due date as Jan. 10, 20XX.
 In the first line of the table, under the column GL Account, click the field so that a selection list icon
will appear.
 Click the selection list so that a list of GL accounts will appear.
 Choose Taxes and Licenses by double-clicking on it.
 Type 4,000 (no currency) under the Net Amount field of the same line.

 Select the payment means by clicking the icon in the toolbar or right-click in the outgoing
payments window and choose the Payment Means

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 In the Payment Means window, set the due date as Jan 10.
 Right-click in the amount and choose Copy Balance Due.
 To enable the Check No. column, check the checkbox in the Manual column.
 Input the check no.
 Click OK.
 Click Add.
 A system message will appear: You cannot change this document after you have added it
Continue?
 Click Add.

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To retrieve the journal entry made in Outgoing Payment:

 Still in Outgoing Payment window, click the Last Data Record icon in the toolbar.
 To view the journal entry made, click the golden arrow after Transaction No.

 You will be led to the next screen.

 Click OK or Cancel to exit from the current screen.

Reversal of Outgoing Payment

To cancel a document, go to Banking > Outgoing Payments > Outgoing Payments.

 Change to find mode by clicking the Find icon in the Toolbar

 Input the document no. and click Find or Enter
 The document you would like to cancel will appear.
 Right-click on the document and select Cancel
 Confirm the system message.

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Exercises

Enter the following payments from vendors/suppliers:

Date Particulars Payment Amount

Means
January 9, 20XX Paid Silicon Bali for computer Check – 003 Php 22,400
peripherals bought on
January 05
January 10, 20XX Partially paid Espil for Check – 004 Php 50,000
machinery bought on January
07
January 12, 20XX Paid Silicon Bali for the Check – 005 Php 50,400
remaining invoice
January 12, 20XX Paid Espil for remaining Check – 006 Php 62,000
balance of machinery bought
on January 07

View the transaction journal report for January 9 – 12, 20XX and submit to your instructor.

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Chapter 8

Special Journal – Sales

Sales Journal

The sales journal lists all credit sales made to customers. Sales returns and cash sales are not
recorded in this journal. Entries in the sales journal typically include the date, invoice number,
customer name, and amount. Invoices are the source documents that provide this information. In its
most basic form, a sales journal has only one column for recording transaction amounts. Each entry
increases (debits) accounts receivable and increases (credits) sales.

Notice the dates and posting references applied to each entry in the illustration to the right.
Each day, individual sales journal entries are posted to the accounts receivable subsidiary ledger
accounts so that customer balances remain current. Customer account numbers (or check marks if
customer accounts are simply kept in alphabetical order) are placed in the sales journal's reference
column to indicate that the entries have been posted. At the end of the accounting period, the column
total is posted to the accounts receivable and sales accounts in the general ledger. Account numbers
are placed in parentheses below the column to indicate that the total has been posted.

Many companies use a multi-column (columnar) sales journal that provides separate columns
for specific sales accounts and for sales tax payable. Each line in a multi-column journal must contain
equal debits and credits. For example, the entries in the sales journal to the right appear below in a
multi-column sales journal that tracks hardware sales, plumbing sales, wire sales, and sales tax
payable. Individual entries are still posted daily to the accounts receivable subsidiary ledger accounts,
and each column total is posted at the end of the accounting period to the appropriate general ledger
account.

Credit Sales Transaction

In SAP Business One, the document to use for credit sales transaction is A/R Invoice.

To access: Go to Sales A/R > A/R Invoice.

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Example:

On January 12, 20XX, the Enterprise render service to Paolo Pascual amounted to P5,000. A
payment term is 30 days. Vat not yet included.

 Click the customer field. Click the selection list.

 Choose Paolo Pascual.
 Type 01.12 (Jan 12, 20XX) in the Posting Date field.
 Press tab. The system automatically assigns the due date field which is 30 days after the posting
and document dates. The reason for this is that during the creation of the subsidiary ledger for
Paolo Pascual, the payment term chosen was n/30.

