Credit Note:

A credit note is sent to customer who returns the goods. It is prepared by seller which contains details regarding the name of the customer and the details of the goods received back from the customer the main object of sending note is to inform the customer that he has been credited in the seller's books. It is a basis for preparing sales return book. It is usually printed in red ink.


Debit Note:

Debit note is a document for recording purchase return. It is prepared by buyer and sent to the suppliers for their information of debiting their account equal to the amount of goods return. It also includes the reasons of goods returned. It is important document to prepare purchase return book.


FACT ERP.X


A comprehensive realtime solution featuring General Ledger (GL), Accounts Receivable (AR), Accounts Payable (AP), Inventory Control (IC), Manufacturing Management, Payroll... all integrated into one single solution.

Work in Progress (WIP) including Waste Management, integrated Fixed Assets with automatic Depreciation calculation, Landed Costing with a customisable FACT Cockpit view for senior managers.


Peachtree Premium Accounting

Peachtree by Sage Premium Accounting 2010 is a comprehensive solution that provides premium features like multi-company consolidations, advanced budgeting, serialized inventory, and Crystal Reports® 2008. It provides a multi-user option for improved productivity with screen-level access control, plus analysis tools, and 140+ customizable reports and financial statements.

Features:
  • Accurate and Efficient Accounting
  • Control Your Business Data
  • Manage for Better Results
  • Data Security
  • Financial Analysis Tools
  • Peachtree Business Analytics
  • Customizable Reports
  • Switch from QuickBooks
  • Save Time on Routine Transactions
  • Get a Snapshot of Your Business
  • Business Management
  • Manage Cash Flow


Traverse

Offering a complete suite of accounting applications and distribution submissions, this among the real estate brokerage accounting software distributed by Open Systems Inc. Very flexible with customization and productivity, its source code is available in order to meet with whatever needs there are. The enterprise edition is equipped with mid- market ERP solution that has windows 2000 ready, accommodate middle to large market solution, SQL server database, Visual Basic, Microsoft Access Client, multilingual capabilities, stored procedures, transaction processing, oped database and data application, among the others. Traverse has applications on accounts payable, accounts receivable, advanced financial analyst, bank reconciliation, bill of materials, fixed assets, general ledger, inventory, not for profit, payroll, project costing, purchase order, sales order, service director and system manager.


Sun Systems 5

Enabling managers to organize their structure by delivering fiscal information that can be easily interpreted, this is among the real estate brokerage accounting software by Systems Unions Inc. Its greatest features are that the different dimensions of executive activity can be mirrored sans the need to prescribe a data association ahead. Sun Systems 5 has applications on accounts payable, accounts receivable, inventory management, professional services automation, collect, connect, financials, analytics, multi- currency, purchase requisitioning, purchase management and sales order management.


Microsoft FRx

Giving mid- market segment and business control of the whole pecuniary reporting method, this is among the real estate brokerage accounting software distributed by Frx Corporation. This needs no guidance from information technology specialists as it has a user- friendly environment. It has help a lot of accountants, controllers and executives to perform their work in a more efficient manner. Allowing to immediately create valuable financial documents, it has a built- in accounting intelligence that links to an organization’s current records. Microsoft FRx has applications on FRx desktop, FRx enterprise and FRx professional.


Sage MAS 500 ERP

Best suited for companies that have more than a thousand employees, this is among the real estate brokerage accounting software distributed by Sage. It is highly- reliable with strong series of applications that includes the entire fields of enterprise management. It also covers the areas of accounting, budgeting, distribution and payroll, among the others. This product is compatible with Microsoft tools, equipment and architecture that will grant a scalable, full- featured and flexible solution. Sage MAS 500 ERP has applications on advanced manufacturing, general ledger, inventory replenishment, product configurator and many more.


Peachtree Complete Accounting


Peachtree by Sage Complete Accounting 2010 combines robust core accounting with features like job costing, time and billing, in-depth inventory capabilities, and analysis tools. Its multi-user option1 helps improve productivity while providing control over who accesses data. Peachtree Complete Accounting 2010 provides 125+ customizable business reports and financial statements.

Peachtree is based on real, double-entry accounting principles with screen-level security, audit trails, and automatic accounting checks. You get the accuracy and control you need to improve results—and truly understand how your business is performing.

  • Accurate and Efficient Accounting
  • Control Your Business Data
  • Manage for Better Results
  • Save Time on Routine Transactions
  • Get a Snapshot of Your Business
  • New: Peachtree Business Analytics
  • Keys to Start-up Success


Peachtree Pro Accounting

Peachtree by Sage Pro Accounting 2010 helps improve your productivity with standard accounting features that can automate invoices, checks, and track employee payroll. You can record customer payments, create budgets, and track sales, inventory, and expenses. It provides 100+ reports and financial statements. All first-time Peachtree customers receive 30 days of free support. Upgrading customers receive one free support call within 30 days of registration.


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manages more than 50,000 transactions each day

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DacEasy : An Accounting Software

DacEasy by Sage is a powerful, easy-to-use, complete accounting solution. At the core of DacEasy is a series of fully integrated modules that give you vital information that's key to your successfully operating your business. You can select the module combination needed to meet the needs of your business and achieve optimal results.

With DacEasy, you get fast access to your data, extensive functionality, powerful reporting, and more. This comprehensive software solution can help you save time and grow your business.

The standard DacEasy Accounting comes with core modules for keeping a general ledger, tracking fixed assets, banking, billing, purchasing, and inventory management. DacEasy Accounting & Payroll has a built-in payroll module.

In addition to these modules, Sage offers a number of add-on modules for tasks such as payroll, order entry, job management and job costing, and point-of-sale management.

The software also automates time-sensitive bookkeeping tasks such as closing out the company ledger at the end of the month and posting data from subsidiary ledgers to the general ledger. It also lets users set dates for posting prepayments, accruals, and depreciation and for clearing audit-trail and product files.

