Chapter 2 GETTING STARTED This section prepares the user for the system by highlighting the file structures and system functions in a simple descriptive overview illustrated by two dissimilar examples. Overview The QUE Accounting system can be structured in various ways because of the freedom it allows in defining the General Ledger, the Department file and the Company Master. It can accommodate a single company that uses a simple chart of accounts or a more elaborate setup that uses subsidiary accounts and departments and requires reporting for multiple companies, and departments within companies. The following examples depict these extremes. EXAMPLE - Company A The Corporation Company A is a corporation composed of two separate companies, XYZ and ABC. Each company has multiple departments which include subsidiaries. Likewise, the Chart of Accounts has both Group and Subsidiary accounts. The controller wishes to run a tight ship and does so by reporting financials departmentally. EXAMPLE - Company B The Small Company Company B is a small company that is composed of two departments. The departments represent a Warehouse and a Sales Office. The proprietor wishes to record expenses separately for these two areas and is accomplishing this by recording transactions by the department identifier (10 for Warehouse and 20 for Sales). The Chart of Accounts is a simple structure that uses no subsidiary accounts. Each company has been setup in the system according to its own specific needs. There are six files used in the system Setup. The SOURCE code, SETUP and RANGE files come predefined but may be changed to reflect your specific needs. The files are inter-related and should be setup in the sequence shown. Table Description SYSTEM stores a record for each Company in the corporation. Keeps track of company data such as current period, password and miscellaneous information RANGE This file identifies the Account number ranges used for the different account classifications in the Chart of Accounts. For example, 1000 - 1999 are reserved for Assets, etc. *(Inventory range). GENERAL The Chart of Accounts is responsible for account LEDGER validations, transaction limits and controlling the printing of financial statements. DEPT The Department Master records a record for each department in the system. TRIAL The Trial Balance contains a record for each BALANCE unique combination of Company, Department and Account. It can be created as Departments and Accounts are being entered or by selecting the 'REBUILD TRIAL BALANCE' option on The SU menu. SOURCE The Source Code table is used to identify the batches entered in ET and to identify the default Debit and Credit Account numbers. The actual table layouts appear below as well as transaction examples and a discussion on the implication of setup design on reporting capabilities. SETUP TRANSACTION PROCCESSING REPORTING SETUP TABLES Both Companies use similar Range and Souce Code tables a) Range Table The three columns below represent the account type, starting and ending account ranges from the table. A 1000 1999 Assets * When interfacing with L 2000 2999 Liabilities inventory, the Cost of C 3000 3999 Capital Goods Sold field is R 4000 4999 Revenue used to record the E 5000 5999 Expenses reduction in inventory. b) Source Code Table The table below represent the three character source code, followed by the default Debit and Credit account numbers. INV 1500 4100 Invoicing= Debit to Accounts Receivable Credit to Sales CSR 1100 1500 Cash receipts= Debit to Cash, Credit to Accounts Receivable CSD 2010 1100 Cash Disbursements= Debit Accounts Payable and Credit to Cash The companies use different Chart of Accounts, Department file and Setup files as illustrated in the following pages. The Chart of Accounts shows the Account number, the account class, the account type, the account group indicator and the ending account range. The Department file shows the Company code, the Department code, the department group indicator and the ending department range. The System file shows only the Company Code and the company name. ** For the purposes of these illustrations, only selected elements appear in these tables. Chapter 3 provides a detailed description of each element in the tables aligned with the Setup process. Company A CHART OF ACCOUNTS Acct Cls Type Group End Description 1000 A L Y 1050 Group Cash Account 1010 A L N 1010 Subsidiary cash account (Bank 1) 1020 A L N 1020 Subsidiary cash account(Bank 2) 1100 A L Y 1100 Inventory w/ no subs 1500 A L Y 1500 Equipment no sub accounts 2000 L L Y 2050 Group Payables 2010 L L N 2010 Accounts Payable sub account 2020 L L N 2020 Accounts Payable sub account 4100 R L Y 4100 Revenue Account DEPARTMENT FILE Comp Dept Group End ABC 10 Y 19 ABC 11 N 11 ABC 12 N 12 ABC 13 N 13 ABC 20 Y 20 XYZ 10 Y 19 XYZ 20 Y 20 SETUP TABLE Comp Name ABC ABC Company XYZ XYZ Company The Trial Balance is a result of each unique Company, account and Department combination entered into the system. The Current and Year To Date figures are included in the example to illustrate the update process. Both companies are starting out with clean balance sheets. TRIAL BALANCE (only ABC is shown) Cmp Acct Dept Current YTDbal ABC 1000 10 0.00 0.00 ABC 2010 10-1000.00 0.00 ABC 1000 11 0.00 0.00 ABC 2010 11 0.00 0.00 ABC 1000 12 0.00 0.00 ABC 2010 12 0.00 0.00 ABC 1000 13 0.00 0.00 ABC 2010 13 0.00 0.00 ABC 1010 10 0.00 0.00 ABC 2020 10 0.00 0.00 ABC 1010 11 0.00 0.00 ABC 2020 11 0.00 0.00 ABC 1010 12 0.00 0.00 ABC 2020 12 0.00 0.00 ABC 1010 13 0.00 0.00 ABC 2020 13 0.00 0.00 ABC 1010 20 0.00 0.00 ABC 1020 10 0.00 0.00 ABC 1020 11 0.00 0.00 ABC 1020 12 0.00 0.00 ABC 1020 13 0.00 0.00 ABC 1020 20 0.00 0.00 ABC 1100 10 0.00 0.00 ABC 1100 11 300.00 0.00 ABC 1100 12 300.00 0.00 ABC 1100 13 400.00 0.00 ABC 1500 10 0.00 0.00 ABC 1500 11 0.00 0.00 ABC 1500 12 0.00 0.00 ABC 1500 13 