Chapter 3

CHAPTER 3 PROCESSING ACCOUNTING DATA IN COMPUTER-BASED SYSTEM
Learning Objectives:
 To identify the benefits of a computer based accounting system in relation to a manual system
 To identify accounting application software categorized as Off the shelf and In house developed
 To start Peachtree accounting and create a company with Peachtree accounting
 To maintain accounts in Peachtree accounting
3.1 Identifying the Usefulness of Computer-Based Accounting System

Accounting is the process of recording, processing and reporting financial events or transactions. All
businesses must follow the same guidelines for that process, whether the transactions are recorded manually
in a journal or electronically with a computer.
Three main steps are involved in processing business transactions. First, the financial information is
collected, verified and analyzed to determine how it will be recorded. Next, the transactions are recorded
manually written in a journal or electronically keyed into a computer. Finally, reports are produced,
analyzing and summarizing the financial information.
Accounting system of an organization uses different resources including human and computer technologies
to collect and convert business transactions to useful information. A system of human and computer
resources records, processes and reports business transactions affecting an organization. When the system
uses only human resources it is identified as manual system or paper based system, this is because people
record, process and report the financial affairs of an organization using paper and pencil or pen with the
support of simple office machines.
Advantages of Manual Accounting System:
 Easy to understand and operate i.e. it requires only knowledge of general rules and procedures of
accounting
 Less costly for organizations processing small volume of transactions
 Easy to trace flow of transactions, thus correct errors.
Disadvantages of Manual Accounting System
 Time Consuming
 Poor Financial analysis
 Highly Subject to errors
 Excessive paper work and management
When an accounting system uses only computer resources to process transactions and general financial
information, it is known as a computer system. The common practice, however, is to use both human and
computer resources and in such case the system is identified as computer based system.
0
In a computer based system the human resource is supported by computers, printers and related storage
devices and other technologies in capturing, storing, processing transactions and generating financial reports.
One of the basic advantages of the computer-based system is that it takes relatively short period of time to
capture and process transactions and generates information for decision-making. Other advantages of
computer-based system are it substantially reduces paper work due to usage of data storage and
communication technologies, easy retrieval and storage of data, easy and fast data handling, accurate and
timely information and lower data processing cost.
Its disadvantages are need for continuous supply of power, subject to damage of data and files due to virus
or facility failure, initial investment in computer facilities is large, thus, costly for small and medium
organizations, the time to install, test and implement computer technologies may be relatively long, and it
requires relatively high skilled human resource.
There are four basic steps in moving from a manual system of bookkeeping to using a computer accounting
system:
1. Decide on conversion date: It must be a date on which you know all account balances, customer balances,
vendor balances, etc. Hence the date would be the beginning of your fiscal year or the beginning of a fiscal
period.
2. Gather all the data you will need: Names and addresses of customers, vendors, employees, sales
representatives.
3. Create a company and
4. Enter the necessary information.
SYSTEM CONVERSION
Conversion is the process of changing from the old AIS to the new. Many elements must be converted:
Hardware, software, datafiles, and procedures.
Conversion approaches
Four conversion approaches are used to change from an old to a new system.
1. Direct Conversion: is an immediate discontinuence of the old AIS when the new one is introduced.
Direct conversion is approppirate when the old AIS has no value or the new one is so different that
comparisons between the two are meaningless. The approach is in expensive, but it provides no back
up AIS. Unless a system has been carefully developed and tested, therefore, direct conversion carries
a high risk of failure.
2. Parallel Conversion: operates the old and new systems simultaneously for a period of time. Parallel
processing protects companies from errors but it is costly and stressful for employees to process all
transactions twice.
3. Phase-In Conversion: gradually replaces elements of the old AIS with the new one. The gradual
changes mean that data processing resources can be acquired over time.
1
4. Pilot Conversion: implements a system in just one part of the organization such as a branch location
3.2 Identifying Accounting Application Software

Organizations usually acquire information system in two ways: 1) they develop customized systems in-
house through formal system development activities, referred to as Custom designed or In-house Developed
, and 2) they purchase commercial systems from software vendors, referred to as off-the shelf, package,
canned or commercial software. Numerous commercial vendors offer high quality, general-purpose
information systems. These vendors primarily serve organizations with generic information needs.
Typically, their client firms have business practices so standardized that they can purchase predestined
information systems and employ them with little or no modifications. However, many organizations require
systems that are highly tuned to their unique operations. These firms design their own information systems
through in- house system development activities.
Each approach has its advantages and disadvantages, but they are not mutually exclusive options. A firm
may satisfy some of its information system needs by purchasing commercial software and develop other
systems in house.
3.3. Creating a Company in Peachtree Accounting
Peachtree Accounting for windows is one of the application package software. It is simple to learn and use.
It provides lots of features and easy to follow instructions. Its screens look and act like paper invoices,
checks, and other commonly used business forms. In addition to tracking accounting data the software can
analyze financial data and can provide time management.
INSTALL PEACHTREE ACCOUNTING
To install Peachtree for the first time, on a standalone personal computer, one need to follow the following
steps:
Step1:
Step1 Insert the CD of Peachtree Accounting for windows. The CD is self-installing. If the CD doesn't self-
install, go to step 2. If you are installing Peachtree from CD that self-installs. click install Peachtree
Accounting and go to step 4.
Step 2: From the window's start button, select run.
Step 3: Type the appropriate drive letter for CD-ROM or disk (for example d:). Then type the word " setup".
Step 4: Follow the on-screen instruction until the Peachtree setup window displays. Review the installation
instruction and select Next.
Step 5: After reading the license agreement, select yes.
Step6: Select Standard. If you are upgrading form an earlier version, select upgrade.
Step 7: Verify the program path and data path. This step is where Peachtree will install your program.
Select Next. The computer will begin to install Peachtree.
Step 8:.Select
8:. the components you want to install, then select Next.
2
Step 9: Select Next to place the program icons into the program folder.
Step 10:
10 Select yes, I want to restart my computer now. Then select finish.
Step 11:
11 Click the Peachtree Accounting icon to begin Peachtree. Your software must have been registered
with Peachtree. If that has been accomplished, you should have received a registration number that
you must enter when prompted by Peachtree. At this step you shall see a window that looks like as
follows and enable you to setup a new company, which is called a Start up window
SETTING UP A NEW COMPANY

After you have installed Peachtree, you are ready to begin. Starting Peachtree is essentially a two-step
process.
1. Start Windows
If you are using Windows 95 (or higher), Windows normally opens automatically when you start your
computer, then:
2. Start Peachtree
From the Windows Start menu, select Programs. Select the Peachtree program folder. Then, select the
Peachtree icon. You can also double-click the Peachtree icon on your Windows desktop to quickly start
Peachtree.
New Company Setup - Introduction
One of the first things you'll want to do when you receive your Peachtree Accounting package is set up your
company. To get things started, Peachtree provides the New Company Setup wizard. When you set up your
company, you provide Peachtree with basic information such as name and address. In addition, you select
your chart of accounts, choose your accounting and posting methods, and specify how your accounting
3
periods is set up. When you complete New Company Setup and select the Finish button, Peachtree presents
the setup checklist. Then, you can start entering default information, record data (such as employee, vendor
and customer records), and beginning balances. Or, you can go right ahead and start using Peachtree to
generate invoices and pay bills.
Set Up a New Company

1. Start Peachtree if it is not already running.
2. From the File menu, select New Company, or choose Set up a New Company in the Peachtree
Accounting Startup window.
3. Select OK. Peachtree displays the New Company Setup - Introduction window, the one shown
above,
4. Read the introductory information.
5. To continue setting up your company, select the Next button. Peachtree displays the New Company
Setup - Company Information window as shown below:
4
Note: If you are rebuilding a company using import/export, there are special considerations you should
be aware of before proceeding.
New Company Setup - Company Information
You use the company information window to enter basic information about your company such as
 Name and address information
 Telephone and fax numbers
 Federal and state employer identification numbers
 State unemployment ID
 Type of business
Note: You can change company information at any time.
Business Types and Equity Accounts
Business Type defines the type of business you run. When creating a new company in Peachtree, you are
prompted for the form of business you operate (Business Type). Based on the choice you make, Peachtree
creates certain equity accounts needed by each business type. The following are the available types of
business in Peachtree Accounting.
 Corporation
 S Corporation
 Partnership
 Sole Proprietorship
 Limited Liability Company (LLC)
5
Note: You can change the type of business at any time. However, once your company is set up, changing
a business type will not change the equity accounts in your chart of accounts. You must add the
appropriate accounts manually.
Equity Accounts show the equity, also known as capital or net worth, or the amount owners have invested
in a business. In the equity section of your chart of accounts, you must do three things:
 Show the initial investment (Paid-in Capital, Owner's Contributions)
 Track withdrawals from this investment (Owner's Draw, Dividend Paid)
 Show the combined profit or loss of the business since inception (Retained Earnings)
Equity can also be thought of as the owner's claims against the assets (versus the claims of others, which are
liabilities). Equity will always equal what is owned (assets) minus what is owed (liabilities).
EQUITY = ASSETS - LIABILITIES
When you're finished entering information, select the Next button. Peachtree displays the New Company
Setup - Chart of Accounts window. The one shown below:
New Company Setup - Chart of Accounts

You need to establish how your new company will be set up: There are four alternatives in Peachtree
accounting.
6
 Set up a new company based on one of several sample companies: Select this option to copy basic
setup information from one of many sample businesses that Peachtree provides. If you are new to
Peachtree, this is a useful shortcut to set up your company. Later, you can change certain settings to
meet your company's specific business needs.
 Copy settings from an existing Peachtree company: Select this option if you want to copy setup
information from another Peachtree company or you are re-building a Peachtree company.
 Convert a company from another accounting program: Select this option if you want to import
company data from Peachtree Complete Accounting for DOS or Peachtree Classic (PCA), Quick
Books, or some other accounting program.
 Build your own company: Select this option if you want to create a company from scratch. This
option is only recommended for experienced users who are comfortable setting up accounting
information. It is these alternative that you need to choose as accounting students.
To continue setting up your company, select the Next button. Peachtree provides you a New Company
Setup-Accounting Method Window, which the one shown below:
New Company Setup - Accounting Method

The accounting method determines how Peachtree handles General Ledger, Accounts Receivable, and
Accounts Payable transactions. There are two methods of accounting in Peachtree Accounting. These are:
1. Accrual Accounting: is a one in which, income is recorded as you invoice customers, and expenses
are recorded when you receive bills from vendors, regardless of when cash is actually exchanged.
This presents a truer picture of income and expenses. Most companies use this method.
7
2. Cash-Basis Accounting: is one in which, income is recorded when cash (checks, money orders, or
currency) is received, and expenses are recorded when paid. However, unpaid credit sales and
purchases do not show on ledgers, which can present a misleading picture of income and expenses.
In Peachtree accounting, if you use cash-basis accounting, you may discover that the inventory
valuation report does not agree with the general ledger account for inventory. This is because
inventory uses the accrual method, while the general ledger is cash basis. This means that the
inventory records will be updated to reflect unpaid purchases and sales, while the general ledger will
not be updated until actual money changes hands.
Important: Once you choose the accounting method and complete the New Company Setup wizard, you
cannot change it for this company.
To continue setting up your company, select the Next button. Peachtree provide you a New Company
Setup-Posting Method Window, which looks like:
New Company Setup - Posting Method

The posting method determines how Peachtree processes transactions to journals and to the general ledger.
There are two posting methods provided by Peachtree accounting:
1. Real-Time Posting: is one in which transactions are posted to the journals and the general ledger as
they are entered and saved. This method can save you time and is best for most business and
network environments. Most companies use this method.
8
2. Batch Posting: Transactions are saved by the program and then posted in a group. When you use
batch posting, you can print registers and check the batch of transactions before posting them to the
journals. You can switch posting methods at any time.
To continue setting up your company, select the Next button. Peachtree provides the New Company Setup-
Accounting periods window, the one shown below:
New Company Setup - Accounting Periods

Accounting periods are units of time that divide your fiscal year for reporting purposes. In Peachtree you
can set up to 13 accounting periods per fiscal year. There are two accounting period options offered by
Peachtree accounting:
1. 12 monthly accounting periods: Each accounting period's starting and ending dates match those of
the 12 calendar months. You can choose to start your fiscal year in January or any other month of the
year. Most companies follow this fiscal year structure.
2. Accounting periods that do not match the calendar months: Choose this option if you want to set
up a custom fiscal year structure. For example, you may want four accounting periods per year or
possibly 13 four-week accounting periods per year.
To continue setting up your company, select the Next button. Peachtree displays the next New Company
Setup - Accounting Period window corresponding to your setup option.
9
New Company Setup - Accounting Periods (Custom Setup)
Starting dates need to be established for setting up your company and entering data.
1. Start New Company Setup, and make sure the Accounting periods that do not match the calendar
months setup option is selected.
2. Accept the default, or select the number of accounting periods in your fiscal year from the list. You
can have up to 13 periods in a single fiscal year.
3. Enter the first day of your first fiscal year, or click the calendar button to select a date.
Usually, a company's fiscal year starts in January and ends in December. However, some companies
start their fiscal year in July and end in June.
4. Enter the first year you will be entering payroll, or select it from the drop-down list.
This date determines which payroll taxes should be used during payroll entry. If you do not intend to
use payroll, enter the same date as your first fiscal year.
5. Enter the first accounting period you will be entering data, or select it from the drop-down list. Then,
enter the year. For more information on choosing starting dates, click .
Tip: The table on the right displays the start and end dates for each accounting period in your first two fiscal
years. You can type or select dates in each of these fields, if necessary, to further customize your setup.
To continue setting up your company, select the Next button. Peachtree displays the New Company Setup -
Defaults window.
New Company Setup - Finish

Use this procedure to complete the new company setup process.
1. Start New Company Setup, and select one of the following setup options
o Set up a new company based on one of several sample companies
o Copy settings from an existing Peachtree company
o Build your own company
10
2. Complete each window that follows until Peachtree displays the New Company Setup – Finish
window.
3. Read the information on the window.
4. Select Yes to display the Setup Checklist. This window allows you to continue setting up specific
company defaults and new information. Otherwise, select No.
5. Select the Finish button to save your company settings.
11
Self Check Exercise- Setting up a New Company
Hawa Enterprise is a merchandising firm that trades electronic items. Hawa enterprise had been using a
manual accounting system in previous years and decided to adopt computerized accounting system since
January 1, 2006
Step 1 – Setting up or creating a new company.
Using the following data, set up a new company for Hawa Enterprise:
(i) Company information
Company name: Hawa Enterprise
Address line 1: P.O.Box 5152
City: Addis Ababa
Country: Ethiopia
Telephone: 251-1-54-99-20
Business type: Private limited
E-mail: Hawa@yahoo.Com
Leave the other company information blank.
(ii) Chart of accounts: Build your own company
(iii) Accounting method: Accrual method
(iv) Posting method: Real-time
(v) Accounting periods: 12 monthly accounting periods
(vi) Starting of the fiscal periods: January 2006
(viii) First month of data entry: January 2006
(ix) First year to enter payroll: 2006
Choose to follow the setup checklist and finalize setting up a new company.
Setup Checklist
This list guides you through the process of setting up company default information, record data (such as
employee, vendor and customer records), and beginning balances. It helps you track your company setup
progress.
12
To display and use the setup checklist
1. From the Maintain menu, select Setup Checklist.
2. Click the area you want to set up. Peachtree displays the appropriate window, where you can enter
your settings.
Each time you enter a function from the setup checklist, you'll be asked whether you want to mark the task
as complete when you exit the task. If you select the Yes button, a check mark is placed next to the task.
You can still access options that are check marked. The check mark just tracks your progress towards
completing setup.
We recommend that you set up the chart of accounts and beginning balances for the General Ledger
accounts first, but after that the order is up to you. What do you need to start using first, Payroll or Accounts
Receivable? Just skip to that section of the checklist.
For explanations about each checklist task, select the Help button in the displayed window or refer to the
appropriate chapter in the User's Guide.
Change Your Company's Basic Information
Use this procedure to change your company's basic information including business address and phone
number.
1. Open your company, if it is not already open.
2. From the Maintain menu, select Company Information. Peachtree displays the Maintain Company
Information window.
3. Enter your changes to one or more of the following: company name, company address, phone
number, fax number, and tax ID information.
4. If the type of business has changed, select the new type from the drop-down list.
5. If you want to change posting methods, click the arrow button.
6. To record the updated company information and close the window, select the OK button
13
Open a Company
The Open Company menu command provides access to previously created companies. (Use the New
Company command to set up a new company.)
Open a company from the Startup screen
1. After starting the Peachtree program, Peachtree displays the startup screen. For instructions on
displaying the startup screen when Peachtree first opens, click .
2. Select Open an existing company (the first option). Peachtree displays the Open an Existing
Company window, where recently opened companies are listed.
3. Select the name of the company you want to open from the Company Name list, and select OK.
If a company name is not listed, click the Browse button to locate and select the company you want
to open.
Open a company within Peachtree
You can only have one company open at a time in Peachtree.
1. From the File menu, select Open Company. Peachtree displays the Open Company window.
If you already have a company open when you open another company, Peachtree will close the
current company. (This only closes the company window in Peachtree; it does not close the
accounting period or year.)
2. Select the name of the company you want to open from the Company Name list box, and then select
OK.
Close a Company
If you want to open a different company in Peachtree, Peachtree will automatically close the current
company. When you exit Peachtree, Peachtree closes the company for you.
Note: When closing a company in Peachtree, you no longer display the company data. Closing a company
does not close the accounting period or year.
Open a Different Company within Peachtree
You can only have one company open at a time in Peachtree.
1. From the File menu, select Open Company. Peachtree displays the Open Company window.
Peachtree will close the current company.
2. Select the name of the company you want to open from the Company Name list, and select OK.
The menus now appear for the company chosen. Any accounting transactions you enter are logged
into the books for the company you opened. Notice that File is still the first menu available.
14
1.1. Peachtree Security Features
Maintain Users
Peachtree can allow custom access for different individuals. You can set up user profiles (records) for each
person who will be using Peachtree. Each user record is set up with a user ID and password that will be
required before opening and working with company data.
When user IDs and passwords are set up, Peachtree prompts you for a user ID and password when you open
a company. If you know the password, you can access the areas of the program to which you have rights.
Note: If you choose to set up user access to your Peachtree company, you must set up at least one user
with access to the Maintain Users window. Typically, this user is considered a system administrator who
has the access rights to set up and maintain company users and their passwords.
You can set up user rights (control levels) to various program areas of Peachtree. You can select a control
level for each program area for this user. Depending on the program area selected, choose No Access, Read,
Add, Edit, or Full control rights.
To expand the list of program areas in the grid, double-click the triangle to the left of the program area.
Note: Passwords from previous versions of Peachtree are converted to user records in which the user
ID and password have the same value. For example, if you set up the password "peach" in Peachtree
Accounting Release 5, enter peach as the user ID and password. To personalize the new user records and
take advantage of the new limited access features, select Users from the Maintain menu. Only passwords
set up in previous versions with access to the "Passwords" window have access to the new Maintain Users
window.
In the unfortunate event that you lose your user ID or password and no one else can open the Peachtree
Company, contact Peachtree Customer Support.
The toolbar at the top of the window contains the following buttons: Close , Save , Delete , New , and Help .
Remove User and Password Security
Erasing all company user records will no longer display the Security Check (log in) window where you
must enter a user ID and password when opening the company. In Peachtree Complete, it will also remove
user accountability if the Use Audit Trail option is selected in Maintain Company Information.
Note: Before removing user and password security, you should log on to the Peachtree company as an
administrative user (meaning you must have access to the Maintain Users window).
1. From the Maintain menu, select Users. Peachtree displays the Maintain Users window.
2. Select each user ID from the lookup list, and select the Delete toolbar button. To display a list of
existing user records, type ? in this field, or select the Lookup button.
It is important that you first delete all non-administrative user records (those who do not have access
to the Maintain Users window) first. Then, delete administrative user records.
15
Note: If multiple users still exist and you attempt to delete the only administrative user record with access
to Maintain Users, Peachtree will prompt you with an error message. You cannot delete the single
administrative user record until all other user records are removed.
Once you delete the last user record, you will not be prompted for a user ID and password when opening
your Peachtree company. Also, if you have the Use Audit Trail option activated (possible only in Peachtree
Complete), activity will not be associated with user IDs.
Set Up User Records and Passwords
In order to implement data security and password protection, you must set up user records. When user IDs
and passwords are set up, Peachtree prompts you for a user ID and password when you open a company. If
you know the password, you can access the areas of the program to which you have rights.
 From the Maintain menu, select Users. Peachtree displays the Maintain Users window.
The first time you access the Maintain Users window, Peachtree displays a security message that
introduces you to user records and passwords. Select OK to display the Maintain Users window.
Note: If you do not have access to the Users option in the Maintain menu, then your user profile
does not have privileges to set up or maintain user records/passwords in this company. Check with
your system administrator, or open the company using a user ID and password that has this
privilege.
To set up the first user record (system administrator)
In order to use user/password security in Peachtree, you must first set up a user record with the Access to
'Maintain Users' option selected. Typically your first user should be an administrative user with full rights to
each area of Peachtree and the ability to set up and maintain user records and passwords. Because of this
Peachtree initially disables the Access to 'Maintain Users' and Inactive options.
1. Enter a user ID (for example, Admin) and its corresponding password .
2. Select the control level for each program area for this user. Depending on the program area selected,
choose No Access, Read, Add, Edit, or Full control rights.
Tip: To quickly establish an administrative user, select the Full Access control level for each
program area listed in the Summary tab.
3. When finished setting up the user record, select Save.
To enter additional user records
1. Select the New button.
2. Enter a user ID and its corresponding password .
Note: Passwords are case sensitive and must be unique. Two or more users cannot have the same
password.
3. If this user will be allowed to establish data security and modify user records, select the Access to
'Maintain Users' check box.
16
Note: Peachtree strongly recommends that you have only one (administrative) user with access
to the Maintain Users window. This will prevent multiple users from accessing other user
passwords, changing user records, or inadvertently erasing user records.
4. If you do not want this user to gain access to company data at this time, select the Inactive check
box.
5. Select the control level for each program area for this user. Depending on the program area selected,
choose No Access, Read, Add, Edit, or Full control rights.
User Rights and Limited Access
To expand the list of program areas in the grid, double-click the triangle to the left of the program
area. If you change a specific (secondary) program area control, then the primary program area will
display Detailed Selection as its control level.
Tip (possible only in Peachtree Complete): To quickly establish a single control level for a primary
program area, select a control level in the Summary tab. For example, to assign rights to all
accounts receivable areas of Peachtree, select the Summary tab and select Full Access control level
in the Sales program area.
6. To establish the user record, select Save.
7. When finished setting up company user records, select Close.
Any changes you make, including changes to your user personal record, will take effect the next time you
open the company.
Important: If you forget your user ID or password, you will not be able to access the company data. It is
your responsibility to maintain user IDs and passwords. It is critical that you write down your user ID and
password and file it away in a secure place.
Remember that user IDs and passwords are case sensitive .
In the unfortunate event that you lose your user ID or password and no one else can open the Peachtree
company, contact Peachtree Customer Support.
Back Up Company
It is important that you back up your company data files on a regular basis in case information is
accidentally deleted or corrupted. You can then restore your data, if necessary.
There are several methods for backing up your company data. If you choose to back up company data
within Peachtree, your company data files and customized forms will be backed up using the Peachtree
format. You can save your Peachtree backup to a hard disk, a diskette, or other data storage device (for
example, a ZIP disk).
17
Note: You can also back up your data using an alternate utility (for example, a tape backup program). If you
choose to back up your company data to a tape device, you must exit Peachtree and use the tape backup
program to copy (and restore) company files.
Warning: If you do choose an alternate utility for backup, be sure that you always append your backed up
company data to the backup file; don't overwrite the file. This will mean that you are constantly saving a
backup of the most current data. Then if any of the data you have backed up is corrupt, you will always have
another recent backup that you can use to restore your data.
 Select the Reminder check box if you want to be prompted to back up in a specified number of
days. If the specified number of days have elapsed since your last Peachtree backup, Peachtree
displays a reminder message when you close the company or exit the program.
 Select the Include company name check box if you want to incorporate your company name in the
name of the backup file that Peachtree creates.
Select the Back Up Now button to enter or select where you want to save your Peachtree backup file. If you
are not prepared to back up your company data at this time, select Close.
To back up your company data files and customized forms using the Peachtree format, use the following
procedure:
1. From the File menu, select Back Up. Peachtree displays the Back Up Company window.
2. Select the Reminder check box if you want to be prompted to back up in a specified number of
days.
If the specified number of days have elapsed since your last Peachtree backup, Peachtree will display
a reminder message when you close the company or exit the program.
3. Select the Include company name check box if you want Peachtree to incorporate your company
name in the name of the backup file it creates.
4. Click the Back Up Now button to enter or select where you want to save your Peachtree backup file.
If you are not prepared to back up your company data at this time, click Close.
5. In the Save Back Up As window, at Save in enter or select the path where you want to save your
backup copy.
6. At File name, enter the name for the backup copy. Peachtree offers a default file name that includes
the current system date—for example, Bellwether Garden Supply-022503.ptb. You can change
this if you like. Peachtree backup files use the *.ptb file extension.
18
For increased security, avoid backing up data over existing backups.
You do not have to specify the location of your data files. Peachtree locates these based on the
company that is currently open.
7. Click the Save button. Peachtree displays one of the following:

o If you are backing up to your hard drive, the estimated size in megabytes (MB) of your
backup.
o If you are backing up to an external source such as diskette or ZIP drive, the number of
diskettes needed.
8. Click OK. The system displays the progress of the backup until it is complete.
If you are backing up to diskettes, Peachtree will prompt you to insert the first and subsequent
diskettes, as needed. You should number these diskettes as instructed.
Note: Depending on the quantity of data, the backup process may take a while to complete. Be patient and
do no Backup Strategies (Getting Started)
The Big Picture How Do I...
You should establish a regular procedure for backing up your data. Backups are the only way to ensure
the security of the accounting records you store in Peachtree. Without backups, you run the risk of
losing weeks or months of work.
How often you back up data is up to you and depends on how you use Peachtree Accounting. If you enter
transactions in a batch, every two weeks, you can get by with backing up every two weeks. If you enter
transactions daily, you need to establish a daily backup routine.
The following chart shows an example of a backup strategy. Weigh this example against the needs of your
business, and decide on a backup strategy of your own.
In this example, the business uses seven sets of backup diskettes—four sets for weekly backups and three
for monthly—which they rotate for maximum security. In the event of a computer virus or some other
corruption of data files, this business has up to three months of backups.
19
In the event of a disk crash, the business would only lose, at the worst, a week's worth of work. (If you don't
want to risk a week's worth of work, implement a daily backup strategy. The cost of diskettes or tapes is
relatively low when compared to the cost of time.).
t interrupt the process. If you interrupt the backup process, you might damage your data.
Open Backup File