 In the Item/Service Type field, change Item to Service by clicking the dropdown list.
 In the first line of the table under the column G/L Account, choose service income (T2100). In the
column Total (LC) of the same line, type 5,000.
 Press tab. Document total is now at P5,600 since VAT is added.
 Click Add or press Enter.

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 Click Yes when System Message prompts: You cannot change this document after you have added
it. Continue?

 The system has just posted AR Invoice document 1.

To view the journal entry made in AR Invoice:

 AR Invoice must still be open.

 Click the last data record icon in the toolbar.
 Click the Accounting tab.
 Click the golden or navigation arrow after Journal Remark.

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 You are led to Journal Entry of the Financials module.

 Click OK or Cancel to exit.

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Cash Sales Transaction

In SAP Business One, the document to use for cash sales transaction is A/R Invoice + Payment.

To access it, go to Sales A/R > A/R Invoice + Payment.

Example:

On January 12, 20XX, the Enterprise render service to walk-in customer amounted to P3,000.
Vat not yet included.

 Type 01.12 (Jan 12, 20XX) in the Posting Date field.

 Press tab.

 In the Item/Service Type field, change Item to Service by clicking the dropdown list.
 In the first line of the table under the column G/L Account, choose service income (T2100). In the
column Total (LC) of the same line, type 3,000.

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 Press tab. Document total is now at P3,360 since VAT is added.

 Click Add or press Enter. Payment means window will open.

 Click the Cash tab.
 In the G/L Account field, choose
cash on Hand.
 In the Total field, right-click and
choose Copy Balance Due.
 Click OK and the screen for
Payment Means will exit.
 In the AR Invoice, click Add.
 Click Yes when System Message
prompts: You cannot change this
document after you have added
it. Continue?
 Click Cancel to exit.

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Exercises

Enter the following sales on the account:

Date Particulars Amount

January 15, 20XX Rendered service to Kathryn Lustre Php 3,000
January 15, 20XX Rendered service to James Padilla Php 5,000
January 16, 20XX Rendered service to Alden Mendoza Php 2,000
January 16, 20XX Rendered service to Kris Aquino Php 7,000
January 17, 20XX Rendered service to Nadine Bernardo Php 4,000
January 17, 20XX Rendered service to Froilan Castro Php 2,500
January 17, 20XX Rendered service to Daniel Reid Php 6,000

View the transaction journal report for January 15 – 17, 20XX and submit to your instructor.

Enter the following sales for walk-in customers:

Date Amount
January 18, 20XX Php 4,000
January 18, 20XX Php 3,000
January 18, 20XX Php 2,000
January 19, 20XX Php 5,000
January 19, 20XX Php 4,000

View the transaction journal report for January 18 – 19, 20XX and submit to your instructor.

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Chapter 9

Special Journal – Receipts

A cash receipts journal is a special record used in accounting, usually by retailers. It involves
recording the details of sales in a specific manner. In turn, the cash receipts journal gathers together the
relevant information in a way that makes it easier to copy across, in aggregate, to traditional double-
entry accounts.

Incoming Payments in SAP Business One

Use this window to create a record each time your company receives a payment from a
customer, vendor or account.

The incoming payment document can be created with the following payment means:

 cash
 check
 credit card
 bank transfer

Once the incoming payment is added, an appropriate journal entry is created. When creating an
incoming payment to clear (fully or partially) a specific document or transaction, an internal
reconciliation automatically takes place.

To access, go to Banking > Incoming Payments > Incoming Payments.

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Example:

On January 22, 20XX, Paolo Pascual settled partially, P2,000 through cash.

On January 27, 20XX, Paolo Pascual settled the remaining balance through cash.

Partial Payment

 In the Code field, click the Selection List and choose Paolo Pascual.
 Set the posting date, document date and due date as Jan. 22, 20XX.

 Select the invoice to be paid.

 In the Total Payment column, input the amount to be paid.

