Example Transactions

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14.5.1 Initial Startup (No Previous Accounting Program Used)

       DEBIT* : ALL ASSETS (CASH, CHECKING, EQUIPMENT, PREPAID EXP)
       CREDIT*: ALL LIABILITIES (TAXES, ACCTS PAY, NOTES PAY) 
              : DEPRECIATION ACCRUED 
       IF DEBITS > CREDITS, CREDIT THE DIFF TO STARTING CAPITAL 
       IF CREDITS > DEBITS, DEBIT THE DIFF TO STARTING CAPITAL
 
Enter all your debits and credits at once by overriding pc/MRP's Out of Balance Message.  
When you have completed your entries post the month and run a Trial Balance Report to 
make sure you are still in balance.

14.5.2 Initial Startup (Switch From Previous Accounting Program)

       IF MID PERIOD
              TRANSFER ALL ACCOUNTS FROM TRIAL BALANCE*
       IF START OF PERIOD 
              TRANSFER LIABILITY,ASSET,EQUITY ACCTS FROM TRIAL BALANCE*
       IF START OF YEAR (TRANSFER YTD EARNINGS TO STARTING CAPITAL)
              TRANSFER LIABILITY,ASSET,EQUITY ACCTS FROM TRIAL BALANCE*
 
Enter all your debits and credits at once by overriding pc/MRP's Out of Balance Message.  
When you have completed your entries post the month and run a Trial Balance Report to 
make sure you are still in balance.

14.5.3 Owner Purchases Supplies With His Own Cash

       ON THE TRANSACTION DATE
               DEBIT  : OFFICE SUPPLIES ETC.  61400000
               CREDIT : NOTES PAYABLE TO OWNER  
 
       WHEN HE IS REIMBURSED
               DEBIT  : NOTES PAYABLE TO OWNER    
               CREDIT : CHECKING 10200000, CASH 10100000, ETC.
 

14.5.4 Start of New Year

        SOLE PROPRIETOR 
                DEBIT : YTD RETAINED EARNINGS 29900000 (TO BRING ACCT TO $0.00) 
                CREDIT : STARTING CAPITAL 25100000 

 

        CORPORATION

                DEBIT : YTD RETAINED EARNINGS 29900000 (TO BRING ACCT TO $0.00) C

               (this is a Credit Account)

                CREDIT:UNDISTRIBUTED RETAINED EARNINGS (QN, CREDIT ACCOUNT) C

               (this is a Credit Account)

 
            This transaction should be dated as the first day of the new year. 

14.5.5 Periodic Inventory Methods

pc/MRP can be set in the configuration menu to use the periodic inventory method. The Periodic Inventory Method requires the inventory to be adjusted at the end of each month instead of with each transaction. The total dollar amount of the inventory at the end of one period is also the beginning balance for the next period. Since pc/MRP automatically increments and decrements the physical inventory you can run pc/MRP's "Total Onhand Stock Value Report" to obtain the inventory value instead of taking a physical inventory. Example sales and purchasing transactions for companies using a periodic inventory are shown below:

Use the Inventory Value Report to find the inventory value at the Start and End of each month (SOM, EOM). Enter the following A type transactions into the general ledger.

START OF MONTH INVENTORY ADJUSTMENT

      DEBIT : STARTING INVENTORY EXP 40100000 incr exp by SOM $amt

      CREDIT: STOCK INVENTORY ASSET 12100000 zeros out asset acct

 
 

END OF MONTH INVENTORY ADJUSTMENT

      DEBIT : STOCK INVENTORY ASSET 12100000    asset = new EOM $amt

      CREDIT: ENDING INVENTORY EXP 42100000     decr exp by EOM $amt

      (YTD Exp Rep will add the SOM and subtract the EOM $amt)

 
 

PURCHASE, CASH    Transaction type P

      DEBIT : PURCHASES 41100000, RENT 61500000, SHOP SUPPLIES 61400000, ETC.

      CREDIT: CHECKING 10200000, CASH 10100000, ETC.

 
 

PURCHASE, ON ACCOUNT

      WHEN YOU RECEIVE INVOICE         Transaction  type I (matl in the door)

          DEBIT: PURCHASES 41100000, SHOP SUPPLIES 61400000, ETC.