This process will restore your company data files and customized forms to a previous state. Once you
restore your data, all information entered after the date of the backup file will be lost and will have to be
reentered.
You must have a Peachtree backup file in order to restore your company data using this method. If you
backed up using another program or device, you must exit Peachtree and restore your company data using
that same method.
Look in: Choose the folder, hard drive, diskette drive, network drive, or data storage device connected to
your computer where your Peachtree backup file is located.
File name: Enter or select the file name for your Peachtree backup. Peachtree backup files use the *.ptb file
extension.
Files of type: Choose Peachtree Backup (*.ptb) type from the drop-down list.
Depending on the quantity of data, the restoration process may take a while to complete. Be patient and do
not interrupt the process. If you interrupt the restoration process, you might corrupt the data
Restore Company Data File
In order to restore company data, you must replace all the current data files with those that have been
previously backed up. You cannot restore individual files because all files are related to one another.
If you backed up company data using Peachtree's backup utility, follow the steps below to restore your data.
If you backed up company data using an alternate utility (for example, a tape program), you must use that
program to restore your company data.
Warning: When you restore company data, all data entered after the company was backed up will be lost
and will have to be reentered.
1. Open the company you want to restore.
2. From the File menu, select Restore. Peachtree displays the Open Backup File window.
3. Choose the folder, hard drive, diskette drive, network drive, or data storage device connected to your
computer where your Peachtree backup file is located. Peachtree backup files use the *.ptb file
extension.
20
4. Select the backup file you want to restore.
5. To begin restoring data, select the correct .ptb file, and then select the Open button.
A warning message appears telling you that backing up is a potentially dangerous process and
suggesting that you make a current backup of data files.
6. To continue, select OK.
7. The Restore Options window appears, letting you decide which files you want to restore:
o To restore all backed-up custom forms, such as customized invoices, select the Customized
Forms check box.
o To restore all Web transactions in the Peachtree Web Transaction Center, select the Web
Transactions check box. All unprocessed Web transactions (those listed in the Inbox list
and Exceptions list) that were synchronized using the PeachSync wizard after the date of the
backup will be lost.
o To restore all backed-up data files for the company, including customized forms, select the
Company Data check box.
8. Select the Restore button.
If you are restoring data from diskettes, the system will request you to insert the first and subsequent
diskettes, as needed.
During the restore process, Peachtree displays a progress indicator.
Note: Depending on the quantity of data, the restoration process may take a while to complete. Be
patient and do not interrupt the process. If you interrupt the restoration process, you might
damage the data.
Delete a Peachtree Company
In some cases you may want to remove a company created in Peachtree, possibly to start over. In order to
delete a company, you must exit Peachtree and delete the company data folder using Windows Explorer.
Warning: You should make a backup of the company's data if there is any possibility you may need the
information later. It is also recommended that you back up data on your hard drive before beginning this
procedure.
1. Open Peachtree and the company you want to eventually delete.
2. From the Help menu, select File Statistics.
3. Write down the company short name displayed in the title bar of the File Statistics window.
The title bar displays "Data File Statistics for XXX," where XXX is the "short version" of your
company name.
4. Exit Peachtree.
5. From the Start menu, select Programs, and then click Windows Explorer.
6. Locate the \PEACHW folder using one of the following methods:
21
o If Peachtree is installed locally not installed on a network or company data is shared from
this computer), select the folder and directory where Peachtree is located. \PEACHW is the
default directory name.
o If Peachtree is installed on a network, select the drive and folder where Peachtree is located. \
PEACHW is the default directory name.
Note: The default folder for Peachtree First Accounting setup is \PTFIRST.
7. Double-click the \PEACHW folder to display subfolders. One of the subfolders should be named the
same as the short company name you wrote down earlier.
8. Select the company folder that matches the company short name. This is your company data.
9. To remove the company data, press the Delete key. Select Yes to confirm that you want to delete all
the folder contents.
Your company is removed. It will not be available when you open Peachtree.
Note: If you are experiencing problems locating your company data in Windows Explorer, please contact
Peachtree Customer Support.
Using Accessibility Shortcut Keys in the Help Viewer
The following keyboard shortcuts can be used for navigation in the HTML Help viewer.
Shortcuts for the Help viewer Shortcuts for the Search tab
Shortcuts for the Contents tab Shortcuts for the Favorites tab
Shortcuts for the Index tab
For more information about Microsoft Windows accessibility features and services, visit the Microsoft
Accessibility and Disabilities
Shortcuts for the Help Viewer
To... Press...
Close the Help viewer. ALT+F4
Switch between the Help viewer and other open windows. ALT+TAB
Display the Options menu. ALT+O
Change Microsoft Internet Explorer settings. The Internet ALT+O, and then press I
Options dialog box contains accessibility settings. To change
these settings click the General tab, and then click
Accessibility.
Hide or show the Navigation pane. ALT+O, and then press T
Print a topic. ALT+O, and then press P,
or right-click in the
Move back to the previous topic. ALT+LEFT ARROW, or
22
ALT+O, and then press B
Move forward to the next topic (provided you have viewed it ALT+RIGHT ARROW, or
just previously). ALT+O, and then press F
Turn on or off search highlighting. ALT+O, and then press O
Refresh the topic that appears in the Topic pane (this is useful if F5, or ALT+O, and then
you have linked to a Web page). press R
Return to the home page (help authors can specify a home page ALT+O, and then press H
for a help system).
Stop the viewer from opening a page (this is also useful if you ALT+O, and then press S
are linking to the Web and want to stop a page from
downloading).
Jump to a predetermined topic or Web page. The help author ALT+O, and then press 1 or
who builds a compiled help (.chm) file can add (on the Options 2
menu) two links to important topics or Web pages. When you
select a Jump command you go to one of those topics or Web
pages.
Switch between the Navigation pane and the Topic pane. F6
Scroll through a topic. UP ARROW and DOWN
ARROW, or PAGE UP and
PAGE DOWN
3.4 Maintaining Accounts

Set Up Your Chart of Accounts for the First Time
If you are converting from another accounting system, please use the Import selection on the File menu.
If you are currently using a manual system for your accounting, there are several things you need to know
when you set up a chart of accounts:
 Determine a conversion date, and gather balances as of that date. You use this information for your
beginning balances.
 If you are setting up a new chart of accounts (instead of copying from one of Peachtree's sample
businesses), you need to have all your account numbers and names written down.
 Have all of your transactions that have occurred after the conversion date ready to enter to bring
your accounts up to date.
1. Select the Chart of Accounts option either from the Setup Checklist on the Maintain menu or from
the Maintain menu itself. Peachtree displays the Maintain Chart of Accounts window.
23
2. Enter an account ID and description for the account.
The account ID determines how the account is identified and sorted in the chart of accounts list.
Most charts of accounts are set up with specific account types grouped together.
3. Select an account type from the drop-down list.
4. Enter any debits or credits you've made against the account in the months listed for period history.
5. Select Save.
6. Enter the Beginning Balance on the General tab.
Account Types (Maintain Chart of Accounts)
Account types define how the account will be grouped in reports and financial statements. They also control
what happens during fiscal year-end.
General Ledger accounts are assigned types on the General tab of the Maintain Chart of Accounts window.
Choose one of the following account types from the drop-down list:
Accounts Payable Expenses
Accounts Receivable Fixed Assets
Accumulated Depreciation Income
Cash Inventory
Cost of Sales Long term liabilities
Equity - doesn't close Other assets
(Corporation)
Equity - gets closed Other current assets
(Proprietorship)
Equity - Retained Earnings Other current liabilities
24
Add an Account to an Established Chart of Accounts
To set up an account using the Navigation Aid
 Select the Chart of Accounts icon in the General Ledger Navigation Aid.
To set up an account using the menu
1. Select Chart of Accounts from the Maintain menu. Peachtree displays the Maintain Chart of
Accounts window.
4. Select Save.
Note: Since this is a new account, Peachtree assumes a beginning balance of zero. You can
immediately assign transactions to the account. If you try to enter a beginning balance, Peachtree
assumes this is a prior-period adjustment and will prompt you for the prior period.
Or
25
1. Select Setup Checklist from the Maintain menu.
2. Click the Chart of Accounts setup option under the General Ledger heading. Peachtree displays
the Maintain Chart of Accounts window.
5. When you're finished filling in the window, select the Save button.
To set up an account from most windows accessed from the Tasks menu
1. Type + or double-click in the Account ID field. Peachtree displays the Maintain Chart of Accounts
window.
4. save
What If I'm Out of Balance?
If you are out of balance in the Beginning Balances for General Ledger Accounts window, Peachtree
displays a warning message indicating that an equity account will be created (or updated) to contain the
difference or out-of-balance amount.
This account will be named Beginning Balance Equity, and its type is Equity-Doesn't Close. This account
does not appear in the Beginning Balances window, but it will appear in the list of accounts and on financial
statements and general ledger reports.
Try to find the reason for the out-of-balance situation, and correct it if possible. (Select Cancel when
Peachtree displays the warning message.) If you are entering beginning balances from financial statements
supplied by your previous accounting system or by your accountant, you most likely made an error in data
entry. Make sure you didn't leave out an account or balance and that you entered all amounts correctly.
If you still cannot find the error, you can select OK at the warning message. Your books will be in balance,
and you can proceed with setting up your company. You can even begin entering and posting transactions.
(Remember that once you post transactions, you will need to enter prior-period adjustments rather than
beginning balances. Although both are entered using the Maintain Chart of Accounts Beginning Balances
button, Peachtree will display the proper window according to whether the transaction has been posted or
not.) Then later, if you find the cause of the out-of-balance situation, you can go back to the Beginning
Balances or Prior Period Adjustments window and correct the situation. Once the Beginning Balance Equity
account has no transactions associated with it, you can delete the account.
26
1. Continue entering beginning balances.
2. Select OK when you are through
Enter General Ledger Account Beginning Balances
If you are just starting out with your company and have not posted any transactions, Peachtree assumes that
you are entering beginning balances for your accounts when you select the Beginning Balances button. If
you have posted transactions, Peachtree assumes that you are entering adjustments to your accounts for a
period in a prior year. If you enter a new account, Peachtree assumes that this account has a zero balance.
You may find it easier to add all necessary accounts and then create one cumulative beginning-balance
entry.
1. From the Maintain menu, select Chart of Accounts. Peachtree displays the Maintain Chart of
Accounts window.
2. Select the Beginning Balances button. Peachtree displays the Select Period window.
3. Select the period in which you want to enter beginning balances. You can select from previous,
current, or future periods.
4. Select OK. Peachtree displays the Chart of Accounts Beginning Balances window.
5. Click or tab to any of the white cells in the grid to add an amount. (The gray cells are for viewing
purposes only.)
6. Enter all the beginning balances for the accounts. Scroll the list box to make sure the account
amounts are correct. If necessary, you can enter a negative amount; just type a minus sign before the
number. Note that for each period, a running beginning balance is kept. Thus, if you change an
amount in Period 1, the amounts for subsequent periods are also changed. However, if you change
an amount in Period 2, the same account balance in Period 1 is unchanged.
Examples of when to enter a negative balance
7. Select the OK button when you're finished
Enter Prior-Period Adjustments
In addition to general ledger account beginning balances, Peachtree allows you to adjust existing account
balances. If you are just starting out with your company and have not posted any transactions, Peachtree
assumes that you are entering beginning balances for your accounts. If you have posted transactions,
Peachtree assumes that you are entering adjustments to your accounts for a period in a prior year. If you
enter a new account, Peachtree assumes that this account has a zero balance. You may find it easier to add
all accounts and then create beginning-balance entries.
Accounts window.
2. Select the Beginning Balances button to enter prior-period adjustments. Peachtree displays the
Select Period to Adjust window.
27
3. Select the accounting period in which you want to enter or adjust balances. For prior-period
adjustments, you can select from previous periods.
4. Select OK. Peachtree displays the Chart of Accounts Prior Year Adjustments window.
5. Click or tab to any of the white cells in the grid to change or add an amount. (The gray cells are
disabled.) If necessary, you can enter a negative amount; just type a minus sign before the number.
Note that for each period, a running beginning balance is kept. Thus, if you change an amount in
Period 1, the amounts for subsequent periods are also changed. However, if you change an amount
in Period 2, the same account balance in Period 1 is unchanged.
6. Select OK when you are finished
How maintain chart of Accounts for the organization, which has branches and many departments
This can be done by Department Masking .
Peachtree offers a powerful feature called masking that helps you departmentalize your financial statements.
To take advantage of this feature, you need to set up your account numbers in a special way.
Say you want to set up a company that comprises a main branch and a remote branch, with two departments:
a sales and a service department. You could establish a seven-character account number, with the fifth
character representing location and the sixth and seventh representing departments.
You could use an M or an R code for the two branches (for Main and Remote branch). You could use 01
and 02 for the department numbers (leaving room for up to 99 departments in the future). Then you would
enter each normal account number in your chart of accounts four times, with each combination of location
and department codes:
 Account #--M--01
 Account #-- R--01
28
 Account #--M--02
 Account #--R--02
When you order a report such as the General Ledger report, you are prompted for the Department mask. To
have this report only show totals for the main branch, enter ****M**. (Asterisks are wild-card characters;
they represent any other possible character.) To have the report only show totals for Department 02, you
would enter *****02. To show totals for the Remote branch, Department 01, enter ****R01.
Masking offers a lot of possibilities. You know your needs, so use your imagination when setting up your
chart of accounts to take advantage of this powerful feature.
In short for all organization which has many branches and department we can maintain chart of accounts
by using departmental masking which a unique feature in Peachtree complete accounting.
Here we are assuming a centralized branch system where all the accounts are maintained in the home
office the first requirement is you have to use the same accounts Number through out the branches and the
departments
Example
x co has branches in Harar and Nazerate and in all branches there are two departments called sale and
service. How to maintain charts of accounts for X co if the co uses centralized system and the home office is
in Addis Ababa.
Step I
Lets us maintain Cash account. If the company uses 1111 accounts number for cash one thing we know
that the counts number must be uniform for all branches including the home office.
Step II
Department masking
** * ** *
Ac# L D
The first three digit shows its accounts number, the fourth digit shows its location (branches location) the
last two digit shows its department.
CODE for department if it is like this for sale department 01 for service department 02.
Code for branches for Addis abba A, for harar H and for Nazerate N
Now we can maintain chart of accounts like this
Cash for Addis Ababa sale department 111A01
Cash for Addis Ababa Service department 111A02
29
Enter and Allocate Budgets for Your Chart of Accounts
You can assign budget dollar amounts for each account for the two open fiscal years. You can enter
individual amounts for each account period or allocate a dollar amount to be distributed throughout the
fiscal year. Budget information can be displayed in reports and financial statements.
Accounts window.
2. Enter or select the account ID to which you want to add budget information. To display a list of
existing accounts, type ? in the G/L Account ID field, or select the Lookup button.
3. Select the Budgets tab.
4. Enter budget amounts for this year and the next.
5. There are two methods of entering budget amounts.
o You can enter different budget amounts for each accounting period. As you enter each
amount, the total amount will be calculated.
o You can also enter one budget amount for the fiscal year and select Allocate. Peachtree will
divide and distribute equal amounts that add up to the entered total for that fiscal year.
6. Select the Copy button to duplicate budget information from the first fiscal year to the second year.
7. When finished, select Save to record the account's budget information.
Self-Check Exercise-2
Maintain the following chart of accounts for Hawa Enterprise and insert the beginning balances as at period
12: 12/01/05 through 12/31/05. All accounts have their balances into their normal balance side.
Account No. Account Title Account Type Balance
1001 Cash at bank (A/C No. 5300) Cash 110,000
1002 Petty cash Cash 2,600
1010 Accounts receivable A/R 18,800
1010-01 Allowance for doubtful accounts A/R 2,000
1011 Prepaid insurance Other current asset 6,400
1012 Supplies Other current asset 3,600
1013 Inventory-House utensils Inventory 16,500
1014 Inventory-Office machineries Inventory 22,000
1101 Office equipment and machineries Fixed Asset 180,000
1101-01 Accumulated depreciation-Office Accumulated depreciation 54,000
equipment & machineries
1102 Building Fixed Assets 600,000
1102-01 Accumulated depreciation- Building Accumulated depreciation 90,000
30
2001 Accounts payable A/P 26,000
2002 Income tax payable Other current liability 8,200
2003 Withholding tax payable Other current liability 5,000
2004 Sales tax payable Other current liability 4,900
2101 Mortgage payable Non-current liability 120,000
3001 Capital stock Equity doesn’t close 300,000
3002 Retained earnings Equity retained earnings 349,800
3003 Dividend Equity doesn’t close -
4001 Sales-House utensils Income -
4001-01 Sales returns and allowance-house Income -
utensils
4001-02 Sales discount- house utensils Income -
4002 Sales-Office machineries Income -
4002-01 Sales return and allowance-Office Income -
machineries
4002-02 Sales discount- Office machineries Income -
4101 Interest income Income -
5001 Cost of sales-House utensils Cost of sales -
5002 Cost of sales-Office equipment Cost of sales -
6001 Salary expense Expense -
6002 Insurance expense Expense -
6003 Supplies expense Expense -
6004 Depreciation expense-Office Expense -
equipment and machinery
6005 Depreciation expense-Building Expense -
6006 Advertising expense Expense -
6007 Miscellaneous expense Expense -
3.5 Processing Accounting Data

3.1 Account Payable
Many businesses not only sell on credit, but also use credit to purchase merchandise for resale, supplies,
equipment, and services. Vendors who extend credit normally allow companies a period of 30 days from the
date of purchase before payments are due. Many vendors, as part of their credit policy, offer cash discount
31
for prompt payment for goods purchased on account. a business may also return damaged merchandise to
vendors.
a business must, in order to remain successful, have timely and accurate information about purchases and
accounts payable. Such businesses acquire needed goods on time; keep track of the amounts owed to
vendors, and pay invoices promptly so that the firm maintain a good credit rating.
3.1.1. Setting up Vendor Defaults
Peachtree organizes and monitors Accounts payable (the amounts you owe and pay to vendors) Defaults are
information you enter one time that will automatically appear in windows or is automatically used by the
system. Once you have set up accounts payable default information, maintaining vendors’ record, entering
purchases and payments is quick and easy.
In the vendor Defaults window, you define the default vendor payment terms, account aging, and custom
field available when you add vendors using the maintain vendors window.
Setting up the default information so it is accurate for the majority of your vendor's saves you time when
you enter your vendors. You may edit these defaults for each vendor.
To set up or review vendor defaults
 From the Maintain menu, select Default Information and choose Vendors.
Default information for vendors includes:
 Standard vendor payment terms
 General Ledger accounts for purchases and discounts
 Aging information for invoices due
 Custom field labels
 1099 settings, which establish how 1099 calculations will be made for each of the General Ledger
accounts in a company's chart of accounts
Most of this information is set up for you during New Company Setup. However, you can change these
defaults at any time. The information in the vendor Defaults window is displayed as four tabbed folders with
a label on each tab. Select a tab to view the information on that tab. These are:
Payment terms Tab
A standard set of payment terms entered in the payment terms tab will be used for all vendors. Select terms
that are appropriate for most of your vendors. You can then change the standard terms for an individual
vendor in the Maintain Vendors window when you enter a vendor payment, Peachtree will determine
whether a discount is to be applied. Peachtree calculates the discount and the net amount of the payment.
To set up default (standard) payment terms for your vendors and default purchase and discount G/L
accounts, select the Payment Terms tab in the Vendor Defaults window.
Standard Terms
32
 C.O.D, Prepaid, Due in number of days, Due on day of next month, Due at end of month:
Select one of these to tell you the type of payment you need to make.
 Net Due in ... Days/Due on the ...: If you choose the Due in number of days option, enter the
number of days past the invoice date before the invoice becomes due. If you chose the Due on day of
next month option, enter the day of the month.
 Discount in ... Days/Discount on ... next month: If you chose the Due in number of days option,
enter the number of days past the invoice date beyond which you will not be allowed a discount by
the vendor. If you chose the Due on day of next month option, enter the day of the month.
 Discount %: If payment is made within the Discount Days range, enter the percent of the total
invoice amount that you will be allowed as a discount. Enter fractions as decimals; for example, two-
and-one-half percent should be entered as 2.5.
 Credit Limit: Enter the total amount of credit you are allowed by the vendor.
G/L Link Accounts
The defaults are used to link purchase and discount G/L accounts to most of your vendors. You can change
individual vendor setup, if necessary.
 G/L Purchase Account: Enter the ID of the liability or expense account you usually use for
purchases. You can change the account entered at the vendor level (Maintain Vendors) or when
entering purchases (Purchases/Receive Inventory or Purchase Orders).
 Discount G/L Account: Enter the ID of the account you want to use for early-payment discounts
you can take.
To display a list of existing accounts, type ? in the G/L Account ID field, or select the Lookup button. To
add a new account, type + or double-click the field, which displays the Maintain Chart of Accounts window.
Account Aging
The Age invoice by option allows you to age invoices by the invoice date or by the due date. Peachtree will
sort and organize the aged payables report accordingly. If you set up Account Aging by due date, the Aged
payable reports will list how overdue each invoice and each vendor balance is, compared to the date the
payment was due. If you age by invoice date, the report will show how old each invoice and each vendor
balance is, compared to the date if the invoice. A company's management decides which option should be
used. Many company's decide to age Account payable by due date because to optimize cash flow. You can
change any of the information in the age categories that meet your company's requirements, by selecting the
field and enter the aging categories.
Age Invoices By
Choose either Invoice Date or Due Date.
Aging Categories
33
Use this to set the ranges of days and the column headings for the Aged Payables report and the Payment
Manager (available only in Peachtree Accounting and Peachtree Complete Accounting). The columns print
from left to right starting with the 1st column. The # of Days field can be either the number of days beyond
the invoice date or beyond the due date, depending on what you enter in the Age Invoices By field.
For example, entering 45 for the 1st column would display all current invoices 45 days late. Entering 90for
the 2nd column would display all invoices that are between 46 and 90 days overdue. Entering 135 in the 3rd
column displays all invoices that are more than between 91 and 135 days overdue. The fourth column will
show all invoices that are more than 135 days overdue.
Custom Fields Tab
You customize your vendor information with five blank fields, which can optionally appear on reports.
Once you set up the field here, you can enter information into the field in the maintain vendors window.
Custom fields offer you a way to keep track of specific information about the people who supply you with
goods and services. Each business is unique. While we already provide fields to record the most common
business data, you probably require other information from time to time. Custom fields let you set up and
store that data.
You use the custom fields to set up fields that aren't available on the Maintain Vendors window. For
example, you can label vendors by location (in-state, out-of-state, international). You would enter the label
as Location. When you are entering a vendor, you would enter the vendor's location under the Custom
Fields tab.
Select the Enabled check box to enter or change the field label. If you decide not to use a field, simply clear
the Enabled check box. The data will remain, but it will be inaccessible. If you decide you want to use the
field label again, select the Enabled check box, and the program will make the data available.
1099 Setting Tab

Use this tab to make 1099 assignments for each of the general ledger account in your chart of accounts. This
is not applicable to the Ethiopian case.
Finally select ok, if you changed any default settings, or select cancel if all settings were correct.
34
3.1.2. Setting-up Vendor Records
The maintain Vendor window allows you to enter and/or update the information about your vendors. It is
also where you set up government agencies to whom you pay taxes or financial institutions if you pay your
taxes to bans using federal coupons.
To enter or update vendor information, select maintain from the menu bar, then select Vendors. The
information is displayed as four tabbed folders with a label or each tab. The fields are only one tab are
visible at a time, but you can view the fields on another tab by clicking the tab level.
Use the Maintain Vendors window to enter, change, and store information about the companies and people
from whom you purchase goods and services. This includes information such as
 name and address information of the vendor including mailing address, phone numbers, e-mail
address, and Web site address
 vendor history, such as last invoice and last payment information, period history, and the date of the
first purchase from the vendor
 the General Ledger purchase account
 terms of payment and credit limit
 your balance with this vendor
 the type of 1099 form sent (if any)
35
You can add a vendor, change existing vendor information, or delete a vendor if no transactions have been
entered for the vendor.
Vendor Header Fields
Vendor header fields are located above the folder tabs of the Maintain Vendors window. This is where you
enter lookup information about the vendor such as the vendor ID, name, and status.
Vendor ID: This code can be up to 20 alphanumeric characters. Lists and reports sort on vendor IDs, so the
coding convention you use is important. Numeric characters sort before alpha characters. For example, the
following ID codes are sorted this way:
Also, the code is case sensitive, so that codes A1 and a1 are seen as two different vendor IDs. Capital letters
sort before non-capital letters. You cannot use *,?, or + in the code.
Name: Enter the name of the new vendor (up to 39 alphanumeric characters) here. This name prints on
checks and reports. This can be a company name or an individual's name.
Inactive: If you plan to purge this vendor when you close the fiscal year, select this check box. Once a
vendor record is inactive, Peachtree displays a warning when you try to make a purchase or payment to the
vendor. You can update the vendor record with address and telephone information. Important: When you
choose to purge after closing the fiscal year, all vendors that have no outstanding transactions and are
tagged as inactive will be purged.
General Tab
Contact Enter the name of the person you deal with most for this vendor.
Address You can enter the address in two lines that can contain up to 30 characters each.
City, ST, Zip The three boxes on this line represent the city, state, and zip code respectively.
 You can enter up to 20 characters for the city.
 Enter the two-character postal abbreviation for your state.
 You can enter up to 10 characters for the zip code.
Vendor Type You can use this to group like vendors together. For example, if you have some vendors for
services and some vendors for products, you can enter "SERVICES" and "PRODUCTS" to identify what
each vendor sells. You can enter up to eight characters. Remember Peachtree is case sensitive; be consistent
in the way you enter types.
1099 Type Select one of the following 1099 types from the drop-down list: None, Interest, and Independent
Contractor.
 If you have any outside contractors who received more than $600 from you in a single year, you
must submit to the Internal Revenue Service a 1099 Miscellaneous form for each of those
contractors. Select Ind. Contractor for contractors who fit the criteria.
 If you have paid interest of at least $10 to a vendor on a loan, you must submit the 1099 Interest
form.
36
 Select None if your vendors meet neither independent contractor criteria nor interest criteria.
Beginning Balances for Vendors