DacEasy's fast search engine helps users get at accounting data and customer accounts quickly and efficiently because data can be entered or edited without a lengthy search. A report generator provides templates for drafting financial reports, including a variety of charts.


Decision for choosing Good Accounting Software

At this time, you should be in a good position to select an accounting software package. If you have more than one package left on your list, make a decision based on guts or instincts. If you still can’t decide, choose the product that is easiest to use on a day-to-day basis, the product that is built on top of the most promising technology, or the product that offers the strongest reporting. Otherwise, flip a coin. We believe that the actual price of the software is not really relevant (within 200% or so). The real cost of accounting software is the time required to get it up and going and the time required each day to implement manual work-around procedures to compensate for missing features and reports.


Choosing the Right Accounting Software Package

1. Become Knowledgeable – To get started, it is always helpful to educate yourself about the accounting software packages that are out there. (We know that the reality is that nobody has enough time to fully do this.) The Internet can help by making it faster and easier to locate information. But you may also choose to attend independent seminars, vendor sponsored seminars, and trade show exhibition booths, and read newspaper and magazine articles.

2. Make a List of Potential Solutions - Make a list of all of the products that might meet your needs. Include products that you are aware of, products you read about, products you hear about, products listed on the Internet, etc. If possible, talk to your competitors and ask them what they use and add these to the list as well. So that you can evaluate the products side-by-side, you may consider preparing a more elaborate list – a spreadsheet listing key information for each product. For example, your spreadsheet might include information for modules, pricing, platform, customization capabilities, certified payroll, retainage, time and billing solution, and bar coding – or whatever you determine is most important to your company. The objective here is to focus just on the most important issues and not be blinded by small insignificant shortcomings. This matrix will also be helpful in sharing information with others who may have input into the ultimate decision.

For each product you are evaluating, begin tabulating a list of the features and facts that impress you about the company, the product, and the reseller. For example, you may list key awards received by the product, the fact that the company provides great support, or describe a great feature that you think your company would really benefit from. Continue to add to this list as your evaluation continues.

3. Eliminate the Obvious Poor Choices - Start to eliminate potential products due to missing modules, missing key features, or because they are simply too expensive. Cross them off your list and notate why you did. Selecting the right package is mostly a process of eliminating the wrong packages. Generally, you can eliminate many products at this stage. Continue to eliminate products throughout the entire evaluation process.

4. Evaluate Product Features - Next, make a complete listing of the unique features that your company requires, and compare this list to the features provided by each product. There are several good software programs that aid you in this process. By far the least expensive and most comprehensive program on the market is The Accounting Library. The Accounting Library lists over 4,000 accounting software features. Simply place a checkmark by each feature that your company needs, and the Accounting Library will rank the top 150 products according to the product that best meet your needs to the product that least meets your needs. You can also print a "Missing Needs Report" that will summarize the features you need that are missing from each product. Based on your review of the features, you can easily eliminate obvious poor solutions from further consideration. I highly recommend this product to potential customers as well as resellers and consultants.

5. Visit Internet Sites – Next, visit the Internet sites for each accounting software product remaining on your list. If your list is still lengthy, pick your best four or five options and concentrate on them for now. Print out the information, organize it in a binder, and study it in detail. Use a highlighter to highlight the key points you identify as it is likely that someone in your organization will probably review your documentation at some point the future.

6. Request Brochures and Evaluation Code – Next, call each accounting software publisher and request their latest brochure information and an evaluation copy of the software. Watch out, this will trigger accounting software sales representatives to come calling on you.

7. Identify Top Resellers - By far, the number one complaint in the accounting software industry is "poor resellers". Because this is the single-most important element in the successful implementation of an accounting system, you need to take extra care to make sure that you identify the best resellers and consultants. If you call the company and ask for a referral, the accounting software publisher will typically pass you off to the next reseller on their list, and you may get stuck with a less experienced installer. Don't make this error. Here at Accounting Software Advisor, we have published a complete section devoted to helping you understand how to find, evaluate and select the right reseller to meet your needs - we recommend only those resellers who have passed our rigorous due diligence standards.

8. Product Demonstration – By this point, hopefully you have identified the best resellers in your area for the products you are considering. Next, you should arrange for these resellers to demonstrate their products to you. They should be able to do this in about 2 to 4 hours. They should take time up front to ask you extensive questions about your company and your needs. This will help them better understand what you are looking for and they can then tailor their demonstration to your particular needs. (If they don’t take time to talk to you up front, watch out - you are probably dealing with an inexperienced person.) Allow them to make their pitch - they all have a canned sales pitch, and by damned, they will all make you endure it. Hopefully the reseller will use live software to demonstrate the product to you, but sometimes slides and overheads are used as well. Take the demo for what it is – a sales pitch. Before it is over, hit them with your toughest questions. Make sure to ask them about their available time, their installation methodology, their track record for getting the systems up and running properly on time, and a list of 3 to 5 references whom you can call to check up on their work. You may even ask them to install an evaluation copy of the product on your computer so you can further evaluate the product on your own time.

9. Hands On Testing – If you received code from the accounting software vendors, this would be a good time to evaluate it. Keep in mind that you will be testing software that you do not know how to use. If you are unable to make something work the way you want it to work, don’t assume that it won’t do it. (Most software publishers receive thousands of suggestions to add features that are already present in the system.) Simply write down the problem and address it with your reseller the next chance you get. Make sure to update your list of good and bad points for each product. Include subjective points about performance, look and feel, ease of use, etc.

10. Call References – At this time, call the references supplied by the vendors and ask a few simple questions as follows:

1. Do you use XXXXX Software?

2. When did you install it?

3. Who performed the installation (company and name of reseller)?

4. Did they do a good job and install the system in a timely manner?

5. Are you satisfied with the product?

6. What problems have you had with the product?

These six questions are usually all you need, as they will flush out any problems with the resellers or the product. Be careful to make sure that the reference is being honest with you. Some references will not say anything bad in fear of a lawsuit. Others may not really be valid references, instead they may be a brother-in-law or close friend. Therefore, be on the look out for suspiciously short responses or people who are not able to describe specific details of the engagement. If you reach 3 consecutive good references that you are comfortable with – then in our opinion, that product and installer have passed the final test. Also, if you receive negative feedback, it may be helpful to try to distinguish between a “Good product/Bad reseller” versus a “Bad product/Good reseller” situation.


