Chapter 5:Chapter 5: General Ledger & InventoryGeneral Ledger & Inventory

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General Ledger and General Ledger and InventoryInventory In Chapter 5, you learn how to use the General Ledger

chart of accounts. This chapter provides you with an explanation of how to set up your own company.

Peachtree comes with over 70 sample company charts of account. You can set up your own chart of accounts from scratch or select one of the sample companies’ charts of accounts.

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

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

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Software Objectives, p. 151Software Objectives, p. 151 Restore data from Exercise 4-2. (This back up

was made on p. 149.) Enter a new account in the chart of accounts. Enter a budget amount for an account. Make a general journal entry to transfer funds. Display the general ledger trial balance. Set up an inventory item. Record an inventory adjustment. Make two backups: one blank, formatted disk

for Chapter 5; one blank, formatted disk for Exercise 5-2.

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Web Objectives, p. 151Web Objectives, p. 151 Use your Internet browser to go to the book’s

web site at www.mhhe.com/business/accounting/yacht2002.

Complete the Internet activity for Ask Jeeves. Complete the steps shown for this activity.

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Peachtree TipPeachtree Tip

Peachtree uses a perpetual inventory system. See page 172 for a review of how Peachtree journalizes the purchase and sale of inventory items.

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Backing Up Chapter 5Backing Up Chapter 5

Disks Backup Name

KB Page Nos.

10 of 18 A:\Chapter 5 764 KB 174-175

11 of 18 A:\Exercise 5-2 767 KB 180

Use one blank, formatted disk to back up Chapter 5 on pages 174-175. You will need another blank, formatted disk to back up Exercise 5-2 on page 180.

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Chapter 5 TopicsChapter 5 Topics1. Software & web objectives, p. 1512. Chart of Accounts, pp. 152-1533. Getting started, pp. 154-1584. General Journal, pp. 158-1625. Setting up an inventory item, pp. 162-163

a. Inventory types, pp. 163-166b. Inventory default accounts, pp. 166-167

6. Inventory and purchases, pp. 167-1697. Inventory and sales, pp. 170-1728. Inventory adjustments, pp. 173-174

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Chapter 5 Topics continuedChapter 5 Topics continued9. Backing up Chapter 5 data, pp. 174-175

10. Internet Activity, p. 175

11. Summary and review, pp. 175-176

a. Going to the Net, p. 176

b. Multiple choice questions, pp. 176-179

c. Exercise 5-1, p. 179

d. Exercise 5-2, p. 180

e. Chapter 5 index, p. 181

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5-9““Help Topic” window, p. 153Help Topic” window, p. 153 Click on Help, then Contents and Index. Select the “Contents”

folder tab. Double-click on “Help for Your Specific Type of Business.” Double-click on “A-Z List of Business Types.” Then, double-click on “List of Sample Chart of Accounts.”

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Completed “Maintain Chart of Completed “Maintain Chart of Accounts” window, p. 156Accounts” window, p. 156

Click on Maintain, then Chart of Accounts. In the “Account ID” box, type 10500. In the “Description” box, type Money-Market Fund.

Select the “Budgets” folder tab.

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““Maintain Chart of Accounts,” p. 158Maintain Chart of Accounts,” p. 158 Complete steps 1- 3 on pages 157-158 to see this screen.

Select the “Save” icon, then “Close” to return to the menu bar.

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General Journal Entry, p. 160General Journal Entry, p. 160 Complete steps 1- 9 on pages 159-160 to see this screen.

Select “Save” to post to the General Ledger.

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General Ledger Trial Balance, p. 161General Ledger Trial Balance, p. 161 Click on Reports, then General Ledger. In the “Report List,”

double-click on “General Ledger Trial Balance.”

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Completed “Maintain Inventory Items,” p. 166Completed “Maintain Inventory Items,” p. 166 Click on Maintain, then Inventory Items. Complete the steps shown

on pages 162 through 166. The completed “Maintain Inventory Items” window appears.

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Completed “Purchases/Receive Inventory” window, Completed “Purchases/Receive Inventory” window, p. 169p. 169

Click on Tasks, then Purchases/Receive Inventory. Complete steps 1 – 7 on pages 167-169.

Post this purchase. Press <Esc> to return to the menu bar.

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Completed “Sales/Invoicing” window, p. 171Completed “Sales/Invoicing” window, p. 171 Click on Tasks, then Sales/Invoicing. Complete steps 2 – 5 on page 171.

Post the invoice. Close the window to return to the menu bar.

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Completed “Inventory Adjustments” window, p. 174Completed “Inventory Adjustments” window, p. 174 Click on Tasks, then Inventory Adjustments. Complete steps 2 – 4 on

pages 173 and 174.

Post this adjustment, then close the window to return to the menu bar.

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Chapter 5:Chapter 5: Glossary of Terms Glossary of Terms

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Perpetual inventory, p. 151Perpetual inventory, p. 151

In a perpetual inventory system, an up-to-date record of inventory is maintained, recording each purchase and each sale that occurs.

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Chart of accounts, p. 153Chart of accounts, p. 153 A list of all the accounts used by a company, showing the

identifying number assigned to each account Peachtree has over 70 sample charts of accounts.

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Chapter 5, Internet Activity, p. 175Chapter 5, Internet Activity, p. 175

1 Go to the book’s web site at www.mhhe.com/business/accounting/yacht2002

2 In the “Student Center” list, link to Internet Activities.

3 Link to WEB EXERCISES PART 1.

4 Scroll down the screen to the Interest Activity labeled ASK JEEVES.

5. Use a word processing program to answer the questions in steps 1-4.

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Going to the Net, p. 175Going to the Net, p. 175

Access the AccountantsWorld.com web site at www.accountantsworld.com

Put your cursor over “About Us.” Then, select “Mission” from the drop-down list. Read the mission statement.

1. What does the mission statement say the accounting firm of tomorrow will be like?

2. How will accountantsworld.com serve the needs of the accounting community?