To enter beginning balances for vendor records, select the Beginning Balances button on the General tab
of the Maintain Vendors window. Vendor beginning balance consists of outstanding invoices that you have
not entered in Peachtree as a purchase or a payment. You can enter a beginning balance for a vendor at any
time.
There are two tabs on the Vendor Beginning Balances window: Purchases from and Vendor Balances.
Select the vendor name on the Vendor Balances tab; then enter amounts for outstanding invoices on the
37
Purchases from tab. These transactions can be adjusted until a payment has been applied to them. If a
payment has been made on an invoice, it will appear on a gray background. To modify or delete this paid
transaction, you must delete the payment you made against it. If you need to enter more than one line on this
tab, press ENTER to go to the next line and continue.
If you have set up your company on an accrual basis, you must enter an A/P general ledger account. If your
company is set up on a cash basis, the words <Cash Basis> will appear in the A/P Account field, and it will
be disabled.
This amount should not include any transactions (such as purchases) that you have already entered in the
task screens, such as the Purchases window. These beginning balance amounts are not transferred to your
A/P account in the general ledger. Be sure that the total amount of your vendor beginning balances is equal
to the amount you entered as a beginning balance in your chart of accounts for your A/P accounts.
If a payment has been made against a beginning balance invoice, it will appear as gray and be disabled.
Note: You can enter a beginning balance credit memo using the Beginning Balances for Vendors window.
Choose the Purchases from tab, and then enter the invoice as a negative invoice, with negative values.
However, if you enter the credit memo as a beginning balance invoice, it will not be identified as a credit
memo on vendor reports and statements. If you want a beginning balance credit memo to be credited as such
on reports and statements, enter it instead in the Vendor Credit Memos window. The same is true for a
prepayment. If you want it identified as a credit memo on reports and statements, enter it in the Vendor
Credit Memos window.
To enter a beginning balance credit memo or prepayment and have it appear as a credit memo on reports
and statements, follow the instructions under Entering a Credit Memo on a Purchase without Invoice.
The Purchases from tab includes the following fields:
 Invoice Number: Enter the number of the outstanding invoice. This is required.
 Date: Enter the date the invoice was created.
 Purchase Order Number: Enter the purchase order number, if any.
 Amount: Enter the amount of the invoice.
 A/P Account: Enter the Accounts Payable account (accrual accounting only) you want to use for
this vendor's beginning balance. Press ENTER to take you to the next line where you can enter
another invoice.
When you're through current Balance for Vendor
The current balance in the Maintain Vendor window displays the total of all unpaid invoices currently in the
vendor ledger as of the System Date. Even if you are in a previous accounting period and your System Date
is today's date, the current balance reflects all unpaid invoices as of today's date.
38
If you select the arrow button to the right of the current balance, the current vendor ledger for this vendor
will appear.
This feature is only available for previously saved vendors. When you enter a new vendor, the current
balance will not appear until you save the vendor record for the first time. Entering beginning balances,
select the Save button.
Self Check Exercise Maintaining Vendors Ledger
Vendor Vendor Invoice Purchase Purchase Purchase Invoice A/P Bal Jan
Address
Id Name Date Defaults Terms order No. No. a/c 1, 2004
P.O.Box Any expense
account 2/10,n/30 A/P
V01 HP Trading 1111 12/11/05 PO101 P455 8,600
General P.O.Box Any expense
V02 Electronics 1212 12/02/05 PO112 P432 5,200
Office P.O.Box Any expense
V03 Solutions 1143 12/10/05 PO106 P460 4,300
GP P.O.Box Any expense
V04 Electronics 5114 12/18/05 PO117 P450 3,000
P.O.Box Any expense
V05 Fortune Plc 5615 12/20/05 PO109 P428 4,900
Any expense Sales
account
tax
-
Inland P.O.Box paya
R Revenue 1009 12/31/05 - 1010 ble 18,100
Any expense Mortg
account
age
-
Mortgag Bank of P.O.Box paya
e Addis 1515 11/31/05 - 1011 ble 120,000
Required:
(i) Maintain vendors ledger;

(ii) Insert the beginning balances;
(iii) Preview vendors ledger;
39
Purchase Defaults
To set up unique purchase transaction defaults for each vendor record, select the Purchase Defaults tab in
the Maintain Vendors window. You can change this information at the transaction level, if necessary.
Purchase Acct.: Enter a General Ledger account for the default purchase account for this vendor. This is
normally an expense account. The default for this is set in Vendor Defaults. When purchasing an inventory
item, the General Ledger default accounts entered in Maintain Inventory Items override this default account.
Tax ID #: Enter the vendor's tax ID number. This is only necessary if you send this vendor a 1099 form.
Account #: The Account # is the number the vendor uses for your account. This is the number that many
vendors request you place on your check when you send in your payments. If you want, you can create a
check form that includes this field. For further information about displaying fields on forms, click .
Ship Via: Select the primary shipping carrier that this vendor uses for items. The shipping carriers are set
up in Inventory Item Defaults.
Terms: You can choose to use the standard vendor payment terms set up in Vendor Defaults or set up a
unique set of terms for this vendor. Select the Terms button to change the payment terms for this vendor.
Custom Fields
To enter custom field information for the selected vendor record, select the Custom Fields tab in the
Maintain Vendors window. Custom field names are set up in Vendor Defaults.
History tap
To display the selected vendor's current history, select the History tab in the Maintain Vendors window.
When entering a new vendor, you can enter information on this tab; once you save the vendor record, this
tab is for display purposes only.
Vendor Since: Enter the date you first had a transaction with the vendor.
Last Invoice Date: Enter the date of the last invoice you received from the vendor.
Last Invoice Amt.: Enter the amount of the last invoice.
Last Payment Date: Enter the last date you paid the vendor.
Last Payment Amt.: Enter the last amount you paid the vendor.
40
3.2. Inventory Ledger
3.2.1. Setting-up Inventory Item Defaults
Peachtree lets you set up default information for inventory items. Use this feature like a template or model
upon which to build all your item records. You enter the most common information. Then, when you set up
new inventory items and enter transactions, the default information is automatically included. In most cases,
you won't have to enter anything.
 To set up or review inventory item defaults, select Default Information from the Maintain
menu, and choose Inventory Items.
Besides settings that determine how Peachtree handles general issues such as out-of-stock warnings, default
information for inventory includes:
 General Ledger Accounts and Costing Methods for each item class
 Item Tax and Shipping Information
 Item Custom Fields
 Item Sales Price Levels
All of this information is set up in New Company Setup. Or, you can add or modify defaults through the
Maintain, Default Information menu.
Tabs
General
41
Select the General tab of the Inventory Item Defaults window to make basic choices about how inventory
items will be handled in Peachtree. These choices include whether you want to allow inventory items to
share UPC/SKU numbers and whether you want to be warned when an item is out of stock.
UPC/SKU: This check box lets you decide whether you want inventory items to be able to share UPC/SKU
values. Check it to allow duplicate UPC/SKU numbers.
Quantity Available: This check box lets you decide whether you want Peachtree to consider the number of
units of an item appearing on purchase orders when calculating an item's quantity available . This option is
available only in Peachtree Accounting and Peachtree Complete.
Sales Invoice/Receipt Out of Stock Warning Message: These options let you decide whether you want to
be warned, when entering invoices/receipts, that an item is out of stock. Select the appropriate option button
to tell Peachtree that you don't want to be warned, that you want to be warned when an item is out of stock
based on quantity on hand, or that you want to be warned when an item is out of stock based on quantity
available . The last option is available only in Peachtree Accounting and Peachtree Complete.
Sales Order Out of Stock Warning Message (Peachtree Accounting and Peachtree Complete
Accounting only): These options let you decide whether you want to be warned, when entering sales
orders, that an item is out of stock. Select the appropriate option button to tell Peachtree that you don't want
to be warned, that you want to be warned when an item is out of stock based on quantity on hand, or that
you want to be warned when an item is out of stock based on quantity available . These options are
available only in Peachtree Accounting and Peachtree Complete.
GL Accounts/Costing
To set up the default or most common General Ledger accounts for each item class in inventory, select the
GL Accounts/Costing tab in the Inventory Item Defaults window. When entering a new inventory item, the
default accounts are automatically filled in for you. This speeds up the process of entering new items.
You can change any of these defaults when entering each item (in Maintain Inventory Items), if necessary.
Note that some items are gray and inaccessible. For example, you cannot enter general ledger accounts for
Description Only items because no accounting is entered or tracked for this item class. You can only enter
costing methods for Stock and Assembly items since Peachtree only tracks costing for these item classes.
Inventory G/L Account Defaults
Stock item
Stock Item Default G/L accounts
Stock items are traditional inventory items, which are tracked for quantities, average costs, vendors, low
stock points, and so on. Once an item is assigned a stock class, it cannot be changed.
G/L Sales/Inc: Enter the default income account that will be credited when you sell stock items.
G/L Invtry/Wage: Enter the default inventory account that will be debited when you purchase stock items
and credited when you sell stock items.
42
G/L Cost Sales: Enter the default cost of sales account that will be debited when you sell stock items.
Costing: Enter the default costing method used for all stock items. To ensure accurate costing, Peachtree
highly recommends that you use the same costing method for each stock item and assembly item.
Non-stock item
Non-Stock Item Default G/L Accounts
Non-stock items are used for such items as service contracts, which you sell but do not put into your
inventory. Quantities, descriptions, and unit prices are printed on invoices, but quantities on hand are not
tracked. You can assign a cost of goods general ledger account to non-stock items, but it is not affected by a
costing method.
G/L Sales/Inc: Enter the default income account that will be credited when you sell non-stock items.
G/L Invtry/Wage: Enter the default inventory account that will be debited when you purchase non-stock
items and credited when you sell non-stock items.
G/L Cost Sales: Enter the default cost of sales account that will be debited when you sell non-stock items.
Service
Service Item Default G/L Accounts
Service: Use this for services you can apply to your general ledger salary and wages account. This is useful
for services provided by your employees. You can enter a cost for the service.
G/L Sales/Inc: Enter the default income account that will be credited when you sell service items.
G/L Invtry/Wage: Enter the default salary and wages account that will be debited when you purchase
service items and credited when you sell service items.
G/L Cost Sales: Enter the default cost of sales account that will be debited when you sell service items.
Note: If you are using Time & Billing (possible only in Peachtree Complete) and you do not want the
service to directly affect cost of sales, use charge (expense) items in place of service items.
Labor
Labor Item Default G/L Accounts
Labor is used for outside labor that you use for projects; you can enter a cost for the service and apply it to
cost of sales when selling the labor item. Use this for labor that you can apply to your general ledger salary
and wages account.
G/L Sales/Inc: Enter the default income account that will be credited when you sell labor.
G/L Invtry/Wage: Enter the default salary and wages account that will be debited when you purchase labor
and credited when you sell the labor.
G/L Cost Sales: Enter the default cost of sales account that will be debited when you sell labor.
43
Note: If you are using Time & Billing (possible only in Peachtree Complete) and you do not want the labor
to directly affect cost of sales, use activity items in place of labor items.
Assembly item
Assembly Item Default G/L Accounts
An assembly item is a group of items that you have assembled using the Bill of Materials tab of the
Maintain Inventory Items window.
G/L Sales/Inc: Enter the default income account that will be credited when you sell assembly items.
G/L Invtry/Wage: Enter the default inventory account that will be debited when you purchase assembly
items and credited when you sell assembly items.
G/L Cost Sales: Enter the default cost of sales account that will be debited when you sell assembly items.
Costing: Enter the costing method used for all assembly items. To ensure accurate costing, Peachtree highly
recommends that you stick to one costing method for all stock items and assembly items.
Activity item (available only in Peachtree Complete Accounting)
Activity Item Default G/L Accounts
Activity items are used on employee or vendor time tickets when recording time spent performing services
for a customer or job. Use activity items when you plan on billing customers for reimbursable expenses in
sales/invoicing.
GL Sales/Inc: Enter the default service income account that will be credited when you bill your customers
for activity items. This feature is available only in Peachtree Complete Accounting.
Charge item (available only in Peachtree Complete Accounting)
Charge Item Default G/L Accounts
Charge items are expenses recorded by an employee or vendor on expense tickets when various services are
performed for a customer or job. Use charge items when you plan on billing customers for reimbursable
expenses recorded on expense tickets in sales/invoicing.
GL Sales/Inc: Enter the default service income account that will be credited when you bill your customers
for charge (expense) items.
Freight
G/L Freight Account
You need to specify an account to be the general ledger freight account for recording freight charges entered
in the Quotes, Sales Orders (available only in Peachtree Accounting and Peachtree Complete), and
Sales/Invoicing windows. Select an account from the chart of accounts listed in the lookup box to be the
general ledger freight account. The description of the account you selected will appear beside the account
number. If you do not specify a G/L freight account or if your account description says <Undefined
Account>, then you will receive an error message when you try to leave this tab. Be sure to select the OK
button at the bottom of the lookup window to save your selection.
44
Taxes/Shipping
To set up default tax type categories and shipping methods for your inventory items, select the
Taxing/Shipping tab in the Inventory Item Defaults window.
Item Tax Type
An item can be taxed or it might be exempt. For example, staple items such as bread and milk are often not
taxed. Many states categorize taxable and nontaxable items. You can use item tax types to identify these
unique categories. This information will print out on the Taxable/Exempt Sales report.
You can make up to 25 entries in this box.
Use this window to enter the different reasons for exemptions provided by your state.
 Field: The number here identifies the tax type. This number is used by Peachtree and is for display
only.
 Description: Enter a tax type description (for example, taxable, exempt, or food). You can enter
only one taxable description.
 Tax: Select this check box if the item is taxable.
Ship Methods
You can use this to enter different ship methods for items (up to 10 fields). You can enter up to 20
alphanumeric characters (for example, Federal Express, UPS, and US Postal Service). Your entries here will
appear in the Ship Via field on the Purchase Orders (available only in Peachtree Accounting and Peachtree
Complete), Purchases, Sales/Invoicing, Quotes, and Sales Orders (available only in Peachtree Accounting
and Peachtree Complete) windows. These are used to set up defaults for both customers and vendors.
Custom Fields
To set up custom field names for your customer records, select the Custom Fields tab in the Inventory Item
Defaults window. Custom fields offer you a way to keep track of specific information about your inventory
items. Each business is unique. While we already provide fields to record most common business data, you
probably require other information from time to time. Custom Fields lets you set up and store that data.
Use the custom fields to set up fields to store additional information about each item. For example, you may
want to label items by color (blue, green, red, and so on). You would enter the label as Color. When you are
entering an item, you would enter its color on the Custom Fields tab, in the field labeled Color.
45
the Enabled check box. The data will remain, but it will not be accessible. If you decide you want to use the
field label again, check the Enabled box, and the program will make the data available.
There are three steps to setting up and recording custom fields:
1. Set up and enable custom field names in Inventory Item Defaults.
2. Enter custom field data for each item record in Maintain Inventory Items.
3. View and print the data in Inventory reports.
Price Levels
To set up sales price levels for your items, select the Price Levels tab on the Inventory Item Defaults
window. Price levels offer you a way to charge different prices to different customers. For example, a
regular customer who buys large quantities of an item may get a better price than the occasional customer
who only buys one of that same item.
You can customize sales-price-level names and disable/enable levels in Peachtree Accounting and First
Accounting for up to five price levels. Instead of "Price Level 1," "Price Level 2," and so on, you can set up
your own sales-price-level names. For example, you can set up "Retail," "10% Sale," "20% Sale,"
"Wholesale," and "Employee Price" price-level names. You can do the same in Peachtree Complete, for up
to ten price levels.
In Peachtree Complete Accounting, you can also edit the default sales price calculation for each price level.
You can set default price calculations for each sales-price level. Setting default price-level calculations does
not affect existing inventory items, only new items that you add. These calculations can be overridden at the
inventory-item level, if desired.
1. From the Maintain menu, select Default Information, then Inventory Items. Peachtree displays
the Inventory Item Defaults window
2. Select the Price Levels tab. To learn more about price-level names and how to set them up, click
.
3. Select the price level that you want to set up a calculation for, and click the Edit button (to the far
right ).
4. Calculate the new price using the options in the drop-down menus:
 Use: Select a pricing level value on which to base the calculation. Select from Price Level One, last
cost , current price, or no calculation .
 And: Select the type of mathematical formula you want the calculation to perform. Select from
increase or decrease by amount (enter the specific amount in the next field), or increase or decrease
by percent (enter the specific percent in the next field).
 Round New Price to: Select a custom rounding operation for this calculation. Select from no
rounding, round to specific cent (enter the cent value in the next field), or round to next whole dollar.
46
5. Select OK to accept the new calculation, or Cancel to reset the calculation to the beginning value.
6. If you are finished with your changes, select OK on the Inventory Item Defaults window. Select
Edit button to change other price levels.
3.2.2. Maintain Inventory Items

Peachtree tracks the inventory items you buy and sell and automatically updates the quantities after each
posted transaction. It also allows you to store items you do not stock but that you enter on invoices. This
makes entering invoices faster for you.
Tracking inventory in Peachtree is basically a three-step process:
 Enter item information, including Sales account, Inventory account, and Cost of Sales account.
 Use item codes when entering purchases and sales. Peachtree computes and tracks costs and
quantities on a daily basis, based on transaction date and item class.
 Enter adjustments, if necessary, through the Inventory Adjustments Task.
Peachtree does the rest, adjusting inventory levels each time you post a purchase or sale of an inventory
item. In addition, the program will track the cost of each item on a daily basis, based on the transaction date
and item class.
In addition to tracking costs and quantities, using inventory items makes entering transactions easier.
Through Maintain Inventory Items, you set up the goods and/or services you sell. You can set a unit price
and the account to be adjusted by the sale of this commodity (see Non-stock Items above). Then, when you
47
enter the sale, you need only select an inventory item and enter a quantity ordered; then Peachtree computes
the total. Both the item description and detailed description print on the invoice.
The toolbar at the top of the window contains the following buttons: Close , Save , Delete , Change ID ,
New , Detail , Note , and Help .
Header Fields and Tabs
Inventory item header fields are located above the folder tabs of the Maintain Inventory Items window. This
is where you enter lookup information about the item such as item ID, name, short description for lists, item
class (type of inventory item), and item status.
Item ID: This identifies the item in lookup lists. Enter an ID of up to 20 alphanumeric characters for a new
inventory item. You cannot use *, ?, or + in the ID code. Inventory items are listed numerically and
alphabetically by ID code, with numbers coming before letters. You might want to code your most
frequently used items so that they will appear first. Remember that the ID code is case sensitive, so that
codes A1 and a1 are seen as two different Inventory Items.
Description: You can enter up to 30 alphanumeric characters for the description. This description is the
short description that appears in the item lookup lists. You can enter longer descriptions that can be used in
sales or purchase transactions on the General tab. For more information, click .
Attributes: If the ID displayed in the Item ID field is that of a sub stock item , when you select the Item
Attributes tab, the Attributes field appears. It lists the primary and secondary attributes of the item. The field
is for display purposes only; it cannot be edited.
Item Class: This identifies the type of inventory item. Once an item class is established (saved) for an
inventory item, it cannot be changed.
Inactive: If you no longer plan to use an inventory item, you can mark the item as inactive. Once an
inventory item record is inactive, Peachtree displays a warning when you try to sell an inventory item. You
can update the inventory item description. Important: When you choose to Purge after closing the fiscal
year, all inventory items that are not associated with existing transactions and are tagged as inactive will be
purged.
General tab
This tab is where you enter basic information about the inventory item such as description, sales price, and
quantity on hand, and beginning balances, among other things.
Description Type: This specifies which description type is displayed in the window. Select the description
type from the drop-down list; then enter the description in the text field to the right. Select for Sales to enter
a description that will be used in quotes, sales orders, sales/invoicing, and receipts. Select for Purchases to
enter a description that will be used in purchase orders, purchases/receive inventory, and payments. It could
reference the vendor's catalog number for the item.
48
Sales Price/Billing Levels Enter the default sales price amount to display on quotes, sales orders, and
invoices for this item. For each item, you can set up to ten pricing levels. Note: if you are setting up an
activity item, then Billing Rate levels replace Sales Price Level fields. Billing Rate levels correspond to the
ones you set for your employees when working Subject to Commission with time-ticket hours.
Unit/Measure: This defines one unit of measure for the item. For example, a unit of measure can be each,
units, case, barrel, and so on. The item's unit/measure prints on Physical Inventory List, Item Price List,
Inventory Stock Status, and Inventory Valuation reports.
Item Type: You can use this to group like inventory items together. For example, if you have a large
warehouse, you may want to enter Electric for electrical items and Plumbing for plumbing supplies. You
can use the Item Type field to filter most inventory reports. You can enter up to eight characters. Note This
field is case sensitive. If you enter "Electric" when filtering item types in reports, inventory items that are
identified as "electric" or "ELECTRIC" will not be included.
Subject to Commission: This identifies whether the item, when sold through Sales/Invoicing, should be
included in the Accounts Receivable Sales Rep report. Select the check box to indicate that the item is
subject to commission. Note: Commission amounts must be calculated manually through payroll.
Cost Method: This identifies how the cost of the stock item will be calculated when you purchase and sell it.
Select one of the three inventory costing methods from the drop-down list: Average Cost, LIFO (last in, first
out), and FIFO (first in, first out). Generally, all inventory items need to use the same costing method.
Check with your accountant about the implications of doing this before you make any changes.
Last Unit Cost: This represents the latest unit cost amount associated with this item. Once a purchase,
payment, or adjustment (including beginning balances) is made for an item, the last unit cost is updated.
Minimum Stock: Enter the number at which you will typically reorder the item. This is used only for stock
and assembly items. For example, when you run the Inventory Reorder Worksheet, you can use this number
to filter the report by those items that are below minimum quantity in the Net Quantity field. This helps
determine how much of which items you need to reorder.
Reorder Quantity: This is the amount of the item that you normally order. It is used only for stock and
assembly items and appears on the Inventory Stock Status Report and the Inventory Reorder Worksheet.
Custom Fields tab
This tab helps you to enter custom field information for the selected item record. Custom field names are set
up in Inventory Item Defaults.
History tab
To display the period history of stock and assembly inventory items, select the History tab in the Maintain
Inventory Items window. Non-stock items do not retain history. You cannot edit any of these fields. This tab
is for display purposes only.
Period History: This is a summary of inventory transactions for stock and assembly items for past periods.
49
# Units Sold: This is the total number of units sold for the period.
Sales ($): This is the total sales amount for the period.
# Units Received: This is the total number of units purchased for the period.
Costs ($): This is the total purchase amount for the period.
Bill of Materials tab
To tell Peachtree what items you want to use in an assembly, select the Bill of Materials tab in the Maintain
Inventory Items window. (This tab is only available if an assembly item ID is selected.) Once you have
transactions that use an assembly, such as purchases or sales invoices, you cannot change the components in
the assembly. However, you can copy an assembly and modify the copy as a new assembly. Once you enter
the components on the Bill of Materials tab and select Save, you need to "build" the assembly. The cost of
building the assembly is posted when you actually create quantities of an assembly item, using
Build/UnBuild Assemblies from the Tasks menu.
Components of the Assembly
Item ID: You can enter a ? or click the right mouse button to select an existing inventory item from the
look-up list.
Description: This is the short description of the inventory item. You cannot change this description once
the assembly item is saved for the first time.
Quantity Needed: This is the amount of this item needed to build one assembly item.
Print Components on Invoice: Select this check box if you want all of the components of an assembly to
print on quotes, sales orders, and invoices. If this box is not selected, then only the assembly prints on
invoices and on quotes, sales orders, and invoices.
Add: Select this button to add an inventory item to the assembly. Note: You cannot modify the components
of an assembly once you have purchased or sold the assembly.
Remove: Select this button to remove an inventory item from the assembly.
If you no longer want to use this specific assembly, you can unbuild it so there are no quantities of the
assembly in stock. Then you can copy the assembly to a new one and modify the new assembly. You could
then make the old assembly inactive (by selecting the inactive check box on General tab of Maintain
Inventory Items) so you will be warned when selecting it for a transaction.
Entering Beginning Balance for Inventory
You can enter inventory beginning balance for stock items and assemblies.
o Select the beginning balance button on the General Tab of the maintain inventory items
window. The Inventory Beginning Balance window displays.
o From the list, select the item you want to enter Beginning Balance for.
o Enter two of the three amounts- quantity, unit cost and total cost. Peachtree Accounting will
calculate the third or remaining amount.
50
o Select ok to save the beginning balance of all items selected.
Self check Exercise-Maintaining Inventory Ledger
Default GL Accounts
Item Cost Unit
ID Description G/L cost of Qt.
class GL sales GL Inventory method Cost
sales
Inventory- Cost of
1,80
101 TV set Stock Sales-house house sales-house Average 2
0
utensils utensils utensils
Inventory- Cost of
2,80
102 Refrigerator Stock Sales-house house sales-house Average 3
0
Inventory- Cost of
2,25
103 Stove Stock Sales-house house sales-house Average 2
0
Inventory- Cost of
5,20
201 Computer Stock Sales-office office sales-office Average 2
0
machines machines machines
Inventory- Cost of
Electronics 3,80
202 Stock Sales-office office sales-office Average 2
type writer 0
Inventory- Cost of
2,00
203 Printer Stock Sales-office office sales-office Average 2
0
Required:
 Maintain inventory ledger;

 Insert the beginning balances;
 Preview inventory ledger;
3.3 Account Receivable
51
If your entity has a number of charge customer, or if it is an association that collects dues or other charges
from members, you will want to keep track of the amounts owed you. Peachtree Accounting account
receivable function does this and maintains a record of how much each customer has purchased in a year to
date, items and credit limit for the customer, the amount of current and past due bills, and other information
about the customer.
You can use accounts receivable to prepare customer statements, including dunning notices to customers
whose accounts are past due. It can calculate and add a finance charge, which is penalty levied on
customers who do not pay their bills on time. The module print several summary reports giving information
about customers.
Setting Up Customer Sales Taxes
If you are responsible for collecting sales tax when selling items or services to your customers, you must set
up sales tax codes. Sales tax codes can then be applied customer invoices in order to calculate the proper
sales tax for you customer.
First set up a vendor to whom you send tax revenue, and then set up a sales tax authority that corresponds to
an individual tax and vendor. In case of Ethiopia it is The Federal Inland Revenue Administration (FIRA).
Finally set up a sales tax code that corresponds to the combination of sales tax authorities for a customer
region.
Setting Up Sales Tax Authorities.
To set up sales tax authority from the Maintain main menu click on Sales taxes. Then choose sales tax
authorities.
Use this window to set up your tax authorities.
52
ID: Enter up to eight alphanumeric characters for the tax authority ID. You can use descriptive IDs such as
City, State, or County.
Description: You can enter a description of up to 30 characters. You can enter the percent that the sales
code is (for example, One percent).
Tax Rate: This is the tax percent. For example, entering 1. will give you a tax rate of 1 percent. If you enter
1 without the decimal point, the percent will be .01.
Tax Payable To: In most cases, this will be the state that you have already set up as a vendor. If you haven't
already set up the vendor, you can add the vendor here by typing + and entering the vendor information.
This is the taxing entity you pay. Peachtree stores taxing entities in its vendor file. To display a list of
existing vendors, type ? in this field, or select the Lookup button. To add a new vendor, type + or double-
click the field, which displays the Maintain Vendors window.
Sales Tax Payable G/L Account: This is the general ledger account to which you'll post the amounts of
this sales tax authority. If all of your sales tax is payable to your state government, you might only need one
sales tax G/L account. If you also sell items taxed by the federal government, you can set up an additional
account. To display a list of existing G/L accounts, type ? in this field, or select the Lookup button. To add a
new account, type + or double-click the field, which displays the Maintain Chart of Accounts window.
Setting up sales tax codes