10 - Step Blueprint for Selecting the Right Accounting Software

Selecting the wrong accounting software can be a complete disaster. You could even lose your job or your business by making a poor choice – it has certainly happened many times before. Exactly where can you go to get the information you need to make the right decision? There are trade shows, seminars, and magazine articles on selecting accounting software, but they typically just tell you the good stuff. The accounting software publishers at conferences and other similar shows will provide you with a fancy brochure and show you what they have to offer, but the truth is that it is almost impossible to tell what’s missing or what’s wrong with the product. The Value-Added Resellers (VARs) will come to your office to demonstrate the product, but they usually skip over the negative points and weaknesses as well. The magazine articles all seem to gloss over the bad stuff in fear of chasing away advertising dollars.

Too often it takes a complete installation of the system and at least a month of operations to tell if the product will meet your needs – and by then, it is too late. There seems to be no independent place to go to get good help in avoiding the wrong package. This is a problem that everyone faces when selecting accounting software. The good news is that almost all accounting software packages have gotten better over the past decade, and it is now easier to end up with a fairly good product than it used to be.


Top Ten in the Beginning ERP Market

Companies with $25 Million to $500 Million in Revenue

1.

ACCPAC Advantage Series Enterprise Edition (Best Software)

2.

ACCPAC ProSeries (Best Software)

3.

Axapta (Microsoft Software)
4. Epicor (Epicor Software)

5.

e-Business Suite (Oracle)

6.

Great Plains (Microsoft)

7.

SYSPRO (SysproUSA)

8.

MAS 500 (Best Software)

9.

Navision (Microsoft)

10.

Solomon (Microsoft)



Top 10 Accounting Software Market

The following are the top ten Middle-Market Accounting Software Market companies having $2 Million to $50 Million in revenue.

1.

ACCPAC Advantage Series Corporate Edition (Best Software)

2.

ACCPAC ProSeries (Best Software)
3. Accountmate (Best Software)
4. BusinessVision 32 (Best Software)

5.

Great Plains (Microsoft)

6.

MAS 90 & MAS 200 (Best Software)

7.

Navision (Microsoft)

8.

Solomon (Microsoft)

9.

SouthWare Excellence Series (SouthWare)

10.


SYSPRO (SysproUSA)


Top Accounting Software Products

The following are the top accounting software products that are used in those companies having up to $5 million revenue.
1. BusinessVision 32 (Best Software)

2.

Small Business Manager (Microsoft)
3. M.Y.O.B (M.Y.O.B. Software)
4. Peachtree Complete Accounting 2004 (Best Software)
5. QuickBooks Pro 2003 (Intuit)

6.

Simply Accounting (Best Software)
7. NetSuite
8.

Vision Point 2000 (Best Software)


Softrax Revenue Manager: Revenue Recognition for ERP

MIRROR YOUR REVENUE RECOGNITION PROCESSES IN AN ENTERPRISE APPLICATION

Softrax Revenue Manager is the first and only software application that enables companies to manage revenue compliance, reporting, and forecasting in a single system—in concert with existing ERP, Business Intelligence and Compliance infrastructures. It enables companies to fully implement, monitor, and manage their revenue recognition policy on an enterprise-wide basis. It mirrors the corporate revenue policy in a single system, and controls all critical revenue processes, including: allocation, scheduling, recognition, compliance, reporting, and forecasting.


NetSuite

Founded in 1998, NetSuite Inc. is the leading provider of web-based accounting / enterprise resource planning (ERP) with over 6,000 global customers. Specifically created for the needs of growing and midsize customers, NetSuite provides businesses with one complete system to run their entire company, including accounting / ERP, Inventory, CRM, and E-commerce. NetSuite helps companies automate processes, streamline operations, make faster better decisions, grow and scale faster, and eliminate IT hassles and costs. Delivered via the Internet, NetSuite can be implemented all at once or modularly, depending on your needs.

Run your business better today with NetSuite.

Intelligent
You have real-time access to all the information you need to make better, faster business decisions. Role-based customization facilitates quick end-user adoption across your organization. With the Real-time Dashboard, users see the information most relevant to their job functions.

Integrated
NetSuite integrates front-office, back-office and ecommerce capabilities in a single powerful application. With one data repository, you can be certain that all your users view and use accurate and up-to-the-second data.

Simple
As an on-demand, Web-based solution, NetSuite significantly reduces your total cost of ownership. It’s faster and less expensive to implement than traditional software. Additionally, you no longer have to purchase hardware, or maintain and upgrade software. And its simple user interface facilitates quick end-user adoption.

Automate
NetSuite automates all your key business processes—from lead generation to sales orders, from product shipment to customer service—across your entire company and through your trading partners. Since all corporate data is held in a single system, you access one real-time view of all your key business metrics, enabling you to make better, faster decisions in an increasingly competitive landscape.


Acumatica Distribution Management Suite

The Distribution Management Suite is an add-on module to the Financial Management Suite for managing the complexities of distribution such as purchasing, ordering, tracking inventory, filling orders, and delivering customer support.

The distribution suite is integrated with our core financial modules to deliver real-time measurements of profitability by warehouse, product line, location, and business unit. Integration with CRM ensures that your entire organization, from sales to support, has visibility into your distribution processes.

The product is integrated with the other Acumatica suites to provide all business management functions in a single, integrated system. This allows sales teams to make a quote based on current inventory and sign a contract which creates the appropriate sales order. The sales order can trigger the creation of a purchase order as well as the pick list for warehouse operations. Customer service can access an up-to-date status of orders, including partially filled orders. Finance and accounting can monitor purchasing processes and inventory levels to minimize costs.

