Chart of Accounts Module
14.3.1 Overview
pc/MRP comes with a standard set of chart of account numbers such as 6250000 for Utilities, 1030000 for Savings Account, etc. The first four characters are reserved for the base account number and the last four characters are reserved for division and department number. pc/MRP has reserved the 5th and 6th characters of the account number for divisions and the 7th and 8th characters of the account number for departments. For example 62500001 could represent Utilities Expense for Division 0001 or 62500105 could represent Utilities for Division 01 Department 05. You can use the standard set of chart of account numbers as is. Or, you can add, delete, and modify the standard set of chart of account numbers as described below.
14.3.2 Establish a base chart of accounts structure on paper
First establish a base chart of accounts structure on paper. Base accounts must end in “0000” and do not report to a parent account. An example of a base chart of account structure is listed below:
Assets
1020-0000 Checking
1070-0000 Accounts Receivable
Liabilities
2010-0000 Loan
2070-0000 Accounts Payable
Equities
3040-0000 Retained Earnings
Revenue
4040-0000 Sales Income
Expenses
5040-0000 Utilities
14.3.3 Establish a set of sub-chart of account numbers on paper
pc/MRP Versions 8.04e and higher allow you create sub-chart of account numbers that report to and roll up into a parent chart of account numbers. There are two types of sub accounts, category and divisional.
Category Sub Accounts should always end in 0000. An example chart of accounts using category sub-accounts is listed below:
Assets
1020-0000 Checking
1021-0000 Wells
1022-0000 Bank of
1070-0000 Accounts Receivable
Liabilities
2010-0000 Loan
2070-0000 Accounts Payable
Equities
3040-0000 Retained Earnings
Revenue
4040-0000 Sales Income
Expenses
5000-0000 Utilities
5040-0000 Water
5050-0000 Electricity
Division Sub Account should always end in a 4 digit number other than “0000”. This allows pc/MRP to filter these accounts into Divisional YTD Expense and Revenue Reports. An example chart of accounts using category sub-accounts is listed below:
Assets
1020-0000 Checking
1020-0001 Checking Division 1
1020-0002 Checking Division 2
1070-0000 Accounts Receivable
Liabilities
2010-0000 Loan
2070-0000 Accounts Payable
Equities
3040-0000 Retained Earnings
Revenue
4040-0000 Sales Income
4040-0001 Sales Income Division 1
4040-0002 Sales Income Division 2
Expenses
5000-0000 Utilities
5000-0001 Utilities Division 1
5000-0002 Utilities Division 2
Gets filtered into a YTD Expense and Revenue Financial Statement for Division 1
Including both Divisional and Category Sub Accounts in your chart of accounts can be done two ways. The first way would be to create sub accounts by division and then category. This structure will show the rolled up Utilities Cost for the Divisional YTD Expense and Revenue Report:
Expenses
5000-0000 Utilities
5000-0001 Utilities Division 1 (Will be displayed on the Div1 YTD Exp and Rev Report)
5040-0001 Water Div 1
5050-0001 Electricity Div 1
5000-0002 Utilities Division 2
5040-0002 Water Div 2
5050-0002 Electricity Div 2
Gets filtered into a YTD Expense and Revenue Financial Statement for Division 1
The second way would be to create sub accounts by category and then division. This structure will not display the rolled up Utility Cost for the Division on the Divisional YTD Expense and Revenue Report.
Expenses
5000-0000 Utilities
5040-0000 Water
5040-0001 Water Div 1
5050-0002 Water Div 2
5050-0000 Electricity
5050-0001 Electricity Div 1
5050-0002 Electricity Div 2
Gets filtered into a YTD Expense and Revenue Financial Statement for Division 1
14.3.4 Entering a base chart of account number
You must first enter a set of base chart of account numbers such as checking, utilities, etc. Base chart of account numbers have no parent accounts and always end in 0000. To enter a base chart of account number, click on Modules, Accounting, Chart of Accounts, New
Enter the base chart of accounts number (it must end in “0000”). Enter the chart of accounts description, Account Type, select Yes or No for Tax Deductable, and select Debit or Credit. Do not select a parent account as this is a base chart of account.
Select the Account Type from the drop down list box which includes:
EG Expense Cost of Goods Sold QN Equity
El Expense Labor QR Equity, YTD Retained Earnings
EN Expense,
EW Expense, Write Off LL Liabilities, Long Term
EO Expense, Other AF Asset, Fixed
ET Expense, Taxes AC Asset, Current
RN Revenue,
RO Revenue, Other AD Asset, Depreciation
14.3.5 Entering a sub chart of account number
To
create a base sub-chart of account number you would select Modules, Accounting,
Chart of Accounts, New or Edit. Select the parent account by
pressing the Sub Account of Ellipsis Button as shown on the screen below.