To set up sales tax codes from the main menu select Maintain the click on the Sales taxes, and then choose
sales tax codes. Make sure you have already set up your sales tax authorities before you begin setting up
sales tax codes. You will also want to have a vendor set up for the state or other authorities you will send
your tax check to before you continue.
You can use this to set up tax codes for each customer. You assign the tax code to the customer in the
Maintain Customers/Prospects window.
Each sales tax code can contain up to five tax authorities, which is why you must have the sales tax
authorities set up before you can set up the sales tax codes. For example, you can set up city, county, state,
and any other special tax entities. You enter the sales tax authorities by double-clicking the first column of
the tax authority list box at the bottom of the window or by selecting Sales Tax Authorities from the Sales
Taxes selection of the Maintain menu.
53
When you enter a transaction for a customer through the Quotes, Sales Orders and Sales/Invoicing tasks,
the sales tax code you set up in Maintain Customers/Prospects for that customer record is automatically
included. If you need to use a different tax code, you can select an alternate sales tax code in the Quotes,
Sales Orders, or Sales/Invoicing windows.
If you have items that are taxed by the federal government (excise tax), you can create a sales tax code
specific to those items. Enter a separate invoice in the Sales/Invoicing selection for just those federally taxed
items, and use the tax code that includes the federal tax rate. You can change the sales tax codes at any time.
Sales Tax Code: Enter up to eight alphanumeric characters for the sales tax code.
Description: You can enter a description of up to 30 characters. You can enter the percent that the sales
code is (for example, Five percent).
Tax Freight: Select this check box if you are required to add sales tax to any freight charges that your
customers pay for shipping services. This requirement varies from state to state. Check with your local sales
tax authority to be sure.
Sales Tax Authorities List Box: This lists the tax authorities (for example, state, county, and city) that are
included in this sales tax code. If you double-click the first column, Peachtree displays the Maintain Sales
Tax Authorities window.
Self Check Exercise
(i) Sales Tax Authority and Sales Tax Code
ID Description Tax Payable to Tax Tax Payable GL

(Sales Rate Account
Tax
54
Code)
ST Sales tax Inland Revenue 12% Sales tax payable
Withholding Withholding tax
WT tax Inland Revenue 2% payable
Required:
(i) Maintain Sales tax Authority
(ii) Maintain Sales Tax Code
Setting Up Customers
Customer Defaults
Peachtree lets you set up default information for customers. Use this feature like a template or model upon
which to build all your customer records. You enter the most common information. Then, when you set up
new customers and enter transactions, the default information is automatically included. In most cases, you
won't have to enter anything. A name and address is all that's required; then you're ready to invoice!
To set up or review customer defaults

 From the Maintain menu, select Default Information and choose Customers.
55
Default information for customers includes:
 Standard customer payment terms
 General Ledger accounts for sales and discounts
 Aging information for invoices due
 Custom field labels
 Finance charge rules and label
 Customer payment methods
Most of this information is set up for you during New Company Setup. However, you change these defaults
at any time.
Tabs
Payment Terms: helps to set up default (standard) payment terms for your customers and default sales and
discount G/L accounts.
Account Aging: helps to set up how sales invoices are aged and what aging brackets will be used for
accounts receivable.
Custom Fields: helps to set up custom field names for your customer records.
Finance Charges
To set up when and how finance charges are calculated for your customers, select the Finance Charges tab
in the Customer Defaults window. Finance charges (also known as late fees or service charges) can be
calculated and applied to your customers for invoices that are past due. These charges will appear in your
customer statements.
Note: Finance (late) charges are not applied automatically in Peachtree. This is done from the Task menu
by selecting Finance Charges.
Charge Finance Charges
56
In order to apply finance (late) charges, the Charge Finance Charges option must be selected in Customer
Defaults. Once finance charges are activated, you can set conditions for calculating finance charges.
Charge Finance Charges ... On Invoices XX days overdue: Enter the point at which finance charges
should be applied to overdue invoices. For example, a finance charge will be imposed on the balance due
after a 30-day grace period. Finance charges are calculated from the first day the invoice becomes overdue,
not from the beginning of this grace period.
On Invoices up to: Enter the balance amount over which the second interest rate will apply. On balances
below this rate, the rate in the Annual Interest Rate field will apply. On balances over this amount, the
second interest rate applies. This lets you offer different rates to customers depending on the balance their
accounts carry.
Annual Interest Rate: Enter the annual interest rate for balances at or below the specified dollar amount.
Maximum Annual Interest Rate: Enter the annual interest rate for balances above the specified dollar
amount. If you want to enter only one rate, enter the same amount in both boxes.
Minimum Finance Charge: Enter the minimum finance charge dollar amount that will apply when a
customer is late with a payment. If the calculated amount is less than the minimum displayed here, the
minimum amount will be used. The default minimum amount is 50 cents.
Charge Interest on Finance Charges: Select this check box if you want to compound late charges. In other
words, do you want to charge late charges on late charges?
Note: This is not allowed by law in some states. Check your local regulations before choosing this option.
Finance Charge G/L Account: This identifies the G/L account that will be used when applying finance
charges (for example, Finance Charge Income).
Appears on invoices and statements as: Select how you want your finance charges to appear on sales
invoices and customer statements from the drop-down list. Choose Late Charge, Finance Charge, or enter
your own label (for example Late Fee, Service Charge, Participation Fee, and so on). You can enter up to 20
alphanumeric characters. If the Charge Finance Charges check box is selected, then this field is required and
cannot be blank.
Pay Methods: helps to set up payment methods for your customers or deposit ticket ID properties.
Maintain Customers/Prospects
Use the Maintain Customers/Prospects window to enter, change, and store information about companies and
people to whom you sell goods and services. You can also enter information about companies and people
with whom you would like to do business (prospects).
57
For customers and prospects, this includes information such as:
 Name and address information, including separate billing and shipping information, e-mail address,
and Web site address
 The date of the last invoice, statement, and payment received
 Sales history, including year-to-date and period-to-date sales and monthly totals
 The usual sales account used for this customer
 Terms of payment and the sales tax code
 The customer's beginning balance
Header Fields and Tabs
Customer/Prospect Header Fields
This is where you enter lookup information about the customer such as the customer ID, name, and status.
Customer ID: Enter up to 20 alphanumeric characters for a new customer's ID. For existing customers, you
can select to look up the customer you want.
Name: Enter up to 39 alphanumeric characters for a new customer's name.
Prospect: If you check this box, this company or person is not included on any customer reports. If you
generate an invoice for the prospect or clear the check box, the prospect becomes a regular customer and is
included on customer reports.
Inactive: Once a customer record is inactive, Peachtree displays a warning if you try to make a sale to the
customer.
General
This is where you to enter basic information about the customer such as contact information, address, phone
and fax numbers, sales tax code, and beginning balances.
58
Sales Defaults
To set up unique sales transaction defaults for each customer record, select the Sales Defaults tab in the
Maintain Customers/Prospects window. You can change this information at the transaction level, if
necessary.
Sales Rep: You can enter the sales representative that has contact with the customer. The sales
representative must have already been entered in the Maintain Employees/Sales Reps window.
G/L Sales Account: Enter a General Ledger account for the default sales account for this customer. This is
normally an income account. When selling inventory items, Peachtree overrides this account with the
General Ledger default accounts set up in Maintain Inventory Items.
Open P.O. #: This is the standing purchase order number you can use for this customer. This defaults on the
Quotes, Sales Orders, and Sales/Invoicing windows.
Ship Via: You can select the primary shipping carrier you want to use to ship items to this customer.
Whatever you select here will default for sales transactions you enter for this customer. Shipping carriers are
set up in the Inventory Items Defaults window.
Resale #: If this customer purchases items for resale, enter the resale number here. Resale numbers are
required by most states for businesses that sell taxable goods. It enables the business to sell goods to other
businesses for resale without charging a tax or to buy goods from other businesses for resale without paying
a tax. If a customer intends to resell your goods, enter the customer's resale number (also called seller's
permit) here.
Pricing Level: You can choose from various pricing levels that are set up in the Maintain Inventory Items
window when invoicing your customers.
Terms: You can choose to use the standard customer payment terms set up in Customers Defaults or set up
a unique set of terms for this customer. To change the payment terms for this customer, select the Terms
button.
Custom Fields
To enter custom field information for the selected customer record, select the Custom Fields tab in the
Maintain Customers/Prospects window. Custom field names are set up in Customer Defaults.
History Tab
To display the selected customer's current history, select the History tab in the Maintain
Customers/Prospects window. When entering a new customer, you can enter information on this tab; once
you save the customer record, this tab is for display purposes only.
General tab
59
Select the General tab of the Maintain Inventory Items window to enter basic information about the
inventory item such as item ID, name, description, account numbers, sales price, quantity on hand, and
beginning balances, among other things.
Fields
Inventory Item Header Fields For Sales/Purchases
Description for Purchases Description for Sales
Multiple Sales Price and Billing GL Sales Account
Levels
Item Tax Type G/L Inventory Account
Last Unit Cost G/L Cost of Sales Account
Costing Method Minimum Stock
UPC / SKU Reorder Quantity
Item Type Qty on SO's (Peachtree Accounting
and Peachtree Complete
Accounting only)
Location Qty on PO's
Unit/Measure Preferred Vendor ID
Weight Buyer ID
Qty on Hand Beginning Balances
Qty Available
Custom Fields tab

To enter custom field information for the selected item record, select the Custom Fields tab in the Maintain
Inventory Items window. Custom field names are set up in Inventory Item Defaults.
To set up custom field names for your customer records, select the Custom Fields tab in the Inventory Item
Defaults window. Custom fields offer you a way to keep track of specific information about your inventory
items. Each business is unique. While we already provide fields to record most common business data, you
probably require other information from time to time. Custom Fields lets you set up and store that data.
Use the custom fields to set up fields to store additional information about each item. For example, you may
want to label items by color (blue, green, red, and so on). You would enter the label as Color. When you are
entering an item, you would enter its color on the Custom Fields tab, in the field labeled Color.
the Enabled check box. The data will remain, but it will not be accessible. If you decide you want to use the
field label again, check the Enabled box, and the program will make the data available.
60
There are three steps to setting up and recording custom fields:
1. Set up and enable custom field names in Inventory Item Defaults.
2. Enter custom field data for each item record in Maintain Inventory Items.
3. View and print the data in Inventory reports.
Examples
Custom fields let you use your imagination. What do I really need to know about my inventory? Below are
examples of inventory item custom fields you could set up.
Field Name Data Entered
Alternate Vendor the vendor to use if the primary vendor (stored in
Maintain Inventory) is not available
Secondary Location further define the location of this item in your
warehouse of building
Shipping Weight the shipping weight of one unit of the product
Frequency if a service, indicate how often it is usually supplied
Preferred Brand indicate the preferred company of manufacture
History tab
To display the period history of stock and assembly inventory items, select the History tab in the Maintain
Inventory Items window. Non-stock items do not retain history. You cannot edit any of these fields. This tab
is for display purposes only.
Period History: This is a summary of inventory transactions for stock and assembly items for past periods.
# Units Sold: This is the total number of units sold for the period.
Sales ($): This is the total sales amount for the period.
# Units Received: This is the total number of units purchased for the period.
Costs ($): This is the total purchase amount for the period.
Bill of Materials tab
To tell Peachtree what items you want to use in an assembly, select the Bill of Materials tab in the Maintain
Inventory Items window. (This tab is only available if an assembly item ID is selected.) Once you have
transactions that use an assembly, such as purchases or sales invoices, you cannot change the components in
the assembly. However, you can copy an assembly and modify the copy as a new assembly. Once you enter
the components on the Bill of Materials tab and select Save, you need to "build" the assembly.
The cost of building the assembly is posted when you actually create quantities of an assembly item, using
Build/UnBuild Assemblies from the Tasks menu.
Components of the Assembly
61
Item ID: You can enter a ? or click the right mouse button to select an existing inventory item from the
look-up list.
Description: This is the short description of the inventory item. You cannot change this description once
the assembly item is saved for the first time.
Quantity Needed: This is the amount of this item needed to build one assembly item.
Print Components on Invoice: Select this check box if you want all of the components of an assembly to
print on quotes, sales orders, and invoices. If this box is not selected, then only the assembly prints on
invoices and on quotes, sales orders, and invoices.
Add: Select this button to add an inventory item to the assembly. Note: You cannot modify the components
of an assembly once you have purchased or sold the assembly.
Remove: Select this button to remove an inventory item from the assembly.
If you no longer want to use this specific assembly, you can unbuild it so there are no quantities of the
assembly in stock. Then you can copy the assembly to a new one and modify the new assembly. You could
then make the old assembly inactive (by selecting the inactive check box on General tab of Maintain
Inventory Items) so you will be warned when selecting it for a transaction.
Item Attributes tab
To set up master stock items and create related sub stock items , select the Item Attributes tab in the
Maintain Inventory Items window. To create a master stock item, you enter the item ID and description and
then select Master Stock Item as the item class.
Primary Attributes: These are sets of item characteristics that you designate as primary ones. Attributes
could include size, length, color, price range, and so forth.
 Name: Enter the name of the primary attribute set.
 ID: Enter the identifier of each individual attribute in the set.
 Description: Enter a brief description for each individual attribute in the set.
Secondary Attributes: These are sets of item characteristics that you designate as secondary ones.
Attributes could include size, length, color, price range, and so forth.
 Name: Enter the name of the primary attribute set.
 ID: Enter the identifier of each individual attribute in the set.
 Description: Enter a brief description for each individual attribute in the set.
Created Sub stock Items: Once you save a new master stock item, this table lists by item ID all sub stock
items generated from the master. The table displays the primary and secondary attributes that govern each
substock item, the quantity on hand for each listed item, and whether or not each item is active
Set Up an Inventory Item
Use this procedure to set up a new inventory item record.
1. Do one of the following:
62
o From the Maintain menu, select Inventory Items.
o From the Maintain menu, select Setup Checklist. Under the Inventory Items heading, click
the Inventory Items and Assembly Records setup option.
o Click the Inventory Items icon on the Inventory Navigation Aid.
o Type + or double-click inside the Item ID field of any task (transaction) window.
Peachtree displays the Maintain Inventory items window.
2. Enter a new item ID, and complete the necessary item information.
When you're finished filling in the window, select the Save button.
Self check Exercise maintain customers and customer ledger
Custome Customer Address Sales Invoice Sales Sales Purch. Invoi A/R Bal
r Id Name Tax ID Date Default Terms order ce a/c Jan 1,
or No. No. 2004
Code
C01 John P.O.Box ST 12/04/05 Sales- 2/10,n/30 PO523 S311 A/R 4,800
house
Trading 1010
utensils
C02 Genu Plc. P.O.Box ST 12/05/05 Sales- 2/10,n/30 PO681 S318 A/R 5,000
house
1615
utensils
C03 Excel Office P.O.Box ST 12/16/05 Sales- 3/7,n/30 PO440 S326 A/R 3,000
Office
1717
machines
C04 Anna Inc. P.O.Box ST 12/31/05 Sales- 2/10,n/30 PO312 S340 A/R 6,000
Office
5555
machines
Required:
(iv) Maintain customer ledger;

(v) Insert the beginning balances;
(vi) Preview customer ledger;
PAYROLL
Peachtree automates your payroll process. Once you set up payroll tax tables, employee defaults and
employee records, you only have to select each employee using the payroll tasks, and Peachtree
automatically computes the paycheck. Then, you can print a batch of checks for all employees or print a
single paycheck, if you like.
The payroll process in Peachtree Accounting involves the following steps:
63
 Completing Payroll Setup Wizard
 Maintaining Payroll Tax Tables
 Entering Employee Default Information
 Maintaining Employee Personal Records
 Completing Payroll Tasks
1. COMPLETING PAYROLL SETUP WIZARD

Completing this process helps you to establish standard payroll fields, default general ledger accounts and
other optional payroll fields such as employee vacation time tracking. Note, however, that all the procedures
in the payroll setup wizard may not necessarily have impact on the Ethiopian Payroll System (EPS).
Nevertheless, it is not possible to handle transactions and data related to the EPS using payroll facilities of
Peachtree Accounting Complete Software Packages (PACSP) without passing through or completing all
the procedures making up the Payroll Setup Wizard.
The following steps help you to complete the Payroll Setup Wizard.
i) From the Maintain main menu, select Default Information, and then choose Payroll Setup Wizard.
ii) In the Payroll Setup Wizard window, select the next button or select the Initial Payroll Setup option,
and in the Initial Payroll Setup folder
64
 Enter or select from the drop-down list a state abbreviation for the state where in majority of your
employees work.
 Enter or select a locality and locality tax rate if the fields are available and applicable.
 Enter the unemployment percentage the state government requires your company to pay
 Select Yes to create payroll fields for employee tips and meals, otherwise select No.
Although the aforementioned procedures do not affect the EPS, you cannot pass to the next steps
particularly without selecting any one of the states from the state drop-down list and specifying general
ledger accounts to be used by Peachtree in setting up basic payroll fields. Therefore, it is a must to
select one from the available states and enter the appropriate GL accounts in the boxes available as
given in step-iii below and after that you may escape the remaining procedures.
iii) Select the next button and enter payroll default general ledger accounts to be used in relation to standard
payroll fields. Later you can establish accounts for specific pay rates and payroll fields, if you want.
65
 Gross Pay Account-Typically, this is the Salaries Expense or Wages Expense account which will be
used to record all kinds of payments to employees including basic salary, allowances, overtime, etc.
Later you can set up individual expense accounts for each pay or salary type, if you want.
 Tax Liability Account-This account will be used to record obligations of the employer for its share
of contributions in to employees pension/provident fund plan. This could be Pension or Provident
Fund Payable account.
 Tax Expense Account-This account may be used to record expenses related to contributions by the
employer in to the employees pension/provident fund plan. This is commonly the Payroll Expenses
Account.
iv) The next steps in the Payroll Setup Wizard are not that much relevant to the EPS. Thus, unless
otherwise you want to know something about these steps, select the next button until the finish button is
enabled which helps you to finish the Payroll Setup Wizard. Note, however, that the steps related to
Vacation Time Tracking may be helpful to your company if it wants to track employee vacation time.
66
Instruction
Please read the following material very carefully. After understanding it try to exercise the
examples for HAWA enterprise
For editing the Ethiopian employment tax table here is Schedule A of Proclamation NO.286/2002
of Ethiopian law.
From Birr To Birr Tax Rate applicable
O 150 Exempt
150 650 10%
651 1400 15%
1401 2,350 20%
2,351 3,550 25%
3,551 5000 30%
Over 5,000 35%
2. MAINTAINING PAYROLL TAX TABLES

The maintain company payroll tax tables window enables you to create a new tax table or modify an
exiting one which will be used to determine amounts related to particular payroll field such as employee
income tax and employee/employer pension/provident fund contribution. PACSP provides tax tables that
affect payroll transactions of companies operating under the USA tax and business laws. These tables can be
67
accessed through the Edit global sub-option of the Payroll tax table’s option in the file main menu. Global
payroll tax tables do not affect payroll transactions of companies operating under the Ethiopian tax and
business laws. As a result, it is not necessary to edit these global tax tables. For companies operating under
the Ethiopian tax and business laws, the Edit company sub-option of the Payroll tax tables option in the file
main menu will help them to create payroll tax tables appropriate to handle their payroll transactions in the
Ethiopian context.
Note that creating tax tables for a certain deduction or addition is advisable if the deduction or addition is
variable (requires calculation) and/or is applicable to all or majority of your company employees. For a
fixed sum of deduction and/or addition affecting only particular employee, it is advisable to insert the
related amount in the personal records of each employee using the maintain employees/sales reps window.
A certain fixed sum of deduction and/or addition affecting all or majority of your company employees may
be inserted through the Employee Defaults window. For additional information, read the topics on
Entering Employee Default Information and Maintaining Employee Personal Records on pages 7 and 11,
respectively.
Creating payroll tax tables involves the following steps:

i) From the File main menu, select Payroll tax tables, and then choose Edit company
68
ii) If you wish to modify an existing tax table, scroll through the list at the top of the window or click the
Find button and type text to search for a tax table in the list and make the necessary changes and click
Save to save the changes you made. To create a new tax table, go to step "iii" below.
iii) In the maintain company payroll tax tables window complete the following procedures.
 Tax ID - Enter an ID that is not already in the Tax Table list. Tax ID may take any number and/or
alphabet - not more than eight characters. For instance, INTax or ITAX2004 for employee income
tax, PenEE or PENSION4 for employee pension fund contribution, ProvER or PENSION6 for
employer provident fund contribution, and UNIONdue, Miazia 23 or LABOUR for employee labor
union contribution, etc.
 Tax Name - The name of a payroll tax table is very important, because it shows the way the
computer identifies which tax table to use for calculating an amount related to particular payroll
field. Tax Name must be entered according to strict rules. The name consists of two parts,
separated by a single space.
 Tax Name - It consists of not more than thirty numeric and/or alphabetic characters. You may
also enter two or more words separated by a single space. For instance, Income Tax for
employee income tax, Pension EE for employee pension fund contribution, Provident ER for
employer provident fund contribution, and UnionDue EE or Labour Union for employee labor
union contribution, etc. Including the suffix particularly ER in payroll tax names will help you
and Peachtree to identify whether the tax table relates to the employer. For instance, Pension
ER indicates that this tax table will be used to calculate the sum to be contributed by the
employer to the employee pension fund plan maintained by the organization. Therefore, names
of payroll tax tables affecting the employer must include the suffix ER. However, including the
suffix EE to tax names for employee related payroll tax tables is not mandatory.
 Payroll Tax Year - This is represented by the last two digits of the calendar year to which the tax
table applies. If the current calendar year, for instance, is 2004, the payroll tax year will be 04; if
it is 1996, then the payroll tax year will be 96. During Payroll Entry (or any other time the
program must calculate payroll deductions or additions), Peachtree looks for the tax name
associated with a payroll field, adds a space and the last two digits of the current calendar year to
it, and then searches for that combined name in the payroll tax tables. For example, suppose the
calendar year is 2003 and there is a payroll field (created during entering employees default
information in the employee defaults window) called Pension. On the same line as the Pension,
“Pension EE” was entered in the “Tax Name” column of the EmployEE fields of the employee
defaults window. Any time the program needs to calculate the amount related to the Pension
payroll field, it will combine the name and the year to form “Pension EE 03” and search for that
name in the payroll tax tables. If it finds it, it will calculate the value for the Pension payroll
69
field during payroll entry tasks. If it does not find it, the program will give you feedback
consisting of a "beep" sound followed by a written message indicating that it could not find the
tax table which the program is required to use in calculating a certain amount. Such feedback is
usually available while you are handling tasks related to payroll entry. So, whenever you face
with such feedback, you have to make sure that you properly entered the payroll tax name i.e.
check for the "single space" rule and entering payroll tax year.
 Filing Status - Filing status determines the way deductions especially income tax is calculated.
Filing status of an employee may entitle or prohibit her/him to or from getting tax exemption based
on the employee’s family status or number of dependents. It, however, does not affect the EPS
because in Ethiopia each and every employee is required to pay tax on all her/his earnings regardless
of whether s/he is married or has dependents. But, for selecting one of the available options is a
must, select the “All Filing Statuses” option from the filling status drop-down list.
 Appears on Payroll Tax Report Menus - For this option does not affect the EPS in any ways, better
you leave it. If you put check make on the box corresponding to this option, however, writing
formulae in the formula box (covered in the next page) will somehow be complicated.
 Government - This identifies which government authority is collecting the amount calculated based
on payroll tax table identified in the previous procedures. It also determines which filing status will
be looked at when calculating deductions. You may choose any one of the available options:
Federal, State or Local. Note, however, that, if you select a State or Local, you have to make sure
that you wrote the name of a state or locality in all spaces in any window (e.g. in the employee
defaults and maintain employees/sales reps windows) requiring you to write state and/or local
names or specify for which state or locality the tax applies. If you select, on the other hand, the
Federal option, you have to make sure that you did not write or you have deleted anything written in
all spaces in any window (e.g. in the maintain payroll tax tables, employee defaults and maintain
employees/sales reps windows) requiring you to write name of a state and/or locality. For
convenience, select the Federal option and leave empty all boxes requiring you to write
state/locality name.
 Type - Specifies the treatment of an amount calculated using a tax table identified in the previous
procedures. Select Deduction, Addition, or Exception as a type for a certain amount to tell Peachtree
if it should add/deduct this amount to/from employee paychecks or it is an exception (for example,
vacation/sick time). If an amount is set as a deduction (e.g. income tax or union due) and returns a
positive number, then its value is set to zero. If an amount is set as an addition (e.g. overtime or
allowance) and returns a negative number, then its amount is set to zero. If you want to use positive
and negative numbers in the payroll calculation, however, select the Exception option. The
70
Exception option should only be used for vacation/sick time or other items where it makes sense to
have either a negative or positive number as the result of particular calculation.
 Formula - This box helps you to write a formula telling Peachtree how to calculate payroll
deductions, additions or any other item you want the program to calculate. The formula is entered in
the form of one or more equations, in a manner similar to that used in “BASIC” programming. For a
single equation, a variable (“variable” refers to particular item to be calculated using this formula,
for instance, pension, income tax or overtime) is put at the beginning of the equation, followed by an
equal sign (=), followed by an expression. During a calculation, the expression is evaluated and the
result is stored in the variable. If there are multiple equations, they are separated from each other by
a semicolon (;). Equations do not have to begin on separate lines, but they are easier to read if you
type them that way. You are free to use either upper or lower case letters, since the program ignores
case. Besides, for the program ignores spaces, you are free to use spaces as you wish to make the
equations easier to read. However, you should correctly spell such words/phrases as “answer”,
“table” and “adjusted_gross” which are commonly used in formulae required to calculate such
deductions as income tax and pension. Following are some of the words/phrases which we
commonly write instead of the aforementioned words/phrases; anser, answers, anwer, tabl, teble,
adgusted-gross, adjusted-gross, adjusted-gros, ajusted-gross, agusted_gross, etc. If you misspell any
of the words/phrases “answer”, “table” and “adjusted_gross”, the program will give you feedback
consisting of a "beep" sound followed by a written message indicating that the word/phrase you
wrote is not valid. Such feedback is provided when you try to save incorrectly written formula
related to a specific payroll tax table.
In addition to equations, a formula can have one or more explanatory comments. A comment is
entered by typing in a quotation mark (“), followed by the desired text, which can be as long as you
wish up to 1,000 characters, followed by another quotation mark (”). During a calculation, the
computer ignores anything that appears between quotation marks.
71
Below are sample formulae for some payroll deductions/additions.
 Employee Income Tax

Tax ID ETHTAX
Tax Name ETHTAX 02
Formula ANSWER=-TABLE (ADJUSTED_GROSS)
Note that you can write any Tax ID and Tax Name for a deduction or addition given that you do not
use such characters as *, /,?, and +. You should correctly spell the words/phrases answer, table and
adjusted_gross. You should write the word table as part of an expression when the deduction and/or
addition are to be calculated using tables such as the Schedule-A of the Ethiopian Income Tax
Proclamation No. 286 of 2002.
 Employee Pension/Provident Fund (4%)

Tax ID PENS4
Tax Name PENS4 02
Formula ANSWER=-0.04*(ADJUSTED_GROSS)
Note that, the word table is not included in the above and the next three formulae because there are
no specific tables to be used in calculating such items as pension, union due and bonus.
 Employer Pension/Provident Fund (8%)