 Select the payment means by clicking the icon in the toolbar or right-click in the incoming
payments window and choose the Payment Means

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 Click the Cash tab.
 In the G/L Account field, choose cash on Hand.
 In the Total field, right-click and choose Copy Balance Due.
 Click OK and the screen for Payment Means will exit.
 Click Add.
 A system message will
appear: You cannot
change this document
after you have added it
Continue?
 Click Add.

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To retrieve the journal entry made in Incoming Payment:

 Still in Incoming Payment window, click the Last Data Record icon in the toolbar.
 To view the journal entry made, click the golden arrow after Transaction No.

 You will be led to the next screen.

 Click OK or Cancel to exit from the current screen.

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Full Payment

 In the Code field, click the Selection List and choose Paolo Pascual.
 Set the posting date, document date and due date as Jan. 27, 20XX.
 Select the invoice to be paid.
 In the Total Payment column input the amount to be paid.

 Select the payment means by clicking the icon in the toolbar or right-click in the incoming
payments window and choose the Payment Means

 Click the Cash tab.

 In the G/L Account field, choose cash on Hand.
 In the Total field, right-click and choose Copy Balance Due.
 Click OK and the screen for Payment Means will exit.
 Click Add.
 A system message will appear: You cannot change this document after you have added it
Continue?
 Click Add.

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To retrieve the journal entry made in Incoming Payment:

 Still in Incoming Payment window, click the Last Data Record icon in the toolbar.
 To view the journal entry made, click the golden arrow after Transaction No.
 You will be led to the next screen.

 Click OK or Cancel to exit from the current screen.

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Exercises

Enter the payment of the following customers:

Date Particulars Amount

January 21, 20XX Received from Kathryn Lustre Php 3,360
January 22, 20XX Received from James Padilla Php 5,600
January 22, 20XX Received from Alden Mendoza Php 2,240
January 23, 20XX Received from Kris Aquino Php 7,840
January 24, 20XX Received from Nadine Bernardo Php 4,480
January 25, 20XX Received from Froilan Castro Php 2,800
January 25, 20XX Received from Daniel Reid Php 6,720

View the transaction journal report for January 21 – 25, 20XX and submit to your instructor.

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Chapter 10

Perpetual Inventory System

Perpetual Inventory System

Perpetual inventory is a method of accounting for inventory that records the sale or purchase of
inventory immediately through the use of computerized point-of-sale systems and enterprise asset
management software. Perpetual inventory provides a highly detailed view of changes in inventory
with immediate reporting of the amount of inventory in stock, and accurately reflects the level of
goods on hand.

A point-of-sale system drives changes in inventory levels because inventory is decreased, and
cost of sales, an expense account, is increased whenever a sale is made. Inventory reports are accessed
online at any time, which makes it easier to manage inventory levels and the cash needed to purchase
additional inventory. A periodic system requires management to stop doing business and physically
count the inventory before posting any accounting entries. Businesses th at sell large dollar items, such
as car dealerships and jewelry stores, must frequently count inventory, but these firms also maintain a
point-of-sale system. The inventory counts are performed frequently to prevent theft of assets, not to
maintain inventory levels in the accounting system.

Sales returns have the effect of increasing stock on hand and purchase returns decrease the
stock on hand. Withdrawals of inventory by the proprietor must also be accounted for, as this will
decrease the balance of stock. As inventory is always recorded at cost price, there is a need to have
access to information regarding the cost price of stock throughout the accounting period.

Advantages of Perpetual Inventory

1. There is greater control over stock because up-to-date information is available throughout the
accounting period. This means management is able to make better decisions relating to inventory.

2. Slow moving and fast moving lines of inventory can be identified. A stock card is used to record all
movements of a particular item of inventory.

3. Reordering of inventory is more efficient. Part of perpetual inventory involves keeping a record of
how many units of each type of stock are on hand at any time. When the number of units reaches a
certain level (known as the reorder point) an order can be dispatched to the relevant supplier. This
helps to avoid the problem of running out of stock.

