Preparing the start of year accounts

Discussions, hints and tips for users of Retail-Man Point of Sale, from Ezi Solution.

Moderators: sami, graham

Preparing the start of year accounts

Postby sami » Mon Jun 05, 2006 6:07 pm

For the new users, the question is how to enter the starting balances of the various accounts. Note that all profit and loss and trading accounts has to be zero at the start of each accounting year, Retail Man and Ezi Accounting will zero these accounts automatically at the start of each year without the user intervention, The only thing the user has to do is provide the start of the accounting year from MAINTENANCE > SYSTEM SETUP > GENERAL, this has to be done only once and the system will use the day and month for each following year.
To prepare the start of year accounts, you need to look at the balance sheet accounts.
If you have the Balance Sheet from your accountant, you can enter that using ACCOUNTS > ENTRY VOUCHER and enter the accounts as shown on the Balance Sheet. If there is an account on the Balance Sheet that does not exist, just go to the Chart of Accounts and create it there, but at the end if the data entry, the DEBIT side MUST EQUAL the CREDIT side, once done, just save.

If you have already been using the system but have not used the accounting section, and you need to start using it in the following accounting year, you still need to get the balance sheet from your accountant, but since the accounts will have an existing balance, you will need to enter the difference between the starting balances and the actual balance, then if there is any imbalance, you can enter that in to a suspense account (normally an account in group 6)

This operation can be done anytime during the accounting year, you only have to change the voucher date to the start of the year date, and the system will work itself out.

The only question that remains is which is Debit and which is Credit, this is a major problem for the average user with no or little accounting experience, however, if you follow the rules below, you can’t go wrong (if you do, do not panic, you can always go back and modify your entries)

• Asset accounts (groups 1 to 3) are debit accounts - therefore to increase these accounts they must be debited.

• Liability accounts (groups 4 to 6) are credit accounts - therefore to increase these accounts they must be credited.

• Income accounts (group 7) are credit accounts - therefore to increase these accounts they must be credited.

• Expense accounts (Group 9) are debit accounts - therefore to increase these accounts they must be debited
sami
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