Tax ID PENS6
Tax Name PENS6 ER 02
Note that the above tax name includes the suffix ER to indicate that the provident fund
contribution relates to the employer.
 1% Contribution to Labor Union/Idir/Iqub/Social Club/Disaster Prevention and

Preparedness Commission (DPPC)
Tax ID LUNION
Tax Name LUNION 02
72
 Bonus (Birr 500 plus 1%)
Tax ID BONUS
Tax Name BONUS 02
Formula ANSWER= 500 + (0.01*(ADJUSTED_GROSS))
Peachtree defines the phrase adjusted_gross (which is represented by the word Gross in the
tabs/folders of the Employee Defaults & Maintain Employees/Sales Reps windows) to be the
sum of all employee compensations such as basic salary, overtime, bonus, allowance, commission,
etc. Thus, by default, adjusted_gross means gross earnings. For calculating deductions and/or
additions, however, you can redefine the phrase “adjusted_gross” to mean anything you want it to
be such as basic salary, taxable income, etc. This is done in the calculate adjusted gross window
accessible through the employee defaults window if the redefined adjusted_gross is to be used for
calculating deductions/additions affecting all or majority of your company employees or in the
calculate adjusted gross window accessible through the maintain employees/sales reps window if
the redefined adjusted_gross is to be used for calculating deductions/additions affecting a specific
employee. For additional information on redefining adjusted_gross, read the topic on “entering
employee fields information in the EmployEE Fields Tab/Folder” on page-8.
 Table - If your tax formula uses the Table function, then click the Table button in the main menu of
the Maintain Company Payroll Tax Tables window and set up the withholding tax percentage table
used for that function. If your formula does not use the Table function, then you can still set up the
table by activating this button, but it will not affect tax calculations.
If you want to install Schedule-A of the Ethiopian Income Tax Proclamation No. 286 of 2002 to be used
in calculating employee income taxes using Peachtree, do the following:
 Gross More Than - Refers to the taxable earnings floor/base in excess of which a certain income tax
rate is applicable in a progressive income tax system. For example, 150, 650 and 1400 are the taxable
income bases for the first (10%), second (15%) and third (20%) income tax rates, respectively, in
73
Schedule-A of the Ethiopian Income Tax Proclamation No. 286 of 2002. The amounts entered in this
column must be entered in each row in increasing order, for instance, 150; 650; 1400; etc. Any rows
that are beyond the last amount (e.g. 5000) of the table must have a zero entered in the related column
under the Gross More Than heading. During calculations, Peachtree matches the Gross More Than
column to the employee's taxable gross and uses the information in the row to calculate the related
income tax.
 Withhold - Refers to a fixed amount of tax an employee is required to pay when her/his taxable
earnings is more than a certain taxable base but less than the next upper base. Enter the withholding
amount that corresponds to a certain taxable base in the Gross More Than column; for instance, enter
“0” in the row under this column corresponding to the Gross More Than 150, because there is no
fixed amount of tax payable on taxable earnings more than 150 but less than the next higher base,
rather the employee must pay 10% when her/his taxable income exceeds Birr 150 up to the next
higher base. Enter 50 and 162.5, in the rows corresponding to the Gross More Than 650 and 1400,
respectively, because if an employee’s taxable income is more than 650, s/he has to pay Birr 50 (10%
of 650 minus 150) and then 15% on amounts in excess of 650 up to 1400. If an employee’s taxable
income is more than 1400, s/he has to pay in total Birr 162 (10% of 650 minus 150, plus 15% of 1400
minus 650) and then 20% on amounts in excess of 1400 up to 2350. The amounts entered in this
column must be cumulative and entered in each row in increasing order. Any rows that are beyond the
last amount (e.g. 1087.5 corresponding to gross more than 5000) of the table must have a zero entered
into the related column under the withhold header.
 Plus % - Refers the amount of tax, expressed in terms of percentage of the taxable income, an
employee is required to pay when her/his taxable earnings exceed a certain taxable base. For instance,
10% and 15% are additional taxes an employee is required to pay when her/his taxable earnings
exceed Birr 150 and Birr 650, respectively. Enter the percentage that helps the computer to determine
the amount to be added to the sum in the withhold column based on the amount in the Gross More
Than column. For instance enter 10%, 15% and 20%, corresponding to Gross More Than 150, 650
and 1400, respectively. The amounts entered in this column must be entered in each row in increasing
order. Any rows which are beyond the last figure (e.g. 35% corresponding to Gross More Than 5000)
of the table must have a zero entered in the column under the plus % header.
 Then, click Ok in the Withholding Tax Percentage Table Entry window to go back to the Maintain
Company Payroll Tax Tables window.
 Finally, click the Save button in the Maintain Company Payroll Tax Tables window to save the
information related to the payroll tax table you just entered. If you want to continue entering
additional payroll tax table, enter a new Tax ID by writing it over the existing Tax ID. However, if
74
you want to finish the process of entering payroll tax tables, click the Close button in the Maintain
Company Payroll Tax Tables window.
3. ENTERING EMPLOYEE DEFAULT INFORMATION

Once you have completed the Payroll Setup Wizard (or copied employee defaults from an existing
company in the New Company Setup wizard), you can modify payroll setup to match your business’s
specific payroll needs. The information on the Employee Defaults window displays standard employee
information that will be considered during payroll entry. You can also modify individual employee records
for unique setup, if necessary, while maintaining employee personal records in the Maintain
Employees/Sales Reps window.
The following steps, broken up by tabs/folders help you to setup employee default information.
i) From the Maintain menu, select Default Information, and then choose Employees….
ii) Entering general information in the General Tab/Folder
 This step helps you to record information concerning the location where in majority of your
employees work and setup custom fields that helps you to record additional information about your
employees such as birthday, emergency contact person’s name, etc.
 State/locality - If you completed the Payroll Setup wizard, these values are displayed for you. If not
displayed, enter the appropriate state/locality. If you select the Federal option for the government
collecting taxes in the maintain payroll tax tables window while maintaining payroll tax tables,
however, you should make sure that you did not write or you have deleted anything in the boxes
requiring you to write state/locality name.
75
 Custom Fields - Place check marks in all or some of the available boxes to enable the custom fields
and enter your own field labels to keep track of specific information associated with employees. For
example, you may enable the first custom field and enter “Birthday” as a field label so that you will
be able to maintain employee birthday information in the Maintain Employees/Sales Reps window.
If custom fields are not enabled, you will not be able to enter custom field data in the Maintain
Employees/Sales Reps window. Note that, if you enabled a given custom field, you should assign a
field label to it.
 Assign Payroll Fields for - These fields are not necessary for the EPS, thus, you may escape them
and move to the next steps.
iii) Entering pay level information in the Pay Levels Tab/Folder
 This step helps you to set up a maximum of 20 different pay level field names for hourly pay types
and other 20 for salary pay types. This means that you can track basic salary, overtime, bonus, or any
other special types of pays for salaried employees.
 Enter name of each compensation you offer to your employees in the "field name" box (e.g. basic
salary, taxable/non-taxable allowance, overtime, etc) and select the GL account to which you debt
the payments (e.g. salary expenses) from the GL Account drop-down list. For example, you may
write basic salary as a field name and select 516 as an account number for, say, salary expenses,
which will be debited for the basic salary of each employee. You should set up all pay level field
names here whether they apply to specific employee, to all or majority of your company employees.
76
iv) Entering employee fields information in the EmployEE Fields Tab/Folder
 The EmployEE payroll fields serve the following basic functions:

(a) Enter payroll deductions and/or additions, such as employee income tax, labor union due,
pension/provident fund contribution, and/or overtime compensation that will be combined with
employee gross earnings to compute taxable earnings and ultimately net pay, and
(b) Memo amounts, such as basic salary (on which to calculate pension/provident fund
contributions) and non-taxable allowances that are tracked for calculating such items as taxable
income. Memo amounts/items, however, are not posted to the general ledger.
You should set up all payroll deductions, additions and/or memo items here whether they apply to
specific employee, to all or majority of your company employees so that such items will be available
to you when maintaining employee personal records in subsequent procedures.
 Field Name - Identifies the payroll fields/items (e.g. income tax and employee pension contribution)
that appear on employee paychecks and reports and memo items (e.g. basic salary and non-taxable
allowances) which do not appear on employee paychecks and reports (see "memo" below). In
addition to the existing Gross payroll field, you can set up a maximum of 29 other payroll fields.
Common payroll fields you should set up in this step include such fields related to employee
deductions as income tax, pension, bank loan, union due, and other contributions; such fields related
to employee additions as overtime and bonus as well as memo items such as basic salary and non-
taxable allowances. You can enter a new name on any blank line that describes the employee related
deduction, addition or memo. When entering payroll field names, you must use a single space or the
77
underscore character (shift plus the minus sign) to separate words that make up a field name, for
instance, Income Tax or Income_Tax for employee income tax deductions. Note the difference
between the following two characters; "-" (minus) and "_" (underscore). Also, payroll fields must
begin with an alpha character.
 G/L Account - Identifies the general ledger account to which the amounts related to the payroll field
entered in the payroll field name column should be posted. For example, the Employee Income Tax
Payable and Employee Pension/Provident Fund Contribution Payable accounts can be used to record
amounts related to employee income tax and pension/provident fund contribution, respectively.
Since memo amounts are not meant to be posted, they do not require specifying related general
ledger accounts.
 Calc (Calculate) - A check mark placed in any of the boxes under the Calc heading corresponding to
a certain field name indicates that Peachtree, using a certain payroll tax table, should automatically
calculate the payroll field amount. If check mark is placed in any box, then you must specify which
payroll tax table to be used in calculating the amount corresponding to the payroll field. This is done
by selecting a tax table from the Tax Name drop-down list. If a check mark is not placed in
particular box under the Calc heading corresponding to a certain payroll field, you can manually
enter amount for this field in the amount.
 Tax Name - If the amount related to a particular field name is to be calculated by the program, enter
or select from the tax name drop down list the name of the tax table to be used. Press ? to see a list
of tax tables.
 Amount - If amount related to particular field name is not meant to be calculated by the program,
enter a flat rate here in this window especially if the amount applies to all or majority of your
company employees (for example, Birr 200 transportation allowance to each and every employee) or
in the Maintain Employees/Sales Reps window if the amount is unique to each employee (for
example, Birr 200 allowance for one employee and Birr 500 allowance for another employee or
basic salary of each employee). Enter positive numbers for earnings and negative numbers for
deductions in the Amount field.
 Memo - A check mark placed in any of the boxes under the memo heading indicates that the
corresponding field amount is for use in calculating certain figures and not to be posted to the
general ledger. For example, you may enter basic salary in the field name and put a check mark in
the box under the memo heading corresponding to the field name basic salary so that the basic
salary may be used to calculate employee/employer pension fund contribution. For memo items you
do not need to enter the GL account name because memo items are not meant to be posted to the GL.
All non-dollar amounts should be marked as memo items (for example, vacation-time or sick-time
hours earned).
78
 Run - A check mark placed in any of the boxes under the run heading indicates that the
corresponding field amount should accrue continuously each payroll year. Peachtree will keep a
running total of this field and not reset the amount to zero when you close payroll tax years. For
example, if you set up a field to track vacation hours, you might want the unused total to be carried
over into the following payroll tax year. In this case, put a check mark in the box under the run
heading corresponding to the appropriate vacation time field.
 Adjust - This step helps you to redefine the adjusted_gross in relation to a certain amount to be
calculated by Peachtree. Remember that, the adjusted_gross identifier is used in formulae entered in
the Maintain Company Payroll Tax Tables for use in calculating certain payroll additions and/or
deductions. When you select the Adjust button corresponding to a certain field name (e.g. income
tax or pension), Peachtree displays the Calculate Adjusted Gross window. The Adjusted_Gross
identifier is used in many calculations of payroll deductions and/or additions. In some cases you may
want the entire gross pay to be used as a taxable gross (in this case, adjusted_gross=gross=sum of all
employee earnings); in other cases you may want employee benefits, such as non-taxable
allowances, to be deducted from gross pay to determine taxable gross for computing particularly
income tax (in this case, adjusted_gross=taxable income=gross less non-taxable allowances). To
redefine the adjust_gross amount used for either an employee or employer payroll field calculations,
do the following:
 To redefine the adjusted_gross applicable to all or majority of your company employees, select
the Adjust button corresponding to the payroll field to be calculated based on this redefined
adjusted_gross on the EmployEE or EmployER tab/folder of the Employee Defaults window.
The Adjust button is only accessible if you put a check mark in the box corresponding to a
certain field name under the Calc header.
79
 To redefine the adjusted_gross in relation to specific employee, clear the check mark in the box
corresponding to the field to be calculated under the Std (standard) header and put a check mark
under the Calc header on the EmployEE or EmployER tab/folder in the Maintain
Employees/Sales Reps window. Then, the Adjust button will be activated and select it.
 In the Calculate Adjusted Gross window, put a check mark under the Use header in each box
corresponding to each payroll field that make up the Adjusted_Gross for the payroll field you are
calculating. For example, to calculate pension/provident fund contribution of either the employee
or employer, put a check mark in the box corresponding to basic salary. In this case,
adjusted_gross is redefined to be basic salary and employee/employer pension/provident fund
contribution will be calculated on only the basic salary represented by the redefined
adjusted_gross. If you want to redefine the adjusted_gross to mean taxable income to calculate
income tax, put check marks in boxes corresponding to the field names gross and non-taxable
allowance (for instance, transportation allowance) and adjusted_gross will equal to gross (which
includes all kinds of payments to employees) minus non-taxable allowance. Or else, put check
marks in boxes corresponding to the field names basic salary, taxable allowance, overtime and
bonus, and other taxable employee earnings and then adjusted_gross will equal to the sum of
basic salary, taxable allowance, overtime, bonus, and any other taxable employee
compensations. To do this all, however, you should first create the required field names (e.g.
basic salary, taxable allowance, non-taxable allowance, bonus, etc.) and define them whether
they should be treated as memos or not.
 Then, click Ok to come out of the Calculate Adjusted Gross window.
v) Entering employer fields information in the EmployER Fields Tab/Folder
80
 This tab helps you to set up default employer payroll fields. Employer fields refer to such
employer’s contribution as pension/provident. Amounts related to employer fields do not affect
employee gross/net pay and do not appear in any employee paychecks.
 Field Name - Identifies the employer payroll field that appears on business payroll reports. You can
enter a new name on any blank line that describes the employer’s share in certain contributions for
the benefits of employees. When entering payroll field names, you must use a single space or the
underscore character (shift plus the minus sign) to separate words that makeup field name, for
instance, Pension Con or Pension_Con, a field name for employer’s share in contributions to
employee pension/provident fund plan. Note the difference between the following two characters; "-"
(minus) and "_" (underscore). Also, payroll fields must begin with an alpha character.
 Liability - Identifies the general ledger liability account to be credited each payroll period for this
employer payroll field. For instance, Pension Fund Contribution Payable account may be credited
for or used to record the employer's share of pension/provident fund contribution.
 Expense - Identifies the general ledger expense account to be debited each payroll period for this
employer payroll field. For example, Payroll Expenses account may be debited for or used to record
the employer's share of pension/provident fund contribution and/or any other payment to the
advantage of employees.
 Calc – A check mark placed in any of the boxes under the Calc heading corresponding to a certain
field name indicates that Peachtree, using a certain payroll tax table, should automatically calculate
the payroll field amount. If check mark is placed in any box, then you must specify which payroll
tax table to be used in calculating the amount corresponding to the payroll field. This is done by
81
selecting a tax table from the tax name drop-down list. Note that boxes for entering employer related
fixed sum are not available in EmpoyER Fields tab/folder of both the Employee Defaults and
Maintain Employees/Sales Reps windows.
 Adjust - This step helps you to redefine the adjusted_gross when calculating certain employer
related amounts. When you select the Adjust button corresponding to a certain field name (e.g.
pension or provident fund), Peachtree displays the Calculate Adjusted Gross window. The
Adjusted_Gross identifier is used in many calculations of certain field amounts. For more
information on redefining adjusted_gross, read the topic on “Entering employee fields information
in the EmployEE Fields Tab/Folder" on pages 8-10.
 Then, click Ok to come out of the Calculate Adjusted Gross window.
vi) Finally click Ok in the employee defaults window to finish the process of recording employee default
information.
4. MAINTAINING EMPLOYEE PERSONAL RECORDS

The Maintain Employees/Sales Reps window helps you to store personal information associated with each
and every employee and/or sales representative (rep) of your company. You can use this window to add a
new employee record and/or modify/delete an existing employee record. The process involves the
following steps.
i) Opening the maintain employees/sales reps window
 from the main menu options select maintain, then
 select the employee/sales reps option
82
Employee information is broken up into six areas: Header fields, General tab, Custom Fields tab, Pay
Info tab, EmployEE Fields tab, and the EmployER Fields tab.
ii) Entering information in the Header fields

In the header fields, you can enter a new employee ID and employee name. To display or modify an
existing employee record, enter or select the employee ID from the lookup list. Peachtree can set up three
types of employee records. Information that appears in the employee record depends on the type of
employee you set up.
 Employee - Turns on all employee-specific fields and enables payroll entry.
 Sales Rep - Includes the employee’s information in all sales representative reports. This turns off tax
filing, pay rate, and deduction information. Sales representatives will not be available for payroll
entry.
 Both - Makes the individual both an employee and a sales representative. Information will be
included in sales representative reports and payroll entry.
To make the employee record inactive, select the Inactive check box in the header fields. The employee can
later be deleted at year-end processing. If you try to enter a transaction for this employee, you will be
warned of the inactive status.
iii) Entering information in the General tab/folder
83
The General tab is used to record employee address; determine employee filing statuses and type; record
employee date of hire, raise and termination; and enter employee beginning balance. Of all these, important
to the EPS are employee address, type, beginning balance and date of hire, raise and termination. So, you
should properly fill these fields. Use the Type field to group similar employees (for example, by department
or position) in reports. The Type field is case sensitive (FULL, Full, and full are all different codes). Enter
appropriate hire date and other applicable dates. Enter or select a date for each field as needed. The hired,
last raise, and terminated dates are for record purposes only and not used by any other area of Peachtree. Do
not select the Beginning Balances button until you have entered all the other information related to this
employee and are ready to save the record. If you are setting up all your employees from a different system
or have unpaid employee balances, click the beginning balance button to go to the Employee Beginning
Balances window where in you enter beginning balances and related information.
iv) Entering information in the Custom fields tab/folder

Custom fields are used to enter customized employee information with five user-defined fields. The
customized information may include such items as employee birthday; emergency contact person; marital,
academic and administrative status, etc. You can use custom fields to sort and group business-specific
information in reports and forms. If you do not have access to a particular custom field (the field label that
appears gray), go to the Employee Defaults window to enable it. Note that, custom fields are available here
in this window if only you set them up in the Employee Defaults window.
84
v) Entering information in the Pay Info tab/folder
Pay Info specifies how you pay specific employees. Although the pay levels you use here are set up in
Employee Defaults window, you should set specific rates for the pay levels that apply to each employee in
this tab/folder. If you want to add more pay levels, go the pay levels tab/folder of the employee defaults
window. The information you enter here is default information; it saves you time by appearing
automatically when you are entering paycheck information for the employee. You can still override it, if
necessary, at the paycheck level. Choose one of the following options from the Pay Method drop-down list
to determine how you want to pay the employee during payroll entry.
 Salary - This pay method is used for salaried employees i.e. those who are paid a set amount of
gross pay per payroll period. If you select the salary pay method, specify whether the salary is
payable weekly, biweekly (every two weeks), semimonthly (twice a month) monthly, or annually in
the frequency box.
 Hourly-Hours Per Pay Period - This method is used for hourly employees who normally work a set
number of hours per pay period and accordingly paid. For hourly employees, you will set a default
number of hours per period in the Hours Per Pay Period box.
 Hourly-Time Ticket Hours - Used for hourly employees who base their hours worked on time
tickets recorded during the payroll period. When this method is selected, you are given the option to
set up an hourly billing rate that is used in Time & Billing. You must also select the frequency of
pay for this employee.
 Rate -Either the Hourly or Salary pay rates display depending on the pay method selected for this
employee. Under the Hourly or Salary Rate heading, enter pay rate corresponding to each pay level,
for instance, 5000 for basic salary and 400 for allowance. The descriptions you see under the field
name heading refer to pay levels set up in Employee Defaults window. For pay level fields to be
available here, they should be set up in the EmployEE Fields tab/folder of the Employee Defaults
window.
85
 Std (Standard) - A check mark under the Std heading corresponding to a certain pay level indicates
that the amount corresponding to this pay level is to be posted to the G/L account you set up in the
Employee Defaults window. Clear the Std check box to change the G/L account to be used for
recording amounts related to a specific pay level for this employee.
vi) Entering information in the EmployEE Fields tab/folder

This tab/folder lists company-wide payroll fields set up in the Employee Defaults window. If you have
employees whose payroll deductions and/or additions differ (in terms of amount, the adjusted_gross to be
used in calculating the deduction/addition, the GL account to be used for recording the deduction/addition,
etc.) from the company-wide deductions and/or additions, this is where you enter these differences.
 Field Name - This is the name of the payroll field set up in Employee Defaults window. It cannot be
changed here. If you want to modify or add a new payroll field name specific to this employee, you
have to go to the Employee Defaults window.
 Std - A check mark in a box under the Std heading corresponding to a specific field indicates that
Peachtree has to use the G/L account you set up in Employee Defaults window to record amount
related to this field and the standard calculation set up in the Maintain Company Payroll Tax Tables
and the Employee Defaults windows. Clear the Std check mark corresponding to a certain box to
change the G/L Account number, the Calc, Tax Name, the amount, as well as the Adjust settings for
a specific field name.
 G/L Account - This step helps you to specify the General Ledger account where amount related to a
field name is to be posted. This is not available or applicable if the Memo and/or Std boxes are
checked. To display a list of existing accounts, type ? in this field, or select the Lookup button. To
add a new account, type + or double-click the field.
 Calc - This field is available if the check mark in the Std field is removed. Select this check box if
the amount related to this field is to be calculated by Peachtree based on an adjusted_gross figure
and specific tax table.
86
 Tax Name - This field is available if a check mark in the Std field is removed and a check mark is
placed in the Calc box. If this field is to be calculated by Peachtree, enter the name of the tax table
to be used. Press ? to see a list of tax tables.
 Amount - This field is available if check marks in both the Std and Calc boxes are removed. If you
aren't using a calculation, enter a flat rate here. Positive numbers are earnings and negative numbers
are deductions. Basic salary, nontaxable allowances and some deductions or additions related to
particular employee should be entered in the amount field of this tab.
 Memo and Run - These fields are not available in this folder. You may access them through the
Employee Defaults window. Check marks placed on boxes under these fields indicate that the
information identified as memo does not affect your company general ledger accounts or financial
statements and the amount related to the one with a corresponding check mark under the run header
is not to be set to zero when you close payroll years. For more information on these fields, read the
topic on "Entering employee fields information in the EmployEE Fields Tab/Folder" on page-8.
 Adjust - This field is available if a check mark is not placed in boxes under the Std header.
However, a check mark should be placed in the corresponding box under the Calc header. The
Adjust field helps you to redefine the adjusted_gross unique to this employee for calculating certain
additions and/or deductions. For more information on the use of this field, read the topic on
"Entering employee fields information in the EmployEE Fields Tab/Folder" on page-8.
 If you are in the Calculate Adjusted Gross window, click Ok to get out of it and move on to the next
procedure.
vii) Entering information in the EmployER Fields tab/folder

This tab/folder helps you to enter employer payroll fields for employees whose employer payroll fields
differ from the company-wide employer fields established in the Employee Defaults window. Employer
payroll fields unique to particular employee are inserted in this tab/folder.
 Field Name - This is the name of the payroll field set up in Employee Defaults window. It cannot be
changed here. If you want to modify or add a new employer related payroll field name specific to
this employee, you have to go to the Employee Defaults window.
 Std - A check mark in a box under the Std heading corresponding to a specific field indicates that
Peachtree has to use the G/L account you set up in Employee Defaults window to record amount
related to this field and the standard calculation set up in the Maintain Company Payroll Tax Tables
and the Employee Defaults windows. Clear the Std check mark corresponding to a certain box to
change the G/L Account number, the Calc, Tax Name and/or the Adjust settings for this field name.
 Liability - This field helps you to enter the number of the GL liability account you want to use for
recording amounts related to particular employer payroll field name. For instance, Pension Fund
87
Contribution Payable account may be credited for or used to record the employer's share of
pension/provident fund contribution for the benefit of particular employee. To display a list of
existing accounts, type ? in this field, or select the Lookup button. To add a new account, type + or
double-click the field.
 Expense - This field helps you to enter the number of the GL expense account you want to use for
recording amounts related to particular employer payroll field name. For example, Payroll Expenses
account may be debited for or used to record the employer's share of pension/provident fund
contribution and/or any other payment to the advantage of particular employee. To display a list of
existing accounts, type ? in this field, or select the Lookup button. To add a new account, type + or
double-click the field.
 Calc - A check mark placed in any of the boxes under the Calc heading corresponding to a certain
field name indicates that Peachtree, using a certain payroll tax table, should automatically calculate
the payroll field amount. If check mark is placed in any box, then you must specify which payroll
tax table to be used in calculating the amount corresponding to the payroll field. This is done by
selecting a tax table from the tax name drop-down list. Note that boxes for entering employer related
fixed sum are not available in EmpoyER Fields tab/folder of both the Maintain Employees/Sales
Reps and Employee Defaults windows.
 Tax Name - This field is available if a check mark in the Std field is removed and a check mark is
placed in the Calc box. If this field can be calculated, enter the name of the tax table to be used.
Press ? to see a list of tax tables.
 Adjust - This field is available if a check mark is not placed in a box under the Std header.
However, a check mark should be placed in the corresponding box under the Calc header. The
Adjust field helps you to redefine the adjusted_gross unique to this employee for calculating
amounts payable by the employer for the benefit of the employee. For more information on the use
of this field, read the topic on "Entering employee fields information in the EmployEE Fields
Tab/Folder" on page-8.
 If you are in the Calculate Adjusted Gross window, click Ok to get out of it and move on to the next
procedure.
viii) Finally, click Ok in the Maintain Employees/Sales Reps window to finish the process of
maintaining employee personal records.
5. COMPLETING PAYROLL TASKS

Payroll tasks include:
 Payroll Entry - Entering and printing one paycheck at a time.
88
 Select for Payroll Entry - This is a pay method that helps you to filter a group of employees you
want to pay and process a batch of paychecks at one time. It is the quickest and automatic way to
process payroll each period.
 Payroll Reports and Forms - This task helps you to generate different payroll reports and forms
including payroll register which is important for the EPS.
 Closing Payroll Year - Usually there is no need to close a payroll tax year exactly at the end of each
calendar year. If you want, however, you can do it by following the procedures in the Year-End
Wizard which is accessible by selecting the system option from the tasks main menu.
Once payroll is properly set up, you have very little work to do for paying employees.
a) To prepare a paycheck for an employee, do the following

i) From the tasks main menu, select Payroll Entry…
ii) In the Payroll Entry window,

