Financing Cycle Essay Example

Financing Cycle Essay Example Financing Cycle Essay Financing Cycle Essay Monica Douglas-Edwards 3. Financing Cycle (2 pages) Answer the following questions. _ How can you create and maintain the chart of accounts? If your company is already using Peachtree Accounting for daily activity, beginning balances may only be entered in the prior fiscal year. General Ledger beginning balances are entered through Maintain, Chart of Accounts. Before General Ledger beginning balances are entered, do the following: Verify that the Chart of Accounts contains the equity account â€Å"Equity–Retained Earnings. Determine the correct period(s) in which to enter beginning balances. Determine the correct beginning balance amounts. Verify that the beginning balance amounts have an equal number of debits and credits. Verify That Your Chart of Accounts Contains the Equity Account â€Å"Equity – Retained Earnings† Before Peachtree can save beginning balance amounts, an account with a type of Equity – Retained Earnings should have been set up in your Chart of Accounts. If you do not see this account listed, add that account now through Maintain, Chart of Accounts. Determining the Correct Period in Which to Enter Beginning Balances The correct period in which to enter beginning balances depends on what type of financial statement you want to generate: If you want a comparative Balance Sheet for the current fiscal year and the last fiscal year, then enter beginning balances for the first period that you wish to have balances, then for each period thereafter enter the period debit/credit change up to the current period.. If you want a comparative Income Statement for the current fiscal year and the last fiscal year, then enter beginning balances for the first period that you wish to have balances, then for each period thereafter enter the period debit/credit change up to the current period. If you want a Statement of Cash Flow for only the current fiscal year, then enter beginning balances for the last period of the prior fiscal year. If you want a comparative Statement of Cash Flow for the current fiscal year and the last fiscal year, then enter beginning balances for the last period of the year prior to the last fiscal year. : This is the accounting period that is identified as prior to the previous year (e. g. , â€Å"Before 1/1/2003†) in the Beginning Balance Select Period window. These reports will be titled differently for non-profit organizations. Determining the Correct Beginning Balance Amounts For your financial statements and reports to be accurate, beginning balance amounts must be correct. To help you verify beginning balance amounts, you can use the Trial Balance report or Balance Sheet from your previous accounting system. These reports are discussed in detail below. Note: If you do not have either of these reports, please contact your accountant for procedures on how to calculate beginning balances. ) If you start entering beginning balances in Peachtree during the current fiscal year, AND you do NOT need monthly transaction history for comparative financial statements, then use the numbers from a Trial Balance report dated the last day of the month previous to the month transactions w ill be posted in Peachtree. For example, if a company begins using Peachtree Accounting July 1, 2005, then the beginning balances should be entered in July, using the Trial Balance of June 30, 2005. Understanding General Ledger Beginning Balances, 2010) _ How can you post journal entries? 1. In Peachtree, go to Tasks, System and change your accounting period to the first accounting period of the current tax year. 2. Open FAS for Peachtree by either going to Tasks, Fixed Assets within Peachtree or by clicking the FAS icon located on your desktop. 3. Make all necessary additions, changes, and dispositions of assets you have set up. 4. Go to File, Edit Company. On the Book Defaults page, verify that the Fiscal Year-End is accurate. 5. To calculate depreciation, go to Depreciation, Depreciate and choose the Group, Book, and month you will be depreciating through and choose Execute. Review the depreciation amounts for accuracy. 6. Once you have calculated depreciation, you can now post. Go to Depreciate, Post Depreciation. Select the appropriate Group, Book, Period Posting Date and Journal Entry Date. Click the Preview button to preview the journal entries. After reviewing the information, click the Post button to post the journal entries to Peachtree. (Financial Year-End Checklist) _ What are the key financial statements that are available? Describe them. What are some key reports one can generate to measure the firm’s financial performance? Section III: Reporting (minimum 3 pages) Describe how Peachtree Complete Accounting produces information that can be used to manage the business. Identify and describe at least three key reports for each of the cycles the revenue, expenditure and financing cycles for a total of nine reports. You should describe how the report is used, and why it is important in this section. Do not include any screen shots of your reports in this section. You will include one sample report for each of the transaction cycles in the Appendix – see below. Section IV: Your Evaluation of the Software and Final Thoughts (minimum 2 pages) Your evaluation of Peachtree Complete Accounting will be based upon your experience. You will use screen prints to support your evaluation. You will include the screen prints in an Appendix. They are not part of the required 7-10 written pages. Also, include your final thoughts regarding the application you selected here. Include such things as ease of use, in what size of business it would be best used, etc. Appendix _ In the section, include three sample reports – one from each of the three accounting cycles. _ References as needed at the end of the report.