          CREDIT: ACCOUNT PAY 20100000

 
 

WHEN YOU PAY ON ACCOUNT      Transaction type E (Expense)

          DEBIT:ACCOUNT PAY 20100000

          CREDIT: CHECKING 1020, CASH 10100000, ETC.

 
 

SALE, CASH      Transaction type S

      (Firms that do not sell on account, usually enter one cash receipt daily entitled Day's Receipts

       and the date.)

          DEBIT : CHECKING 10200000, CASH 10100000, ETC.

          CREDIT : BUSINESS INCOME 30100000 AND SALES TAX LIABILITY 21100000

 
 

SALE, ON ACCOUNT

      WHEN YOU INVOICE Transaction type O (matl Out the door)

          DEBIT: ACCOUNT RECVB 11100000

          CREDIT: BUSINESS INCOME 30100000 AND SALES TAX LIABILITY 21100000

 
 

 

      WHEN CUSTOMER PAYS ON ACCOUNT     Transaction type R (Revenue)

          DEBIT: CHECKING 10200000, CASH 10100000, ETC.

          CREDIT: ACCOUNT RECVB 11100000

 

14.5.6 Perpetual Inventory Methods

pc/MRP can be set in the configuration menu to use the perpetual inventory method (Version 6.49AS and higher only). The Perpetual Inventory Method requires the inventory to be adjusted with each sale and purchasing transaction. To employ this method the accountant must know the inventory cost for each sale. pc/MRP can provide those figures by first running the Automatic Cost Roll Up Option and then printing out an "All Parts Costed Report" in inventory. With this method you must add a new account called "COST OF GOODS SOLD" to the chart of accounts as an "EG" Debit Account.

If you were to add labor to your BOMs you could manually credit inventory and overhead (credit acct) when debiting cost of goods sold.

PURCHASE, CASH                     Transaction type P             
            DEBIT  : INVENTORY 12100000
            CREDIT : CHECKING 10200000
                
        PURCHASE, ON ACCOUNT          
            WHEN YOU RECEIVE INVOICE   Transaction type I (matl in the door)
            DEBIT  : INVENTORY 12100000
            CREDIT : ACCOUNT PAY 20100000
 
            WHEN YOU PAY ON ACCOUNT   Transaction type E (Expense)
            DEBIT  : ACCOUNT PAY 20100000
            CREDIT : CHECKING 10200000, CASH 10100000, ETC.
 
        SALE, CASH                         Transaction type S
            FOR THE SALE AMOUNT     
            DEBIT : CHECKING 10200000, CASH 10100000, ETC.
            CREDIT: BUSINESS INCOME 30100000 AND SALES TAX LIABILITY 21100000
 
            FOR THE COST OF INVENTORY SHIPPED
            DEBIT : COST OF GOODS SOLD
            CREDIT: INVENTORY 12100000
 
        SALE, ON ACCOUNT
            WHEN YOU INVOICE            Transaction type O (matl Out the door)
            FOR THE SALE AMOUNT
            DEBIT : ACCOUNT RECVB 11100000
            CREDIT: BUSINESS INCOME 30100000 AND SALES TAX LIABILITY 21100000
 
            FOR THE COST OF INVENTORY SHIPPED
            DEBIT : COST OF GOODS SOLD
            CREDIT: INVENTORY 12100000
 
            WHEN CUSTOMER PAYS          Transaction type R (Revenue)
            DEBIT : CHECKING 10200000, CASH 10100000, ETC.
            CREDIT: ACCOUNT RECVB 11100000

14.5.7 Payroll Entries

Please note the following caps, percentages and deductions may vary from state to state and change without notice. The following are used for example only.