 Enter or select the employee ID from the employee lookup list. Once a valid employee ID has been
entered, the rest of the information is filled in automatically.
 Specify the pay period or enter the pay date
 Verify the information that appears (amount of hours or salary, deductions and allowances, or any
other calculated amounts). If the information is correct, proceed to the next steps. It is in the payroll
entry window that you will be prompted a feedback consisting of a "beep" sound followed by a
written message - it could not find the tax table - which indicates that the program is unable to find
payroll tax table which it is required to use in calculating a certain amount. So, some of the amounts
89
you see in this window may not be correctly calculated. When you face with such feedback, go to the
Maintain Company Payroll Tax Tables window to make sure that you correctly entered the tax
table which the program is not able to find. Check for the single space and tax year rules.
 Click the Save button to save the event. All payroll transactions will be posted both to the general
ledger and to the employee file.
 Click the Journal button to see how the payroll amounts are to be journalized.
 Click the Print button to print the paycheck.
 Click the New button to prepare paychecks for another employee or the Close button to finish the
process of preparing paychecks.
b) If you want to pay a group of employees in one batch, do the following;

i) From the tasks main menu, choose the Select for Payroll Entry… option
ii) In the Select Employees - Filter Section window

 Select the Pay Frequencies (weekly, monthly etc.) and Methods (salary or hourly) to be included in
the pay process.
 Select the employees to be treated in the pay process (e.g. all or some of them).
 If you want to prepare paychecks for some of your employees, put a check mark in the From option
and select group of employees from the drop-down list.
 Finally, click Ok to go to the Select Employees to Pay window where you can see list of employees
to be paid including employee gross and net pays related to each emloyee.
 If you want to see the details of payments for an employee and check for their accuracy, select the
employee name and click the Detail button at the top row of the Select Employees to Pay window.
90
 Finally, click Ok to leave the Select Employees to Pay - Detail window and go back to the Select
Employees to Pay window where in you may select the Print button to print pay checks and click
the close button to finish the process of preparing paychecks.
c) To design and view Payroll Register, do the following

i) From the reports main menu, select the payroll… option
ii) In the Select a report window
 Select payroll from the report area and select payroll register from the report list
 To design/redesign the format of, view and print the payroll register, click the design, preview and
print buttons, respectively, available at the top of this window and complete the necessary
procedures therein.
d) To close Payroll Tax Year, do the following

Peachtree refers to the payroll tax year as the calendar year in which payroll transactions take place.
Peachtree keeps two years of payroll activity open at one time. As a result, there is no need to close a
payroll tax year exactly at the end of each calendar year. For example, if 2000 is the first of two fiscal
periods, you do not need to close this payroll tax year until the end of 2001. On the other hand, if 2000 is the
second of the two payroll years, you must close the 1999 payroll tax year before you can enter 2001 payroll
transactions. It is highly recommends that you wait to close the first payroll tax year until all payroll reports
and related data are finalized, may be up to the first quarter of the second payroll tax year. If there are
mistakes in employee earnings and/or other related data, you will have the opportunity to correct them. To
close payroll tax year, follow the procedures you will be prompted by the Year-End Wizard which is
accessible by selecting the system option from the tasks main menu. The Year-End wizard prompts you for
completion of any uncompleted year-end tasks. The wizard will remind you to print any journals, reports,
payroll checks and forms you may have neglected to print. It will also prompt you to backup your data if
you have not already done so.
Self Check Exercise: Employee information
Below is information related to employees of the company?
 Pay levels/Compensation-all employees receive the following monthly compensation
except – Hiwot. She is paid on Hourly basis for her regular and overtime compensation.
 Basic salary
 Taxable allowance
 Nontaxable allowance
 Overtime
 Bonus (new year bonus amounting to 10% of basic salary. Hiwot’s bonus is Birr 150)
91
 Deductions-the following are monthly deduction from each employees gross salary
 Income tax according to Schedule-A of the Ethiopian Income Tax Proclamation No. 286
of 2002.
 Permanent Employee Provident fund (8% of basic salary)
 Permanent Employee Labour Union Due (3% of basic salary)
 Bank loan
 Employer contributions
 Permanent Employees Provident fund (16% of basic salary) ,i.e based on proclamation
286/2002 provident fund contributed by employer if it is more than 155 is subjected to tax.
 GL accounts - select the appropriate GL accounts to record payroll related transactions.

 Employee custom fields - the company wants to keep information related to each
employee’s position and employment status in the company, birthday, educational
qualification and marital status.
Employ ID Custom Fields Pay Levels (Birr) Other Monthly

ee Deductions
Name Position BirtA-day Education Status Basic Over Allowance (Birr)
Qualif. Salary -time
Employ. Marital Tax- Non- Bank Advance
(Regular
able taxabl Loan Salary
Ars)
e
kiflfe 11AB G. Manager 02/12/71 BA, MBA Permanent Married 8,000 -- 1,000 300 400 --
bekalu 12CD Personnel 13/09/78 BA, MARM Permanent Married 5,500 -- 600 300 300 200
gebre 13FG Accountant 07/06/80 BA, ACCA Permanent Single 2,000 500 300 300 -- 100
h/yesus 14TY Purchaser 26/07/83 Diploma Permanent Married 1,400 400 300 300 -- 200
kidist 15JK Secretary 19/01/81 Diploma Permanent single 1,800 200 300 300 -- --
hiwot 16SZ Typist 22/03/85 10+1 Temporary Single (170 hrs) 50 hrs 100 300 -- --
Additional Information
1. All employees were hired on December 30, 2006.
2. Hiwot’s average Hourly compensation rates for regular and overtime work are Birr 6 and
Birr 12, respectively. Besides, the company pays Birr 300 monthly tuition fee for hiwot.
3. The company's employee provident fund plan is maintained with Commercial Nominees
Plc.
4. All permanent employees of the company, except ato kifle -the GM, make monthly
contribution to the Ethiopian Labor Union of employees of private companies.
92
5. The company regularly remits employee withholding, including income tax, provident fund
contribution, union due and bank loan, to the appropriate institutions within 15 days of the
month next to the salary month.
6. All employees dwell in an apartment the company leased for the same purpose. The
apartment is located at Addis Ababa, Kirkos Kifle Ketema, Kebele 17, Bole Road. The
residents use common telephone line -12121212- with extension numbers starting from 111 for kifle
to 116 for hiwot
Required: Based on the above information complete all the necessary payroll procedures and generate
payroll register for the month ended January 31, 2006. (Note that compensation
information given on Table-2 above is for the month of January 2006.)
Accounts Payable Tasks
1.1. Purchase orders
This is where you enter a purchase request for items from a vendor. When you post a Purchase Order, you
do not actually update any accounting information. The accounting information is updated only when you
actually receive the items on the purchase order through the Purchases/Receive Inventory task, or if you're
using cash accounting, when you pay the vendor.
Note: The vendor must already be entered in Maintain Vendors before you can enter a purchase order. To
enter a one-time purchase from a vendor you don't want to keep on record, use Payments. and leave the
Vendor ID field blank.
To change the display format of the Purchase Orders task window, select the Template toolbar button.
Choose the Standard predefined template, one of your own templates, or the Customize Templates option.
Templates are designed by hiding one or more data-entry fields that are not needed for unique transaction
tasks.
If you set up the distribution list box for two lines in the Global selection of the Options menu, descriptions
of the item, account, and job appear in the second line.
If any field on this window is grayed out, then it is unavailable for editing or entering information.
To print a purchase order, either select the Print button or print the purchase order through Accounts
Payable Reports. Do not enter a PO# if you plan to print the PO. Peachtree assigns a number at print time.
93
The toolbar at the top of the window contains the following buttons: Close , New , Open, Save, Print, Delete
, Row , Note , Journal , Event , Template , and Help .
1. From the Tasks menu, select Purchase Orders. Peachtree displays the Purchase Orders window.
Note: This procedure assumes you are using the predefined Standard template. To select a template,
click the Template toolbar button, and choose Product from the pull-down menu. If you choose a
customized template, please adjust the instructions below accordingly. For more information on
templates, click .
2. Enter or select the vendor ID. To display a list of existing vendors, type ? in this field, or select the
Lookup button. To add a new vendor, type + or double-click the field, which displays the Maintain
Vendors window.
When the vendor is selected, Peachtree supplies the vendor default information, including name,
remit address, shipping method, and payment terms.
3. If you will be printing the purchase order and want Peachtree to automatically assign this purchase
order a number, leave the PO # field blank. Otherwise, enter the purchase order number in this field.
4. If the purchase order date is not today's date, enter the date in the Date field.
5. Enter the date this purchase order is good through in the Good thru field. Change the shipping
address if necessary and the method of shipment. Click on the arrow button to display the ship-to
information. To change the shipment method, select the method from the drop-down list.
6. Change the discount amount if necessary, as well as the displayed terms.
The Displayed Terms field automatically fills in with the default terms.
7. If you are using special terms from this vendor and want to show them on the printed purchase order,
enter the new term information here.
94
8. If yours is an accrual-based company, you can select the accounts payable G/L account for this
purchase. On financial statements this will be your accounts payable liability account. If yours is a
cash-basis company, this field will display <Cash Basis>.
Note: If you have the Hide General Ledger Accounts global option activated, Peachtree will not
display the A/P Account field in this window. To modify the A/P account used for this transaction,
you must select the Journal button.
9. Enter the information for each item on a separate line, including the item's quantity, item ID,
description, unit price (the number of decimal places is selected in Maintain Global Options), and
job information (if applicable). The default unit price is the last posted price for this item.
If you are tracking job costs, you can assign a job for each non-stock line item. You cannot enter a
purchase order for a stock or assembly item in your inventory and assign a job to it. You can apply
stock or assembly items to a job at the time of the sale, but not the time of purchase.
10. The default G/L purchase account that appears for each line item is based on the vendor purchase
account default or the item ID selected. To change the account ID, type ? in this field, or select the
Lookup button. To add a new account, type + or double-click the field, which displays the Maintain
Chart of Accounts window.
display G/L Account fields in this window. To modify G/L accounts used for this transaction, you
must select the Journal button.
11. Continue entering line items until you have completed the purchase order.
12. Select the Print button if you want to print and save the order. Otherwise, click the Save button.
Note: Purchase orders are not posted to general ledger. When you receive inventory and apply this
purchase order to a customer invoice (after shipping the items ordered or performing services
requested), the purchase order data is transferred to the vendor invoice. Then, the purchase can be
posted to the general ledger.
Self Check Exercise Purchase Orders;

Jan 10: Issued purchase order no. PO154 to HP Trading to buy 50 printers at $2,100 each; Terms
2/10,n/30; Good thru is Jan 25, 2006;
Jan 12: Issued purchase order no. PO155 to GP Electronics to buy 26 TV sets at $2,000 each at
purchase terms 3/12; n/30. This order issued is valid only for 10 days;
95
Jan 16: Issued purchase order no. PO156 to GMAT Electronics (new vendor; ID no. V07) to acquire
20 at $1,500 scanners (new inventory; inventory ID 204). Good thru is January 26.
Feb 18: Issued purchase order no. PO 157 to Office Solutions to acquire 16 computers at $5,400.
Good thru is Feb 28.
Required:
(i) Record the above entries in the proper journal;
(ii) Preview the purchase order journal, purchase order register, and purchase order report as of
February 28th 2006;
(iii) Are GL accounts to be affects with these events recoded? Check.
After you have entered a purchase order for your vendor, the next step is to receive the inventory for that
purchase order as it arrives. Peachtree allows you to receive a different quantity for an item than you
originally ordered. That is, you can receive less than or more than the originally ordered quantity.
1. From the Tasks menu, select Purchases/Receive Inventory. Peachtree displays the
Purchases/Receive Inventory window.
click Template toolbar button, and choose Product from the pull-down menu. If you choose a
templates, click .
96
Lookup button.
If you have open purchase orders with this vendor, the Apply to Purchase Order # tab displays in
front.
3. Enter the vendor's invoice number in the Invoice # field. This is a required field.
If you have not yet received a vendor invoice (bill) for this shipment, select the Waiting on Bill from
Vendor check box. Once your vendor sends you the bill, edit this invoice; clear the Waiting on Bill
from Vendor check box; and enter the invoice number. Then, when you post the invoice with the
invoice number, you will be able to select the invoice for payment.
Note: If you have received inventory from a vendor by entering a purchase using the "Waiting on
Bill" option, Peachtree will warn you when you select this vendor so you don't enter the invoice for
this vendor's order twice by mistake.
4. Enter the date of the transaction if it is different from the displayed date.
5. Change the shipping address if necessary and the method of shipment. Click the arrow button to
display the box with ship-to information. To change the shipment method, select the method from
the drop-down list.
7. If the vendor used special terms, enter the new term information here.
9. From the drop-down list on the Apply to Purchase Order # tab, select the purchase order number
that you want to receive inventory against. Peachtree displays the items on the order in the line-item
list.
The first two columns on the line-item list (the Item ID column and the Remaining column) are
gray, meaning you cannot edit them. To edit a purchase order, you must edit it in the Purchase Order
task.
The Remaining column shows the number of items left to be shipped to complete the purchase
order. For example, if there were 20 widgets on a purchase order and you were shipped 15 of them,
the Remaining column will show that 5 widgets still need to be shipped the next time you display
the purchase invoice.
97
10. In the Received field, enter the quantity of an item received.
11. If you received all of the items, select Receive All from the Edit menu. Selecting Receive None
removes all entries from the Received field.
12. If necessary, you can edit the information for each item included on the invoice, including the item's
quantity, item ID, description, unit price (the number of decimal places is selected in Maintain
Global Options), and job information (if applicable). The default unit price is the last posted price for
this item.
purchase order for a stock or assembly item in your inventory and assign a job to it. You can apply
13. The default G/L purchase account that appears for each line item is based on the vendor purchase
14. Continue entering items until you have completed receiving the items in this shipment.
If the vendor included additional purchase items on the invoice that were not included on your
purchase order, select the Apply to Purchases tab. For more information on entering a purchase
invoice, click .
15. If you have paid a partial or full payment at the same time you received this invoice, enter the
amount in the Amount Paid at Purchase field. The Reference field and Cash Account field will
appear allowing you to enter payment information.
The Net Amount Due displays what you currently owe for the purchase.
16. When finished, select the Save button to record the purchase.
1.2. Purchases/Receive Inventory.
This allows you to either enter vendor purchase invoices or receive inventory for purchase orders (possible
in Peachtree Accounting and Peachtree Complete only). The vendor can be an already-existing vendor, or
you can add a new vendor.
In Peachtree Accounting and Peachtree Complete, there are two tabs:
 Apply to Purchase Order: When you select a vendor who has open purchase orders, Peachtree
displays the this tab, allowing you to select which purchase order to receive items against.
 Apply to Purchases: If you select a vendor with no open purchase orders, by default Peachtree
displays this tab, where you can enter a purchase that did not originate on a purchase order. In
98
addition, if items were included on the purchase invoice that are not included on the purchase order,
you can add them here.
In First Accounting, only the information within the Apply to Purchases tab (described above) appears in
the Purchases window.
To change the display format of the Purchases window, select the Template toolbar button. Choose the
Standard predefined template, one of your own templates, or the Customize Templates option. Templates
are designed by hiding one or more data-entry fields that are not needed for unique transaction tasks.
If you set up the distribution list box for two lines in the Global selection of the Options menu, descriptions
of the item, account, and job appear in the second line.
The toolbar at the top of the window contains the following buttons (depending on which tab is in front):
Close , New , Open , Save , Delete , Recur , Row , Note , Journal , Event , Template , and Help .
If you want to enter the purchase of an item that did not originate from a purchase order, enter purchases
using the following steps.
1. From the Tasks menu, select Purchases.
click the Template toolbar button, and choose Product from the pull-down menu. If you choose a
templates, click .
Lookup button. To add a new vendor, type + or double-click the field, which displays the Maintain
Vendors window.
When the vendor is selected, Peachtree supplies the vendor default information, including name,
remit address, shipping method, and payment terms.
99
3. Enter the vendor's invoice number in the Invoice # field. This is a required field.
If you have not yet received a vendor invoice (bill) for this shipment, select the Waiting on Bill from
Vendor check box. Once your vendor sends you the bill, edit this invoice; clear the Waiting on Bill
from Vendor check box; and enter the invoice number. Then, when you post the invoice with the
invoice number, you will be able to select the invoice for payment.
Note: If you have received inventory from a vendor by entering a purchase using the Waiting on
Bill from Vendor option, Peachtree will warn you when you select this vendor so you don't enter
the invoice for this vendor's order twice by mistake.
5. Change the shipping address if necessary and the method of shipment. Click the arrow button to
display the ship-to information. To change the shipment method, select the method from the drop-
down list.
7. If the vendor used special terms, enter the new term information here.
9. If there are open POs (possible only in Peachtree Accounting and Peachtree Complete), the Apply to
PO tab is in front. To enter a purchase, select the Apply to Purchases tab.
To apply a purchase order to the invoice, click .
10. Enter the information for each item on a separate line, including the item's quantity, item ID,
description, unit price (the number of decimal places is selected in Maintain Global Options), and
job information (if applicable). The default unit price is the last posted price for this item.
purchase order for a stock or assembly item in your inventory and assign a Job to it. You can apply
11. The default G/L purchase accounts that display for each line item are based on the vendor's purchase
100
12. Continue entering line items until you have completed the purchase invoice.
13. If you have paid a partial or full payment at the same time you received this invoice, enter the
amount in the Amount Paid at Purchase field. The Reference field and Cash Account field will
appear allowing you to enter payment information.
The Net Amount Due displays what you currently owe for the purchase.
14. When finished, select the Save button to record the purchase.
Self Check Exercise Purchase or Receipt of Inventory;

Jan 15: Hawa Enerprise received all the items indicated on PO154 at a price of $2,150 with the same terms.
Issued purchase invoice PI654;
Jan 22: Acquired 10 units of TV sets from Adobe Electronics (new vendor) at $1,900 each. PI 655 is issued
and no purchase order had been issued earlier in connection with this purchase. Purchase terms is
3/7, n/40. An amount of $10,000 is paid at the time of purchase with payment reference no. of 1112;
Jan 22:Received 20 TV sets for those indicated on purchase order no. PO155 at $2,000 each. Terms of
purchase was altered to 2/10,n/30. Purchase invoice no. PI656 is issued. It was noticed that the
vendor hasn’t sent the bills by the time the goods were received.
Feb 26:Acquired 16 computers at $5,400 as a result of purchase order PO157 issued. Purchase terms is
1/10,n/30. The entire amount was paid by the time the items were received. Purchase invoice no.
657 is issued.
March 10: Acquired 20 VCR (under inventory house utensils and inventory ID 104) at $1,400 each
from Venture Trading (new vendor; vendor ID V07) at terms 3/10, n/30. purchase invoice no. PI158
is issued. No sales purchase order had been issued earlier in connection with this purchase;
Required:
(i) Record the above entries in the appropriate journal;
(ii) Preview balances of each inventory items as at March 31st, 2006;
(iii) Are the controlling payable GL accounts in agreement with balances in the vendors ledger?
(iv) Preview the purchase order report and purchase order register as at March 31 st 2006. What
differences the two reports are having?
(v) How is the purchase order report up-dated for the above the above purchases affected?
101
If you make a payment to a vendor at the time you record the purchase, you can enter the amount paid
directly in the Purchases window. Follow these steps:
1. From the Tasks menu, select Purchases.
2. In the window, enter the purchase information following the instructions under Enter a Purchase
Invoice.
3. Once you have finished entering the information, in the Amount Paid at Purchase field, enter the
amount you are paying; then press Enter.
The Reference and Cash Account fields appear at the bottom left side of the Purchases window.
4. In the Reference field, enter the check number you used to pay the invoice.
5. In the GL Account field, enter or select the general ledger account ID to which you want to apply
the amount paid. The default account is the cash account that was used in the Payments or Write
Checks window. You can select a different account or add a new one here.
Note: If you have the Hide General Ledger Accounts global option activated, the GL Account
lookup list displays only names of cash accounts currently set up in the chart of accounts. Select the
cash account name to apply to this payment. If you want to apply an alternate G/L account (an
account that uses an account type other than Cash) for this payment, you must select the Journal
button.
6. When finished, select Save to record the purchase and your payment.
1.3. Payments
This allows you to write checks for vendor invoices, for payments that don't have a vendor invoice, and for
prepayments or discounts. You can also write a check to a customer.
Note the distribution list box at the bottom of the window. The fields of the distribution box differ
depending on whether you're applying the payment to invoices or expenses. If a vendor has open invoices,
the Apply to Invoices tab will be in front. However, if you are entering a payment to a one-time vendor not
in the system, the Apply to Expenses tab is defaulted.
You can also select the prepayment check box for a payment to an existing vendor where there isn't an
invoice.
If you set up the distribution list box for two lines in the Global Options, descriptions of the item, account,
and job appear in the second line.
Sometimes you will need to void a displayed payment. When you do, click the Delete toolbar button, and
then select the Void option.
102
The toolbar contains the following buttons: Close , New , Open, Save, Delete, Recur , Note , Journal , Event
, Template , and Help .
Uncalculated Balance
If Peachtree displays the word Uncalculated in the Balance field, the Recalculate cash balance
automatically in Receipts and Payments global option is currently not selected. You can manually update
the cash balance; for more information, click .
There are two basic methods of paying vendors:
 Apply vendor invoices: pay previously entered invoices in the Purchases window.
 Apply to expenses (cash purchase): pay a vendor without using a vendor invoice. See Enter a Cash
Purchase for further information.
To apply a payment to vendor invoices
1. From the Tasks menu, select Payments.
2. Enter or select the vendor ID that you want to pay. To display a list of existing vendors, type ? in
this field, or select the Lookup button.
If you there are unpaid invoices for this vendor, Peachtree lists them on the Apply to Invoices tab. If
there are no unpaid invoices, Peachtree displays the Apply to Expenses tab.
3. Enter or select the cash account from which you will be writing the check.
4. On the Apply to Invoices tab, select the Pay check box next each the invoice that you want to pay.
103
o If the you want to pay an invoice in full, place the cursor in the Amount column for the
invoice, and select the Pay check box. Peachtree will fill in the Amount Paid field.
o If you want pay a partial amount on the invoice, enter that amount. Peachtree will
automatically select the Pay check box.
Note: If you overpay the amount, a credit is made to the vendor's ledger; for underpayments, the
payment amount is applied to the invoice balance. You will need a reference number in order to post
or save the record.
5. If you want to print the check, select the Print button; for step-by-step instructions on printing from
the Payments window, see Print a Form from a Task Window. Otherwise, select the Save button to
record the payment.
The program debits Accounts Payable for the total amount and credits the cash account for the net check
amount and also credits the discount-taken account (if applicable).
You can also use the Select for Payment selection. This allows you to pay invoices that meet certain criteria
and print checks for them. You can also partially pay invoices using this selection.
Self check Exercise Cash Payments;

Payments from bank account no. B-5300.
Jan 2: Issued ck#210 in settlement of purchase invoice #432.
Jan 14: Paid dividends to owners; $12,000. Issued ck# 214.
Jan 31: Issued ck# 217 to pay salary expense of the month; $8,000 (net pay) net of I/tax of $2,000
and pension fund of $1,000. The gross amount of the weekly salary is $11,000. You need to
maintain a new ‘pension fund payable’ account (account type: other current liability; account
number 2005)
Feb 10: Issued ck#218 ($6,000) for Insurance Co. as two years insurance premium since Feb 1, 2006;
104
Feb 28: Issued ck# 212 to pay salary expense of the month; $8,000 (net pay) net of
I/tax of $2,000 and pension fund of $1,000. The gross amount of the weekly
salary is $11,000.
March 4: Issued ck# 219 in settlement of purchase invoice #657.
March 8: Issued ck#220 in settlement of purchase invoice #655.
March 10: Issued ck# 221 for $1,000 to open a new bank account B-5500 at Awash bank. You need to
maintain a new ‘Cash in bank: B-5500’ account (account type: cash; account number
1003).
March 12: Issued ck #222 for $600 to pay telephone expense for the month of February 2004. (Record
into ‘utilities expense’ account: new account with account no. 6008). You may record this
transaction from ‘write checks’ category of the ‘task’ menu.
Payments from the petty cash:
Jan 2: Paid $80 for advertising. Prepared CPV#301.
Jan 10: Paid $20 for loading (miscellaneous expense). Prepared CPV#302.
You may record the following two transactions from ‘write checks’ category of the ‘task’ menu.
Jan 22: Paid $60 for repair of office equipment. (Record into ‘repair expense’ account:
new account with account no. 6009). Prepared CPV#303.
Jan 28: Paid $70 for electric bill of the month (utilities expense).
Transactions on bank account no. B-5500:
Jan 10: Received and deposited $60,000 from issuance of shares at par value. Receipt No. 906. The
amount was deposited into cash in bank with deposit ticket no. 2020.
Jan 20: Issued ck#001 for office equipment acquired; $10,000 for the firm’s own use. Issued
ck#001.
March 19: Issued ck#002 for settlement of purchase invoice no. 158.
105
Required:
(i) Record the above transactions in the proper journal after selecting the proper ‘cash’ account
affected;
(ii) Preview the cash disbursement journal for the following ‘cash’ accounts separately:
(a) Cash account no. B-5300;
(b) Cash account no. B-5500; and
(c) Petty cash
(iii) Preview the check register being separated for each ‘cash’ account; for
(a) Cash account no. B-5300;
(b) Cash account no. B-5500; and
(c) Petty cash
(iv) Preview the trial balance as at March 31st, 2006;
(v) Preview the details of the accounts in the general ledger as at March 31st 2006;
(vi) Determine the total cash balance as at March 31st 2006;
Accounts Receivable Tasks

