Title:

Account Setup and Administration - General Ledger

Products: Paramo Pro, WRC
Last Updated: 10 April  2015
Related Links: General Journal

Update Account

The following attributes can be updated:

New Account Entry

  1. Navigate to Home - Accounts GL and select new record.
  2. Select the Account Type and enter a new account number and account name. 
  3. An account with a Debit balance must be entered as a negative value.

New Account Entry

acount update function


Account Types

The recommended account number ranges are also shown here, however any account numbering scheme can be adopted

Account Type Description
Revenue - Sales
(10000-15000)

Records sale of goods or services to customers 
Revenue - Other
(15001-20000)

Revenue from other sources 
Expense - Cost of Sales
(20001-30000)

Expenses directly related to cost of purchasing goods for eventual sale. These include direct manufacturing costs
Expense
(30001-40000)

Other expenses not related to sales
Assets - Intangible
(40001-41000)

Intangible assets including goodwill
Assets - Fixed
(41001-46000)

Usually major asset purchases. Long term assets are tangible assets and may also have a accumulated depreciation account for each asset class to record depreciation.
Accumulated Depreciaton
(46001-50000)

Asset depreciation accounts
Assets - Current
(50001-59000)

These represent items or amounts owed to the business
Bank
(59001-60000)

These represent bank accounts, bank accounts with overdraft facilities, cash accounts and credit card accounts. Account numbering should be in decreasing order of use (i.e. the current account or checking account should come first). Accounts are displayed in the balance sheet as current assets or current liabilties, depending on the balance at the time.

Credit Cards
(60001-61000)

These represent bank accounts which normally have overdrafts, and credit card accounts
Current Liabilities
(60001-70000)

These represent accounts owing amount of money to the business. Current liabilities are typically due for repayment within 12 months from when a balance sheet is prepared (e.g. bank overdrafts).
Long Term Liabilities
(70001-80000)

These represent borrowings which are due in more than 12 months from the balance sheet being prepared
Equity
(80001-99000)

These represent money or equity owed by the business to the owner

Important Pre Loaded GL Accounts

Account Name Description

Opening Stock (20010)


This account holds entries for the opening stock valuation at the beginning of the financial year (or at the start of business).

Debtors Account
(Accounts Receivables)

This account is where the summary for invoiced sales, and the summary of receipts are posted. A debit balance shows the total owed by customers at any given point.

No entries normally need to be made to this account.



Creditors Account (Accounts Payables)

This is a account where the summary for invoiced purchases, and the summary of payments to suppliers are posted.  A credit balance shows the total owed to suppliers at any given point.
 
No entries normally need to be made to this account.


GL Tax account

The tax liability account is set up for VAT, and records input and output (sales) tax entries.  Tax charged by location and code is recorded in a tax journal. The balance of this acccount provides the total tax liability at any point.

If separate input and output tax accounts are needed, rename this account to Output (or sales Tax) and create a new gl account named Input Tax ( or Purchase Tax).  Associate the Input Tax account with the Input Tax default

Sales

Records the sales of goods or services which are the primary business activity. Entries from the sales journal must be periodically posted here (using the summary post function)

Sales Returns

Records the credit notes issed to customers. Entries from the credit notes journal must be periodically posted here (using the summary post function)

Shipping sales

Records the shipping charges on sales. A summary of charges is posted along with the sales summary from the sales journal.

Purchases

Records the purchase of goods that are intended for resale.  Entries from the purchase journal must be periodically posted here (using the summary post function).
If the business is engaged in manufacturing, the purchases account can be subdivided. See section on manufacturing accounts below.

Purchase Returns

Records the debit notes issued to suppliers. Entries from the debit notes journal must be periodically posted here (using the summary post function)

Shipping purchasing

Records shipping charged on purchased goods intended for resale. A summary of charges is posted along with the purchase summary from the purchase journal.

Discount Received

Records discounts received from suppliers for early payments. A summary is posted along with the creditors summary.

Discount Allowed

Records discounts for early payment given to customers. A summary is posted along with the debtors summary.

Profit and Loss

Balances from the income and expenditure accounts are posted here, usually at the end of the financial year. Also see trial balance, and profit and loss adjustments in the general journal.

General Ledger Defaults

Task Default Description
Counter Sales
Default bank account when the money is paid when a customer pays a part (or full) prepayment in a credit sale

Sales

Sales summary totals

Sales-Other

Customer opening balances

Sales-Returns

Customer returns summary totals

Discount-Received

Early payment discount given by suppliers

Purchasing-Direct

Purchasing summary totals

Purchasing-Shipping

Purchasing shipping summay totals

Purchasing-Returns

Debit notes summary totals

Purchases-Other

Supplier opening balances

Discount-Allowed

Early payment discount to customers

Sales-Shipping

Shipping charged summary totals

Output Tax

Input Tax

Creditorsrs

Debtors

Profit and Loss

Default account for closing income and expense accounts at the end of the year

Opening Balance

Gets the Default equity account for entering opening balances.

To Change a GL Default

You can re-assign the task default to a different GL account (e.g. 'Counter-Sales' is initially assigned to the Checking Account. This default can be reassigned to a different bank account.)

  1. Navigate to Home - Accounts GL - Defaults
  2. Select a different Ledger Account and press Enter / Return

Important Pre Loaded Manufacturing GL Accounts

Manufacturing accounts are part of the cost of sales calculation in the profit and loss statement.

Account Name Description

Direct Labour

This holds entries for cost of labour directly used in items for resale e.g. machine operator.

Direct Expenses

This holds entries for direct expense used in items for resale. e.g. rental of machines

InDirect Expenses

This holds entries for expenses not directly traceable to items being sold. e.g. heat and lighting

Work in Progress Stock

This account holds entries for the opening work in progress stock valuation at the beginning of the financial year (or at the start of business).  The value of the work in progress stock is not calculated and will have to be provided by the user when the profit and loss double entry is made.