PAYING WAGES (ENTER AS A "W" TYPE ACCOUNTING TRANSACTION)
 
        EXAMPLE EMPLOYEE PAYROLL CHECK:
                GROSS WAGES                              408.00
                FWT (Federal Withholding Tax)             31.51
                SSEC (Social Security Tax)                25.30
                MEDI (Social Security Medicare)            5.92
                SWT (State Withholding Tax)                1.94
                SDI (State Disability Tax)                 5.10
                                                        ------
                NET PAY                                  338.23
 
        METHOD 1 (DOUBLE ENTRY SCREEN METHOD):
                                     
        DEBIT :GROSS WAGE EXPENSES 50100000                408.00
        CREDIT: FWT LIABILITY 22100000                              31.50
        FICA LIABILITY (SSEC + MEDI) 22110000                       31.22
        SWT LIABILITY 22140000                                       1.94
        SDI LIABILITY 22130000                                       5.10
        CHECKING ACCT 10200000 (NET PAY)                           338.23  
 
        DEBIT : EXPENSES PAYROLL TAXES (SSEC+MEDI) 51100000 31.22
        CREDIT: FICA LIABILITY (SSEC+MEDI) 22110000                 31.22
 
         METHOD 2 (SINGLE ENTRY SCREEN METHOD):
 
        DEBIT : GROSS WAGE EXPENSES 50100000               408.00
        DEBIT : EXPENSES PAYROLL TAXES (SSEC+MEDI) 51100000 31.22 
        CREDIT: FWT LIABILITY 22100000                              31.50
        FICA LIABILITY (2x(SEC+MEDI)) 22110000                      62.44
        SWT LIABILITY 22140000                                       1.94
        SDI LIABILITY 22130000                                       5.10
        CHECKING ACCT 10200000 (NET PAY)                           338.23
 
PAYING FEDERAL GOVERNMENT PAYROLL TAXES (941)
        DEBIT  : ACCUM LIAB FWT 22100000                           31.50
        DEBIT  : FICA(SSEC+MEDI) 22110000                          62.44
        CREDIT : BANK CHECKING ACCT 10200000                       93.94         
  

PAYING FEDERAL UNEMPLOYMENT TAX

        DEBIT  : EXPENSES PAYROLL TAXES 51100000

        CREDIT : ACCUM LIAB FUTA 22120000

 

        DEBIT  : ACCUM LIAB FUTA 22120000

        CREDIT : BANK CHECKING ACCT 10200000

 

PAYING STATE PAYROLL TAXES

        DEBIT  : ACCUMULATED LIAB SDI 22130000,SWT 22140000

        CREDIT : BANK CHECKING 10200000

 

PAYING STATE PAYROLL TAXES

        DEBIT  : EXPENSES PAYROLL TAXES 51100000

        CREDIT : ACCUM LIAB SUI 22150000 ETT 22160000

 

        DEBIT  : ACCUM LIAB SUI 22150000, ETT 22160000

        CREDIT : BANK CHECKING ACCT 10200000

14.5.8 Owner Withdrawals And Contributions

SOLE PROPRIETOR 
  OWNER WITHDRAWS MONEY 
     DEBIT: OWNER WITHDRAW (QN, Debit Account)
     CREDIT: CHECKING 10200000
 

  OWNER PUTS HIS OWN MONEY IN (Not on a loan type basis)

     DEBIT: CHECKING 10200000

     CREDIT: OWNER CONTRIBUTION (QN, Credit Account)

 

CORPORATION

  OWNER WITHDRAWS MONEY

     DEBIT: CAPITAL DECREASE 27100000

     CREDIT: CHECKING 10200000

 
  OWNER PUTS HIS OWN MONEY IN (Not on a loan type basis)
     DEBIT: CHECKING 10200000 
     CREDIT: OWNER CAPITOL INCREASE 26100000 

14.5.9 Income Taxes

WHEN PREPAYING ESTIMATED TAXES 
    DEBIT : ASSETS, PREPAID FED TAX 16100000, PREPAID STATE TAX 16200000 
    CREDIT: CHECKING 10200000 
 
WHEN PAYING INCOME TAXES INDIVIDUAL OWNER 
    DEBIT : EQUITY COMPANY TAXES 29100000 (Similar to Owner Withheld) 
    CREDIT: ASSETS, PREPAID TAXES 16100000 16200000 AND CHECKING 10200000 
 
CORPORATION (Over simplified, see your accountant for details) 
    DEBIT : EXPENSES, COMPANY TAXES 90100000, 90200000 
    CREDIT: ASSETS, PREPAID TAXES 16100000, 16200000 

14.5.10 Checking Account Adjustments

Make the following adjustments only if you cannot trace the reason for the imbalance. Please note that these adjustments can affect your tax liability.