2.1. Sales Quotes
Quotes are printed estimates for a possible sale to that can be presented to either a new prospect or recorded
customer. You can also set up expiration dates for entered quotes.
When you print or save a sales quote, you do not actually update accounting information. The sale is
recorded and accounting information updated when you convert the quote to a sales invoice. To convert a
quote to a sales order (possible only in Peachtree Accounting and Peachtree Complete) or to a sales invoice,
select the Convert button in the Quotes window.
To change the display format of the Quotes task window, select the Template toolbar button. Choose the
Product or Service predefined template, one of your own templates, or the Customize Templates option.
Templates are designed by hiding one or more data-entry fields that are not needed for unique tasks.
If you set up the distribution list box for two lines in the Global Options selection of the Options menu,
descriptions of the item, account, and job appear in the second line.
106
The toolbar at the top of the window contains the following buttons: Close , New , Open, Save, Print, Delete
, Convert, Row, Note , Journal , Event , Template , and Help .
To enter a quote that uses inventory items, follow these steps:
1. From the Tasks menu, select Quotes/Sales Orders; then select Quotes from the submenu. (In First
Accounting, simply select Quotes from the Tasks menu.)
2. In the Quotes window, select the Template toolbar button, and choose the predefined Product
template from the pull-down menu.
3. Enter or select the customer ID. To display a list of existing customers, type ? in this field, or select
the Lookup button. To add a new customer, type + or double-click the field, which displays the
When the customer is selected, Peachtree supplies the customer default information, including
billing and shipping addresses, sales account, shipping method, payment terms, and sales tax code.
4. Leave the Quote # field blank if you want Peachtree to print the quote. Peachtree will increase the
quote number by one when it is printed. Otherwise, enter a quote number or other reference number.
(If you print the quote with a quote number assigned or print it again later, the invoice will have the
word DUPLICATE on it.)
5. Enter the date of the quote if it is different from the displayed date. Then, enter the date that the
quote will expire.
6. If you have entered a default shipping address in the customer's record, the first shipping address
appears on the quote.
107
7. You can select the Ship To button to add a new shipping address or select another shipping address
from the choices available. Change the customer's ship-to information, if necessary, by selecting the
arrow button next to the Ship To address field.
8. If you have entered a default P.O.# in the customer's record, it appears on the quote. If not, you can
enter the customer's purchase order number now or change the default to any other piece of
information that will identify this quote to the customer.
9. If you have entered a default shipping method in the customer's record, it will appear. You can select
the Ship Via button if you want to select a different shipping method. You can also enter a ship date.
10. Peachtree uses the default terms you have entered for the customer, but you may want to select the
Terms button to change the default discount dates or amounts for this quote. When a receipt that
qualifies for an early-payment discount is applied against the invoice, Peachtree will calculate the
discount.
11. If you entered a default sales representative in the customer's record, it will appear. Otherwise, select
the code of the sales representative, if applicable.
12. Enter the information for each item included on the quote on a separate line, including the item's
quantity, item ID, description, unit price (the number of decimal places is selected in Global
Options), sales tax status, and job information (if applicable).
13. The default G/L sales account that appears for each line item is based on the customer sales account
default or the item ID selected. To change the account ID, type? in this field, or select the Lookup
button. To add a new account, type + or double-click the field, which displays the Maintain Chart of
Accounts window.
Note: If you have the Hide General Ledger Accounts global option activated, Peachtree will not display
G/L Account fields in this window. To modify G/L accounts used for this transaction, you must select
the Journal button.
14. Continue entering line items until you have entered them all.
15. If yours is an accrual-based company, you can select the accounts receivable G/L account for this
potential sale. On financial statements this will be your accounts receivable asset account. If yours is
a cash-basis company, this field will display <Cash Basis>.
Note: If you have the Hide General Ledger Accounts global option activated, Peachtree will not display
the A/R Account field in this window. To modify the A/R account used for this transaction, you must
select the Journal button.
16. Select the sales tax code for this sale.
17. If you intend to charge freight for shipping this order, include an amount in the Freight field.
18. Select the Print button if you want to print and save the quote. Otherwise, click the Save button.
108
Note: Quotes are not posted to general ledger. When you convert the quote to an invoice, the sale can be
posted to the general ledger. Quotes can also be converted to sales orders, but again you must invoice
the customer to actually post the sale
Self Check Exercise-Quotes

Hawa Enterprise issued the following quotes for the months of January and February 2006.
Jan 11: Issued sales quote no. SQ112 for 1 TV sets at $2,300 each to Genu Plc. The quotation is to expire 15
days after. The quotation is issued in response to customer purchase order no. 345. 2/10,n/30 is
indicated as terms onto the quotation. The quotation is subject to sales tax and the items are to be shipped to
the address of Genu Plc.
Jan 26: Issued sales quote no. SQ113 for 2 refrigerators at $3,400 to Acer Trading (new customer; P.O.Box
5411). The quotation is to expire 30 days after. The quotation is issued in response to customer purchase
order no. 213. The quotation is subject to 3/8,n/30 and subject to sales tax. The items are to be shipped to
the address of Acer Trading.
Feb 2:Issued sales quote no. SQ114 for 2 computers at $6,000 to Excel Office. Good thru is Feb 28. The
quotation is issued in response to customer purchase order no. 106. The quotation is subject to 3/7,n/30
terms and subject to sales tax. The items are to be shipped to the address of Excel Office.
Required:
(i) Record the above events in the appropriate journal;
(ii) Preview the quote register for the period ended February 28, 2006
Convert quote
Once your customer has accepted a quote, you can then convert it to an actual sale. Once you convert a
quote, it is no longer displayed as a quote.
You can convert a quote to one of the following:
Sale/Invoice: The quote will be available for editing on the Sales/Invoicing task window. If you have an
invoice number for this quote already and will not print the invoice, enter it in the Invoice # field. You can
also leave the Invoice # field blank so you can print the assigned number later.
Sale Invoice and Print Now: This option allows you to convert the quote to an invoice and immediately
print the invoice. Peachtree opens the standard windows for selecting the invoice form you want to use and
provides you with the starting invoice number.
109
Sales Order (available only in Peachtree Accounting and Peachtree Complete): This option allows you to
convert the quote to a sales order, so you can ship partial shipments of items on the quote if, for example,
some of the items on the quote are not in stock. Peachtree will display the next available sales order number
and assign it when you convert the quote.
When you convert a quote, the quote number is retained for reference. You cannot edit the quote in the
Quotes task window, but you will be able to see what the original quote number was from the new task
window.
2.2. Sales orders
Sales orders let you enter items for a customer, then invoice and ship the items as they become available in
your inventory, tracking the backorders in the system. You can view inventory reports that show the number
of items backordered for your customers to help you plan your purchases.
 To open Peachtree's Sales Order window, select Quotes/Sales Orders from the Tasks menu. Then
choose Sales Orders.
Sales orders can be printed as warehouse picking slips or package packing slips that can be marked up
before shipping the product to your customer. After the sales order has been marked up, the shipped items
can be applied to an invoice. Only one sales order can be applied to an invoice. However, multiple invoices
can be entered from a single sales order.
The toolbar at the top of the window contains the following buttons: Close , New , Open , Save , Print,
Delete , Note , Journal , Event , Template , and Help .
110
Sales orders let you enter items for a customer. Later, you can invoice and ship the items as they become
available in your inventory, tracking the backorders in the system.
1. From the Tasks menu, select Quotes/Sales Orders; then select Sales Orders from the submenu.
3. Enter a sales order number if you want to change the one Peachtree automatically enters.
If you have not previously entered a sales order, this field is blank. Once you enter the first one,
Peachtree automatically increases the number by one.
4. Enter the date of the sales order if it is different from the displayed date.
will appear on the sales order. Change the customer's ship-to information, if necessary, by selecting
the arrow button next to the Ship To address field.
6. If you have entered a default P.O.# in the customer's record, it will appear on the sales order. If not,
you can enter the customer's purchase order number now or change the default to any other piece of
information that will identify this sales order to the customer.
the Ship Via button if you want to select a different shipping method.
Terms button to change the default discount dates or amounts for this sales order. When a receipt
that qualifies for an early-payment discount is applied against the invoice, Peachtree will calculate
the discount.
9. If you entered a default sales representative in the customer's record, it will appear. Otherwise, select
the code of the sales representative, if applicable.
10. Enter the information for each item included on the sales order on a separate line, including the
item's quantity, item ID, description, unit price (the number of decimal places is selected in Global
Note: When you enter a quantity for a sales order, Peachtree checks available inventory to fill the
sales order. If the quantity on the sales order exceeds the quantity on hand, a warning is issued (only
if the Warn if inventory item is out of stock box on the Maintain Global Options window is
checked). This does not prevent you from selling the item, it just warns you that there is not enough
of the item to complete the sales order.
111
default or the item ID selected. To change the account ID, type ? in this field, or select the Lookup
Accounts window.
display the A/R Account field in this window. To modify the A/R account used for this transaction,
15. Select the Print button if you want to print and save the order. Otherwise, click the Save button.
Note: Sales orders are not posted to general ledger. When you apply this sales order to a customer
invoice (after shipping the items ordered or performing services requested), the sales order data is
transferred to the sales invoice. Then, the sale can be posted to the general ledger.
Self Check Exercise Sales Orders

Jan 15: Hawa Enterprise Issued sales order no. SO#001 for Genu plc. for 1 TV set at $2,200 to be
shipped 10 days later. Customer purchase order No. 345 was received.
Jan 27: Converted the sales quote issued on January 26 to sales order No. SO#002. The goods are to
be shipped 10 days after.
Feb 6:Issued SO#003 for Excel Office for 1 electric typewriter at $,4,600 to be issued 5 days later.
Customer purchase order No. 448 was received.
Feb 22:Issued SO#004 for Anna Inc. for 1 computer at $6,400 and 1 printer at $3,000 to be issued 5 days
later. Customer purchase order No. 658 was received.
Required:
(i) Record the above events;
(ii) Preview sales order journal, sales order register, and sales order report as at February 29th 2006.
112
To ship items on a sales order, open the Sales/Invoicing window, select the customer, then choose the open
sales order you want to invoice. Once you enter the quantity of items you are shipping, you can print this
invoice and have Peachtree assign an invoice number, or you can enter an invoice number if the invoice was
prepared manually and you will not print it from Peachtree.
1. From the Tasks menu, select Sales/Invoicing. Peachtree displays the Sales/Invoicing window.
Note: This procedure assumes you are using the predefined Product template. To select a template,
click the Template toolbar button and choose Product from the pull-down menu. If you choose a
templates, click .
the Lookup button.
If the customer has open sales orders, the Apply to Sales Order # tab appears in front.
3. Enter the invoice number in the Invoice # field if you are not going to print the invoice. Leave this
field blank if you are going to print the invoice and Peachtree will assign the next available invoice
number for you when you print the invoice.
If you will be changing terms, shipping information, and so on for this invoice, be sure to select the
sales order before making your changes. The information on the sales order is entered into the fields
on the Sales/Invoicing window and will overwrite any information currently in those fields.
113
4. From the drop-down list on the Apply to Sales Order # tab, select the sales order number that you
want to ship items from. Peachtree displays the items on the order in the line-item list.
The first two columns in the line-item list, the Item ID and Remaining columns are gray, meaning
you cannot edit them. To edit a sales order, you must open the sales order in the Sales Order
window.
The Remaining column shows the number of items left to be shipped to complete the sales order.
For example, if there were 20 widgets on a sales order and you have previously shipped 15 of them,
when you ship additional items, the Remaining column will show that 5 widgets still need to be
shipped.
5. Enter the quantity of the item you plan to ship from the sales order.
6. If you plan to ship all of the items, select Ship All from the Edit menu or click the Ship button and
choose the All option. Selecting Ship None removes all entries from the Shipped field.
7. If necessary, you can edit the information for each item included on the invoice, including the item's
description, unit price (the number of decimal places is selected in Global Options), sales tax status,
and the job information (if applicable).
Accounts window.
display G/L Accounts field in this window. To modify G/L accounts used for this transaction, you
9. You can apply reimbursable expenses to the invoices if this customer is associated with a job and
you have entered related job expense transactions. For more information, click
12. If freight was entered on the sales order and you want to add it to this sales/invoice, select the All
button.
13. If you have received a partial or full payment for this invoice at the time of the sale, select the
Amount Paid at Sale button. Peachtree displays the Receive Payment window, where you can enter
114
receipt information.
The Net Amount Due displays what the customer currently owes for the sale.
14. Select the Print button if you want to print and save the invoice. Otherwise, click the Save button
2.3.Sales/Invoicing
1. From the Tasks menu, select Sales/Invoicing. Peachtree displays the Sales/Invoicing window.
2. Select the Template toolbar button, and choose the predefined Product template from the pull-down
menu.
Note: This procedure assumes you are using the predefined Product template. If you choose a
templates, click .
4. If this customer has open sales orders (possible only in Peachtree Accounting and Peachtree
Complete), the Apply to Sales Order tab appears in front. To enter new items on the invoice, select
the Apply to Sales tab.
5. Leave the Invoice # field blank if you want Peachtree to print an invoice. Peachtree will increase the
invoice number by one when it is printed. Otherwise, enter an invoice number or other reference
number. (If you print the invoice with an invoice number assigned or print it again later, the invoice
will have the word DUPLICATE on it.)
will appear on the invoice.
8. You can select the Ship To button to add a new shipping address or select another shipping address
from the choices available. Change the customer's ship-to information, if necessary, by selecting the
arrow button next to the Ship To address field.
9. If you have entered a default P.O.# in the customer's record, it will appear on the invoice. If not, you
can enter the customer's purchase order number now or change the default to any other piece of
information that will identify this invoice to the customer.
the Ship Via button if you want to select a different shipping method. You can also enter a ship date.
Terms button to change the default discount dates or amounts for this invoice. When a receipt that
115
qualifies for an early-payment discount is applied against the invoice, Peachtree will calculate the
discount.
12. If you entered a default Sales Rep in the customer's record, it will appear. Otherwise, select the code
of the sales representative, if applicable.
13. Enter the information for each item included on the invoice on a separate line, including the item's
quantity, item ID, description, unit price (the number of decimal places is selected in Global
Accounts window.
15. Continue entering line items until you have entered them all.
16. Select the Apply Tickets/Reimbursable Expenses button to include job-expense transactions
related to this customer on the invoice. (In First Accounting, this button is called simply Apply
Reimbursable Expenses.) For more information, click .
17. If yours is an accrual-based company, you can select the Accounts Receivable G/L account for this
20. If you have received a partial or full payment for this invoice at the time of the sale, select the
Amount Paid at Sale button. Peachtree displays the Receive Payment window, where you can enter
receipt information.
The Net Amount Due displays what the customer currently owes for the sale.
21. Select the Print button if you want to print and save the invoice. Otherwise, click the Save button.
Self check Exercise Sales Invoices

Jan 25: Hawa Enterprise Issued SI#001 for 1 TV set shipped to Genu Plc. Sales order no. SO#001
had been issued for this shipment earlier.
116
Jan 27: Sold 1 stove to Duno Plc (new customer; P.O.Box 1119). at a price of $3,000. No sales order
had been issued in connection with this shipment. Issued SI#002.
Feb 27: Sold 1 computer to Anna Inc. at $6,400 for which SO#004 had been issued earlier. The
amount was collected immediately when the good had been shipped. Issued sales invoice no.
003.
Feb28: Converted SQ#114 to sales invoice no. 004 with the same term.
Required:
(ii) Preview the ‘sales journal’, ‘invoice register’ and ‘items sold to customers’ reports for the period
ended February 28, 2006;
(iii) Is the sales order report updated for the goods shipped;
(iv) Preview the quote register. Are the quotes converted to sales invoice existing into the quote
register?
(v) Preview the cost of goods sold journal;
(vi) Preview the inventory profitability report as at February 28th 2006;
(vii) Preview the inventory stock status report as at February 28th 2006;
(viii) Preview the inventory valuation report as at February 28th 2006;
(ix) Tell out the inventory balance for each inventory type as at February 28, 2006;
2.4 Receipt
This allows you to enter all checks, cash, and credit card slips you receive and deposit them in your
checking account.
There are two ways you can account for receipts in Peachtree:
 If you sent an invoice to a customer, you apply the receipt to the invoice. Invoices entered in the
Sales/Invoicing window appear as distribution lines when you enter the customer ID. You can check
the Pay column beside each invoice being paid in full by this receipt.
 If you made a direct sale that didn't require an invoice, you use Receipts and enter it on the Apply to
Revenues tab. This requires you to specify a check number and sales account.
You can enter as many as 500 lines per receipt. If you set up the Distribution list box for two lines in the
Global Options selection of the Options menu, descriptions of the item, account, and job appear in the
second line.
117
If your customer is paying by credit card, click the Credit Card button to enter credit card information and
the transaction authorization code. If the credit card payment was authorized and an authorization code was
entered in the Credit Card Information window, "(Approved)" appears beside the Credit Card button.
If any field on this screen is grayed out, then it is unavailable for editing or entering information.
The toolbar at the top of the window contains the following buttons: Close , New , Open, Save , Print,
Delete , Row , Detail , Journal , Event , and Help .
When a customer pays an invoice, enter the amount in the Receipts window.
To enter customer payment on an invoice
1. From the Tasks menu, select Receipts. Peachtree displays the Receipts window.
2. Enter a deposit ticket ID that can easily represent the type and source of payment. This will make
account reconciliation easier to manage.
Peachtree automatically enters the deposit ticket ID as a numeric representation of the current date.
All receipts that use the same deposit ticket ID will appear as one lump sum in Account
Reconciliation. If you want this transaction to be reconciled as a separate item, enter a unique
deposit ticket ID.
the Lookup button.
If there are unpaid invoices for this customer, Peachtree lists them on the Apply to Invoices tab. If
there are no unpaid invoices, Peachtree displays the Apply to Revenue tab.
4. Enter a reference number that will help identify the receipt (for example, the customer's check
number).
118
5. If you are recording deposit tickets within the Receipts window, enter or accept the suggested
Deposit Ticket ID . Otherwise, leave this field blank. You can record deposit ticket IDs in the Select
for Deposit window.
6. Select a payment method (for example, Cash or Check). Payment methods are set up in Customer
Defaults; these are quite useful in reports when managing receipts.
7. In the Cash Account list, enter or select the bank account in which the receipt is deposited.
If you have the Hide General Ledger Accounts global option activated, the Cash Account lookup
list displays only names of cash accounts currently set up in the chart of accounts. If you want to
apply an alternate G/L account (an account that uses an account type other than Cash) for this
payment receipt, you must select the Journal button.
8. On the Apply to Invoices tab, select the Pay check box next to each invoice that the customer is
paying.
o If the customer has paid the invoice in full, place the cursor in the Amount column for the
invoice, and select the Pay check box. Peachtree will fill in the Amount Paid field.
o If the customer has only paid a partial amount on the invoice, enter that amount. Peachtree
will automatically select the Pay check box.
Note: If your customer overpays the amount, a credit is made to the customer's ledger; for
underpayments, the payment amount is applied to the invoice balance. You will need a reference
number in order to post or save the record.
9. Select the Print button if you want to print and save the receipt. Otherwise, click the Save button.
When a customer pays for an item and there is no invoice, enter a cash sale.
1. From the Tasks menu, select Receipts. Peachtree displays the Receipts window.
2. Enter a reference number for this transaction. This must be a unique number and is generally the
customer's check number. Avoid entering "CASH" as the reference for more than one transaction.
3. In the Cash Account list, enter or select the bank account in which the receipt is deposited.
If you have the Hide General Ledger Accounts global option activated, the Cash Account lookup
list displays only names of cash accounts currently set up in the chart of accounts.
4. If you are recording deposit tickets within the Receipts window, enter or accept the suggested
Deposit Ticket ID . Otherwise, leave this field blank. You can record deposit ticket IDs in the Select
for Deposit window.
5. Select the Apply to Revenues tab. Then, enter the line items on the receipt the same way as you do
in Sales/Invoicing.
6. Select the Print button if you want to print and save the receipt. Otherwise, click the Save button.
Self Check Exercise-Cash Collection
119
Assume all the collections are deposited into the bank.
Jan 04: Received the amount involved on sales invoice no. S311; receipt no.897 and deposit ticket
no. 1613;
Jan 04: Received the amount involved on sales invoice no. S318; receipt no. 898 and deposit ticket
no. 1614
Jan 10: Received $50,000 cash from issuance of common stock at par. Receipt No. 899. The
amount was deposited into cash in bank with deposit ticket no. 1615.
Feb 5: Received amount outstanding on sales invoice no. 002. Make sure that 2/10, n/30 terms was
included while recording the sales invoice.
Feb 25: Collected the amount outstanding from sales invoice no. 001. Make sure that terms
2/10,n/30 had been inserted while entering the sales invoice. Receipt no. 900 and deposit
ticket no. 1616 were prepared;
March 7: Received the amount outstanding on sales invoice no. 004; receipt no. 901 and deposit ticket
no. 1617;
Required:
(ii) Preview the cash in bank account in the GL. How much balance does it read in as at February
28th 2006? What about the balance on March 31st 2006;
(iii) Check that the sum of the customer accounts in the customer ledger is equal to receivable
controlling accounts in the GL;
(iv)Preview the trial balance as at March 31st , 2006;
(v) Preview the customers ledger as at March 31st 2006;
General Journal Entry

You use the General Journal to enter those types of transactions that are not readily categorized in the Tasks
menu. Depreciation would be an example of something that would be entered into the General Journal.
Here, you can also edit adjustments made in account reconciliation.
120
Unlike other screens in Peachtree, you provide all the accounting distributions in the General Journal. At
other times, Peachtree automatically distributes certain amounts, based on the default General Ledger
accounts you set up in maintenance windows.
In the General Journal, you enter both debits and credits, and when the amounts balance, you can post the
General Journal by selecting the Save button if you're using the real-time posting method. If you are using
the batch-posting method, select the Save button; then use the Post option from the System selection of the
Tasks menu.
The toolbar at the top of the window contains the following buttons: Close , New , Open, Save, Delete ,
Recur , Row , and Help .
The General Journal is used to enter those types of transactions that are not readily categorized in the Tasks
menu. Typical General Journal entries include chart of account beginning balances, depreciation, and
account transfers. Here, you can also edit adjustments made in Account Reconciliation.
Unlike other screens in Peachtree, you provide all the accounting distributions in the General Journal. At
other times, Peachtree automatically distributes certain amounts, based on guidelines you set in Maintain
menus.
1. From the Tasks menu, select General Journal Entry. Peachtree displays the General Journal Entry
window.
2. Enter or select the date of the transactions you want to enter.
Peachtree defaults this date to the Peachtree system date. If you are in an accounting period that is
different from the system date, then Peachtree displays the first day of that period.
121
You can also select the Open toolbar button to edit a General Journal entry in the current or alternate
accounting period.
3. Select the Reverse check box to have the transaction automatically reversed the first day of the next
accounting period.
Reversing means that debits become credits and credits become debits.
4. Enter a reference for the transaction up to 20 characters.
If you enter a number reference, Peachtree will increase future General Journal entries by one while
this window is open.
5. For each line enter or select an account ID. To display a list of existing accounts, type ? in the G/L
Account ID field, or select the Lookup button.
6. For each line enter an amount in either the Debit or Credit columns.
7. For each line enter a description for the transaction.
The description will appear in General Ledger and various reports.
8. If the transaction is associated with a job, enter or select a job ID. You can later apply the General
Journal entry to a customer invoice, if needed.
9. Once the Out of Balance field is zero (0.00), select Save to record the transaction in the General
Journal.
Self Check Exercise :Recording General Journal Entries
Given the following data for Hawa Enterprise:
(a) It is discovered that purchase of supplies for $200 was erroneously recorded into prepaid insurance
account; JV001/06
(b) Withholding tax reduced ($300) was erroneously recorded as income tax payable; JV002/06
(c) A payment from petty cash fund ($100) was recorded as payment from cash in bank. JV003/06
Required:
(i) Record the above entries in a general journal dated January 1, 2006;
(ii) Preview the trial balance as at January 31, 2006 including accounts with zero balances;
(iii) Preview the vendor ledgers as at January 31, 2006;
Inventory Adjustments
You use the Inventory Adjustments selection to make changes to on-hand quantities of inventory items, and
also track those changes. If you use job costing and purchase stock items for inventory, you can also use this
to remove items from inventory and apply them as an expense to a job. This procedure is necessary for stock
or assembly items you used in a job and did not enter on the customer's sales/invoice.
122
Occasionally, you may need to record adjustments to on-hand quantities of inventory items. The Inventory
Adjustment task makes it easy to make these adjustments and to track them.
There are two types of inventory adjustments, increases in quantity and decreases in quantity.
 For an adjustment up, you will enter a positive quantity and can also enter a unit cost. This will
increase your quantity on hand and total inventory value much as a purchase would. If you
previously miscounted your inventory and now have more units on hand than you thought you had,
you could adjust up.
 For an adjustment down, you will enter a negative quantity, but you can't enter a unit cost.
Peachtree will figure out the cost value that these units are being removed at, much like a sale. An
inventory adjustment down will decrease the quantity on hand as well as the total value. If
something was stolen or broken or if inventory was previously miscounted, you could adjust down.
To record an inventory adjustment
1. From the Tasks menu, select Inventory Adjustments. Peachtree displays the Inventory Adjustment
window.
2. Enter or select the item ID you want to adjust. To display a list of existing items, type ? in this field,
or select the Lookup button. To add a new item, type + or double-click the field, which displays the
Maintain Inventory Items window.
This can only be an item classified as a stock item or assembly item.
3. Enter anything you like in the Reference field up to 20 alphanumeric characters.
For example, you could enter your initials or the date in this field.
4. Enter or select the date the change in inventory occurred or the date of the physical inventory count.
The date is automatically filled in as the current system date.
5. If you are tracking jobs, enter or select a job to attach this adjustment to.
123
6. Enter or select a G/L account to take this adjustment out of, and enter a unit cost for the inventory
item (for positive adjustments only).
The default G/L source account is the Cost of Goods Sold Account. The other account affected by
adjustments is the inventory account. To change the account ID, type ? in this field, or select the
Lookup button.
The Unit Cost default is the current cost of the item and must be positive.
7. Enter the amount to adjust the quantity by.
The Quantity on Hand is already filled in, and Peachtree calculates the New Quantity after you
enter the adjustment.
8. If you know the reason for the adjustment, enter it.
For example, Found in warehouse or Theft.
9. Save the adjustment. The Cost of Goods Sold, Inventory Total Value, and Inventory G/L accounts
are all updated.
(5) Recording Other Transactions;

Returns
Feb 28: Returned 2 of the computers purchased on February 26 for the fact that they are not in
congruent with the specifications indicated. Debit memo #001.
March 02: Excel Office returned one of the computers that had been sold on February 28 on sales
invoice no. 004. Credit memo #001
March 12: Returned 3 of the VCR purchased on March 10 due to the reason that they are not found to
be functional. Debit memo #002
For all of the transactions cash is not involved immediately.
Inventory Adjustments
Jan 31: While performing a physical count, it is determined that unit of TV set on hand to be 29.
The difference is assumed to be stolen. JV#008/06.
Jan 31: Units of computer on hand is determined to be nil. Thus, it is determined to bring the balance of
computer on hand into zero. It is believed that the discrepancy occurred while making physical
counts in earlier period (starting the Peachtree accounting system). JV#009/06.
Other Adjustments
Sony Enterprise records internal transactions at the end of every month.