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4. Interim profit reports can be prepared without doing a stock take. Gross profit figures can be
calculated on a monthly/weekly even daily basis, and estimated net profit figures can be calculated for
each week or month.

5. The level of stock losses or gains can be measured. The perpetual method can identify the stock
actually sold and the goods which have been lost (due to theft and breakages).

Screenshot of the Item Master Data from SAP Business One

Inventory Status

You can also see the inventory status in the item master on the Inventory Data tab page.

 In Stock: The current stock level of the item.

 Com m itted: The item stock that is reserved for customers and for internal use is displayed here. The
stock that is reserved for internal use is the quantity of the item for that will be used for a finished
product based on the BOMs for existing production orders.
 Ordered: This field shows the quantity of the item ordered from the vendor. This figure consists of
the quantity ordered from external vendors plus the quantity that is being produced and that will
enter the warehouse by a certain date.
 Available: The available quantity of an item displays. This figure comprises:
In Stock - Com m itted + Ordered

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Stock Movements

SAP Business One records goods receipts and goods issues in any warehouse and allows you to
track your stock transfers from one warehouse to another. By integrating individual item prices or
price lists, the application simultaneously updates inventory valuation. SAP Business One also fully
integrates inventory and accounting transactions. As a result, when stock levels are adjusted,
inventory accounts are immediately credited or debited, and applicable inventory variances are
accounted for as soon as a stock movement is posted.

Purchase of Items

Example:

On February 5, 20XX the Enterprise purchased the following items from Paule’s Choice:

Item No. Qty. Unit Price Total

AE0003 3 2,400.00 7,200.00
BE0003 3 1,120.00 3,360.00
BL0001 5 760.00 3,800.00
M0010 5 1,280.00 6,400.00
ST0003 5 640.00 3,200.00

 Go to Purchasing A/P > A/P Invoice.

 Click the vendor field. Click the selection list.
 Choose Paule’s Choice.
 Type 02.05 (Feb 5, 20XX) in the Posting Date field.
 Press tab. The system automatically assigns the due date field which is 30 days after the posting
and document dates. The reason for this is that during the creation of the subsidiary ledger for
Paule’s Choice, the payment term chosen was n/30.

 

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 In the Item/Service Type field, click the dropdown list and select Item.
 In the first line of the table under the column Item No., choose AE0003. In the quantity column,
type 3.
 Press tab. Total LC is now at P7,200 and Document Total is P8,064 since VAT is added.

 In the second line of the table select BE0003 and change the Quantity. Continue the steps until you
finished ST0003.
 Document total is P26,835.20 since VAT is added.
 Click Add or press Enter.
 Click Yes when System Message prompts: You cannot change this document after you have added
it. Continue?

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To view the journal entry made in AP Invoice:

 AP Invoice must still be open.

 Click the last data record icon in the toolbar.
 Click the Accounting tab.
 Click the golden or navigation arrow after Journal Remark.

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 You are led to Journal Entry of the Financials module.
 Click OK or Cancel to exit.

To view the inventory in the warehouse:

 AP Invoice must still be open.

 Click the last data record icon in the toolbar.
 Click the link arrow in Item No. The item master data window will open.

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 In the Item Master Data window, select Inventory Data tab.
Note: Since we use A/P Invoice, the quantity in “In Stock” and “Available” column should
increase.

 Click OK or Cancel to exit.

