14.3.1
EXAMPLE TRANSACTIONS
14.3.1 Initial Startup (No Previous Accounting Program Used)
DEBIT* : ALL ASSETS (CASH, CHECKING, EQUIPMENT, PREPAID EXP)
CREDIT*: ALL LIABILITIES (TAXES, ACCTS PAY, NOTES PAY)
: DEPRECIATION ACCRUED
IF DEBITS > CREDITS, CREDIT THE DIFF TO STARTING CAPITAL
IF CREDITS > DEBITS, DEBIT THE DIFF TO STARTING CAPITAL
Enter all your debits and credits at once by overriding pc/MRP's Out of Balance
Message. When you have completed your entries post the month and run a Trial
Balance Report to make sure you are still in balance.
14.3.2 Initial Startup (Switch From Previous Accounting Program)
IF MID PERIOD
TRANSFER ALL ACCOUNTS FROM TRIAL BALANCE*
IF START OF PERIOD
TRANSFER LIABILITY,ASSET,EQUITY ACCTS FROM TRIAL BALANCE*
IF START OF YEAR (TRANSFER YTD EARNINGS TO STARTING CAPITAL)
TRANSFER LIABILITY,ASSET,EQUITY ACCTS FROM TRIAL BALANCE*
Enter all your debits and credits at once by overriding pc/MRP's Out of Balance Message.
When you have completed your entries post the month and run a Trial Balance Report to
make sure you are still in balance.
14.3.3 Owner Purchases Supplies With His Own Cash
ON THE TRANSACTION DATE
DEBIT : OFFICE SUPPLIES ETC. 61400000
CREDIT : NOTES PAYABLE TO OWNER
WHEN HE IS REIMBURSED
DEBIT : NOTES PAYABLE TO OWNER
CREDIT : CHECKING 10200000, CASH 10100000, ETC.
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14.3.4 Start of New Year
SOLE PROPRIETOR
DEBIT : YTD RETAINED EARNINGS 29900000 (TO BRING ACCT TO $0.00)
CREDIT : STARTING CAPITAL 25100000
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14.3.5 Periodic Inventory Methods
pc/MRP can be set in the configuration menu to use the periodic inventory method. The Periodic Inventory Method requires the inventory to be adjusted at the end of each month instead of with each transaction. The total dollar amount of the inventory at the end of one period is also the beginning balance for the next period. Since pc/MRP automatically increments and decrements the physical inventory you can run pc/MRP's "Total Onhand Stock Value Report" to obtain the inventory value instead of taking a physical inventory. Example sales and purchasing transactions for companies using a periodic inventory are shown below:
Use the Partmaster's Inventory Value Report to find the inventory value at the Start and End of each month (SOM, EOM). Enter the following A type transactions into the gen ledger.
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14.3.6 Perpetual Inventory Methods
pc/MRP can be set in the configuration menu to use the perpetual inventory method (Version 6.49AS and higher only). The Perpetual Inventory Method requires the inventory to be adjusted with each sale and purchasing transaction. To employ this method the accountant must know the inventory cost for each sale. pc/MRP can provide those figures by first running the Automatic Cost Roll Up Option and then printing out an "All Parts Costed Report" in the Partmaster Module. With this method you must add a new account called "COST OF GOODS SOLD" to the chart of accounts as an "EG" Debit Account.
If you were to add labor to your BOMs you could manually credit inventory and overhead (credit acct) when debiting cost of goods sold.
PURCHASE, CASH Transaction type P
DEBIT : INVENTORY 12100000
CREDIT : CHECKING 10200000
PURCHASE, ON ACCOUNT
WHEN YOU RECEIVE INVOICE Transaction type I (matl in the door)
DEBIT : INVENTORY 12100000
CREDIT : ACCOUNT PAY 20100000
WHEN YOU PAY ON ACCOUNT Transaction type E (Expense)
DEBIT : ACCOUNT PAY 20100000
CREDIT : CHECKING 10200000, CASH 10100000, ETC.