 
      SOLE PROPRIETOR 
          IF ACTUAL BANK BALANCE IS MORE THAN PC/MRP BALANCE
              DEBIT CHECKING 10200000 FOR THE DIFFERENCE 
              EDIT OWNERS CONTRIBUTION (QN, Credit Account) 
 
          IF PC/MRP BALANCE IS MORE THAN ACTUAL BALANCE 
               DEBIT OWNERS WITHDRAWAL (QN, Debit Account) 
               CREDIT CHECKING 10200000 
 
      CORPORATION 
          IF ACTUAL BANK BALANCE IS MORE THAN PC/MRP BALANCE 
            DEBIT CHECKING 10200000 FOR THE DIFFERENCE 
            CREDIT INCOME ADJUSTMENT (RN, Credit Account) 
 
 
      IF PC/MRP BALANCE IS MORE THAN ACTUAL BALANCE 
            DEBIT EXPENSE ADJUSTMENT (EN, Debit Account) 
            CREDIT CHECKING 10200000 

14.5.11 Breaking Out Freight Charges

When pc/MRP expenses a receiver or payable voucher it debits 41100000 (Purchases) for the full amount (including freight) and credits 20100000 (accounts payable) for the full amount (including freight). If you wish to have freight broken out in your financial statements you would enter an I type transaction into the general ledger as you normally would and:

DEBIT 41100000 PURCHASES FOR PURCHASE AMT ONLY (disp at

top of screen)

DEBIT 41400000 FOR THE FREIGHT AMT (displayed at top of screen)

 

CREDIT ACCTS PAYABLE FOR THE FULL AMT (displayed at top of screen)

14.5.12 Credit Card Entries

If you plan to pay the credit card bill at a later date:

SELECT ACCOUNTING
SELECT ACCOUNTS PAYABLE VOUCHER
SELECT NEW AP VOUCHER
ACCEPT DEFAULTS: STORES, RECEIVER NUMBER
SELECT NO PARTNUMBER
SCROLL TO PICK UP THE BANKS ADDRESS
ENTER THE CREDIT CARD AND PAYMENT PERIOD IN DESCRIPTION
ENTER A QUANTITY OF 1
ENTER THE TOTAL DOLLAR AMOUNT IN PRICE FIELD
FILL IN COMMENTS
PRESS THE ACCEPT BUTTON
IT WILL NOW ENTER AN I TYPE TRANSACTION
ACCEPT THE NEXT TRANSACTION NUMBER
   DEBIT VARIOUS EXPENSE ACCOUNTS
   CREDIT AP OR AP-CREDIT CARD ACCOUNT FOR TOTAL AMOUNT OF EXPENSES.

Pay off the credit card bill at the later date using an E(expense) type transaction or a "Pay Bills Check Run."

CREDIT CHECKING
DEBIT AP OR CREDIT AP-CREDIT CARD ACCOUNT

14.5.13 Adjusting Inventory Asset Chart of Account Values

Debiting an asset account, increases it's value and crediting it, decreases it's value.

IF YOU HAVE SET pc/MRP TO "PERPETUAL ACCOUNTING METHODS" (OPTION 10 IN SETTINGS AND UTILITIES)
   IF YOU WISH TO INCREASE THE INVENTORY VALUE
      DEBIT THE INVENTORY ASSET CHART OF ACCOUNTS 
      CREDIT THE COST OF SALES EXPENSE ACCOUNT NUMBER
   IF YOU WISH TO DECREASE THE INVENTORY VALUE
      DEBIT THE COST OF SALES EXPENSE ACCOUNT NUMBER
      CREDIT THE INVENTORY ASSET CHART OF ACCOUNTS
IF YOU HAVE SET pc/MRP TO "PERIODIC ACCOUNTING METHODS" (OPTION 10 IN SETTINGS AND UTILITIES)
   IF YOU WISH TO INCREASE THE INVENTORY VALUE
      DEBIT THE INVENTORY ASSET CHART OF ACCOUNTS 
      CREDIT THE PURCHASES EXPENSE ACCOUNT NUMBER
   IF YOU WISH TO DECREASE THE INVENTORY VALUE
      DEBIT THE PURCHASES EXPENSE ACCOUNT NUMBER
      CREDIT THE INVENTORY ASSET CHART OF ACCOUNTS