The product includes reporting tools, dashboards, workflow, and file management features to streamline business processes. Detailed access controls ensure that only authorized users can see specific screens, reports, and objects. Web-based customization tools give authorized users the ability to change the appearance, business logic, and database fields associated with their deployment.

Since it is web-based, the Distribution Management Suite can be deployed faster and maintained for less money than traditional client-server applications. The product is designed to be installed on-premise, hosted at a datacenter, or deployed on a cloud computing platform.


Restaurant Accounting Software | Ctuit Radar


Accounting software for Restaurants from Ctuit. Radar provides polling of your point of sale data to reduce data entry. Accounting functions such as posting, accrual setup, and adjustments are included. Report off of the accounting data by generating daily P&L statements per location. Exports to leading traditional Accounting Software packages are supported.


QuickBooks 2010

QuickBooks Pro and Premier 2010 feature the all-new Intuit App Center, providing users access to scalable, Software-as-a-Service business applications directly from within QuickBooks. Currently more than 25 applications are available, including a service that helps track and manage marketing campaigns and sales leads to maximize profits. All applications offer free trials, and many work directly with QuickBooks data, extending the value of the information and eliminating the need for double data entry.

Other new features in QuickBooks 2010 include an improved Company Snapshot, giving the small business owner a tailored visual overview of how business is performing, and Intuit Check Solutions, which allows small business owners to scan or key in checks for immediate deposit.

In a recent survey, QuickBooks users said they save an average of four hours per week managing their business finances compared to their previous method. An array of new features help small businesses save precious time by making important jobs and key tasks easier than ever, giving entrepreneurs more time to focus on their business, so that they can spend less time on their bookkeeping. New and improved time-saving features include:
Express Install: A new product installation option cuts the number of startup steps in half.

Add/Edit Multiple List Entries: Users can save time by editing multiple long lists of items, customers, or vendors, rather than edit each item individually. They can also copy and paste data into QuickBooks directly from Excel with a simple key stroke, eliminating the unnecessary steps of inputting the data directly.

Forms Customization: More customization options, including free professional design templates for commonly used forms such as invoices and estimates, give QuickBooks users the ability to apply the same design to multiple forms at once. Those who want help designing a unique look can connect with a community of professional designers through Intuit Creative Solutions.

“The Add/Edit Multiple List Entries features is one of the greatest updates I have seen in years,” said Christine Bailey, owner of Small Office Solutions in Daphne, Ala. “It is so much easier to add customers, vendors and items, all at one time versus going into each one and saving and then adding the next one. Wow, what a time saver!”



Sage 200

Several of the deals have come from Sage 200 customers, he says. “We see Sage as a donor of business.

The installed base of Sage low-end to mid-end customers is phenomenally large, but we find that businesses looking to control complexity often find a home in the Dynamics product set,” he says.

He says customers like the Dynamics Dashboard because accounts clerks, accounts managers and financial directors can be given different views of the same accounting information.

Sage remains the company to beat in the UK accounts market. Cynthia Alers, Sage Group director of investor relations, says that the company has 772,000 Sage accounts users in the UK, and continues to add 30,000 new customers each year.


CODA 2go

CODA – a once traditional accounting software house – has demonstrated a top ten aged debtor list on a Blackberry, using its CODA 2go SAAS product offering, which it launched six months ago.

CODA 2go is targeting the Saleforce customer base of 1.2 million users.
“We began looking at the cloud market two years ago as we saw a delivery method that was on the uptake and one that could give us inroads into markets that traditionally couldn’t afford CODA’s high-end solutions,” says Jeremy Roche, chief executive of CODA Group.

“When we looked at building our own SAAS platform, the investment we would have had to make to scale and provide security and up-time and everything else, would have been enormous.

“By going with Force.com, we were taking advantage of the investment that Salesforce.com had already made, which let us concentrate on building the cloud version of CODA 2go.” CODA 2go costs US$125 per month per user.

Microsoft Dynamics product marketing director Gary Turner says that Microsoft “wants to embrace the best part of classically deployed software, and the internet generation” through its ‘Software Plus’ service – installed enterprise-wide software, but linked to the web.

He points out that Tenon, a large UK accounting firm, already deploys Dynamics accounting products as an outsourced, hosted product accessible over the web.

Turner acknowledges that the UK Dynamics business is “blunted”, but no more so than the rest of the market.

“I don’t expect to see the kind of growth that we experienced in the last 24 months during this year,” he says.

New business deals in the £10,000 to £50,000 bracket are still being signed, he says; businesses are looking for ways to manage customers more efficiently, to control cashflow and improve inventory levels.


Credit Hound

Richard Reavely, director of Draycir, says that sales of its Credit Hound package have picked up in the last two months.

Credit Hound takes creditor information from Sage and Microsoft Dynamics accounting software and automatically emails creditors when invoices are due, or schedules telephone appointments if an invoice are late.

“Resellers are joining up because they are looking for new products to sell to their existing Sage customers," he says.

However, the biggest technology change by far is undoubtedly Software as a Service (SAAS) offerings from new and established suppliers, even though the majority of traditional accounting software suppliers and resellers continue to insist that SAAS is not happening on their patch.

They give two reasons: their accounting customers see no need for it, and large accounting systems are already integrated into other applications which can only be operated and maintained on a local server or local network.


Outlook to Exchequor

Users can also enter data into Exchequor from Outlook, blurring the distinction between accounting software and a user’s everyday mail and calendar package.

Both Access Technology Group and Microsoft have launched a carbon emission dashboard, allowing companies to track carbon emissions using data held within the accounts software they already use.

“We think companies are beginning to take their environmental reporting seriously. We were the first to bring out a carbon emissions tracking system from within an accounts package, and have made the package free,” says Alistair O’Reilly, group managing director for Access Technology Group.