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Exercises

Create the following purchases on account on February 10, 20XX:

Clinic
Item No. Qty. Unit Price Total
E0003 5 1,640.00 8,200.00
M0006 5 880.00 4,400.00
ST0001 5 920.00 4,600.00
ST0002 5 920.00 4,600.00
SS0003 5 920.00 4,600.00

Paule’s Choice
Item No. Qty. Unit Price Total
M0003 3 1,280.00 3,840.00
S0004 3 1,440.00 4,320.00
T0003 10 920.00 9,200.00
T0004 10 800.00 8,000.00

Dra. Dennise Gross Skincare

Item No. Qty. Unit Price Total
E0002 5 2,600.00 13,000.00
S0002 3 2,720.00 8,160.00

Elizabeth Alden
Item No. Qty. Unit Price Total
S0001 3 2,960.00 8,880.00
LG0001 10 720.00 7,200.00

esmashbox
Item No. Qty. Unit Price Total
F0001 3 1,680.00 5,040.00
BE0002 3 1,680.00 5,040.00

Eztee Louder
Item No. Qty. Unit Price Total
L0003 5 1,200.00 6,000.00
MA0003 10 1,000.00 10,000.00

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Kiss My Cheeks
Item No. Qty. Unit Price Total
M0007 10 518.00 5,180.00
SS0001 5 600.00 3,000.00

LA’Oreal
Item No. Qty. Unit Price Total
F0004 5 460.00 2,300.00
B0003 10 518.00 5,180.00

Laura Michelle
Item No. Qty. Unit Price Total
L0001 5 1,080.00 5,400.00
TM0002 5 1,720.00 8,600.00

M.A.C.K
Item No. Qty. Unit Price Total
F0003 3 1,280.00 3,840.00
AE0004 3 2,000.00 6,000.00
T0001 5 1,400.00 7,000.00
T0002 5 1,120.00 5,600.00
LG0004 10 1,040.00 10,400.00

View the transaction journal report for February 10, 20XX and submit to your instructor.

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Sale of Items

Example:

On February 11, 20XX, Nadine Bernardo bought the following items: Item No. Qty.
F0004 1
L0001 2

 Go to Sales A/R > A/R Invoice.

 Click the customer field. Click the selection list.
 Choose Nadine Bernardo.
 Type 02.10 (Feb 10, 20XX) in the Posting Date field.
 Press tab. The system automatically assigns the due date field which is 30 days after the posting
and document dates. The reason for this is that during the creation of the subsidiary ledger for
Nadine Bernardo, the payment term chosen was n/30.

 In the Item/Service Type field, click

the dropdown list and select Item.
 In the first line of the table under the
column Item No., choose F0004. In the
quantity column, type 1.
 Press tab. Total LC is now at P598 and
Document Total is P669.76 since VAT
is added.

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 In the second line of the table select L0001 and change the Quantity. Document total is P3,814.72
since VAT is added.
 Click Add or press Enter.
 Click Yes when System Message prompts: You cannot change this document after you have added
it. Continue?

To view the journal entry made in AR Invoice:

 AR Invoice must still be open.

 Click the last data record icon in the toolbar.
 Click the Accounting tab.
 Click the golden or navigation arrow after Journal Remark.

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 You are led to Journal Entry of the Financials module.
 Click OK or Cancel to exit.

To view the inventory in the warehouse:

 AR Invoice must still be open.

 Click the last data record icon in the toolbar.
 Click the link arrow in Item No. The item master data window will open.

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 In the Item Master Data window, select Inventory Data tab.
Note: Since we use A/R Invoice, the quantity in “In Stock” and “Available” column should
decrease.

 Click OK or Cancel to exit.

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Exercises

Create the following sales on the account:

February 12, 20XX

Maine Richards Kris Aquino

Item No. Qty. Paolo Pascual Froilan Castro Item No. Qty.
T0002 1 Item No. Qty. Item No. Qty. M0007 1
B0003 1 S0001 1 S0002 1 ST0001 1

February 15, 20XX

Bea dela Cruz

Alden Mendoza Kathryn Lustre Item No. Qty. Daniel Reid
Item No. Qty. Item No. Qty. L0001 1 Item No. Qty.
E0002 1 TM0002 1 L0003 1 T0001 1

February 20, 20XX

Kris Aquino
Charles Lee Item No. Qty.
Item No. Qty. F0003 1
AE0004 1 L0003 1

View the transaction journal report for February 12 – 20, 20XX and submit to your instructor.