0.00 0.00 ABC 2000 10 1000.00 0.00 ABC 2000 11 0.00 0.00 ABC 2000 12 0.00 0.00 ABC 2000 13 0.00 0.00 The dollar amounts represent balances of transactions occurring in the current period. These transactions may come from one of the input modules, ET, Accounts Payable, Accounts Receivable, Payroll or directly changed through the Change Trial Balance function of the TB module. Company B CHART OF ACCOUNTS Acct Cls Type Group End Description 1000 A L Y 1000 Cash 1100 A L Y 1100 Office Furniture 1500 A L Y 1500 Equipment 2010 L L Y 2010 Accounts payable 4100 R L Y 4100 Revenue DEPARTMENT FILE Comp Dept Group End BBB 10 Y 10 BBB 20 Y 20 SETUP FILE Comp Name BBB BBB Company TRIAL BALANCE Company B Cmp Acct Dept Current YTDbal BBB 1000 10 0.00 0.00 BBB 1000 20 0.00 0.00 BBB 1100 10 0.00 0.00 BBB 1100 20 0.00 0.00 BBB 1500 10 0.00 0.00 BBB 1500 20 0.00 0.00 BBB 2000 10 0.00 0.00 BBB 2000 20 0.00 0.00 Comparisons Company B books are less extensive than Company A. As depicted there is a direct relationship between the number of accounts, companies and departments entered and the number of entries in the Trial balance. At any time through the course of the year, department and account records may be added at will and without affecting any existing balances. Likewise, Departments and Accounts may be deleted as long as there are no transaction balances, current or Year to Date. TRANSACTION PROCESSING As transactions are entered, deleted, and modified through one of the update modules (ET, AR and AP), and the Trial Balance is updated simultaneously. For example, Company A wishes to distribute inventory just purchased on credit to the three subsidiary departments in Company ABC. Since Account Payable is recorded at the Group level, the transaction would be entered in ET as: Company Account Department Amount ABC 2010 10 -1000.00 ABC 1100 11 300.00 ABC 1100 12 300.00 ABC 1100 13 400.00 A similar transaction for Company B would yield like results. But instead of recording the credit (Accounts Payable) for one department, the expense of purchasing office furniture is divided equally between the two departments receiving the goods. Company Account Department Amount BBB 2010 10 -1000.00 BBB 1100 11 300.00 BBB 1100 12 300.00 BBB 1100 13 400.00 The appropriate adjustments to the Trial balance are shown. Note both sets of transactions constitute a balanced accounting entry and that the adjustments made to the Trial Balance keep the books in balance. REPORTING Detailed transactions reports can be printed through the Transaction Register function in each of the input entry processes. Ranges on accounts and dates may be specified as well as specifying certain source codes. The Transaction Register is used to produce standard registers such as Cash Receipts, Cash Disbursements, and Sales jounals. Since the financial statements access the Trial Balance directly, all balances will encompass all entries in the Transaction files. The financial statements may be ran as often as needed without any restrictions to the contrary. As new transactions are added to the transaction files, changed or deleted, the Trial Balance is affected, accordingly. A value set in the SYSTEM file for each company keeps track of changes to the Trial Balance and forces the print of certain financial statements before the period may be closed. To access transactions which reside in multiple modules such as Accounts Payable and Accounts Receivable, the Detailed Trial Balance or Report Writer modules may be used. If a specific account is the target, the Account Query function provides a listing of all transaction for that account number for Current or History files. Company A has more reporting options since it has more accounts, companies and department entries. Financial statements may be produced for an individual department, a group department an entire company or for the entire corporation. Company B has less options. Reports can be produced for the entire company as a whole or for one of the individual departments. Chapter 3 Setup The Setup section covers the setup process, that is necessary before the system may be used in a 'live' mode. If you are uncomfortable at this time or at any time throughout the process, you may end the session and continue later without any interruptions to the system. All the information entered will be intact as you left it. For a overview of how the system is used we strongly suggest using the Practice system that is installed with the system. Practice System To start the system enter 'ZZZ' for the Company and TEST for the password. As you will notice, all files in the production system are blank except for the ZZZ Company record. To install the Practice System go to the UT menu and select 'START PRACTICE' from the menu. SETUP Files The files used in the system Setup are listed below. The SOURCE code, SETUP and RANGE files come predefined but may be changed to reflect your specific needs. The files are inter-related and should be setup in the sequence shown. Table Description SETUP stores a record for each Company in the corporation. Keeps track of company data such as current period, password and miscellaneous information RANGE This file identifies the Account number ranges used for the different account classifications in the Chart of Accounts. For example, 1000 - 1999 is reserved for assets. GENERAL The Chart of Accounts is responsible for account LEDGER validations, transaction limits and controlling the printing of financial statements. DEPT The Department Master records a record for each department in the system. TRIAL The Trial Balance contains a record for each BALANCE unique combination of Company, Department and Account. It can be created as Departments and Accounts are being entered or by selecting the 'REBUILD TRIAL BALANCE' option on The SU menu. SOURCE The Source Code table is used to identify the batches