“While new business licence sales have slowed (although bread and butter deals continue to be signed worth £30,000 to £60,000) the demand for consultancy on existing systems is on the increase,” he adds.

“We need to provide features that allow personnel across the business to gain access to financial data, including bespoke reports and business documentation.”

O’Reilly says that Access Technology has added electronic document management, a scheduling module and a web-based professional services
module to its Access Accounting product set.

He says there is also interest in a new leasing scheme, which is offering customers lease rates of 3.5%, less than most leasing companies are able to offer.


Objective or Importance or Advantages of Ledger:

A ledger is a principal book so that it has a great importance of achieving the goal of accounting and book-keeping. Some objectives may be as follows:
  1. Knowledge of debtor: A ledger gives the information to the proprietor about his debtor to whom he has sold goods on credit and amount due from him to be received.
  2. Knowledge of creditor: A ledger also discloses the amount to be paid to creditor from whom the business has purchased goods on credit.
  3. Knowledge of total sale and purchase: It helps to know total sales or purchases of a certain period through sales account and purchase account.
  4. Knowledge of expenses: For each head of expenditure, a separate account is opened. It helps to know the amount spent on different heads of expenditures.
  5. Knowledge of income: Like the expenses, ledger accounts also help to disclose the incomes generated by the firm during a certain period.


Ledger Account

Meaning of Ledger:
Journal as we have discussed in previous chapter, is a chronological record of business transactions which does not record relating to a particular subject, thing or person at a place if they occur on different dates. To avoid such limitation of journal, a statement is prepared to collect all the transactions of same nature at one place which is called 'ledger'. In other words, a ledger is a book of recording transactions in a classified way according to their nature and type.

According to Mukharji and Hanif "The ledger is the principal books of accounts where similar transactions relating to a particular person or thing are recorded." From this definition, we know that a ledger is a principal book of account. All similar transactions are collected at a place. For example, transaction relating to cash are assembled under a ledger i.e., cash account. A separate account is opened for a particular transaction generally on a separate page or sheet.

Before preparing the ledger, journal entries must be passed. For every journal entry, one ledger account is to be debited and another is to be credited. Such process of transferring the transactions which have been previously recorded in the journal into the appropriate ledger accounts is called "Posting".


Trustees
The Foundation’s Board of Trustees is an independent body of leaders in their professions with diverse backgrounds and expertise in areas of business, finance, investment, accounting, government, investor advocacy, education, and other professions involved in the activities of the financial and capital markets. The Board is currently comprised of 16 members and, other than the chairman, Trustees serve a single five-year term and until their successors are elected and qualified. To provide for appropriate continuity of leadership, the Trustee serving in the capacity as chair may be re-elected to successive terms without limitations on the number of terms he or she may serve. The Trustees, in their capacity as the members of the Foundation, have sole authority to elect all Trustees. Three Trustees must have extensive experience as fi nancial offi cers or as elected offi cials of state or local governments and candidates for these positions are nominated by the nine governmental organizations that helped form the GASB under the Foundation. Nominations for the remaining at-large Trustee positions are solicited from a broad array of market participants.

The members of the FAF Board of Trustees are:
  • John J. Brennan (chairman, FAF), chairman, Vanguard;
  • Robert T. Blakely (vice chairman, FAF), executive vice president and CFO (retired), Fannie Mae;
  • W. Steve Albrecht, associate dean of the Marriott School of Management and professor, Brigham Young University;
  • Rick Anderson, chairman, Moss Adams LLP;
  • Frank H. Brod, corporate vice president, Finance and Administration, and chief accounting officer, Microsoft Corporation;
  • Ellyn L. Brown, president, Brown & Associates;
  • Jeffrey J. Diermeier, retired president and chief executive offi cer, CFA Institute;
  • Cynthia P. Eisenhauer, former chief of staff for Iowa Governor Tom Vilsack;
  • Timothy P. Flynn, chairman, KPMG;
  • Edward M. Harrington, general manager, San Francisco Public Utilities Commission, California;
  • Dennis Kass, chairman and chief executive offi cer, Jennison Associates LLC;
  • John J. Perrell III, retired vice president–global policies, American Express Company;
  • Susan M. Phillips, dean, George Washington University School of Business;
  • James H. Quigley, chief executive offi cer, Deloitte & Touche Tohmatsu;
  • John J. Radford, state controller, Oregon;
  • Paul C. Wirth, global controller, Morgan Stanley.


AN INDEPENDENT STRUCTURE

Financial Accounting Standards Board (FASB)
The FASB is part of a structure that is independent of all other business and professional organizations. Before the present structure was created, financial accounting and reporting standards were established first by the Committee on Accounting Procedure of the American Institute of Certified Public Accountants (AICPA) (1936–1959) and then by the ,Accounting Principles Board, also a part of the AICPA (1959–1973). Pronouncements of those predecessor bodies remain in force unless amended or superseded by the FASB.

Financial Accounting Standards Advisory Council (FASAC)
The FASAC has responsibility for advising the FASB on technical issues on the Board’s agenda, project priorities, matters likely to require the attention of the FASB, and such other matters as may be requested by the FASB or its chairman. At present, the Council has more than 30 members who represent a broad cross section of the FASB’s constituency.

Financial Accounting Foundation (FAF)
The Foundation, which was incorporated to operate exclusively for charitable, educational, scientifi c, and literary purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code, is responsible for selecting the members of the FASB and its advisory councils, ensuring
adequate funding of their activities, and exercising general oversight with the exception of the FASB’s resolution of technical issues.

Governmental Accounting Standards Board (GASB)
In 1984, the Foundation established the GASB to set standards of financial accounting and reporting for state and local governmental units. As with the FASB, the Foundation is responsible for selecting its members, ensuring adequate funding, and exercising general oversight.