SALE, CASH Transaction type S
FOR THE SALE AMOUNT
DEBIT : CHECKING 10200000, CASH 10100000, ETC.
CREDIT: BUSINESS INCOME 30100000 AND SALES TAX LIABILITY 21100000
FOR THE COST OF INVENTORY SHIPPED
DEBIT : COST OF GOODS SOLD
CREDIT: INVENTORY 12100000
SALE, ON ACCOUNT
WHEN YOU INVOICE Transaction type O (matl Out the door)
FOR THE SALE AMOUNT
DEBIT : ACCOUNT RECVB 11100000
CREDIT: BUSINESS INCOME 30100000 AND SALES TAX LIABILITY 21100000
FOR THE COST OF INVENTORY SHIPPED
DEBIT : COST OF GOODS SOLD
CREDIT : INVENTORY 12100000
WHEN CUSTOMER PAYS Transaction type R (Revenue)
DEBIT : CHECKING 10200000, CASH 10100000, ETC.
CREDIT : ACCOUNT RECVB 11100000
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14.3.7 Payroll Entries
Please note the following caps, percentages and deductions may vary from state to state and change without notice. The following are used for example only.
PAYING WAGES (ENTER AS A "W" TYPE ACCOUNTING TRANSACTION)
EXAMPLE EMPLOYEE PAYROLL CHECK:
GROSS WAGES 408.00
FWT (Federal Witholding Tax) 31.51
SSEC (Social Security Tax) 25.30
MEDI (Social Security Medicare) 5.92
SWT (State Witholding Tax) 1.94
SDI (State Disability Tax) 5.10
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NET PAY 338.23
METHOD 1 (DOUBLE ENTRY SCREEN METHOD):
DEBIT :GROSS WAGE EXPENSES 50100000 408.00
CREDIT :FWT LIABILITY 22100000 31.50
FICA LIABILITY (SSEC + MEDI) 22110000 31.22
SWT LIABILITY 22140000 1.94
SDI LIABILITY 22130000 5.10
CHECKING ACCT 10200000 (NET PAY) 338.23
DEBIT : EXPENSES PAYROLL TAXES (SSEC+MEDI) 51100000 31.22
CREDIT : FICA LIABILITY (SSEC+MEDI) 22110000 31.22
METHOD 2 (SINGLE ENTRY SCREEN METHOD):
DEBIT : GROSS WAGE EXPENSES 50100000 408.00
DEBIT : EXPENSES PAYROLL TAXES (SSEC+MEDI) 51100000 31.22
CREDIT : FWT LIABILITY 22100000 31.50
FICA LIABILITY (2x(SEC+MEDI)) 22110000 62.44
SWT LIABILITY 22140000 1.94
SDI LIABILITY 22130000 5.10
CHECKING ACCT 10200000 (NET PAY) 338.23
PAYING FEDERAL GOVERNMENT PAYROLL TAXES (941)
DEBIT : ACCUM LIAB FWT 22100000 31.50
DEBIT : FICA(SSEC+MEDI) 22110000 62.44
CREDIT : BANK CHECKING ACCT 10200000 93.94
PAYING FEDERAL UNEMPLOYMENT TAX DEBIT: EXPENSES PAYROLL TAXES 51100000 CREDIT : ACCUM LIAB FUTA 22120000 DEBIT: ACCUM LIAB FUTA 22120000 CREDIT : BANK CHECKING ACCT 10200000 PAYING STATE PAYROLL TAXES DEBIT : ACCUMULATED LIAB SDI 22130000,SWT 22140000 CREDIT : BANK CHECKING 10200000 PAYING STATE PAYROLL TAXES DEBIT: EXPENSES PAYROLL TAXES 51100000 CREDIT : ACCUM LIAB SUI 22150000 ETT 22160000 DEBIT : ACCUM LIAB SUI 22150000, ETT 22160000 CREDIT : BANK CHECKING ACCT 10200000
14.3.8 Owner Withdrawals And Contributions
SOLE PROPRIETOR
OWNER WITHDRAWS MONEY
DEBIT OWNER WITHDRAW (QN, Debit Account)
CREDIT CHECKING 10200000
OWNER PUTS HIS OWN MONEY IN (Not on a loan type basis)
DEBIT CHECKING 10200000
CREDIT OWNER CONTRIBUTION (QN, Credit Account)
CORPORATION
OWNER WITHDRAWS MONEY
DEBIT CAPITAL DECREASE 27100000
CREDIT CHECKING 10200000