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Chapter 11

General Ledger

This report enables you to generate a list of journal entries posted to the company database
according to various criteria.

Generating the General Ledger Report

 Go to Financials > Financial Reports > Accounting > General Ledger.

 The General Ledger – Selection Criteria will appear.

 Uncheck Business Partner since this would refer to Subsidiary Ledgers of all customers and vendors.
 The Accounts must be checked.
 Click x between # and Account.
 Enter the desired posting date range.
 Click OK.

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Chapter 12

Trial Balance

A trial balance is a bookkeeping or accounting report that lists the balances in each of an
organization's general ledger accounts. (Accounts with zero balances will likely be omitted.) The debit
balance amounts are listed in a column with the heading "Debit balances" and the credit balance
amounts are listed in another column with the heading "Credit balances." The total of each of these two
columns should be identical.

In a manual system a trial balance was commonly prepared by the bookkeeper in order to
discover whether math errors and/or some posting errors were made. Today, bookkeeping and
accounting software has eliminated those clerical errors. This means that the trial balance is less
important for bookkeeping purposes since it is almost certain that the total of the debit and credit
columns will be equal.

However, the trial balance continues to be useful for auditors and accountants who wish to
show 1) the general ledger account balances prior to their proposed adjustments, 2) their proposed
adjustments, and 3) all of the account balances after the proposed adjustments. These final balances are
known as the adjusted trial balance, and these amounts will be used in the organization's financial
statements.

Generating the Trial Balance Report

 Go to Financials > Financial Reports > Financial > Trial Balance.

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 The Trial Balance – Selection Criteria will appear.
 Uncheck Business Partner since this would refer to Subsidiary Ledgers of all customers and
vendors.
 The Accounts must be checked. Click x between # and Account.
 Enter the desired posting date range. Click OK.
 The Trial Balance Report will be shown.

 Change to desired level from Level 1 to Level 5.

 You can also hide the titles by clicking “Hide Titles” checkbox.

 Submit the generated Trial Balance Report to your instructor.

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Chapter 13

Adjustments

Adjusting entries are journal entries made at the end of an accounting cycle to update certain
revenue and expense accounts and to make sure you comply with the matching principle.
The matching principle states that expenses have to be matched to the accounting period in which the
revenue paying for them is earned. There are four main types of accounts that need to be adjusted:
prepaid expenses, accrued expenses, unearned revenues and accrued revenues.

The two major types of adjusting entries are:

a. Accruals are for revenues and expenses that are matched to dates before the transaction has been
recorded.

b. Deferrals are for revenues and expenses that are matched to dates after the transaction has been
recorded.

Accruals

Accruals are adjustments for 1) revenues that have been earned but are not yet recorded in
the accounts, and 2) expenses that have been incurred but are not yet recorded in the accounts. The
accruals need to be added via adjusting entries so that the financial statements report these amounts.

Some accrued items for which adjusting entries may be made include:

 Salaries
 Past-due expenses
 Income tax expenses
 Interest income
 Unbilled revenue

Deferrals

In accounting, this means to defer or to delay recognizing certain revenues or expenses on the
income statement until a later, more appropriate time. Revenues are deferred to a balance sheet

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liability account until they are earned in a later period. When the revenues are earned they will be
moved from the balance sheet account to revenues on the income statement.

Some deferred items for which adjusting entries would be made include:

 Prepaid insurance
 Prepaid rent
 Office supplies
 Depreciation
 Unearned revenue

Completing the Adjusting of Entries

To prevent inadvertent omission of some adjusting entries, it is helpful to review the ones from
the previous accounting period since such transactions often recur. It also helps to talk to various
people in the company who might know about unbilled revenue or other items that might require
adjustments.

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Chapter 14

Financial Statements

Navigate the system for the list of journal entries made through the document Journal Entry.

 Go to Financials > Financial Report > Financial > Balance Sheet/Profit and Loss Statement.

 When Balance Sheet/Profit and Loss Statement/Cash Flow Report

– Selection Criteria window appears, enter the desired range dates.