Certain precepts in the conduct of its activities

  • To be objective in its decision making and to ensure,insofar as possible, the neutrality of information resulting from its standards. To be neutral, information must report economic activity as faithfully as possible without coloring the image it communicates for the purpose of influencing behavior in any particular direction.
  • To weigh carefully the views of its constituents in developing concepts and standards. However, the ultimate determinant of concepts and standards must be the Board’s judgment, based on research, public input, and careful deliberation about the usefulness of the resulting information.
  • To promulgate standards only when the expected benefits exceed the perceived costs. While reliable, quantitative cost-benefi t calculations are seldom possible, the Board strives to determine that a proposed standard will meet a signifi cant need and that the costs it imposes, compared with possible alternatives, are justifi ed in relation to the overall benefi ts.
  • To bring about needed changes in ways that minimize disruption to the continuity of reporting practice. Reasonable effective dates and transition provisions are established when new standards are introduced. The Board considers it desirable that change be evolutionary to the extent that it can be accommodated by the need for relevance, reliability, comparability, and consistency.
  • To review the effects of past decisions and interpret, amend, or replace standards in a timely fashion when such action is indicated.
The FASB is committed to following an open, orderly process for standard setting that precludes placing any particular interest above the interests of the many who rely on fi nancial information. The Board believes that this broad public interest is best served by developing neutral
standards that result in accounting for similar transactions and circumstances in a like manner and accounting for different transactions and circumstances in a different
manner.


THE MISSION OF THE FINANCIAL ACCOUNTING STANDARDS BOARD

The mission of the FASB is to establish and improve standards of financial accounting and reporting for the guidance and education of public, including issuers, auditors, and users of financial information.
Our financial reporting system is essential to the efficient functioning of the economy, That is because it is the means by which investors, creditors, and others receive the credible, transparent, and comparable financial information they rely on to make sound investment and credit decisions. Accounting standards are an important element of the financial reporting system because they govern the minimum required content of financial statements of U.S. public companies.
To accomplish its mission, the FASB acts to:
  • Improve the usefulness of financial reporting by focusing on the primary characteristics of relevance and reliability and on the qualities of comparability and consistency;
  • Keep standards current to reflect changes in methods of doing business and changes in the economic environment;
  • Consider promptly any significant areas of deficiency in financial reporting that might be addressed through the standard-setting process;
  • Promote the international convergence of accounting standards concurrent with improving the quality of financial reporting; and
  • Improve the common understanding of the nature and purpose of information contained in financial reports.
The FASB develops broad accounting concepts as well as standards for financial reporting. It also provides guidance on implementation of standards. Concepts are useful in guiding the Board in establishing standards and in providing a frame of reference, or conceptual framework, for resolving accounting issues. The framework will help to establish reasonable bounds for judgement in preparing financial information and to increase understanding of, and confidence in, financial information on the part of users of financial reports. It also will help the public to understand the nature and limitations of information supplied by financial reporting.
The Board's work on both concepts and standards is based on research aimed at gaining new insights and ideas. Research is conducted by the FASB staff and others, including foreign, national, and international accounting standard-setting bodies. The Board's activities are open to public participation and observation under the "due process" procedures established by the Board. The FASB actively solicits the views of its various constituencies on accounting issues.


International Accounting Standards Boards (FASB)

Since 1973, the Financial Accounting Standards Board(FASB) has been the designated organization in the private sector for establishing standards of financial accounting. Those standards govern the preparation of financial statements. They are officially recognized as authoritative by the Securities and Exchange Commission (SEC) (Financial Reporting Release NO.1, Section 101, and reaffirmed in its April 2003 Policy Statement) and the American Institute of Certified Public Accountants (Rule 203, Rules of Professional Conduct, as amended May 1973 and 1979). Such standards are important to the efficient functioning of the economy because investors, creditors, auditors and other rely on credible, transparent and comparable financial information.

The SEC has statutory authority to establish financial accounting and reporting standards for publicly held companies under the Securities Exchange Act of 1934. Throughout its history, however, the commission's policy has been to rely on the private sector for this function to the extent that the private sector demonstrates ability to fulfill the responsibility in the public interest.


Rules of Debit and Credit:

Ruels of debit and credit denote to the rules of debiting an account and crediting another of a transaction under double entry book-keeping system. There are following approaches for the rules of debit and credit.

Rules of Debit and Credit on the Basis of Nature of Account:
This approach is known as English or Dual Aspect Approach.
a) Personal Account:
Personal accounts are related to any person or organization. Mukesh Account, Bill Account, John Account, Swiss Bank Limited Account etc. are some examples of personal accounts. According to this account, the rules of debit and credit is:
Debit the receiver
Credit the giver


Rules of Journalizing:

We have already discussed that journalizing is a task of recording transactions in a journal. Before journalizing a transaction, following three steps must be minded.
  1. Firstly, we need to find out the two aspects or two fold effect of a transaction.
  2. Secondly, we need to identify the accounts whether they are personal, real or nominal accounts.
  3. Finally, we need to use the golden rules of debit and credit.


Objectives or Advantages of Journal:

The following are some objectives of journal.
  1. It provides date-wise (chronological) records of all business transactions.
  2. It helps to prepare ledger account.
  3. It helps to understand the principles of double entry book-keeping system through the accounts to be debited and credited.
  4. It gives complete information at one place about each business transaction with narration.
Ruling or Format of a Journal:
A general format of the journal is as given below which has five columns.








Each Column is discussed in detail as follows:
Date: This is the first column of a journal which is meant for recording the date of transaction. All the transactions should be recorded in the order of date or in the order of occurrence.

Particulars: It is the second column of journal which is meant for recording two names of account to be debited and credited. The word 'Dr.' is written after the name of debit account. In the next line the account to be creditedis written with the prefix 'To'.

After each entry, a brief explanation of each transaction is given which is called 'Narration'. It explains the reasons of debiting and crediting the accounts. It is followed by word 'Being' or 'For'.

L.F. : It is third column of a journal. The full form of L.F. is ledger folio which is for the record of page number or folio number of the ledger where the posting has been made from journal.

