Chapter 5General Ledger, Inventory,

and Internal Control

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All Rights Reserved.

General Ledger and Inventory

In Chapter 5, you learn how to use the General Ledger chart of accounts.

Peachtree includes over 75 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 level.

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

Another Peachtree feature is user security. On pages 175-182, Internal Control, you look at how Peachtree keeps company data secure.

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Software Objectives, p. 151

1. Restore data from Exercise 4-2. (This backup was made on p. 151.)

2. Enter a new account in the Chart of Accounts.

3. Look at Peachtree’s budget feature.

4. Make a General Journal entry to transfer funds.

5. Display the General Ledger Trial Balance.

6. Set up an Inventory Item.

7. Record an inventory adjustment.

8. Look at Peachtree’s internal controls and audit trail.

9. Make two backups: backup Chapter 5 data; and backup Exercise 5-2.

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Web Objectives, p. 153

1. Use your Internet browser to go to the book’s

web site at www.mhhe.com/yacht2008.

2. Complete the Internet activity for Ask Jeeves.

3. Complete the steps shown for this activity.

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Peachtree Tip

Peachtree uses a perpetual inventory

system. See pages 171-173 for a review of

how Peachtree journalizes the purchase and

sale of inventory items.

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Backing Up Chapter 5

Backup Name KB Page Nos.

Chapter 5 3,408 KB 182-183

Exercise 5-2 3,411 KB 188

In Chapter 5, you make two backups. The Chapter 5.ptb

backup is made on pp. 182-183 and the Exercise 5-2.ptb

backup is made on page 188. Refer to the chart shown on

page 2 in the textbook

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Chapter 5 Topics

1. Software & web objectives, p. 153

2. Chart of Accounts, pp. 154-156

3. Getting started, pp. 156-158

4. Budgets, pp. 158-160

5. General Journal, pp. 160-164

6. Setting up an inventory item, p. 165

a. Inventory types, pp. 165-169

6. Inventory and purchases, pp. 169-171

7. Inventory and sales, pp. 171-173

8. Inventory Adjustments, p.174-175

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Chapter 5 Topics (concluded)

9. Internal Control, p. 175

a. Setting up company users, passwords and access rights, pp. 176-177

b. Audit trail report, pp. 177-179

c. Displaying the Audit trail report & find transactions report, pp. 180-182

10. Backing up Chapter 5 data, pp. 182-183

11. Internet Activity, p. 183

12. Summary and review, pp. 183-184

a. Going to the Net, p. 184

b. Multiple choice questions, pp. 185-187

c. Exercise 5-1, p. 188

d. Exercise 5-2, p. 188

e. Chapter 5 index, p. 189

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Peachtree Help window, p. 155

Complete steps 1-5 on p. 154. The Peachtree help window appears.

Toolbar

NavigationTopic

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Maintain Chart of Accounts window, p. 157

From the Company page, click ; New Account. In the Account ID box, type 10500. In the Description box, type Money-Market Fund. Make sure Cash is selected as the Account Type. This window is shown on p. 157.

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Budgets, pp. 158-160

From the Company page, click ; New Budget. Read page158. This window is shown on p. 159.

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General Journal Entry, pp. 160-162Complete steps 1- 10 on pages 161-162. The General Journal Entry window is shown on p. 162, below step 10.

Select to post to the General Ledger.

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General Ledger Trial Balance, p. 163

Complete steps 1 and 2

on p. 162. Bellwether

Garden Supply’s

General Ledger Trial

Balance appears.

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General Ledger Trial Balance

(concluded), p. 164

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Completed Maintain Inventory Items, pp. 166-169

From the Navigation Bar, select ; , New

Inventory Item. The completed Maintain Inventory Items window

appears on p. 168.

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Completed Purchases/Receive Inventory window,

pp. 169-171

Complete Inventory and Purchases, steps 1-7, p. 170. The Purchases/Receive Inventory is below step 7.

Post .

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Completed Sales/Invoicing window, pp. 171-172

Complete Inventory and Sales, pp. 171-172, steps 1-7. The Sales/Invoicing window is shown below step 6, . 172.

Post .

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Completed Inventory Adjustments window, p. 174

From the Navigation Bar, click then select . Complete steps 2 – 4 , p. 174.

Post this adjustment.

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Internal Control, pp. 175-178

Read pages 175-178. This window is

shown on page 178.

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Audit Trail Report, p. 181

Read pages

178-182.

This window

is shown on

page 181.

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Backing Up Chapter 5 Data, pp. 182-183

Complete steps 1-6 on pp. 182-183.

The suggested file name is Chapter 5.

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Chapter 5

Glossary of Terms

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Perpetual inventory, p. 153

In a perpetual inventory system, an up-to-

date record of inventory is maintained, and

the inventory account is revised each time

a purchase or sale is made.

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Chart of accounts, p. 154A 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. 154HTML stands for Hypertext Markup Language.

Peachtree’s Help windows display in HTML format.

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Internal Control, p. 175Internal 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.

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Audit Trail, p. 175If 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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Chapter 5, Internet Activity, p. 183

1 From your Internet browser, go to the book’s website at

www.mhhe.com/yacht2008.

2 Link to Student Edition.

3 In the Course-wide content list, link to Internet Activities; then link to Part

1 Internet Activities for Chapters 1-8. Open or Save. (In the Choose a

Chapter field if you select Chapter 5 observe that chapter-specific links

are available; for example, Multiple Choice Quiz, True or False,

PowerPoint Presentations and Going to the Net Exercises.) The Course-

wide Content also includes a Glossary link.

4 Scroll down the window to the Internet Activity labeled ASK JEEVES –

Chapter 5. Read steps 1-4.

5 Follow the steps shown on the textbook’s website to complete this

Internet activity.

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

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Going to the Net, p. 184

Access the Yahoo small business website at http://smallbusiness.yahoo.com/r-index; link to Ten Tips for New Small Businesses. The complete website address is http://smallbusiness.yahoo.com/r-article-

a-41095-m-1-sc-12-ten_tips_for_new_small_businesses-i. (Hint: If this article is no longer available, link to another area from Yahoo’s small business page and write a brief essay—no more than 125 words—describing the link.)

1. List the 10 tips for starting a new business.

2. Link to one additional site from this page.

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