Chapter 05:General Ledger, Inventory,

and Internal Control

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

General Ledger and Inventory

In Chapter 5, you learn more about the General Ledger chart of accounts.

Peachtree includes over 75 sample charts of accounts. You can set up your own chart of accounts, copy a chart of accounts used by another company, or use one of the samples.

Chapter 5 also shows you how to use Peachtree’s inventory system. Peachtree lets you track inventory items both at the purchasing and sales level.

Peachtree keeps track of cost of goods sold, stock levels, sales prices, and vendors.

Another Peachtree feature is user security. On pages 190-198, Security and Internal Control, you learn about how Peachtree keeps company data secure.

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Peachtree Tip

Peachtree uses a perpetual inventory

system. See the tables on page 188 to

review how Peachtree journalizes the

purchase and sale of inventory items.

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Backing Up Chapter 5

Backup File (.ptb)

Excel (.xlsx) and Adobe (.pdf) KB Page Nos.

Chapter 5.ptb 3,576 KB 198-199

Exercise 5-2.ptb 3,571 KB 203

Exercise 5-2_General Ledger

Trial Balance.xlsx

15 KB 203

Exercise 5-2_General Ledger

Trial Balance.pdf

56 KB 203

In Chapter 5, you make two backups, export the General

Ledger Trial Balance to Excel, and save one PDF file.

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Peachtree Help: Chart of Accounts,

pp. 166-167

Complete steps 1-6 on pp. 166-167. The Peachtree help window appears.

Toolbar

Navigation pane

Topic pane

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Chapter 5:

Glossary of Terms

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Perpetual inventory, p. 165

In a perpetual inventory system, an up-to-

date record of inventory is maintained. The

inventory account is revised each time a

purchase or sale is made.

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Chart of accounts, pp. 166-167

A list of all the

accounts used by a

company, showing

the identifying

number assigned to

each account

Peachtree has over

75 sample charts of

accounts.

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HTML, p. 166

HTML is an acronym for Hypertext Markup

Language. Peachtree’s Help windows display in

HTML format.

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Inventory System, p. 178Peachtree’s Inventory & Services Navigation Center shows Peachtree’s

inventory system, which includes information and access points related

to the company’s inventory items. The Inventory & Services selection

shows Peachtree’s inventory module or inventory system. The

Inventory & Services workflow diagram is shown below.

Workflow

diagram

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Internal Control, p. 190

Internal control is an integrated system of people,

processes, and procedures that minimize or eliminate

business risks, protect assets, facilitate reliable

accounting, and promote efficient operations. (Refer

to pages 190-198.)

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Audit Trail, pp. 194-198If changes are made to company records, Peachtree’s audit trail

provides documentation. An audit trail records all entries and changes

related to the company’s data, including actions by specific users.

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Going to the Net, pp. 199-200

Access this website

http://www.nolo.com/legal-encyclopedia/bookkeeping-

accounting-basics-29653.html. Read the Bookkeeping and

Accounting Basics article.

1. List the three steps for keeping your small business accounting records.

2. From this website, link to another area.

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Analysis Questions, p. 2041. List four ways that Peachtree includes user security

and internal control.

a. Setting up user names, passwords, and access

rights.

b. The ability to associate the user currently logged into

the Peachtree company with the data that is being

entered.

c. Limit access to information in Peachtree’s Navigation

Centers.

d. Audit Trail reports that show what each user entered.

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Analysis Questions (continued), p. 204

2. How is the audit trail associated with user security?

Provide an example.

When User Security is set up, Peachtree can

associate the user currently logged into the

company with the data being entered. For

example, USER1 adds a customer record. USER2

then logs on and modifies the customer record.

The Audit Trail report will show that USER2 was

the last person who worked with the customer

record, and it will display what was changed.

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Analysis Questions (concluded), p. 204

3. How does user security address the purpose of internal

control?

By limiting access to accounting data, Peachtree's user

security feature addresses an important purpose of internal

control. For example, assigning users to one Navigation

Center increases the accuracy of records and reports. Also,

since one user assumes responsibility for repetitive tasks,

the efficiency of operations increases. User security reduces

the business's risk of users changing or deleting data

inappropriately which also safeguards accounting data. User

security establishes accountability and allows the company

to track who has performed various maintenance and

recording tasks.

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Assessment Rubric, p. 204

Date Transaction

Navigation

Center/Module

Task

Window

Journal

Dr./Cr.

3/18 Transfer $1,200

from the Regular

Checking Account to

the Payroll

Checking Account.

Banking; General

Journal Entry, New

General Journal

Entry

General Ledger

General

Journal

Entry

window

General

Journal

Dr. 10300,

Payroll

Checking

Account,

$1,200

Cr. 10200,

Regular

Checking

Account,

$1,200

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Assessment Rubric (concluded), p. 204

Date Transaction

Navigation

Center/Module

Task

Window

Journal

Dr./Cr.

3/19 Purchased two (2)

Oriole Feeders from

DeJulia Wholesale

Suppliers, Invoice

No. 94977, $14.

Vendors &

Purchases; Enter

Bills, New Bill

Accounts Payable

Purchases/

Receive

Inventory

window

Purchases

Journal

Dr. 12000,

Inventory, $14.

Cr. 20000,

Accounts

Payable/DeJulia

Wholesale

Suppliers, $14.

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Online Learning Center Go online to www.mhhe.com/yacht2012 for additional

resources. Link to Student Edition, select Chapter 5.

o Interactive Testing

o Glossary of Terms

o Feature Quizzes

o PowerPoints

o Assessment Rubrics

o Going to the Net

o QA Templates

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