Dr. or Debit Amount: In this column, the amount of account to be debited is written strictly in sequence with the name of the account.

Cr. or Credit Amount: It is fifth of last column of a journal where amount of credit account is written. It also must be in sequence with the name of the account credited.


Journal

When any transaction takes place, it may be immediately noted down in a book which is known as memorandum book so that the transaction may not be forgotten. It is a just rough book and after it, a journal is prepared. A journal is also known as book of original entry which is a chronological record (in order of occurrence) of transactions according to double entry book-keeping system. In other words, it is subsidiary book meant for recording the day-t0-day transactions of a business in the order in which they take place.

The word 'Journal' has come from a French word 'Jour' which denotes a 'day book'. Therefore, it also may be known as day book. The act of recording transactions in journal is called 'journalizing' and the record of a transaction in journal is called 'journal entry'.


Continue......Terms of Doub........

12. Profit:
Profit is an economic gain arises from the sale of goods. When the goods is sold at higher price than its cost the difference is profit. In case of running business, the profit for the year is the excess of income over expenditures. Mathematically, it can expressed as:
Profit = Incomes - Expenses

13. Loss:
The word refers to the excess amount of expenditures over incomes. When goods of $10,000 has been sold for $8,000 the difference $2,000 ($10,000 - $8,000) is a loss. Goods lost by fire, theft, accidents etc also included in it.

14. Financial Transactions:
Any exchange of goods or services for cash or credit by one person to another is a transaction. Those transactions that are related with money are financial transactions.


Continue...........Some Basic.........

9. Purchase:
Purchase of raw material either on cash or credit by a manufacturing concern for production and then sale is termed as purchase. In case of trading concern, goods purchased for resale purpose is known as purchase. If a bookshop purchases books and stationery, they are termed as purchases but if it acquires furniture, then that is not treated as a purchase because the furniture is non-trading goods for a bookshop.

10. Sale:
The word 'sale' denotes the exchange of goods or services for money either on cash or credit. However, it does not include the sale of assets like sales of old machinery and furniture.

11. Stock:
The term stock denotes to unsold goods lying in business. It also includes the unused raw material in production. Opening stock is the amount of goods in hand at the beginning of the period where as closing stock means the stock of goods at the end of the year. There are following three types of stock or inventory.
  • Stock of raw material : It refers to unused stock raw materials but to be used for production of finished goods in future.
  • Stock of work-in-progress : It denotes to that stock of goods which are partly produced. It is also called as semi-finished goods. Raw materials in the process of production which are not yet been finished are stock of work-in-progress.
  • Stock of finished goods : Those completed goods which are left to be sold at store are known as stock of finished goods.


Some Basic Terms of Double Entry System:

4. Drawings:
Money or value of goods belonging to business withdrawn by proprietor for his personal and domestic use is called drawing. It reduces the capital of the business.

5. Revenue:
Revenue is the sum of money received or to be received from the customers or clients of a business as a result of sale of them of goods or both. Income generated from the sale of goods, rent received, commission received etc. are some items of revenue. They are regular in nature.

6. Expenses:
Expenses include the cost of goods sold, amount paid for salary, rent, advertisement, insurance, wage etc. They are spent for generating future revenue. Expenses is the amount spent to produce and sell goods or services.

7. Debtors:
A person or an organization that owes money to the business mainly on account of credit sale of goods or rendering of services is a debtor. Debtors are current assets as they are expected to be collected within short period. When goods or services are sold on credit in the ordinary course of business, the customers are known as trade debtors.

8. Creditors:
The creditors are those persons or organizations to whom the amount are due. It is caused due to the credit purchase of goods or services. When goods or services are purchased on credit for the purpose of resale purpose the supplier or sellers are known as trade creditors.


Some Basic Terms of Double Entry System:

1. Capital:
The amount that is invested in the business by the propreitor is called capital. In other words, capital is the excess of assets over external liablilities. For example, if the total assets of business is $120,000 and the liabilities is $80,000, then the capital on that date would be Rs. 40,000 ($120,000-80,000). Sometimes, it is also called as net worth or owner's equity.

2. Assets:
Any property or possession of the business is known as assets. It also refers to the amount due on debtors. Plant, machinery, land, building, cash in hand, cash at bank, bills receivable, debtors, prepaid expenses, accrued income etc. are some of example of assets. The following are further classifications of assets:
  1. Current Assets
  2. Fixed Assets
  • Tangible Fixed Assets
  • Intangible Fixed Assets
3. Liabilities:
Liabilities denote the amount owing to outsiders who are not owners. In other words, the debts that are due by the firm to other parties are collectively known as liabilities. Creditors, bank overdraft, bank loan etc. are some examples of liabilities. Capital introduced by owner is also comes under liability. There are two types of liabilities.
  1. Long Term Liabilities
  2. Current Liabilities


Inventory

Assets whose purpose is for sale to customers are inventory. In a grocery store, food is inventory. Books and magazines are inventory. Cash registers are not inventory.

Example
A developer builds a tract of homes and puts them up for sale. Are those buildings fixed assets or inventory?
Answer: inventory because their purpose is for sale to customers.
For people live in those homes, they are fixed assets. Even though a homeowner may hope to sell it sometime down the road, he’s using the asset, not just holding it for sale.

Inventory accounting shows up in two places in the financial statements. It is a current asset in the Balance Sheet. It is also a part of Cost of Goods Sold in the Income Statement.

Experience
Few software packages handle the Cost of Goods Sold accounting properly. While in theory Cost of Goods Sold should show Beginning Inventory, Purchases, and Ending Inventory, we lump them all into just one account.
This is where you may want to consult your particular accounting program’s limitations, to see if you need to do this, too.

At the end of the year each company should physically count its inventory. The accountant should price this merchandise at cost and then adjust the books to the inventory that is actually on hand. Both GAAP and IRS rules require a physical count once a year.

But how do you count for inventory in the meantime?