The new sub-account will automatically be the same Account Type and
Debit/Credit Type as its parent account.
14.3.6 Register your default account numbers:
Once your base chart of account numbers are established, you must register your default account numbers with pc/MRP. This will allow pc/MRP to automatically pull up the correct accounts to debit and credit when you are making an entry into the general ledger. For example, pc/MRP needs to automatically pull up and debit and credit your AP and Checking Account Numbers when ever you are paying bills. To register your key chart of accounts select Configuration, Settings and Utilities, Option 9, and Edit Template Account Numbers. Enter your key chart of account numbers as shown on the following screen.
14.3.7 Adding multiple division and department account numbers:
With pc/MRP, you can enter divisional chart of accounts one account at a time by selecting Modules, Accounting, Chart of Accounts, New. If applicable, you can add new divisions or departments to pc/MRP’s chart of accounts. pc/MRP has reserved the 5th and 6th characters of the account number for divisions and the 7th and 8th characters of the account number for departments.
For example if you wanted to add expense and revenue accounts for a division 10, department 01, you would select configuration, Settings and Utilities, Option 9, Add a New Division/Department. pc/MRP will ask you to enter the starting chart of account number (must end on 0000) and the ending chart of account number (must end in 0000). pc/MRP will create new chart of accounts ending in 1001 for every account that ends in 0000 between the starting number and the ending number as per the screen shown in the screen below.
14.3.8 Edit/View (A Chart Of Accounts)
Allows you to edit a Chart of Account Number. Editing or adding chart of account numbers is not recommended unless you fully understand accounting, and how pc/MRP operates with the chart of account numbers. pc/MRP will not accept any changes made to accounts that have had dollar amounts posted to them.
If you edit one of the base chart of account numbers, such as AR, AP, Checking, etc., you must also go to pc/MRP's configuration menu and make the same change in the chart of accounts template file.
To edit a chart of account number users must use option 72 in the Settings and Utilities Menu as this will change the account number everywhere including the prior backup copies made by pc/MRP after you close (post) a month.
14.3.9 Print (Display The Chart Of Accounts)
Allows
you to printout or display the Chart of Accounts. pc/MRP's Chart of accounts are further defined
as follows:
22100000 PAYROLL TAX F.W.T. = liability, federal withholding tax
22110000 PAYROLL TAX F.I.C.A = liability, federal social security
22120000 PAYROLL TAX F.U.T.A = liability, federal unemployment tax
22130000 PAYROLL TAX S.D.I. = liability, state disability
22140000 PAYROLL TAX S.W.T. = liability, state withholding
22150000 PAYROLL TAX S.U.I. = liability, state unemployment
22160000 PAYROLL TAX E.T.T. = liability, state employment training
29100000 COMPANY TAXES = taxes paid by individual owner
90100000 COMPANY TAX-FEDERAL = taxes paid by corporation
14.3.10 Index (The Chart Of Accounts)
Re-indexes the chart of accounts index file. pc/MRP automatically updates its index files under normal operation. However, if you ever get a "record out of range" error message, re-indexing the index file is usually the cure.
14.3.11 Remove Marked Records
Removes all deleted chart of account numbers from the disk. The records will no longer be recoverable.
14.3.12 Chart of Accounts Categories
The chart of account numbers have been divided into five different categories listed below.
CATEGORY EXAMPLES NUMBERS TYPE DED D/C-----------------------------------------------------------------------------ASSET +(cash,recvbls,inventory,advances,equip) 1000 Ax N D -(depreciation, allowance for bad accounts) CLIABILITY +(accounts pay, loans pay, taxes payable) 2000 Lx N C -(repayment of loan) DEQUITY +(stock issued, capital in, ret earnings) 2500 Qx N C -(capital withdrawal by owner) DREVENUE +(interest income, sales) 3000 Rx N C -(sales discounts allowed, returned merch) DEXPENSES +(rent, wages, supplies, taxes) 4000 Ex Y D -(purchase discounts taken, taxes refund) C Expense accounts are categorized as follows: EG Accounts will be totaled under Cost of Goods Sold EL Accounts will be totaled under Cost of Labor EN Accounts will be totaled under Normal Operating Expenses< EW Accounts will be totaled under Write off Expenses EO Accounts will be totaled under Other Expenses ET Accounts will be totaled under Income Taxes Revenue Accounts are categorized as follows: RN Accounts will be totaled under Revenue RO Accounts will be totaled under Other Revenue Equity Accounts are categorized as follows: QN Accounts will be totaled under Equity QR Account is reserved for single YTD Retained Earnings Liability Accounts are categorized as follows: LC Accounts will be totaled under Current Liabilities LL Accounts will be totaled under Long Term Liabilities Asset Accounts are categorized as follows: AF Accounts will be totaled under Fixed Assets AC Accounts will be totaled under Current Assets AL Accounts will be totaled under Long Term Assets AD Accounts will be totaled Accum Write Offs
14.3.13 pc/MRP Chart of Account Structures & Software Restrictions
pc/MRP Versions 8.03 and lower allowed divisional sub-accounts but not category sub accounts.
pc/MRP Versions 8.04a – 8.04d allowed category sub accounts
pc/MRP Versions 8.04e and higher allowed:
Adding a divisional chart of accounts by clicking on Chart of Accounts New
A divisional sub account to report to a base corporate chart of account (ends in 0000)
A user to select a divisional sub account as a parent
account.
14.3.14 pc/MRP Chart of Account
Structures Rules
Base Top Chart of Account Number
Has no parent account
The account number must be unique
Has a dept/div suffix of 0000
Sub Chart of Account Number
Has a parent account
The account number must be unique
Div/Dept Sub Account must have a suffix that is not 0000
Must be same account type a parent
Edit a Chart of Account
Edit the Chart of Account Number Field
Must be done with Option 72
Edit the Chart of Account Description Field
OK
Edit the Account Type Field
Must have no existing transactions
Must have no existing sub accounts
Must have no twin div/dept accounts
Edit the Debit/Credit Field
Must have no existing transactions
?Must have no existing sub accounts
Must have no twin div/dept accounts
Edit the Full ID Field
Must have no existing transactions
Must have no existing sub accounts
Must have no twin div/dept accounts
Delete a Top Base Chart of Account
Must have no transaction history
Must have no sub accounts (sub accounts must be deleted first)
Must have no Div/Dept Accounts (Div/Dept accounts must be deleted first)
Delete a Base Sub Chart of Account
Must have no transaction history
Must have no sub accounts (sub accounts must be deleted first)
Must have no Div/Dept Accounts (Div/Dept accounts must be deleted first)
Delete a Top Div/Dept Chart of Account
Must have no transaction history
Must have no sub accounts (sub accounts must be deleted first)
Delete a Div/Dept Chart of Accounts
Must have no transaction history
Must have no sub accounts (sub accounts must be deleted first)
14.3.9 pc/MRP Chart of Account Structures & Software Restrictions
5000-0000 Utilities (Base Top Account Number)
5010-0000 Electricity (Base Sub Chart of Account Number)
5020-0000 Water (Base Sub Chart of Account Number)
5025-0000 Reclaimed Water (Base Sub Chart of Account Number)
5027-0000 Drinking Water (Base Sub Chart of Account Number)
5000-0010 Utilities
5010-0010 Electricity
5020-0010 Water
5025-0010 Reclaimed Water (Base Sub Chart of Account Number) 5027-0010 Drinking Water (Base Sub Chart of Account Number)
Pro: Can get a Divisional YTD Expense and Rev Report (all 0010 accnts) when closing a month
???: 5000-0000 is treated as a separate HQ division in the Divisional YTD Exp and Rev Report
Pro: 5000-0010 does report to 5000-0000 in the Financial Close General Ledger Report
Chart of accounts structure with no sub-accounts
804c can do this
Assets
1020-0000 Checking
1070-0000 Accounts Receivable
Liabilities
2010-0000 Loan
2070-0000 Accounts Payable
Equities
3040-0000 Retained Earnings
Revenue
4040-0000 Sales Income
Expenses
5040-0000 Utilities
Important
The layout of financial
statements (Profit and Loss, Trial Balance, Balance Sheet, Year to Date Expense
and Revenue Report, General Ledger, Accounts Payable, Accounts Receivable) are
very precise (debit listed before credit) and consistent. The layout
for the financial statements have been set and used for 100s of years and are
the same from country to country company to company. I would
be very hesitant to change the layout of the financial statements.
Accounting reports (all transactions for an invoice, current balance of a
specified chart of accounts) are not set in stone.