 Click OK.

 Submit the balance sheet and profit and loss statement to your instructor.

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Chapter 15

Closing Entries

 To access, go to Administration> Utilities > Period End Closing.

 When Period End Closing – Selection Criteria window appears Enter the following:
 Period – 20XX
 From 20XX-01
 To 20XX-02
 Retained Earnings Account – Diokno, Capital
 Period-End Closing Account – Income Summary

 Click Execute.

In the Period End Closing Window, do the following:

 Due date and Document Date: February 28, 20XX

 Click ‘approved’ or click the checkboxes (to close nominal accounts to Diokno, Capital.
 Execute

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To generate the journal entries made:

 Go to Financials > Financial Report > Accounting > Transaction Journal Report .
 When Transaction Journal Report – Selection Criteria window appears, choose Closing Balance in
the Original Journal field.
 Enter the desired range dates: From 02.28.XX to 03.01.XX.

 Click OK.

 Submit the transaction journal report to your instructor.

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Chapter 16

Post-Closing Trial Balance

Generating the Trial Balance Report

 Go to Financials > Financial Reports > Financial > Trial Balance.

 The Trial Balance – Selection Criteria will appear.
 Uncheck Business Partner since this would refer to Subsidiary Ledgers of all customers and
vendors.
 The Accounts must be checked. Click x between # and Account.
 Enter the desired posting date range.
 Click Add Closing Balances checkbox. Click OK.

 The Trial Balance Report will be shown. Change to desired level from Level 1 to Level 5.
 Click Hide Titles checkbox.
Note: The profit and loss account balances m ust be zero.
 Submit the generated Trial Balance Report to your instructor.
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Additional Exercises

MARCH (Service Concern)

DATE PARTICULARS
March 2 Invested additional cash amounting to 800,000
March 2 Paid rent amounting to 7,000. Check no. 007
March 3 Bought office supplies amounting to 3,000. Check no. 008
March 3 Paid Espil Co. for remaining balance amounting to 112,000. Check no. 009
March 5 Rendered service to Kris Aquino on account for 2,500 (vat not yet included)
March 6 Rendered service to Charles Lee on account for 3,000 (vat not yet included)
March 6 Rendered service to Kathryn Lustre on account for 1,500 (vat not yet included)
March 9 Rendered service to Maine Richards on account for 4,000 (vat not yet included)
March 9 Rendered service to James Padilla on account for 2,000 (vat not yet included)
March 10 Rendered service to Alden Mendoza on account for 3,000 (vat not yet included)
March 10 Received payment from Froilan Castro for 3,960.32
March 10 Received payment from Charles Lee for 2,912
March 11 Received payment from Maine Richards for 2,384.93
March 11 Rendered service to Froilan Castro on account for 3,000 (vat not yet included)
March 12 Received payment from Alden Mendoza for 3,785.60
March 12 Rendered service for cash amounting to 2,500 (vat not yet included)
March 13 Received payment from Nadine Bernardo for 3,814.72
March 14 Rendered service for cash amounting to 3,500 (vat not yet included)
March 15 Paid salary of the bookkeeper for the first half of the month for 5,000. Check no.
010
March 15 Rendered service for cash amounting to 5,500 (vat not yet included)
March 16 Received payment from Kathryn Lustre for 2,504.32
March 17 Rendered service for cash amounting to 5,000 (vat not yet included)
March 18 Received payment from Daniel Reid for 2,038.40
March 19 Rendered service for cash amounting to 3,000 (vat not yet included)
March 20 Received payment from Kris Aquino for 2,093.73 & 3,610.88
March 20 Rendered service for cash amounting to 6,000 (vat not yet included)
March 23 Received payment from Bea dela Cruz for 3,319.68
March 25 Rendered service for cash amounting to 1,500 (vat not yet included)
March 26 Rendered service to Daniel Reid on account for 4,000 (vat not yet included)
March 27 Rendered service to Maine Richards on account for 3,500 (vat not yet included)
March 31 Paid utilities for the month. Water 500 (Check no. 011) & Electricity 850 (Check
no. 012)
March 31 Paid telephone bill for 300. Check no. 013
March 31 Paid salary of the bookkeeper for the end of the month for 5,000. Check no. 014
March 31 Record depreciation for office equipment, machinery and office furniture.