One method is the percent of sales method. First, you should code all inventory purchases to Inventory (the Balance Sheet account). Next, figure your average markup. This can be based on the ratio of Cost of Goods Sold to Sales in previous years. Then at the end of the period (usually a month or a quarter) make an adjusting entry to credit this amount out of inventory and debit it into Cost of Goods Sold.

Example
Assume markup of 20%. August Sales were $10,000.
Cost of Goods Sold should be $8,000.

Don’t try to be too exact with these estimates. They are, after all, estimates. Use rounding. Don’t imply accuracy that is not there and is not possible to achieve. Note that this is why a physical count is so important. That should be calculated to the last penny!

How do you cost inventory?

So the clerks have gone all around the plant and you now have a whole bunch of count sheets. The amounts of each item should be multiplied by how much these items cost to get your cost. But how can you know? What if the prices were different at different times of the year? Which prices should you use?

First, you’ve got to have records of how much units were bought at what prices. Next, you have several options: First in First Out (FIFO), Average, and Last in First Out (LIFO). As the names imply, you go through your lists, crossing out items as sold until you get to the number of units that match your count. Those are the prices you use to cost the items on your count sheets.


QuickBooks 2010................


QuickBooks 2010 also helps small business owners gain valuable insights into how their business is performing so that they can make better decisions and increase profitability. New features to help customers improve their bottom line include:

Company Snapshot: QuickBooks users can now create a customized report to display on their computer screen, getting an immediate view of their company’s bottom line. Previously, the Company Snapshot was a static view that could not be personalized. Users can choose from several reports, including new ones for yearly expenses and income comparisons, detailed expense and income breakdowns, and a top customer list. Plus, the reports can be changed instantly.

Report Center: This radically re-designed report center gives users access to more than 100 reports and makes it easier to find the right report in order to make better business decisions. Different views make it easier to navigate quickly between reports. These include a carousel view to flip through the reports, a list view to see all reports at once, and a ‘favorites’ view to keep track of frequently used reports. A new search feature helps users find the report with the specific information they want.

“The new Company Snapshot gives you great information at the click of a button,” said Debbie Kirkland, president of Kirkland Services in Christmas Valley, Ore. “This is a great place to go to pinpoint problem areas or to just determine your strengths and weaknesses within your company.”


You know that when you take a brand new computer out of its box it is no longer as valuable as the price you paid for it. Fixed assets depreciate in value. The difference between what you bought an asset for and what is it now worth is depreciation.

Depreciation is an expense. It is also a contra-account against fixed assets.
Example
This is what the Fixed Assets section of a Balance Sheet might look like: The journal entry for this might have been
Machinery and Equipment $ 50,000
Buildings 100,000
Less: Accum. Dep. (20,000)
=======
Total Fixes Assets $130,000

Depreciation Expense (debit)


5,000

Accumulated Depreciation (credit)
5,000

Tip - Jack’s
Make only one journal entry for all your assets. Use only one Depreciation Expense amount in your Income Statement and one Accumulated Depreciation amount in your Balance Sheet. These amounts should be the total of all your depreciation calculations.
This is easier on both the accountant and the readers of the financial statements. Few people want to go into all the details of depreciation and it just makes them look more complicated than they need to be.
Ignore Kathy’s tip below. (Grin!)

Tip - Judi's
Ignore Jack’s tip above. (Grin!)
Separate listings of Depreciation Expense and Accumulated Depreciation should be in the financial statements for each category of assets. This gives the user valuable information on the aging of a company’s plant and equipment. Together with the Cash Flow Statement’s section on which assets have been bought and sold, an analyst can form useful conclusions about a company’s present and future capital needs.

Jack’s Rebuttal
Most users couldn’t be bothered. If a user wants to know all that, then provide them the depreciation schedule that gives them even more information. Otherwise why assault users with additional information when financial statements are complicated enough?

Judi’s Rebuttal
Breaking out depreciation isn’t all that complicated to do or to read. Aw, come on Jack!

Okay, so even partners like us can have our professional disagreements! (Grin!)

What about the other $15,000 in Accumulated depreciation (the 20,000 less the 5,000)? Accumulated depreciation is the total of all depreciation for the current period and all prior periods.

Not all of the amount of an asset is depreciated at one time. The idea of depreciation is that depreciation goes up as the asset’s value goes down.

So how are the amounts determined? There are a variety of methods. Here are the two most common.

The Straight Line Method

Take the total cost of an asset. Estimate how much it will be worth when you dispose it. The difference between its starting amount and the ending amount is going to have to be depreciated.

Now estimate its total useful life. Divide the total difference by the total life. That is the amount to depreciate this period.
Example
Assume a widget that costs $10,500. Its useful life is 10 years. Its value at the end will be $500.
Over the next 10 years you will need to adjust this widget’s book value from $10,500 down to $500. In other words, you’ve got to decrease it by $10,000 over 10 years. This works out to an average of $1,000 per year.
The straight line method is to just use the average.

The IRS Method

This is not generally accepted accounting principles (GAAP). It is for accounting on the Tax Basis of accounting which is an Other Comprehensive Basis of Accounting (OCBOA). More on GAAP vs. OCBOA here.

The IRS has tables that you use to look up the deductable depreciation amounts. Remember that these tables like all IRS rules are the result of politics not any accounting theory.

For example there is the Section 179 Expense election. This allows you to deduct all of the value of new assets up to a certain amount.

Peachtree has a module to track fixed assets and depreciation. Quickbooks does not. A spreadsheet can also track depreciation.

With a spreadsheet like Excel, each row is for individual assets. Columns are for the Asset’s name, Class, Date Purchased, Amount, Depreciation Method, Accumulated Depreciation - Beginning of Year, Depreciation Expense, Accumulated Depreciation - End of Year. The class is the Balance Sheet line description.

Then sort by class (Judi’s tip) and sub-total for your series of journal entries. Use the Depreciation Expense column subtotals for your series of journal entries. Otherwise, just use the total at the bottom for Jack’s one comprehensive journal entry.


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