Chart of accounts structure with category sub-accounts
804c Can do this
804c User should not debit a parent account, we must allow this as they may add accounts in future and they can transfer balances into sub-accounts
Assets
1020-0000 Checking
1021-0000 Wells
1022-0000 Bank of
1070-0000 Accounts Receivable
Liabilities
2010-0000 Loan
2070-0000 Accounts Payable
Equities
3040-0000 Retained Earnings
Revenue
4040-0000 Sales Income
Expenses
5000-0000 Utilities
5040-0000 Water
5050-0000 Electricity
Chart of accounts structure with division sub-accounts
804c can not make an 0001 account a child of a 0000 account*
804c can not create individual 0001 sub accounts must use option 9*
804c User should not debit a parent account, we must allow this as they may add accounts in future and they can transfer balances into sub-accounts
804c Provides Exp & Rev Statement for Divisions, no Balance Sheet, Trial Balance for Divisions
Assets
1020-0000 Checking
1020-0001 Checking Division 1 (no filtered balance sheet or trial balance statements)
1020-0002 Checking Division 2 (no filtered balance sheet or trial balance statements)
1070-0000 Accounts Receivable
Liabilities
2010-0000 Loan
2070-0000 Accounts Payable
Equities
3040-0000 Retained Earnings
Revenue
4040-0000 Sales Income
4040-0001 Sales Income Division 1
4040-0002 Sales Income Division 2
Expenses
5000-0000 Utilities
5000-0001 Utilities Division 1
5000-0002 Utilities Division 2
Gets filtered into a YTD Expense and Revenue Financial Statement for Division 1
Chart of accounts structure with category sub-accounts + division sub-accounts
804c can not make an 0001 account a child of a 0000 account*
804c can not create individual 0001 sub accounts must use option 9*
804c User should not debit a parent account, we must allow this as they may add accounts in future and they can transfer balances into sub-accounts
804c Provides Exp & Rev Statement for Divisions, no Balance Sheet, Trial Balance for Divisions
Assets
1020-0000 Checking
1020-0001 Checking Division 1 (This account should be deleted if automatically created)
1020-0002 Checking Division 2 (This account should be deleted if automatically created)
1021-0000 Wells Fargo Checking (kims method depends on 1021 matching divs may
1021-0001 Wells Fargo Checking Division 1 not have Wells Fargo bank accnt)
1021-0002 Wells
1022-0000 Bank of
1022-0001 Bank of
1022-0002 Bank of
1070-0000 Accounts Receivable
Liabilities
2010-0000 Loan
2070-0000 Accounts Payable
Equities
3040-0000 Retained Earnings
Revenue
4040-0000 Sales Income
4040-0001 Sales Income Division 1 Debit Checking Div1,Credit Sales Div1 1500.00
4040-0002 Sales Income Division 2 Debit Checking Div2,Credit Sales Div2 2000.00
Expenses
5000-0000 Utilities
5000-0001 Utilities Division 1 (This account should be deleted if automatically created)
5000-0002 Utilities Division 2 (This account should be deleted if automatically created)
5040-0000 Water
5040-0001 Water Division 1 Debit Water Div1,Credit Checking Div1 100.00
5040-0002 Water Division 2 Debit Water Div2,Credit Checking Div2 200.00
5050-0000 Electricity
5050-0001 Electricity Division 1 Debit Elect Div1,Credit Checking Div1 300.00
5050-0001 Electricity Division 2 Debit Elect Div2,Credit Checking Div2 300.00
Gets filtered into a YTD Expense and Revenue Financial Statement for Division 1
Create the above chart of accounts structure. Enter
the above transactions. Print out our YTD Expense and Revenue Report and
the Divisional YTD Expense and Revenue Reports as they now exist and were
tested in version 8.04d. Then print out the same reports with your
new Expense and Revenue Report and Divisional YTD Expense and Revenue Reports
so we can compare the two. Do not demonstrate to Pat unless you
have both sets of reports printed out. Under no circumstances sew the
new code into the k: drive without an OK from Ron and
myself as there may not be enough testing time before the documentation
and release of version 8.10.
Chart of accounts structure with division sub-accounts + category subaccounts
804c can not make an 0001 account a child of a 0000 account*
804c can not create individual 0001 sub accounts must use option 9*
804c does not allow users to select a div account as a parent account*
804c User should not debit a parent account, we must allow this as they may add accounts in future and they can transfer balances into sub-accounts
804c Provides Exp & Rev Statement for Divisions, no Balance Sheet, Trial Balance for Divisions
Assets
1020-0000 Checking
1020-0001 Checking Division 1 (no filtered balance sheet or trial balance statements)
1020-0002 Checking Division 2 (no filtered balance sheet or trial balance statements)
1070-0000 Accounts Receivable
Liabilities
2010-0000 Loan
2070-0000 Accounts Payable
Equities
3040-0000 Retained Earnings
Revenue
4040-0000 Sales Income
4040-0001 Sales Income Division 1
4041-0001 Normal Income Division 1
4042-0001 Other Income Division 1
4040-0002 Sales Income Division 2
4041-0002 Normal Income Division 2
4042-0002 Other Income Division 2
Expenses
5000-0000 Utilities
5000-0001 Utilities Division 1 (this account will show total utilities on div report !)
5040-0001 Water Div 1
5050-0001 Electricity Div 1
5000-0002 Utilities Division 2 (this account will show total utilities on div report !)
5040-0002 Water Div 2
5050-0002 Electricity Div 2
Gets filtered into a YTD Expense and Revenue Financial Statement for Division 1