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Property Useful life
Office equipment 5yrs
Machinery 5yrs
Office Furniture 2yrs

March 31 Unused office supplies amounted to 1,500

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Additional Exercises

APRIL (Merchandising)

DATE PARTICULARS
April 1 Paid rent amounting to 7,000. Check no. 015
April 2 Bought office supplies amounting to 2,000
April 5 Received payment from Kris Aquino for 2,800
April 6 Received payment from Charles Lee for 3,360
April 6 Received payment from Kathryn Lustre for 1,680
April 9 Received payment from Maine Richards for 4,480
April 9 Received payment from James Padilla for 2,240
April 10 Received payment from Alden Mendoza on account for 3,360
April 10 Paid Estee Louder for purchases made on February 10 for 17,920. Check no. 016
April 10 Paid Kiss my Cheeks for purchases made on February 10 for 9,161.60. Check no.
017
April 10 Paid LA’Oreal for purchases made on February 10 for 8,377.60. Check no. 018
April 10 Paid Laura Michelle for purchases made on February 10 for 15,680. Check no. 019
April 10 Paid M.A.C.K for purchases made on February 10 for 36,780.80. Check no. 020
April 10 Paid Paule’s Choice for purchases made on February 10 for 55,238.40. Check no.
021
April 10 Paid Clinic for purchases made on February 10 for 29,568. Check no. 022
April 10 Paid Dra. Dennise Gross for purchases made on February 10 for 23,699.20. Check
no. 023
April 10 Paid Elizabeth Alden for purchases made on February 10 for 18,009.60. Check no.
024
April 10 Paid Esmashbox for purchases made on February 10 for 11,289.60. Check no. 025
April 10 Froilan Castro bought 1pc of BE0002 & 2pcs of M0007 on account
April 10 Charles Lee bought 2pcs of BL0001 & 2pcs of M0006 on account
April 11 Maine Richards bought 1pc of M0003 on account
April 11 Received payment from Froilan Castro for 3,360
April 12 Alden Mendoza bought 1pc of E0003 & 1pc of F0001 on account
April 12 Sold 1pc of ST0003 for cash
April 13 Nadine Bernardo bought 2pcs of LG0001 & 1pc of MA0003 on account
April 14 Sold 1pc of BE0003 for cash
April 15 Paid salary of the bookkeeper for the first half of the month for 5,000. Check no.
026
April 15 Sold 1pc of AE0003 for cash
April 16 Kathryn Lustre bought 1pc of T0004 & 2pcs of LG0004 on account
April 17 Sold 1pc of S0004 for cash
April 18 Daniel Reid bought 1pc of SS0001 on account
April 19 Sold 2pcs of SS0003 for cash
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April 20 Kris Aquino bought 1pc of T0003 & 1pc of LG0004 on account
April 20 Sold 2pcs of ST0002 for cash
April 23 Bea dela Cruz bought 1pc of AE0003 & 1pc of F0001 on account
April 25 Sold 1pc of M0010 for cash
April 25 Received payment from Daniel Reid for 4,480
April 27 Received payment from Maine Richards for 3,920
April 30 Paid utilities for the month. Water 550 (Check no. 027) & Electricity 850 (Check
no. 028)
April 30 Paid telephone bill for 300. Check no. 029
April 30 Paid salary of the bookkeeper for the end of the month for 5,000. Check no. 030
April 30 Record depreciation for office equipment, machinery and office furniture.
Property Useful life
Office equipment 5yrs
Machinery 5yrs
Office Furniture 2yrs
April 30 Unused office supplies amounted to 800

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