OWNER PUTS HIS OWN MONEY IN (Not on a loan type basis)
DEBIT CHECKING 10200000
CREDIT OWNER CAPITOL INCREASE 26100000
14.3.9 Income Taxes
WHEN PREPAYING ESTIMATED TAXES
DEBIT : ASSETS, PREPAID FED TAX 16100000, PREPAID STATE TAX 16200000
CREDIT : CHECKING 10200000
WHEN PAYING INCOME TAXES INDIVIDUAL OWNER
DEBIT : EQUITY COMPANY TAXES 29100000 (Similar to Owner Witheld)
CREDIT : ASSETS, PREPAID TAXES 16100000 16200000 AND CHECKING 10200000
CORPORATION (Over simplified, see your accountant for details)
DEBIT: EXPENSES, COMPANY TAXES 90100000, 90200000
CREDIT : ASSETS, PREPAID TAXES 16100000, 16200000
14.3.10 Checking Account Adjustments
SOLE PROPRIETOR
IF ACTUAL BANK BALANCE IS MORE THAN PC/MRP BALANCE
DEBIT CHECKING 10200000 FOR THE DIFFERENCE
EDIT OWNERS CONTRIBUTION (QN, Credit Account)
IF PC/MRP BALANCE IS MORE THAN ACTUAL BALANCE
DEBIT OWNERS WITHDRAWAL (QN, Debit Account)
CREDIT CHECKING 10200000
CORPORATION
IF ACTUAL BANK BALANCE IS MORE THAN PC/MRP BALANCE
DEBIT CHECKING 10200000 FOR THE DIFFERENCE
CREDIT INCOME ADJUSTMENT (RN, Credit Account)
IF PC/MRP BALANCE IS MORE THAN ACTUAL BALANCE
DEBIT EXPENSE ADJUSTMENT (EN, Debit Account)
CREDIT CHECKING 10200000
14.3.11 Breaking Out Freight Charges
When pc/MRP expenses a receiver or payable voucher it debits 41100000 (Purchases) for the full amount (including freight) and credits 20100000 (accounts payable) for the full amount (including freight). If you wish to have freight broken out in your financial statements you would enter an I type transaction into the general ledger as you normally would and:
DEBIT 41100000 PURCHASES FOR PURCHASE AMT ONLY (disp at top of screen)
DEBIT 41400000 FOR THE FREIGHT AMT (displayed at top of screen)CREDIT ACCTS PAYABLE FOR THE FULL AMT (displayed at top of screen)
14.3.12 Closing a Month From a Prior Year
If you have not closed any months in the current fiscal year, you can continue to re-close months in the prior fiscal year. Once you have closed a month in the current fiscal year, you can not re-close a month in a prior year, unless you have the back up floppy from the last close of the fiscal prior year.
The reason for this is that pc/MRP's Chart of Accounts database file can actively store the balances for up to 12 months of the fiscal year as shown in the chart of accounts record shown above. If you close a month during the current fiscal year and later close a month from the prior fiscal year, pc/MRP will use the current fiscal year ending balances when calculating the prior fiscal year's year to date balances.
If you have the back up floppy from the last close of the prior year, you can follow the example below to reclose a month from a prior year.
Example 1
If it is now Apr 99, you have closed Dec 98, Jan 99, Feb 99, and you now want to re-close Dec 98 you would have to:
Insert the backup floppy disk labeled CHAR1298.DBF into the a:drive and use the DOS copy command to copy the CHAR1298.DBF file into your pcmrpw directory as CHARTACC.DBF.