124
Jan 31: Amount of supplies on hand allocable for future period is determined to be #2,800.
JV#010/06
Jan 31: Amount of insurance expired during the period is determined to be $3,400. JV#011/06
Jan 31: Depreciation expense of the month on office equipment and machineries is determined
to be $1,200. JV#012/06
Jan 31: Depreciation expense of the month on building is determined to be $3,600.
JV#013/06.
Required:
(i) Record the above transactions in the proper journal; Look at ‘behind the screen’ entries. If the
right accounts and the right amounts are not affected, make correct
Build/Unbuild Assemblies
You use the Assemblies selection to build or unbuild quantities of assembly items in inventory. Assembly
items are created using the Bill of Materials tab in the Maintain Inventory Items window. In Maintain
Inventory Items, you name and create the assembly. In Build/Unbuild Assemblies, you actually put together
or "build" the assembly from its component inventory items. You can also take apart or "unbuild"
assemblies here.
The toolbar at the top of the window contains the following buttons: Close, New, Open, Save, Delete, and
Help.
1. From the Tasks menu, select Assemblies. Peachtree displays the Build/Unbuild Assemblies
window.
2. Enter or select the item ID for the inventory assembly that you want to build. To display a list of
existing items, type ? in this field, or select the Lookup button. To add a new item, type + or double-
click the field, which displays the Maintain Inventory Items window.
125
3. Enter anything you like in the Reference field up to 20 alphanumeric characters. For example, you
could enter your initials or the date in this field.
4. Enter or select the date you built the item. The date is automatically filled in as the current system
date.
5. Enter the quantity you want to build for this assembly. You cannot build more assembly items than
you have components for.
6. Enter a reason for building the assembly.
7. When you're finished, select the Save button to record the transaction.
Unbuild an Assembly
You can break an assembly into its component items by unbuilding it, which is done by entering a negative
number in the Quantity to Build field. When you unbuild (disassemble) an assembly, Peachtree creates a
new entry for that unbuild assembly instead of looking for a previously built entry and deleting that entry.
At the time that you unbuild an assembly, Peachtree will decrease the quantity and value of the assembly
item and increase the quantities and values of the components. Components will be put back at their most
recent cost value, and any value difference between the per unit value of the assembly item and the
composite value of the components will be adjusted to the Cost of Goods Sold account.
1. From the Tasks menu, select Assemblies. Peachtree displays the Build/Unbuild Assemblies
window.
2.Enter or select the item ID for the inventory assembly that you want to unbuild. To display a list of
existing items, type ? in this field, or select the Lookup button. To add a new item, type + or double-click
the field, which displays the Maintain Inventory Items window.
3. Enter anything you like in the Reference field up to 20 alphanumeric characters. For example, you
could enter your initials or the date in this field.
4. Enter or select the date you disassembled the assembly. The date is automatically filled in as the
current system date.
5. Enter the number of assemblies you want to unbuild in the Quantity to Build field.
6. If you are unbuilding an assembly, enter a negative number (preceded by a minus sign). You cannot
unbuild more assembly items than you have in the assembly's quantity on hand.
7. Enter a reason for unbuilding the assembly.
8. Save the transaction.
Account Reconciliation
Peachtree reconciles the selected G/L account against your monthly statement. You can reconcile any
general ledger account in Peachtree. Typically, you would reconcile bank accounts, cash accounts (such as
petty cash), and credit card accounts. You should systematically reconcile accounts each period so that you
126
can quickly detect bank errors, match real-world data with Peachtree data, and identify possible fraudulent
activity.
You can apply (or clear) transactions in three different categories:
 Deposits in transit
 Outstanding checks
 Other outstanding items (such as General Journal entries)
Important: If you are using the batch method, post your accounts to the general ledger before you reconcile.
This ensures that you are using up-to-date information.
To reconcile, you enter the bank statement date and the ending bank balance. Then, you need to clear
transactions that are reported on the bank statement. Each time you clear a transaction, the difference is
reflected in the Outstanding Checks and Deposits in Transit fields.
To clear transactions, check the first column for deposits in transit, outstanding checks, or other outstanding
items.
If you need to make an adjustment, use the Adjust button at the top of the window. Adjustments are saved in
the General Journal and can be edited there too.
Note: You can only reconcile an account once per accounting period. However, you can return to the
Account Reconciliation window anytime during the accounting period to make adjustments. To avoid past
and future reconciliation errors, you must change accounting periods to the date reflected on the monthly
statement.
To avoid fraud and quickly detect errors, strive to have your bank send statements toward the end of a
period or month. Always reconcile your account as soon as it arrives. This ensures that your Peachtree data
is accurate and secure.
If you void a check in Peachtree, the original check will appear in the Checks and Credits section. The
void (reverse) transaction will appear in the Deposits and Debits section. Both should be cleared during
reconciliation in order to balance your account.
127
The toolbar at the top of the window contains the following buttons: Cancel, OK, Range, Row, Adjust, and
Help.
Peachtree allows you to reconcile any account in your chart of accounts. Typically, you would reconcile
bank accounts, cash accounts (such as petty cash), and credit card accounts.
Note: You can only reconcile an account once per accounting period. However, you can return to the
Account Reconciliation window anytime during the accounting period to make adjustments. Always
reconcile an account before closing the fiscal year. You cannot reconcile an account with a bank statement
dated in a closed fiscal year.
If you are using the batch method, post your accounts to the General Ledger before you reconcile. This
ensures that you are using up-to-date information.
1. From the Tasks menu, select Account Reconciliation. Peachtree displays the Account
Reconciliation window.
2. Enter or select the account you want to reconcile. To display a list of existing accounts, type ? in the
G/L Account ID field, or select the Lookup button.
3. Enter the closing date from the bank or credit card statement as the Statement Date.
The statement date you select must be within the current accounting period.
4. Enter the Statement Ending Balance (the ending balance amount included on the bank statement) in
the lower-right section of the window.
128
Transactions that are available to be cleared are listed in two groupings: Checks and Credits,
Deposits and Debits. For each transaction, reference information such as check numbers, amounts,
dates, and vendor/payees or descriptions are listed. Checks are sorted by check number.
5. Select the Clear check box next to each item that is included on the bank statement.
You can also select the All button to select all transactions as cleared. Or you can select the Range
button to choose a range of checks or deposits to clear.
Peachtree keeps track of how many transactions recorded in the general ledger are cleared, how
many are not, and the associated totals.
When all transactions listed on the bank statement are entered and cleared in Peachtree and
outstanding transactions have been accounted for, the unreconciled difference should be zero (0.00).
If not, check the bank statement to make sure that each transaction listed is also entered in Peachtree.
For example, a service charge listed on the statement may need to be entered in Peachtree.
6. If this is the first reconciliation for the selected account, you might have outstanding transactions
not listed on the bank statement that also do not appear in the Account Reconciliation window
because these amounts were entered as a lump-sum beginning balance in the general ledger. This
may cause you to have an unreconciled difference. Select the Beginning Transactions button to enter
these outstanding transactions so that they can be reconciled.
7. Select the Adjust button to enter adjusting journal entries the bank statement included but which are
not included in Peachtree's general ledger. For example, you may have to add bank service or
finance charges. Select OK when done.
8. If you entered adjusting entries, select the Clear check box next to each of these items.
Note: If you enter adjusting entries and later need to change them, you can edit the transactions
using the General Journal Entry window.
129
9. When you have successfully reconciled the account (the un-reconciled difference is zero), select OK
to close the window.
Tip: If you are interrupted during the middle of reconciling, select OK, and exit the window. Later,
while still in the same accounting period, you can resume where you left off. All your cleared items
and other reconciliation information for the account will remain. You can also change accounting
periods to edit previous account reconciliation, if necessary.
Enter Beginning Transactions in Account Reconciliation
Beginning transactions provide a way to account for transactions made prior to starting Peachtree that have
not yet cleared the bank (not appeared on the bank statement). They are primarily used to resolve un-
reconcilable differences during the first account reconciliation.
1. From the Tasks menu, select Account Reconciliation. Peachtree displays the Account
Reconciliation window.
2. Enter or select the account you want to reconcile. To display a list of existing accounts, type ? in the
G/L Account ID field, or select the Lookup button.
3. Reconcile the account. For detailed instructions, click .
If you just started entering data in Peachtree, if this is your first reconciliation of this account, and if
you have a nonzero un-reconciled difference, you may need to enter beginning transactions to
resolve the reconciliation.
Beginning transactions should include each of the following criteria:
o The outstanding transaction amount was originally entered as part of the general ledger
account beginning balance.
o The outstanding transaction is dated prior to the general ledger beginning-balance date.
o The outstanding transaction has not cleared the bank as of this statement (the first statement
you are attempting to reconcile in Peachtree).
4. To enter beginning transactions, select the Beginning Transactions button at the bottom of the
Account Reconciliation window. Peachtree displays the Beginning Transactions window.
5. Enter an amount, description, and reference for each outstanding transaction not listed the statement.
6. Enter the date when the outstanding transaction took place. The date must be in the current or
previous accounting period.
Beginning transactions are typically dated prior to the general ledger beginning-balance date (usually
just prior to the first day of the first period when you are entering data in Peachtree).
7. When you are finished entering beginning transactions, select OK.
Each beginning transaction will appear in either the Checks and Credits or Deposits and Debits
section and be added to the Outstanding Checks or Deposits in Transit totals.
130
8. Do not select the Clear check box next to these items (since they were not listed on the bank
statement). When you reconcile the next monthly statement (the following period), select the Clear
check box when the bank statement indicated that the transactions have cleared.
Note: Beginning transactions are not posted to the General Ledger. They are used only when
initially reconciling an account. Once you have reconciled an account in two or more periods, the
beginning transactions should be cleared.
9. When you have successfully reconciled the account (the un-reconciled difference is zero), select OK
to close the window.
Tip: If you are interrupted in the middle of reconciliation, select OK, and exit the window. Later,
while still in the same accounting period, you can resume where you left off. All your cleared items
and other reconciliation information for the account will remain. You can also change accounting
periods to edit previous account reconciliation, if necessary.
Self Check Exercise-Account Reconciliation
BEFORE DOING THIS EXERCISE, PLEASE MAKE SURE THAT YOU HAVE RECORDED ALL
JANUARY CASH TRANSACTIONS CORRECTLY; WITH CORRECT AMOUNTS AND DATES.
The following bank statement is sent from Commercial Bank of Ethiopia for bank account no. B-5300 for
the month of January 2006;
Bank Statement
Account No. B-5300
Hawa Enterprise
Beginning balance 166,890
- 01/01/04
Debit Credit
1-Jan Ck#208 8,360
2-Jan CH#206 4,560
2-Jan 2,000,000
2-Jan Ck#210 5,200
4-Jan 1,350
5-Jan 5,376
6-Jan 3,200
10-Jan Ck#211 4,300
11-Jan 5,000
13-Jan Credit memo 2116 22,600
15-Jan Credit memo 2146 1,000
15-Jan Ck#214 12,000
18-Jan Ck#215 3,000
131
20-Jan Ck#213 105,350
20-Jan Ck#216 4,900
22-Jan Debit memo 0115 160
31-Jan Ck#217 9,000
156,830 2,038,526 2,048,586
In addition, uncleared reconciling factors as of December 31, 2005 (when Peachtree accounting system) was
started are given as:
Outstanding checks
Ck#208 8,360
Ck#207 9,420
Ck#206 4,560
22,340
Deposits-in-transit
3,200
1,350
4,550
Only one error is discovered in recording ck#217. The check is recorded correctly into the cash
disbursement journal. No other error exists.
Required:
(i) Prepare the bank reconciliation as at January 31, 2006;
(ii) Do adjustments required into the ‘cash’ account balance simultaneously while preparing the bank
reconciliation;
(iii) Is there any unreconciled balance existing after completing the bank reconciliation? If there is
any, how do you explain that.
(iv) How much is the corrected cash balance after the bank reconciliation is performed? Does your
B-5300 ‘cash’ account read the same balance.
(v) Preview and print the bank reconciliation as at January 31, 2006;
(vi) Preview the account register for B-5300 ‘cash’ account at January 31, 2006;
(vii) Design the account register (you previewed above) to filter only:
132
a. Cleared withdrawals and deposits;
b. Uncleared withdrawals and deposits;
Fixed Assets
Represents property, plant, or equipment assets that are acquired for use in a business rather than for resale.
They are called fixed assets because they are to be used for long periods of time.
Setting up Fixed Assets
The fixed asset program needs at least three general ledger accounts in Peachtree accounting: A fixed Asset
account, An accumulated Depreciation account and a Depreciation Expense account.
In addition, if there is an ever dispose of an asset through sale, it would require A Gain or Loss on Sale of
Asset account, with an account type of Expense.
Maintaining Company calendar
The Maintain Company calendar window is used to enter the conversion date and Short tax year
information. Conversion date is the date you begin using Peachtree Fixed Assets. It should be the date for
which you know the accumulated depreciation for all assets. When you enter assets, you can enter the year-
to-date and life-to –date depreciation as of the conversion date. The system will then begin its calculations
from these running balances.
Maintaining Company Books
You can select to turn off access to certain books, if you don’t use them or plan to use them in your
business. If the need arises, you can turn these books on later and begin using them. To do so:
From the maintain menu of Peachtree Fixed Asset (PFA) select Company Books
1. Check the books you may need to use in your business. Remember, you can change your choices,
later if necessary.
2. Click ok when you finish.
The financial book is always checked, and cannot be unchecked. Sine it is used for posting depreciation to
Peachtree Accounting, the financial book must be maintained.
Maintaining Assets
Use Maintain Assets Window to add a new asset or edit information for an existing asset.
Maintain Asset Fields
Asset ID
You must have an Asset Id number for each asset. A number is automatically supplied by the system. The
Asset ID field identifies the asset records in your company file. Each asset must have its own unique
number, which can only be numeric.
133
Description
This field can hold up to 30 characters and should contain a brief description of on the asset. It displays on
reports and in the Browse Lists.
Date Acquired
You must enter a date in this field.
Location
This field can hold up to 24 charcters ans should contain a short address or other location information. It is
used in sorting reports and Browse lists.
Class
Fixed Assets’s property class list contains 30 property types for which you must select the appropriate class
of the asset you are adding or updating. The class of an asset is very important, it helps determine the
automatic selection of the appropriate Depreciation Method and Life for an asset. When you select a class,
choose a class description that best describes the asset. If the asset does not fit any of the defined class,
Choose Other Asset. After you select the appropriate Class, Fixed assets automatically selects the default
values for the following fields:
 Listed
 GL Asset Account (if it is set up before for this class)
 GL Accumulated Depreciation Account (if Set up before for this class)
 Life
 Depreciation Method
Once you change the standard or default information for the general ledger accounts, the new account
becomes the default whenever that class is selected again. You change any of this information as necessary,
for individual assets.
Serial Number
This field can hold up to 15 letters or numbers and should contain the serial number of the asset.
Date Disposed
The Date Disposed field stores the date an asset was sold, traded or disposed of. This field is a display only
field. Fixed Assets updates it when you dispose of an asset, using the Dispose icon.
Department
The Department field stores the department in your business that this asset belongs to. You can use up to 15
number or letters for this field. This field is optional.
New
134
The New Check Box, when checked, indicates that the asset was purchased new, and not used. The default
is checked (New)
Listed
The Listed Checkbox is checked (Selected) to indicate if the asset is considered Listed property or not. In
general, Listed Property is property that may be used less than 100%for business purposes.
 GL Accounts
 GL Asset Account
 GL Accum. Depr. Account
 GL Depr. Expense Account

These General Ledger Account store the Peachtree G/L Account ID of the account used for this asset. For
example, if you are entering a desk, the general ledger account might be Furniture and Fixtures.
To select an account, click the look up icon and double-click an account in the list. Or, type in the Peachtree
Accounting account number, if known. You must select accounts that already exist in peachtree
Accounting’s Chart of Account’s. If you want to enter a new account, you must first go in to Peachtree
Accounting and setup the new account. When you add your first asset for a class, Fixed Assets does not
validate the Account Type; it accepts whatever account you enter, whether it is a Fixed Asset type or not.
Selecting a Book
The book selector divides the Maintain Assets Window in half, between the general or heading information
and the book-specific information. By default, the first book you information for is the Financial Book. You
must set up this book.
You may not have access to six books. If any of the above six books are gray and not available on the
Maintain Asset Window, it’s because access has been turned off in maintain company books. When access
is turned off, Fixed assets still maintains the books, it just doesn’t allow changes to default information.
100% Use
The 100% Use field stores Yes of No to indicate wheter the asset is used 100% for business. The default is
Yes. If the asset was not used 100% for business purpose, enter No in the entry field.
In Service
You must eneter a date in this field. The In Service field stores the date the asset was actually placed in
service. The Acquired date defaults or automatically displays. You can change this default. The format of
the In Service entry should be MMDDYY. If you change the In Service date, Fixed Assets checks to make
sure the depreciation method is valid for the new date.
Depreciation Method
135
You must have data in the Depreciation Method field, although the program suuplies a method based on the
Class and Acquired date you enter. This field stores the depreciation method Fixed Assets uses when
calculating depreciation for the asset. Click the lookup icon to display a list box containing the available
depreciation method for the selected book.
Life
The Life field stores the asset life in the format of 99.99. you must have an entry in this field. Fixed Assets
uses the date you placed the asset in service and the asset Class to determine the Life of the Asset. The Life
is used in calculation depreciation. You can change the default Life selected by Fixed Assets
Browse for Assets
You can find assets easily using the Browse menu. The assets will be stored alphanumerically by the
following criteria:
 Acquired Date
 Asset ID
 Department
 GL Expense Account
 GL Fixed Asset Account
 Asset Class
 GL Accumulated Depreciation Account
 Locations
Disposing of an Asset
Use the Dispose icon to enter disposal information for an asset that your company has sold, exchanged, or
retired. After disposing of the asset in Peachtree Fixed Assets, you must make a general journal entry in
Peachtree Accounting to:
 Remove the asset from you book
 Remove the Accumulated Depreciation from your books
 Adjust the Gain or Loses on Sale of asset account by the amount of the Net book value for the
asset.
The Net Book Value minus the amount entered in Peachtree’s Receipt Task (the proceeds) determines the
loss or gain realized from the sale of the asset.
The accounting and tax requirements for trading and exchanging an asset are quite complex
Depreciation
136
With the exception of land, all fixed assets, over time, lose their capacity to yield services. Accordingly, the
cost of such assets should be transferred to their related expense accounts in a systematic manner during
their expected usefulllife. This periodic expiration is called depreciation.
Calculating Depreciation
Performing this task calculates depreciation for all the assets in the books you select to calculate for. For
financial book, Fixed Assets calculates depreciation and creates the general journal entries that get posted to
Peachtree Accounting. The calculations are displayed on the Maintain Assets Window. They are reflected in
the Current balances section.
137
Steps for calculating depreciation.
1. From the Task menu, select Calculate Depreciation
2. Check the boxes you want to calculate depreciation for. Depreciation for the Financial Book should
not be calculated until all acquisitions and dispositions have been recorded for that month.
3. Select the month-end as a cutoff date, through which you want to calculate depreciation. This list
only contains those months that are open in Peachtree Accounting, it shows month ends, not the
period ending period. A separate set of general journal entries is made for each month calculated.
4. Select OK to calculate. You are notified when depreciation calculation is complete.
Posting Depreciation
The Post to General Ledger Task sends the depreciation calculations for the Financial Book Peachtree
Accounting’s General Ledger.
1. Print the Fixed assets General Leger Posting report. This report shows the entries that were created
and will be posted to the Peachtree General ledger. Check the entries to make sure they seem correct.
2. From the tasks menu, select the Post to Ledger. The Post to General Ledger window displays
3. Select the Post icon
The accumulated depreciation and depreciation expense totals from your Fixed Assets system are written to
the Peachtree Accounting General Journal.
Self Check Exercise Fixed Assets

The following table provides data related to fixed assets of the company.
ID Seri Descripti Cost Savage Econo Date Depreciation
al on Value mic
Acquire In- Method
No. Life
(years) d service
11 1CC Comput 400,0 20,00 5 06/22/ 06/30/ DBMMS(20

C ers 00 0 04 04 0%)
12 1V Vehicles 500,0 80,00 10 03/14/ 03/28/ DBMMS(20
V V 00 0 04 04 0%)
13 1B Building 100,0 15,00 20 01/06/ 01/12/ SLMM
B B s 00 0 05 05
14 1FF Furnitur 40,00 5,000 10 01/13/ 01/19/ SLMM
F e and 0 05 05
Fixtures
15 1LL Land 150,00 ?? ?? 01/09/ 01/19/ ??
L 0 05 05
15 1M Other 900,0 120,0 10 01/15/ 02/15/ SLFM
M M Fixed 00 00 04 04
Assets
Note:
138
 All fixed assets are to be used for only business purposes.
 Life-to-date depreciation is equal to the depreciation balance given as of December 31, 2004
in the chart of accounts of the company.
 No investment tax credit is offered on fixed assets.
 The depreciation method given in the above table is applicable starting from January 1, 2005.
 You should create additional fixed asset accounts when necessary.
 Other fixed assets refer to fixed assets, which cannot be categorized as computers, vehicles,
buildings, land or furniture and fixtures.
Required: Based on the above data and using Peachtree Fixed Assets Program maintain
fixed assets records for the company.
Reports
Peachtree provides you with a versatile reporting program. Each report has its
own selection criteria to help give you the information you need. You can
o customize information and the appearance of that information on reports
o create and change custom report styles, which you can apply to any report for quick, across-
the-board format changes
o apply standard and custom report styles to Peachtree report areas, such as Accounts Payable
or Payroll, so all reports created in that area will have a common style
o display transactions on a report by double-clicking the information (also referred to as drill-
down), so you can view or even edit the information
o preview reports on the screen and print them on paper
o group several reports for printing in the way that best suits your needs
The above functions are undertaken on the Select a Report window:
139
REPORTS
Displaying a Report onscreen
1. From the Reports Menu, select the type of report you want to display. The select a Report window
display with your report area selected.
2. Scroll through the report list to select a report you want to display on screen.
3. There are two methods for displaying a report on the screen: Double clicking the specific report in
the report list. Peachtree displays the report using the filter, fields, and font options saved for the
report. Or Select the specific report. Then, select the screen icon in the top of the select a Report
window. Peachtree displays the report Options window pertaining to the report or financial
statement. Enter the desired information, then select OK. Peachtree displays the report on the screen.
4. To Print a report displayed on screen, Select the Print icon.
FINACIAL STATEMENT REPORTS
Displaying a financial statement onscreen.
1. From the reports menu, select financial statements
2. From the report list, scroll down to select a financial statement you want to appear on the screen
3. There are two methods to displaying a financial statement on the screen: Double click the specific
financial statement in the report list. Or Select the specific report of financial statement. Then, select
the Screen icon in the top the Select a Report Window.
4. Peachtree displays the report Options window pertaining to the financial statement. Enter the desired
information, then select OK. Peachtree displays the financial statement on the screen.
140
5. To print a financial statement displayed on the screen, select the Print Icon.
Self Check Exercise Previewing Financial Statements;
(i) Preview the following:
(a) The trial balance as of March 31 st, 2006 including accounts with zero balances. Let your trial
balance include ‘account type’ and the status of each account as ‘active/inactive’. Modify
the title of your trial balance to change its font into ‘bold’ and ‘blue’ coloring;
(b) Filter instruction (c) to preview only the total of all expenses (including accounts with zero
balances) as of March 31st, 2006;
(c) Details of all GL accounts as of March 31st, 2006 hiding sub-totals of each period;
(d) Filter instruction (b) to preview only income statement GL accounts as of March 31 st, 2006
hiding sub-totals of each period;
(ii) Using the data you entered till now, preview/print the following financial statements for Sony
Enterprise as at March 31st, 2006.
(a) Balance sheet;
(b) Income statements;
(c) Cash flow statement;
(d) Statement of retained earnings;
(e) Statement changes report;
(f) GL account summary;
Modify all the above financial statements to:
- Include accounts with zero balances;
141
- Change the font for the title of major sections of the financial statements into bold and blue
coloring;
- Include footer 1 “Un-audited”;
- Include footer 2 ‘For internal use only”;
- Print all words capitalized;
- Only for your balance sheet, include a 3rd column;
- Change the font for totals of major sections into bold and to print it in reds;
- Change writings of column heading to blue;
(iii) Have you got amounts reports with < > signs reported in each of the above statements? If there
are any, what is of the interpretation you may provide for each?
(iv) Have a look at the details of you account balances reported onto the income statement and the
balance sheet from the statements themselves using the ‘magnifier’. Proceed with this activity
until you explore few of the original source; i.e. transactions recorded in the respective journals.
Self Check Exercise
1. Discuss the usefulness of computer based accounting systems.
2. Compare and contrast manual accounting system with that of computerized accounting system?
3. What specific feature and/or facility you observe on your computerized/ Peachtree accounting?
4. Discuss what basic steps should be taken to convert manual accounting system to computerized
accounting system.
5. Identify the basic decision areas upon conversion.
6. Identify the basic conversion approaches.
142

Chapter 3

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapter 3

Uploaded by

Copyright:

Available Formats

CHAPTER 3 PROCESSING ACCOUNTING DATA IN COMPUTER-BASED SYSTEM

3.1 Identifying the Usefulness of Computer-Based Accounting System

3.2 Identifying Accounting Application Software

SETTING UP A NEW COMPANY

Set Up a New Company

 Limited Liability Company (LLC)

 Track withdrawals from this investment (Owner's Draw, Dividend Paid)

EQUITY = ASSETS - LIABILITIES

New Company Setup - Chart of Accounts

New Company Setup - Accounting Method

New Company Setup - Posting Method

New Company Setup - Accounting Periods

New Company Setup - Finish

7. Click the Save button. Peachtree displays one of the following:

Open Backup File

3.4 Maintaining Accounts

3.5 Processing Accounting Data

1099 Setting Tab

Beginning Balances for Vendors

(i) Maintain vendors ledger;

3.2.2. Maintain Inventory Items

Self check Exercise-Maintaining Inventory Ledger

 Maintain inventory ledger;

Use this window to set up your tax authorities.

Setting up sales tax codes

ID Description Tax Payable to Tax Tax Payable GL

To set up or review customer defaults

Custom Fields tab

(iv) Maintain customer ledger;

The payroll process in Peachtree Accounting involves the following steps:

1. COMPLETING PAYROLL SETUP WIZARD

2. MAINTAINING PAYROLL TAX TABLES

Creating payroll tax tables involves the following steps:

 Employee Income Tax

 Employee Pension/Provident Fund (4%)

 Employer Pension/Provident Fund (8%)

 1% Contribution to Labor Union/Idir/Iqub/Social Club/Disaster Prevention and

3. ENTERING EMPLOYEE DEFAULT INFORMATION

iii) Entering pay level information in the Pay Levels Tab/Folder

 The EmployEE payroll fields serve the following basic functions:

v) Entering employer fields information in the EmployER Fields Tab/Folder

4. MAINTAINING EMPLOYEE PERSONAL RECORDS

ii) Entering information in the Header fields

iii) Entering information in the General tab/folder

iv) Entering information in the Custom fields tab/folder

vi) Entering information in the EmployEE Fields tab/folder

vii) Entering information in the EmployER Fields tab/folder

5. COMPLETING PAYROLL TASKS

a) To prepare a paycheck for an employee, do the following

ii) In the Payroll Entry window,

b) If you want to pay a group of employees in one batch, do the following;

ii) In the Select Employees - Filter Section window

c) To design and view Payroll Register, do the following

d) To close Payroll Tax Year, do the following

 GL accounts - select the appropriate GL accounts to record payroll related transactions.

Employ ID Custom Fields Pay Levels (Birr) Other Monthly

Self Check Exercise Purchase Orders;

(iii) Are GL accounts to be affects with these events recoded? Check.

Self Check Exercise Purchase or Receipt of Inventory;

(ii) Preview balances of each inventory items as at March 31st, 2006;

Self check Exercise Cash Payments;

Jan 2: Issued ck#210 in settlement of purchase invoice #432.

Jan 9: Issued ck#211 in settlement of purchase invoice #460.

Jan 10: Issued ck#212 in settlement of purchase invoice #455.