entered in ET and to identify the default Debit and Credit Account numbers. System Table Field Field Description Period Ending date of the current period Password The password used to log in to the package. Company 3 character alphabetical mnemonic for the company. Report Flag Identifies which required financial statements have been executed during the current period. No entry needed. Balance? Tells whether or not the Balance Sheet is balanced for that company. No entry needed. Number The number of periods in fiscal year. Current The value of the current period. Screen The title to appear on the screen. Report The title to appear on the reports. Retained Earnings The Retained earnings account number. Imperative for proper Balance Sheet operations. Printer Control 80 or 132 columns printer identifier. Use the condense print sequence for 80 col printers. Restore Check Used to alert system of incomplete updates. Set by system ET process. Auto Restore Tells system whether or not to do automatic restore during signon. Also is used to signify automatic backup during logoff. Restore Password Password to be able to do restores. Change/Delete Access Field signifies whether or not changes can be made to transactions. Trial Balance Access Field signifies whther or not access is granted to Trial Balance Change mode and Budget Entries Override Password Password used to enter the ST Setup function which allows the setting of passwords and access control. Report Writer Password Password to guard access to Report Writer option. General Ledger Access Controls access to update functions to the Chart of Accounts Accts Receivable Dir The directory where AR resides * Accts Payable Directory The directory where AP resides * Payroll Directory The directory where Payroll resides. * Only used in case the QUE Accounting modules are used in an integrated fashion. Range Table Class The accounting classification. (A-Assets, L-Liabilities, R-Revenue, E-expense, C-Capital) In case the Inventory Module is installed, it is used also to identify the range of Inventory. Start The first account in range. End The last account in range. Cost of The Account number form the Chart of Accounts used Goods to record the offsetting entry to an inventory reduction Source Code Code The 3 character code to represent transaction Description Description Default Debit The debit account normally associated with this transaction type. Default Credit The credit account normally associated with this transaction type. Chart of Accounts Account Account number Class Account Classification such as A for Assets, etc. Type Identifies Type of account such as L for pos- table. Group Group indicator to identify group accounts End Identifies the last possible account in the group. Closed Closed indicator Retire Retirement date for assets Department Comp Three Character company identifier. Department Two digit identifier. Comp+Dept must be unique to the file. Group Group indicator End Identifies the last possible Dept in that group The Source Code table and the Range table are modified through the ST function off of the main menu. The Chart of Accounts and Department master files are changed through their own functions. For a more detailed description of the elements composing the Chart of Accounts and Department Master, please consult the operational manual. Table Design The focal point of the Accounting System is composed of the structure set up in the General Ledger and Department Master. The Trial Balance is a conglomeration of this structure. When designing your system, it is advisable to sketch your Chart of Account (GL) and Departments out on paper before entering them into the computer. Make sure to plan for future growth if you expect to add some accounts between existing numbers. For example: Before After Addition 1000 Cash 1000 Cash 1100 CDs at First Pennsy. 1100 CDs at First Pennsy 1200 Accounts Receivable 1110 CDs at Mellon 1300 Inventory 1200 Accounts Receivable 1300 Inventory Accounting principle QUE Accounting System follows a standard double entry accounting system. The system assumes no default values for accounts and therefore requires the keyer to use the proper signs (+ and -) for debits and credits. Please consult Chapter 1 if you are unsure of the accounting terms of debits and credits. To increase To decrease Assets use positive numbers use negative values Liabilities use negatives use positive Capital use negatives use positive Revenue use negatives use positive Expense use positive use negatives Group Accounts and Departments Group accounts appear on as single line items on the financial statements while any subsidiary account appears in a detailed schedule printed as optioned at the end of an Income statement or Balance sheet. Group accounts facilitate reporting while providing detail if needed. Larger firms with many accounts might want to use group account to assure their financial statemenst are unclutterred. Group departments are similar in that financial statements printed for group departments will include all amounts for the subsidiary departments. However unlike accounts, a single subsidiary department balance sheet and income statement can be produced. User Defined Reporting The TYPE categories in the Chart of Accounts allows you to define your own sub totaling, report headings and page breaking on the financial statements. The Transaction Registers allow selection of date and account ranges thereby providing reports for a wide range of data. The Query and Report Writer provides the most flexibilty in producing reports. It allows you to combine information from several files and to determine conditional selection, much like the range selection of Transaction Registers. The order of fields to appear on the report as well as the sorting sequence and subtotaling may be defined as well. Queries may be saved for future reference.