COPY A:CHAR1298.DBF C:\PCMRPW\CHARTACC.DBF (assuming pcmrpw is on your c drive)
You could now go into pc/MRP and either make or edit transactions with a transaction date of Dec 1998. Re-close Dec 1998 and initialize month 13. Make a new CHAR1298 back up disk. If the close looks good, re-close DEC 98 again and initialize month 01 (Jan 99). You would need to roll the new balances forward by re-closing Jan 99 and Feb 99.
Example 2
Let's assume you have set up July as the starting of your fiscal year in configuration setting & utilities option 5. It is now Aug 2000, and you have closed July and August of 2000. You now wish to re-close March 2000. You would have to insert the backup floppy disk of the last close for the last fiscal year labeled CHAR0600.DBF into the a:drive. You would use the DOS copy command to copy the CHAR0600.DBF file into your PCMRPW directory as CHARTACC.DBF.
COPY A:\CHAR0600.DBF C:\PCMRPW\CHARTACC.DBF (assuming PCMRPW is on your c drive)
You could now go into pc/MRP and either make or edit a transaction with a transaction date of March 2000. Re-close March 2000, April 2000, May 2000, and June 2000 and initialize month 13. If the close looks good, make a new CHAR0600 backup disk, re-close June 2000 and initialize 01(July 2000). You would need to roll the new balance forward by reclosing July 2000 and August 2000.
14.3.13 Credit Card Entries
If you plan to pay the credit card bill at a later date:
SELECT ACCOUNTING SELECT ACCOUNTS PAYABLE VOUCHER SELECT NEW AP VOUCHER ACCEPT DEFAULTS: STORES, RECEIVER NUMBER SELECT NO PARTNUMBER SCROLL TO PICK UP THE BANKS ADDRESS ENTER THE CREDIT CARD AND PAYMENT PERIOD IN DESCRIPTION ENTER A QUANTITY OF 1 ENTER THE TOTAL DOLLAR AMOUNT IN PRICE FIELD FILL IN COMMENTS PRESS THE ACCEPT BUTTON IT WILL NOW ENTER AN I TYPE TRANSACTION ACCEPT THE NEXT TRANSACTION NUMBER DEBIT VARIOUS EXPENSE ACCOUNTS CREDIT AP OR AP-CREDIT CARD ACCOUNT FOR TOTAL AMOUNT OF EXPENSES.
Pay off the credit card bill at the later date using an E(expense) type transaction or a "Pay Bills Check Run."
CREDIT CHECKING DEBIT AP OR CREDIT AP-CREDIT CARD ACCOUNT
14.3.14 Adjusting Inventory Asset Chart of Account Values
Debiting an asset account, increases it's value and crediting it, decreases it's value.
IF YOU HAVE SET pc/MRP TO "PERPETUAL ACCOUNTING METHODS" (OPTION 10 IN SETTINGS AND UTILITIES)
IF YOU WISH TO INCREASE THE INVENTORY VALUE
DEBIT THE INVENTORY ASSET CHART OF ACCOUNTS
CREDIT THE COST OF SALES EXPENSE ACCOUNT NUMBER
IF YOU WISH TO DECREASE THE INVENTORY VALUE
DEBIT THE COST OF SALES EXPENSE ACCOUNT NUMBER
CREDIT THE INVENTORY ASSET CHART OF ACCOUNTS
IF YOU HAVE SET pc/MRP TO "PERIODIC ACCOUNTING METHODS" (OPTION 10 IN SETTINGS AND UTILITIES)
IF YOU WISH TO INCREASE THE INVENTORY VALUE
DEBIT THE INVENTORY ASSET CHART OF ACCOUNTS
CREDIT THE PURCHASES EXPENSE ACCOUNT NUMBER
IF YOU WISH TO DECREASE THE INVENTORY VALUE
DEBIT THE PURCHASES EXPENSE ACCOUNT NUMBER
CREDIT THE INVENTORY ASSET CHART OF ACCOUNTS