Valuable Study: Maintain Chart Of Accounts

Overview:

“Basic purpose to maintain chart of accounts is mention the accounts and there types, ID, descriptions. We can also delete and inactive the account and set the beginning balance for the current year or previous year.”

We will perform this activity stepwise

Step 1:

For this we first click on “Maintain” option we will show menu open which contain options of Customers,Vendors , Charts of Accounts, Inventory items… ,Costs items….,Fixed Assets,

Company information..., Sales Tax e.t.c

Step 2:

After click “Charts of Accounts” we will get the window which mention right side. Main reason of charts of accounts is add new accounts, define account type, account description, delete accounts, change account ID and describe company accounting record.

There are some box titles which we should discuss

Account ID:

We mention a digits for accounts which specify there identifications in software is called Account ID for example we mention 100 for our cash account and 101 for cash at bank Accounts. In below table all the digits are identification of Accounts.

Note: For distinctive purpose we use 100 figure for assets,200 for liabilities,300 for capital, 400 for sale , 500 for cost of sale, 600 for all expenses

ID	Description	Account Type
100	Cash	Cash
101	Cash at bank	Cash
110	Account receivable	Account receivable
111	inventory	inventory
120	Prepaid rent	Other current asset
121	Advance insurance	Other current asset
150	Land and building	Fixed asset
151	Machinery	Fixed asset
152	Vehicle	Fixed asset
153	Acc. Dep Building	Accumulated depreciation
154	Acc. Dep Machinery	Accumulated depreciation
155	Acc. Dep Vehicle	Accumulated depreciation
200	Account payable	Account payable
210	Salaries payable	Other current liability
211	Interest payable	Other current liability
212	Short term loans	Other current liability
300	Capital	Equity doesn’t close
301	Retain earning	Equity retain earning
302	Dividend	Equity gets close
400	Sale	income
500	Cost of sale	Cost of sale
600	Rent expense	expense
601	Insurance expense	expense
602	Depreciation	expense
603	Salaries expense	expense

Descriptions:

In descriptions we enter the account name such as cash , Account Receivable e.t.c.

Account Type:

Every account has its own nature for example cash is asset in nature salary is expense , notes payable is liability in nature .In software we have need to write account type

Step 3:

After writing the account ID , description and account type we will press (Alt + S) key to save the procedure or you can press to save.

After save all the accounts we can review all accounts by pressing

NOTE: We must create owner’s equity account otherwise it create problem at the end. If we enter the figures then we cannot create this account id

Beginning Balance of Chart of Accounts:

This is use to add beginning balance for current year and adjust the beginning balance of account for prior year.

Step 4:

We will click on beginning balance icon then following window will appear which mention right side. Here you will select month of which data is enter for example if trail balance is given on 1st June then May month will be selected.

Step 5: