Peachtree Training Manual - Final

Table of the Contents
CHAPTER ONE ......................................................................................................................................... 1

AN OVERVIEW OF THE ACCOUNTING INFORMATION SYSTEM ................................................. 1
Advantages of Computerized Accounting System.................................................................................. 1
Selection of Accounting Software........................................................................................................... 1
Introduction to Peachtree ........................................................................................................................ 2
Steps to Install Peachtree Software ......................................................................................................... 2
Flow of Accounting Data ........................................................................................................................ 2
CHAPTER TWO......................................................................................................................................... 3
CREATE A NEW COMPANY - COMPANY INFORMATION .............................................................. 3
New Company Setup ............................................................................................................................... 3
Set Password ........................................................................................................................................... 8
Take Backup ............................................................................................................................................ 8
Restore (Open Backup) ........................................................................................................................... 8
Edit Company.......................................................................................................................................... 8
Delete Company ...................................................................................................................................... 9
CHAPTER THREE ................................................................................................................................... 10
MAINTAIN ACCOUNTING DATA ....................................................................................................... 10
Chart of Accounts.................................................................................................................................. 10
Setting Value Added Tax (VAT) or Turn Over Tax (TOT) ................................................................. 13
Entering Beginning Balances ................................................................................................................ 16
Customers Setup .................................................................................................................................... 19
Vendors Setup ....................................................................................................................................... 21
Inventory Items Setup ........................................................................................................................... 22
Importing Customers, Vendors and Inventories List from Excel ......................................................... 23
CHAPTER FOUR ..................................................................................................................................... 25
RECORDING BUSINESS TRANSACTIONS ........................................................................................ 25
Steps to Record Credit Purchase Transactions ...................................................................................... 25
Steps to Record Credit Purchase Transactions with Down Payments .................................................. 26
Steps to Record Purchase Order Transactions ...................................................................................... 28
Steps to Record Receipt of Purchase Order Transactions ..................................................................... 29
Steps to Record Purchase Return Transactions ..................................................................................... 30
Page |i
Steps to Record Settlement of Credit Purchase Transactions ............................................................... 31
Steps to Record Cash Purchase Transactions ........................................................................................ 33
Steps to Record Payment of Other Expenses & Liabilities ................................................................... 34
Steps to Write Checks ........................................................................................................................... 36
Steps to Record Replenishment of Petty Cash ...................................................................................... 36
Void Paychecks ..................................................................................................................................... 38
Steps to Record Credit Sales Transactions ............................................................................................ 38
Steps to Record Credit Sales Transactions with Down Payments ........................................................ 40
Steps to Record Sales Order .................................................................................................................. 41
Steps to Record Shipment Of Sales Order ............................................................................................ 42
Steps to Record Sales Return Transactions ........................................................................................... 42
Steps to Record Collection of Credit Sales Transactions ...................................................................... 43
Steps to Record Cash Sales Transactions .............................................................................................. 46
Steps to Record Collection of Other Income, Receivables and Investments ........................................ 48
DEPOSIT .............................................................................................................................................. 49
Steps to Record Group Cash Deposit Transactions .............................................................................. 49
Inventory Adjustment ............................................................................................................................ 50
General Journal Entry............................................................................................................................ 51
CHAPTER FIVE ....................................................................................................................................... 53
PAYROLL SETUP ................................................................................................................................... 53
STEPS FOR PAYROLL SETUP IN PEACHTREE ACCOUNTING ................................................. 54
Setup Payroll Formula ........................................................................................................................... 54
Setup Employee ID, Name, Basic Salary, Benefit and Deductions ...................................................... 57
Design Payroll Sheet ............................................................................................................................. 58
CHAPTER SIX ......................................................................................................................................... 59
BANK RECONCILIATION ..................................................................................................................... 59
Steps to Prepare Bank Reconciliation ................................................................................................... 60
CHAPTER SEVEN ................................................................................................................................... 61
DESIGNING & PRINTING REPORTS ................................................................................................... 61
General Ledger Accounts ...................................................................................................................... 61
Balance Sheet ........................................................................................................................................ 62
Income Statement .................................................................................................................................. 62
P a g e | ii
General Ledger Trial Balance: .............................................................................................................. 63
Cash Receipt Journal ............................................................................................................................. 63
Cash Payment Journal ........................................................................................................................... 63
Sales Journal .......................................................................................................................................... 63
Sales Order Journal ............................................................................................................................... 64
Purchase Journal .................................................................................................................................... 64
Purchase Order Journal ......................................................................................................................... 64
Customer Ledger ................................................................................................................................... 64
Vendor Ledger....................................................................................................................................... 64
Inventory Valuation Reports ................................................................................................................. 64
Inventory Profitability Reports.............................................................................................................. 65
Item Costing Reports ............................................................................................................................. 65
Cash Account Register .......................................................................................................................... 65
Chart of Accounts.................................................................................................................................. 65
CHAPTER EIGHT .................................................................................................................................... 66
YEAR-END CLOSING PROCEDURES USING PEACHTREE XXXX ............................................... 66
P a g e | iii
CHAPTER ONE
AN OVERVIEW OF THE ACCOUNTING INFORMATION SYSTEM
Accounting Information System is a special field of accounting that Concerns with design and
implementation of procedures for accumulation and reporting of financial data.
An Accounting information System summarizes financial data about a business organization, and
organizes them into a useful manner for internal and external users; those demand Accounting
Information for different decision making purposes.
As businesses grow and become more complicated, the role of Accounting System Software has also
grown. The need for total information system with Accounting as its base is more pressing. For this
reason, accountants must understand all phases of their company’s operations as well as the
developments in system design and technology.
Advantages of Computerized Accounting System
 Help the management to cope-up with increasing problems of paper handling. Speed-up the
processes by eliminating some of the paper need through storage of data.
 Reduce costs of producing transactions. This cost reduction results from:-
o Better efficiency over human processing
o Handling large volume of data, and
o Increased efficiency of tasks for both internal and external auditors.
 Data handling:
o Better data manageability
o Better data storage, and
o Better data computation, retrieval and auditability.
 Apart from data manipulation, evaluation and control represent advantages of computerization. The
increased accuracy, efficiency, timeliness of reporting can be most helpful in improving the decision
making procedures of the management.
Selection of Accounting Software

Once a user decides to computerize its Accounting System, the next step is to decide how/from where to
obtain a best fitting Accounting Software Application, or the automate Accounting System. There three
basic alternatives to accomplish this decision:-
1. Turn-key software packages: these are off-shelf canned software written by computer
manufacturers or software development companies, sold on open market to a broad range of users
with similar requirements.
2. Vendor supported: this is outsourcing/ hiring an outside company to handle all or part of a
company’s data processing activities.
3. Developing in-house: if canned software cannot fit its specific need, an organization can develop its
own unique and best fitting software within the organization; and this software passes through
System Development Life Cycle (SDLC).
Page |1
Introduction to Peachtree
Peachtree is the most complete, powerful and fully integrated accounting system that combines
marketing and personal data to provide necessary information to effectively control business operations.
It is an Accounting Application for small & medium size businesses, which enables accountants and
managers to automate and manage numerous accounting tasks, such as:
 Recording cash receipt & payment transactions,
 Recording credit sales and purchases,
 Tracking payroll transactions,
 Preparing bank reconciliation,
 Preparing financial statements,
 Importing and manipulating spreadsheet files,
 Internal accounting review,
 Audit trail report, etc.
Steps to Install Peachtree Software

1. Insert the Peachtree Compact Disk in your CD ROM drive; the Peachtree auto run window
automatically appears, Or
Open the Peachtree folder from your flash disk,
2. Click on Setup,
3. Read the information & instruction on the window, and click Next,
4. Accept the license agreement and click Next,
5. Click Yes, if the Microsoft windows detects firewall,
6. Click Ok, when you have finished with any modification to your firewall,
7. Click Ok, when you have turned-off your antivirus software,
8. Enter Serial number found in the Peachtree folder,
9. Stand alone or Network window appears, select No, and click Next,
10. Select Yes to the question, ‘Will you store Peachtree Company data on this computer?’, and click
Yes,
11. Click Yes, when the server of installation confirmation window appears, and click Next,
12. Click Install, Finish,
13. Go to Peachtree Help menu Peachtree Registration, and enter the serial number and registration
number from Peachtree folder, use the serial number for Customer ID, to use Peachtree with no
limit OK
Flow of Accounting Data
Business transaction Objective material evidence Journal Entry Ledger Reports
Page |2
CHAPTER TWO
CREATE A NEW COMPANY - COMPANY INFORMATION
Open ‘Peachtree Quantum 2010 – Accountants’ Edition’ from Start menu All programs, or from
desktop shortcut, go to Peachtree File menu Open Company; you will get the following window:
New Company Setup
Figure 1: Open an existing Company or create a new Company

Click on ‘create new Company’ and then ‘Create a new Company-Introduction’ wizard will appear as
follows including ‘about you company’:
Page |3
Figure 2: create a new Company
Details about your Company

a) Company name and address: Data about Company name & address can be obtained from the
company’s trade license and other reverent sources.
b) Business Type: Your Company’s business type is a complete list of all account titles that will be
used in the general ledger, including a set of Equity accounts tailor-made for the business. All
accounts are associated with account ID to help locate them when recording data. Charts of accounts
can vary depending on the type of business. Peachtree provides sample companies from which you
can copy the chart of accounts. This is a useful shortcut to set your company. Later, you can modify
the chart of accounts to meet the specific needs of your Company.
c) Accounting method
d) Accounting periods
e) Fiscal year: Starting dates need to be established for setting up your company and entering data.
Once you establish a starting date, Peachtree will automatically set up monthly accounting periods
for your first two fiscal years.
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.
Note: If you are creating a consolidated company (Peachtree Premium Accounting and above), this field
will be disabled (gray) and will display the first month and year of the consolidated company's first
fiscal year, based on information taken from the subsidiary companies.
To continue setting up your company, click on the Next button, choose Peachtree Quantum 201X_
includes all features of Peachtree accounting.
Page |4
I. Company Information
Peachtree displays the Create a New Company – Company information window. Enter all the necessary
Company information as follows.
Figure 3: Enter Company information
You can change (edit) company information any time after your company is created, except Accounting
method & Accounting period.
When you've finished entering company information, click on the Next button.
II. Select method to create your company

You need to establish how your new company will be set up:
 Use a sample business type that closely matches your type of company: Select this option to
copy basic setup information, particularly a chart of accounts, from a sample company. You can
select either a simplified chart of accounts that contains only the basic accounts you need to get
started; or you can choose a detailed chart. Your selections will vary depending on a version of
Peachtree software you are using. You can modify the Accounts ID & Description that are
necessary to your Company later, according to your needs.
 Copy settings from an existing Peachtree company: Select this option if you want to copy setup
information from another Peachtree company or if you are rebuilding 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
book, Tally, VT, or some other program. This option also requires editing of Accounts ID &
Accounts title that are relevant to your company.
Page |5
 Build your own Chart of accounts (Designed for accountants & advanced users): Select this
option if you want to build your company’s chart of accounts from the scratch. This option is only
recommended for experienced users who are comfortable in setting-up accounting information. New
users coming from a paper ledger are recommended to select a business type (see above) that most
closely matches their existing chart of accounts and then modify it as they need.
 Note: If you select this option, make that sure have you set up your chart of accounts prior to setting up
any other part of the company. Do this immediately after you finished to Create a New Company
wizard.
 Consolidate existing Peachtree accounting Companies: we use this option when our Company
has two or more branches and when we want to merge or consolidate the reports by the head office
& report to designated authority.
To continue setup of your company, select the Next button. Peachtree displays the Create a New
Company– Define Account segments wizard. ‘Check’ ‘Yes’ if your company has branches or
subsidiaries. Otherwise click on Next button; Peachtree displays the Create new Company- Accounting
Method window.
III. Accounting Method

The accounting method determines how Peachtree handles General Ledger, Accounts Receivable and
Accounts Payable transactions.
a. Accrual Accounting: 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.
b. Cash-Basis Accounting: 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.
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.
IV. Posting Method

The posting method determines how Peachtree processes transactions to journals and the general ledger.
a. Real-Time Posting: Each transaction is posted to the general ledger immediately as it is entered into
a journal & saved. This method can save your time and is best for most business and network
environments. This method is assumed to be best because the data won’t be affected with viruses
and can be edited any time in case of errors. Most companies use this method.
b. Batch Posting: Transactions are saved by the program and then posted in a group. When you use
batch posting, you can print registers and review for accuracy of the batch of before posting them to
the ledgers.
Page |6
c. Smart posting: Transactions are saved & then posted automatically in the background by the smart
posing service. Smart posting allows you to finish the transaction without waiting to post. The
service insures that you get best performance.
Note: You can switch to the posting method you want at any time you need from:
Maintain Company information screen.
To continue setting up your company, click on the Next button. Peachtree displays the Create a New
Company- Accounting Periods window.
V. Accounting Period Structure

Starting dates need to be established for setting up your company and entering data. 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.
Choose the accounting period structure you want your company to follow:
a) 12 monthly accounting periods: Each accounting period's starting and ending dates match those of the
12 calendar months. 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. Enter the first month of your first fiscal
year, or select it from the drop-down list. Then, enter the year. Once you establish a starting date,
Peachtree will automatically set up monthly accounting periods for your first two fiscal years (24
months). Most companies follow this fiscal year structure.
b) Accounting periods that do not match the calendar months: Choose this option if you want to set up
a custom fiscal year structure. Companies with more seasonal business choose this option. For example,
you may want four accounting periods per year or possibly 13 four-week accounting periods per year or
want to use Ethiopian Calendar that starts on July 8 & ends on July 7.
If you use Ethiopian calendar, adhere the following procedures:
Accounting periods that do not match the calendar months Next
How many accounting periods do you want in your fiscal year? 12
What is the Start date of your fiscal year?e.g.: July 8, 2018
Periods From to
1 July 8, 2018 August 6, 2018
2 August 7, 2018 September 5, 2018
3 September 6, 2018 October 10, 2018
- - -
- - -
- - -
24. June 8, 2019 July 7, 2019
Enter data of two accounting periods (24 months).
Next Finish
Page |7

Figure 4: Enter accounting periods that do not match the calendar month
Set Password
Maintain User Set-up security Ok User in this company New user (Enter user name
& you password) Save
If there are other users under admin, the audit trail will be on by default and set up security' will be
active only for the admin jowly the admin can manage the Peachtree and other users are only allowed to
enter transactions into the system.
To see Reports & Forms Report groups Company Report Audit trail report
Take Backup
You can take your backup to either internal or external devices through these steps:
File menu Backup Check () remind me When I have not backup in 7 days Check ()
include company name in the backup file name Click on Save in folder Select your device
(Internal or External) Save Ok
Restore (Open Backup)

File menu Restore Browse Look in (select your device to restore your data from_ internal or
External) Backup files Open Next New Company Next Next Finish
Edit Company
Maintain menuCompany Information Ok
Page |8
Delete Company
Open the company you want to delete
Maintain menu company information Write the file directory:
E.g. C:/program files/Sage software/Peachtree/Company/ABCgentr Ok Close the Peachtree
Accounting window
Go to My computer and open each path except the file name (ABCgentr) right click on the file name
& delete (to Send to Recycle Bin) or Shift key plus Delete key (to permanently delete the Company)
Page |9
CHAPTER THREE
MAINTAIN ACCOUNTING DATA
Chart of Accounts
Chart of accounts is a list of all accounts’ ID, description & account type. Before you start to record any
transaction, you must first set the general ledger accounts. You must take care of assigning the account
type because Account Type determines the normal balance, increase & decrease of the ledger accounts.
There are Eighteen Account types in the dropdown list:
1. Accounts Payable: This account type is used for Accounts payable Account when we sale good or
services on credit.
2. Accounts Receivable: We use this account type for Accounts Receivable and Allowance for
Uncollectable when goods or services are sold on credit & Credit Sales Invoice /CRSI/ is issued.
3. Accumulated Depreciation: is the only contra account directly entered to its normal side in the
Peachtree accounting. The remaining three worldwide contra accounts (Allowance for uncollectible,
Sales discount & purchase discount entered to the opposite side with negative (-) sign.
4. Cash: This account type is used for cash on hand, cash at bank (both checking & Saving accounts),
petty cash, etc.
5. Cost of sales: these include all costs that are directly attributable to production or acquisition of goods
sold. Some examples of costs of sales are Freight, purchase, purchase discount, purchase return &
allowance, etc.
6. Equity- gets closed: We use this account type for accounts that directly affect & closed to retained
earnings or capital, such as dividend and withdrawal.
7. Equity- doesn’t close: We use this account type for Capital account & Legal reserve.
8. Equity-Retained Earnings: This account type is used to close the year net income or loss & dividend
(i.e. Retained Earnings).
9. Expenses: This account type is used for all operating and non operating expenses.
10. Fixed Assets: This account type is used for tangible assets purchased for organizational use with
acquisition cost of birr 1,000 and more.
11. Income: We use this account type for all type of revenues such as sales, gain on disposal, other income,
sales discount, sales return and allowance, interest income,... etc.
12. Inventory: We use this account type for all merchandises purchased for resale purposes.
13. Long term liabilities: We use this account type for liabilities with life of more than a year such as
mortgage payable, non-current bank loans & notes payable.
14. Other assets: We use this account type for intelligible assets such as patent, copyright, franchise,
goodwill, etc.
15. Other current assets: We use this account type for all current assets except Cash, Accounts receivable
and inventory but for VAT receivable, Advance profit tax (Withholding tax receivable), office/store
supplies, prepaid rent/insurance, etc.
16. Other current liabilities: We use this account type for all current liabilities except Accounts payable_
(VAT payable, withholding tax payable income tax payable, pension fund passable, bank loan (current),
notes payable (current), etc.
P a g e | 10
17. Payable Retainage: We use this account type for Construction Retainage payable.
18. Receivable Retainage: We use this account type for Construction Retainage receivable.
Steps to maintain Chart of accounts:

1. Go to Maintain menu,
2. Select the Chart of Accounts option,
The Peachtree displays the Maintain Chart of Accounts window.
3. Enter Account ID; eg. 11000
4. Enter Description; eg. Cash
5. Select Account Type drop-down list; eg. Cash
Figure 5: Maintain Chart of Accounts

6. Click on Save and New,
7. Restart steps 3 – 6 to enter another account.
P a g e | 11
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.
Account ID Description Account type
Assets
1100 Cash at CBE- Checking Cash
1110 Cash at CBE- Saving Cash
1120 Petty cash Cash
1150 Accounts receivable Accounts Receivable
1151 Allowance for uncollectible Accounts Receivable
1160 Notes receivable (current ) Other Current Assets
1170 VAT receivable Other Current Assets
1180 Advance profit tax Other Current Assets
1190 Employees advance Other Current Assets
1200 Suspense account Other Current Assets
1210-01 Inventory of computers Inventory
1210-02 Inventory of printers Inventory
1210-03 Inventory of scanners Inventory
1210-04 Inventory of photocopiers Inventory
1310 Office Supplies Other Current Assets
1320 Store Supplies Other Current Assets
1330 Prepaid Insurance Other Current Assets
1400 Office equipment Fixed asset
1400-01 Acc. Depr- Office equipt. Accumulated Depreciation
1500 Office computers Fixed assets
1500-01 Acc. Depr- Computer Accumulated Depreciation
Liabilities
2100 Accounts payable Accounts payable
2200 VAT payable Other Current Liabilities
2300 Income tax payable Other Current Liabilities
2400 Pension fund payable Other Current Liabilities
2500 Credit union payable Other Current Liabilities
2600 Withholding tax payable Other Current Liabilities
2700 Mortgage payable Long Term Liabilities
Capital
3100 Capital Equity doesn’t close
3200 Dividend Equity gets closed
3300 Retained earning Equity retained earnings
Income
4100-10 Sales of Computer Income
4100-20 Sales of printer Income
4100-30 Sales of Scanner Income
4100-40 Sales of photocopier Income
4200 Interest income Income
4300 Sales discount Income
P a g e | 12
4400 Other income Income
4500 Sales of services Income
Cost of sales
5100-10 Cost of Computers Cost of sales
5100-20 Cost of printers Cost of sales
5100-30 Cost of scanners Cost of sales
5100-40 Cost of photocopiers Cost of sales
5200 Purchase discount Cost of sales
5300 Freight account Cost of sales
Expenses
6100 Advertising expense Expenses
6200 Pension fund expense Expenses
6300 Office supplies expense Expenses
6400 Store supplies expense Expenses
6500 Salary expense Expenses
6600 Insurance expense Expenses
6700 Depr. Exp- Computer Expenses
6800 Depr. Exp- Office equipment Expenses
6900 Transportation expense Expenses
6910 Over-time expense Expenses
6920 Rent expense Expenses
6930 Bank service charge Expenses
6940 Telephone expense Expenses
6950 Miscellaneous expense Expenses
6960 Loading & unloading expense Expenses
6970 Interest expense Expenses
6980 Transportation allowance Expenses
Setting Value Added Tax (VAT) or Turn Over Tax (TOT)

VAT or TOT is set for all business types in Ethiopian context, except manufacturing companies_
exempted to encourage industries.
There are two types of VAT registrations:

1. Mandatory VAT registration
It is a type of registration that requires all traders that have annual sales turnover of greater than 500,000
ETB, to collect VAT from their customers and remit to ERCA. They request VAT refund from ERCA
for their purchases from VAT registered suppliers. They record VAT payables for their sales
transactions and VAT receivables for their purchase transactions from VAT registered suppliers. They
declare this month’s VAT to the following month deducting VAT payables from VAT receivables.
 If VAT payable of this month is greater than VAT receivable of his month, they will pay the
difference to ERCA,
 If VAT receivable of this month is greater than VAT receivable of this month, they will request for
VAT refund, which will offset against VAT payable of the next month.
P a g e | 13
 If VAT payable of this month is equal to VAT receivable of this month, there will be no payable or
refund, but they declare a zero balance to ERCA.
2. Voluntary VAT registration

All traders that have annual sales turnover of less than 500,000 ETB can voluntarily collect VAT from
their customers and remit to ERCA, and request for VAT refund for VAT they paid to VAT registered
supplier on their purchases.
The purpose of setting-up VAT/TOT is to calculate the amount of VAT/TOT from sales amount and to
notify the accounting system to credit VAT payable for sales transactions and to debit it when remitted
to ERCA.
In general, VAT registered companies:
1. Collect VAT from all their cash/credit customers on every VATable sales transaction, record the
liability (VAT Payable) until remittance, and declare to ERCA every month.
2. Ask for VAT refund from ERCA for purchases from VAT registered suppliers and records the claim
as debit to VAT Receivable. VAT paid for purchases from non-VAT registered suppliers will be
expensed.
Steps to set VAT:

 Maintain Sales tax
 Setup a new sales tax Next
P a g e | 14
 What is the total rate that you will charge: (VAT-15%, TOT-2% for goods or 10% for services)
 Enter 11 to individual rate Next
 Enter Sales tax agency
Sales tax agent ID: ERCA- AA.
Sale tax agent name: ERCA Eastern AA branch
 Vendor you send the tax you have collected to?: double click on this box
 Vendor ID: ERCA Eastern AA, Name: ERCA Eastern A.A. branch
 Expense Account: VAT payable Save & Close
 Click on the previous box & select ERCA Eastern A.A. branch for vender do you send taxes,
 How are sales taxes calculated for this agency: by Single rate
 Rate: 15%
 Select an account to track sales tax: VAT payable (from drop-down list) Next
 Sales tax ID: VAT
 Sales tax name: Value Added Tax
 Do you Charge sales taxes on freight?: ‘No’_ freight costs are VAT free
‘Yes’_ freight costs are subject to VAT
 Finish
1
Represents the item in question is subject to VAT, otherwise 2 for exemption.
P a g e | 15
Entering Beginning Balances
Before you enter the beginning balances, you have to first identify the source documents used to record
the beginning balance. As accountant, you may employed in a new company that wants to use a
Peachtree Accounting System, or in a company that uses manual Accounting System, but wants to
change to Peachtree Accounting System, or in a company that is already using a Peachtree Accounting
System.
The basic documents required to enter beginning balances into Peachtree accounting:
 If the Company is existing Company, and its fiscal year starts either on January 1, July 1 or July 8,
we use Balance Sheet of the previous year because the effect of all nominal accounts are
summarized to Retained earnings, and only balance sheet accounts are open.
 If the company is started between fiscal period, we use the adjusted Trial Balance of the previous
period. E.g. March, April & May, enter May’s Adjusted Trial Balance for June.
 If the Company is new, enter the starting capital either from trade license, memorandum of
association, bank deposit slip, or cash receipt voucher.
Note: Enter the balances as of the last date of the previous fiscal period, & the system will forward to
current period. E.g. Enter as of 31 December, 2017, & it will forward to 1 January, 2018
Assume you are an accountant of existing company that uses manual accounting, but wants to change to
Peachtree accounting system, enter the figures from Balance Sheet.
Steps:-
 Maintain Chart of Accounts
 Click on Accounts Beginning Balance
 Select period, enter the balances as of the last month of the previous accounting period. E.g.
12/01/2017 - 12/31/2017
 Enter all balance Sheet accounts with their normal balances
 The balance of all Debits must be equal with CreditOk
P a g e | 16
iDream General Trading PLC
Balance Sheet
December 31, 2017
ASSETS LIABILITIES
Cash at CBE- Checking 342,000 Accounts payable 218,930
Accounts receivable 203,030 Mortgage payable 84,200
Notes receivable 15,000 VAT payable 35,000
Inventory of computers 136,000 Total Liabilities 338,130
Inventory of printers 47,200
Inventory of scanners 21,120
Inventory of photocopiers 128,400
Office supplies 14,000
Store supplies 13,200
Prepaid insurance 16,660 CAPITAL
Office equipment 100,800 Capital 600,000
Acc. Depr.- Office equipt (20,160) Retained earning 79,120
Total Capital 679,120
TOTAL ASSETS 1,017,250 TOTAL LIABILITY & CAPITAL 1,017,250
Further assume that the owners made additional cash investments, so enter the additional capital either
from trade license, memorandum of association, bank deposit slip, or cash receipt voucher.
Example: January 1/ 2018, iDream General Trading PLC received birr 500,000 from Mr Dejene &
deposited at CBE- Checking Account by deposit ticket 1/1, CRV-001, to start the business.
Analyze this transaction first:
 Identity type of the transaction Initial investment,
 Identity source document Cash Receipt Voucher (CRV),
 Identity the journal to record Cash Receipt Journal,
 Pass the journal entry.
Steps to record this initial investment:
 Task menuReceipts (for every cash receipt transactions),
 Enter Deposit Ticket ID,
 Select Customer ID from drop-down Window for existing customers, or enter customer name in the
Customer Name field for new customer,
 Enter References:
E.g. CRV-001, Receipt Number: E.g. CRV-001 and transaction Date January l/2018,
 In the Cash Account box, select an appropriate bank account. E.g. Cash@CBE- Checking Account,
 Use Apply to Revenue (for every direct cash collection), write description (Initial Investment), use
GL Account box to select appropriate account, select #2 under tax column to identify the collection
is VAT free, and enter amount in the Amount box.
 Save (post)
P a g e | 17
Figure 6: Cash receipt window
Or
Use the following procedures as an option,
From the Tasks menu, select General Journal Entry. Peachtree displays the General Journal Entry window.
Enter or select the date of the transactions you want to enter.
The 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.
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.
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.
For each line enter an amount in either the Debit or Credit columns.
For each line enter a description for the transaction.
The description will appear in General Ledger and various reports.
Once the Out of Balance field is zero (0.00), select Save to record the transaction in the General Journal.
Here is the cash receipt journal behind the screen:

Code Description Dr Cr
1100 Cash@CBE- Checking Account Br500,000
3300 Capital Br500,000
P a g e | 18
Customers Setup
There are two types of customers: Cash & credit customers.
Cash customers those use perpetual inventory system pass the following journal entries for purchase and
sales of inventories, respectively.
Inventory……..……..……..……..XX
VAT receivable……..……..……..XX
Cash……..……..……..……..……..…XX
Cash……..……..……..……..XX
VAT payable……..……..……..……..…XX
Sales……..……..……..……..……..…….XX
Cost of sales……..……..……..……..XX
Inventory……..……..…..…..……..……..XX
Before starting to record customers (accounts receivable) subsidiary ledger, we should first fill the
necessary information on the default information. The purpose of default information for cash customers
is to make memo the system to credit sales transactions.

Here are the steps to follow to set default information for cash customers:
 Maintain Default information CustomerTerms & Credit  C.O.D. (Cash-on-Delivery)
 GL Sales Account Select any sales account to be used as default (Subject to change)
 Discount GL Account Sales discount Ok
The purpose of default information for credit customers is to make memo the system to credit sales
account, to calculate & debit sales discount, if any; to inform the system remind us for credit limit, &
write past due claims in red.

Here are the steps to follow to set default information for credit customers:
 Maintain Default information Customer
 Terms & Credit Due in number of days Net due in XXX days Discount in XXX days
Discount percent XXX  Credit Limit XXX  Credit Status Notify over Limit
Discount days & rate will be zero if you don’t provide discount.
 GL Sales Account Select any sales account to be used as default (Subject to change)
 Discount GL Account Sales discountsOk

Follow these steps to enter credit customers’ Subsidiary ledger:
Maintain Customers/Prospects Enter Customer ID & Name, & other relevant information
Save New (Do this for all customers)
P a g e | 19

Illustration

Maintain credit customers’ credit term
 Maintain Default information Customer Terms & Credit Due in number of days
Net due in 30 days Discount in 10 days Discount percent 2 Credit Limit 50,000
Credit Status Notify Over Limit
 GL Sales Account 4100-10_ Sales of Computer (Subject to change)

 Discount GL Account 4300_ Sales discounts Ok

Maintain credit customers’ subsidiary ledger
 Maintain Customers/ Prospects
 Under General tab:
 Enter Customer ID, Customer Name, Customer type and telephone,
 Under Contact tab:
 Enter contact name,
 Under Address tab:
 Enter Customer address,
 Under History tab:
 Click on Beginning Balance,
 Select Yes,
 Enter Invoice number, invoice date, Purchase order number (if any), amount and
select Accounts Receivable from the GL Account,
 Save and close, and repeat these steps for all customers.
After you finished entering all your customers in the system, you can see or print the customer ledger.
Steps to see or print the customer ledger:-
 Go to Reports and Forms
 Select Accounts Receivable
 Double click on Customer Ledger
SN Customer ID Customer name Invoice Invoice Date Amount Account type
1 GC- 01 Genesis Computers CRSI- 017 12/24/2017 64,450 1150
2 GT- 02 Gladder Technology CRSI- 009 12/11/2017 49,450 1150
3 KT- 03 Kid Tech CRSI- 002 12/15/2017 12,380 1150
4 MC- 04 Max Technology CRSI- 020 12/30/2017 58,250 1150
5 OT- 05 Office Tech CRSI- 001 12/05/2017 18,500 1150
Total 203,030
P a g e | 20
Vendors Setup
There are two types of Venders: cash & credit vendors. The following are steps to setup default
information for credit suppliers/Vendors:

 
Steps to follow to set default information for credit vendors:
 Maintain Default information Vendor
 Payment Terms tab Due in number of days2 Net due in XXX days Discount in XXX

days Discount percent XXX Credit Limit, XXX
Discount days & rate will be zero if your vendor doesn’t provide you discounts and it is a cash vendor.
 GL Expense Account Select any expense/Inventory account to be used as default (Subject to
change) E.g. Inventory of computers
 Discount GL Account s elect purchase discount or contra purchase account from a drop-down
list. E.g. Purchase discounts Ok

 
Steps to enter credit Vendors’ Subsidiary ledger:
 MaintainVendors
 Under General tab, Enter Vendor ID & Name, & other relevant information Save New (Do
this for all vendors)
Illustration: 
 
Maintain credit vendors’ credit term:
Maintain Default information Vendor Payment Terms Due in number of days Net due
in 30 days Discount in 10days Discount percent 2% Credit Limit 50,000
GL Expense Account 1200-10_Inventory of computers (Subject to change)

Discount GL Account 5200_Purchase discountsOk
 
Maintain credit customers’ subsidiary ledger:
 Maintain Vendor
 Enter vendor ID, name, contact name, vendor type & telephone,
 Under address tab:
 Enter vendor address,
 Under History tab:
 Click on Beginning balance
 Select ‘Yes’
 Enter invoice number, invoice date, PO number, amount and select Accounts
payable from GL Account
 Save and close
 Repeat these steps for all credit vendors with beginning balance.
2
C.O.D for Cash customers
P a g e | 21
SN Vendor ID Vendor name Invoice Invoice Amount Account
Date type
1 AC- 01 Alta Computers GRN- 054 12/25/2017 72,250 2100
2 ET- 02 Ecas Trading GRN- 060 12/30/2017 8,500 2100
3 JT- 03 Jupiter Trading GRN- 055 12/25/2017 51,900 2100
4 NC- 04 Nota Computers GRN- 058 12/29/2017 44,280 2100
5 ST- 05 Snap Computers GRN- 050 12/08/2017 42,000 2100
Total 218,930
To see/ print Vendor ledger
Reports & Terms Accounts payable  Vendor Ledgers
Inventory Items Setup

There are four inventory costing methods: FIFO, LIFO, Weighted Average & Specific Identification
method. ERCA requires Weighted Average costing method for tax reporting purpose.
The purpose of default information Stock items, Master stock and Assembly items is to make memo the
system to credit sales account, debit necessary inventory account, debit cost of sales, debit freight
account & to value the ending inventory using weighted average method, assuming perpetual inventory
system.

 

Steps to set default information for inventory items:

 Maintain Default Information Inventory items
Under GL accounts/Costing tab
 Select item class: Either (Stock item, Master Stock, Assembly or any class from the list) & enter:
 GL Sales account: select a default Sales account. E.g. 4100-10 (Sale of computer)- to be
modified on actual sales transaction
 GL Inventory account: select a default Inventory account. E.g. 1200-10 (Inventory of
computers)- to be modified on actual sales transaction
 GL Cost of sales account: select a default Cost of sales. E.g. 5100-10 (Cost of computers)-
to be modified on actual sales transaction
 Costing method: AVERAGE- for tax purpose
 GL freight account: E.g. 5300 (Freight account), Ok.
Note: Sales transaction under perpetual inventory system affects three ledgers: Sales, inventory and
cost of sales ledgers.

 
Steps to enter subsidiary ledger for ‘Stock items’:
 Maintain Inventory Items
 Enter Item ID, Description, select Stock Item under item class, enter selling price, part
number, item type, unit measurement, select GL sales account, GL inventory account, GL
cost of sales, enter minimum stock & reorder quantity, Save.
 Click on Beginning balances Yes
 Select item & enter quantity & unit cost Ok, and repeat the steps for all inventory items.
P a g e | 22
SN Item ID Description Price Type UM Q Cost TC
1. Cannon Cannon photocopier 9,000 Photo Co PCS 16 6,300 100,800
6317 6317
2. Cannon Cannon photocopier 16,200 Photo Co PCS 2 13,800 27,600
7161 7161
3. Compaq Compaq Computer 8,900 Computer PCS 5 6,300 31,500
204A PIV 17
4. Dell 2512 Dell computer 16,800 Computer PCS 10 10,450 104,500
5. HP ink jet HP inkjet 2100 2,100 Printer PCS 8 1,700 13,600
6. HP laser HP laser jet 3,200 Printer PCS 12 2,800 33,600
jet
7. KTCE KTCE scanner 900 Scanner PCS 9 480 4,320
scanner 4400/A2
8. Sonny Sonny scanner 1,800 Scanner PCS 14 1,200 16,800
scanner 8420/17
Total 332,720
Steps to see/print Inventory Ledger
Reports and forms Inventory Double click on Inventory Valuation Report

 
Steps to enter subsidiary ledger for ‘Master Stock Items’:
 Enter Item ID, Description, select Master Stock Item under item class
 Click on Item attribute use Primary attribute for new brand items, and Secondary attribute
for secondhand items.

 Enter brand name, Item ID description, and select Add to enter the next item Save
 
Steps to enter subsidiary ledger for ‘Assemble Items’:
 Enter Item ID, Description, select Item Class Assemble
 Click of Bills of material
 Select Item ID & enter quantity needed to assembles y Specific Stock item Save
Importing Customers, Vendors and Inventories List from Excel

The following are the steps:
1. From Peachtree File menu, select Import/Export,
2. Select Accounts Receivable, Accounts Payable and Inventory from the report list.
3. Select Customer list, Vendor list and Inventory item list from Accounts Receivable list,
4. Click on Import icon,
5. Select the Show none button,
6. Click on Show check boxes, which is already set-up on excel spreadsheet column description.
E.g. Customer ID Vendor ID Item ID
Customer name Vendor name Item description
7. Click OK
P a g e | 23
8. Click Yes button if you want to continue
9. Click Option and make sure that import/export file are same as your excel spreadsheet file.
If not,
Assume that your Import/Export file path is C/Documents, and Setting/PC/My

documents/Customers/Vendors/Items.CSV
 Open Excel spreadsheet file

 Select new
E.g. Under column 1, enter customer ID, Vendor ID and Item ID; and under column 2,
enter Customer name, Vendor name and Item description,
 From File menu, select Save as, file name: Customer, Vendor and Item
 Save as type: CSV (Comma delimited)
In Peachtree file directory:
 Save
 Yes
 Close excel file
 Follow steps 1-9
10. Ok
P a g e | 24
CHAPTER FOUR
RECORDING BUSINESS TRANSACTIONS
Steps to Record Credit Purchase Transactions

 Task Purchase/Receive Inventory,
 Select Vendor ID for existing vendor, or Click on New to add new Vendor, Save Close,
 Enter invoice number(GRN), & transaction date,
 Under Apply to purchase tab:
 Enter Quantity purchased, select Inventory Item purchased, select proper GL Inventory
Account for the purchased item, enter Unit price of the purchased item and amount in the
Amount box_ Optional
 Enter another related Debit, if any, under Description column, select the GL Account, and
enter amount,
 Click on Journal to see if the Purchase Journal is properly recorded, Cancel/Ok & Save/post/
Example:
January 5/2018- iDream General Trending purchased 2 PCS of Dell computers at birr 10,450 plus 15%
VAT from Snap computers, ref. GRN 061.
Analyze the transaction first:
i. Identify type of the transaction- Credit purchase
ii. Identify the document to prepare- Goods Receiving Note (GRN)
iii. Identify the journal entry to pass- Purchase journal
iv. Record/ pass the journal entry
P a g e | 25
Figure 7: Credit Purchase Journal
Exercises:
January 15/2018: iDream General Trending purchased 5 PCS of Cannon 6317 Photo copy machines at
birr 6,300 each, 4 PCS of HP Laser jet printers at birr 2,800 each, 2 PCS of KTC Scanner at birr 480
each, plus 15% VAT from Jupiter Trading, ref. GRN 062.
January 30/2018: Purchased 2 PCS of HP Laser jet at 2,800 each plus 15% VAT from new supplier, Hi
Per Tech PLC, Vendor ID HP-06, GRN 063.
Steps to Record Credit Purchase Transactions with Down Payments
 Task Purchase/ Receive Inventory,

 Select Vendor ID for existing vendor, or Click on New to add new Vendor, Save, Close,
 Enter Invoice number(GRN), & transaction date,
 Under Apply to Purchase tab:
 Enter Quantity purchased, select Inventory Item purchased, select proper GL Inventory
Account for the purchased item, enter Unit price of the purchased item and amount in the
Amount box _ Optional
 Enter another related Debit, if any, under Description column, select the GL Account, and
enter amount
 Enter the Amount paid at purchase at the bottom of the wizard, enter Reference (Check &
CPV )
P a g e | 26
 Select proper Cash Account
 Click on Journal to see if the Purchase & Cash Disbursement Journal are properly
recorded Cancel/Ok Save (Post)
Example
January 20/2018: iDream General Trending Purchased 3 PCS of Compaq Computers, invoice No.
GRN 064 at 6,300 each from Ecas Trading plus 15% VAT, with down-payment of birr 10,000,
CK.No.14604/CPV001.

i. Identify type of the transaction- Credit purchase with down payment
ii. Identify the document to prepare- Goods Receiving Note (GRN), Cash Payment Voucher (CPV)
& check
iii. Identify the journal entry to pass- Purchase journal & Cash Disbursement Journal
Figure 8: Credit Purchase Journal with down payment
P a g e | 27
Figure 9: Credit purchase journal with down payment, Accounting behind the screen
Steps to Record Purchase Order Transactions
These types of transactions occur when a credit customer sends purchase order to inform the credit
supplier reserve goods or services for a specific date actual purchase.
 Task Purchase Order

 Select Vender ID Enter purchase order Date, Good thru & Purchase Order Number
 Enter Quantity select Item & GL Account enter Unit Price
 Write Description for VAT receivable select GL Account enter amount in the Amount box
 Click on Journal to see the Purchase Order Journal Cancel/Ok Save
Example:
January 20/2018- Sent purchase order to Jupiter Trading for purchase of 1 PCS of Cannon 6317
photocopier at birr 6,300 plus VAT, PO- 001, Good thru by January 31/2018.
i. Identify type of the transaction- Purchase Order
ii. Identify the document to prepare- Purchase Order memo
iii. Identify the journal entry to pass- Purchase Order Journal
P a g e | 28
Figure 10: Purchase order window
NB: The GL Accounts are updated only when items on PO are invoiced.
Steps to Record Receipt of Purchase Order Transactions
 Task Purchase/ Receive Inventory,

 Select Vendor ID,
 Enter Invoice (GRN) number & transaction date,
 Under Apply to Purchase Order No tab:
 Select PO number & enter Quantity received, and amount of VAT receivable in the
Amount box of the second row,
 Click on Journal to see if the Purchase Journal is properly recorded Cancel/Ok Save (Post).
P a g e | 29
Example:
January 31/2018- Received PO No. 001 from Jupiter Trading, GRN- 065 plus VAT.
i. Identify type of the transaction- Receipt of Purchase Order
ii. Identify the document to prepare- GRN
iii. Identify the journal entry to pass- Purchase Journal
Figure 11: Receipt of Purchase Order
Steps to Record Purchase Return Transactions

 Task Vendor Credit Memo,
 Select Vendor ID, enter transaction Date & Credit number,
 Under Apply to Invoice No tab, select invoice number,
 Enter quantity returned in Returned box, and enter the VAT
 Click on Journal to see if the Purchase Journal is properly recorded Cancel/Ok Save (Post).
P a g e | 30
Example:
January 31/2018- Received credit memo from Jupiter Trading as allowance on the damage of 1 PCS
Cannon 6317 photocopier at birr 6,300 plus VAT, GRN- 065, Credit memo- 001
i. Identify type of the transaction- Receipt of Purchase return and allowance
ii. Identify the document to prepare- Credit memo
iii. Identify the journal entry to pass- Purchase journal
Figure 12: Vendor Credit memo
Steps to Record Settlement of Credit Purchase Transactions

These are transactions that happen when a credit customer discharges its credit purchases.
 Task Payment
 Select Vendor ID, enter Check number & transaction Date
 Under Apply to Invoice tab,
P a g e | 31
 Select invoice number; write description (eg. Partially/Fully settled), enter the amount paid
in the Amount box for partial settlement, and check a Pay box in the same row,
 For full settlement, simply check a Pay box in the same row and the amount is automatic,
 Under Apply to Expense, write description (eg. Withholding tax payable), select the proper GL
Account, enter the amount withheld in the Amount box in a bracket or with a minus sign, to show it
is credit (liability),
 Click on Journal to see if the Cash Disbursement Journal is properly recorded Cancel/Ok
Save (Post)
Example:
January 10/2018- Paid birr 72,250 after deducting 2% withholding tax for Alta Computers in full
settlement of GRN- 054, Ref. CK14605/CPV-002.
i. Identify type of the transaction- Settlement of credit purchase,
ii. Identify the document to prepare- CPV, Check & withholding tax receipt,
iii. Identify the journal entry to pass- Cash Disbursement Journal,
iv. Record/ pass the journal entry.
Figure 13: Settlement of credit purchase
P a g e | 32
Exercise:
January 16/2018- Settlement made to Snap Computes for outstanding balance after withholding 2% tax
for GRN-050 & 061, Ref. CPV-003/CK-14606.
January 20/2018- Payment made for Nota Computers birr 30,000 for partial settlement of GRN 058,
CPV-004/CK-14607
Steps to Record Cash Purchase Transactions
Here are steps to record cash purchases:-

 Task Payment,
 Select Vendor ID or Enter Cash suppliers name in the Name field_ for new supplier, enter Check
number & transaction Date, and GRN in Memo box.
 Under Apply to Expense:
 Enter Quantity, select Item, enter Unit PriceAmount (Automatic)_ 1st row
 Write Description (eg. VAT receivable), select proper GL Account, enter the amount in the
Amount box_ 2nd row
 Write Description (eg. Withholding tax payable), select proper GL Account, enter the
amount in the Amount box_ 3rd row, etc.
Save (Post)
NB: VAT registered buyers withhold 2% tax on every purchase above birr 10,000 & 5,00 for goods &
services, respectively, before tax, and record Withholding tax payable (enter with a negative sign) till
remittance to ERCA or any revenue authority.
Example:
January 5 /2018- Purchase of 2 PCS HP laser jet printers at birr 3,000 plus VAT from Cash Supplier,
Grounding Computers CPV-005/CK-14608, GRN-066.

i. Identify type of the transaction- Cash purchase
ii. Identify the document to prepare- CPV, Check & withholding tax receipt
iii. Identify the journal entry to pass- Cash Disbursement Journal
P a g e | 33
Figure 14: Cash purchase
Exercise:
January 10/2018- Purchased 5 PCS Dell Computer at birr 11,000 each, 2 PCS of KTC Scanner at birr
500 each & 6 PCS Cannon photocopier 6317 at birr 7,200 each from Melat Computers plus VAT; and
paid after deducting 2% withholding tax, Ref. CPV-006/CK-14609 and memo GRN-067
Steps to Record Payment of Other Expenses & Liabilities
These are transactions that occur in paying expenses and liabilities to cash or credit vendors.
 Task Payment
 Select Vendor ID or Enter Cash suppliers name in the Name field_ for new supplier, enter Check
number & transaction Date, select proper Cash account it the Company has more than one bank
account in the Cash account box
 Under Apply to Expense:
 Write Description (reason of the payment), select proper GL Account, enter the amount in
the Amount box_ 1st row
 Write Description (eg. VAT receivable), select proper GL Account, enter the amount in the
Amount box_ 2nd row, etc.
Save (Post)
P a g e | 34
Example:
January 20 /2018- Payment of Advertising expense to Samson Advertising PLC, birr 15,000 plus VAT
after withholding 2% tax, Ref. CPV-007/CK-14610

i. Identify type of the transaction- Payment of advertising expense
ii. Identify the document to prepare- CPV, Check & withholding tax receipt
Figure 15: Payment of other expenses
P a g e | 35
Exercise:
January 10/2018- Paid birr 2,000 to Tinbite Isayas for establishment of petty cash,
Ref. CPV-008/CK14611
January 15/2018- Paid birr 3,500 employee advance to Zinash Tessema, Ref. CPV-009/CK-14612
January 25/2018- Birr 20,0000 payment made for mortgage & birr 5,000 interest expense to CBE,
Ref. CPV-010/CK-14616
January 31/2018- Paid birr 35,000 VAT to ERCA, CPV-01 l/CK-14614
Steps to Write Checks

 Tasks menu select Write Checks,
 Enter or select Vendor ID you want to pay,
o If you are entering a handwritten check, enter the check number in the Check Number field.
o If you want Peachtree to print the check, leave this field blank. If this is an electronic
payment, the Check Number field will read "Electronic."
 Enter or select the Date of the disbursement, not necessarily today's date.
 Enter the total amount of the check in the Dollar box,
 If desired, enter a memo up to 30 characters long,
 Enter or select the Cash Account from which you will be writing the check,
 Enter or select the expense account you want to use to distribute the payment,
 If you want to distribute this payment to multiple individual line items, select the Split button. The
Split Transaction window appears, allowing you to make additional distributions, and overwrite.
 Peachtree offers a default Description for the distribution. If needed, change it.
Steps to Record Replenishment of Petty Cash

This is a process of Changing PCPV3 to CPV
 Task Write Check,
 Select the Cash account from which payment is to be made,
 Enter name of the cashier to whom check is written in the Name field,
 Enter Check number & transaction Date,
 Enter the replenished amount in the Dollar box,
 Enter PCPV in the memo box,
 Click on Split,
 Select Account ID, Overwrite the amount of each PCPV on the remaining balance till zero,
 Click on Journal to see if the Petty Cash Replenishment Journal is properly recorded
Cancel/Ok Save (Post).
Note: PCPV will not be posted but replaced by CPV
3
The cashier, only captures payments from Petty cash fund on some objective material evidences (Petty Cash Payment
Vouchers), attaches altogether to request for replenishment. The accountant then issues a check, which is evidenced by Bank
Payment Voucher, on which the cashier signs to verify the receipt of the check from the accountant.
P a g e | 36
Example:
January31/2018- iDream General Trading Cashier Tinbite Isayas requests birr 1,500 for replenishment
of petty cash. Hereunder is PCPV-001-004 detail: Telephone expense birr 400, Office supplies expense
birr 350, Miscellaneous expense birr 300, Loading & unloading expense birr300, VAT receivable birr
150, Ref. CPV-012/CK-14615

i. Identify type of the transaction- Replenishment of petty cash
ii. Identify the document to prepare- PCPV
Figure 16: Replenishment of petty cash
Figure 17: Accounting behind the screen
P a g e | 37
Void Paychecks
This can be used to void payroll checks that have been posted but not cleared. You can void paychecks
either from the Tasks menu or directly from the Payroll Entry window.
 Tasks menu Select Void Checks. The Void Existing Checks window appears.
 At Account ID, enter or select the G/L cash account number used on the check you want to void.
o The window displays a list of the posted checks from the cash account you specified.
 At Void Date , Peachtree offers the system date as default. Accept or change the date as needed.
 Scroll through the list to the check you want to void, and highlight the check.
 Click on the Void button.
 Peachtree asks you to confirm that you want to void this transaction. To void the paycheck, select
Yes.
 If you want to void any more checks from this cash account, then repeat the steps, otherwise Close.
Steps to Record Credit Sales Transactions
 TaskSales/Invoicing
 Select Customer ID, enter transaction Date & Invoice No.
 Under Apply to Sales:
 Enter Quantity, select Item, select GL Account, enter Unit Price_ Amount is automatic.
 Select VAT under Sales tax_ at the bottom of the ledger
 Click on Journal to see if the Sales Journal is properly recorded Cancel/Ok Save (Post)
Example:
January 5/2018- Sold 2 PCS Dell computers at birr 10,800 each to Office Tech PLC, CRSI-01521
plus VAT.

i. Identify type of the transaction- Credit sales
ii. Identify the document to prepare- Credit Receipt Sales Invoice (CRSI)
iii. Identify the journal entry to pass- Sales Journal
P a g e | 38
Figure 18: Credit sales transaction/Sales invoicing
Note: The system calculates & Debits Cost of Sales and Credits Inventory by its Unit Cost times the
Quantity sold behind the screen.
To see/print the Sales Journal
 Reports and Forms Accounts Receivable Double Click on Sales journal (Drag down)
Exercises:
January 10/2018- Sold 4 PCS of Sonny Scanners at birr 1,800 each, 2 PCS of Cannon 7161 photocopy
Machine at birr 16,200 each to Genesis Computers, CRSI-01522 plus VAT.
January 13/2018- Sold 2 PCS of Dell computers at birr 16,800 each, 3 PCS of HP laser jet at
birr 3,200 each, 4 PCS of KTC scanners at birr 900 each, and 1 PC of Cannon 6317
photocopier at birr 9,000 to Kid Tech PLC, CRSI-01523 plus VAT.
January 31/2018- Sold 2 PCS of HP ink jet at birr 2,100 each to new credit customer,
World Tech PLC (WT-06) , CRSI-01524, plus VAT.
P a g e | 39
Steps to Record Credit Sales Transactions with Down Payments
 TaskSales/Invoicing
 Select Customer ID, enter transaction Date & Invoice No.
 Under Apply to Sales:
 Enter Quantity, select Item, select GL Account, enter Unit Price_ Amount automatic
 Click on Amount paid at sale box_ at the bottom of the ledger,
 Enter Deposit ticket ID, Reference, Receipt Amount, select Payment Method Ok
Example:
January25 /2018- Sold 2 PCS Compaq computers at birr 8,900 each to Gladder Technology PLC,
CRSI-01525 plus VAT & received birr 3,000 down payment, Ref. CRV 0847, Deposit ticket ID 1/25

i. Identify type of the transaction- Credit sales with down payment
ii. Identify the document to prepare- Credit Receipt Sales Invoice (CRSI) & Cash (Check) receipt
voucher (CRV)
iii. Identify the journal entry to pass- Sales Journal and Cash Receipt journal
Figure 19: Credit sales with down payment
P a g e | 40
Steps to Record Sales Order
 Task Quotes/Sales Order /Proposal Sales Order
 Select Customer ID, enter sales order transaction Date, Shipping date & SO No.
 Enter Quantity, select Item, select GL Account, enter Unit Price_ Amount automatic
 Click on Journal to see if the Sales Order Journal is properly recorded Cancel/Ok Save
Example:
January 5 /2018- Received Sales order from Genesis Computers, SO No. 001 for 1 PCS of Dell
Computer birr 16,800, plus VAT, Shipped by January31/2018

i. Identify type of the transaction- Sales Order
ii. Identify the document to prepare- Sales order memo
iii. Identify the journal entry to pass- Sales Order Journal
Figure 20: Sales order wizard

Note: Sales orders don’t affect the general ledger accounts as far as the items are not invoiced.
To see/print the Sales Order Journal
 Reports and Forms Accounts Receivable Double Click on Sales Order journal
P a g e | 41
Steps to Record Shipment Of Sales Order
 Task Sales/Invoicing
 Select Customer ID, enter transaction Date, Invoice Number
 Select Sales Order Number under Apply to Sales Order Number
 Enter shipping quantity in the Shipped box
Example:
January31 /2018- Shipped Sales Order Number 001 to Genesis computes 1 PCS of Dell Computer at
birr 16,800 plus VAT, CRSI-01530. The Unit cost of Dell Computer is birr 10,450.
i. Identify type of the transaction- Shipment of Sales Order
ii. Identify the document to prepare- CRSI
Figure 21: Shipment of Sales Orders
Steps to Record Sales Return Transactions

 TaskCredit Memo
 Select Customer ID; enter transaction Date & Credit No.
 Select invoice number under Apply to Invoice No.
P a g e | 42
 Enter quantity returned in the Returned box,
Example:
February 15/2018- Granted credit to Genesis Computers as an allowance on the damage of 1 PCS of
Dell Computer at birr 16,800, CRSI-01530; Credit memo 001.
i. Identify type of the transaction- Sales Return
ii. Identify the document to prepare- Credit memo
Figure 22: Sales return transaction
Steps to Record Collection of Credit Sales Transactions

 Task Receipt
 Enter Deposit ticket ID, select Customer ID, Reference, Receipt No. & transaction Date
 Under Apply to Invoice:
P a g e | 43
 When selected customer has an open invoice (cash collection from credit customer), use this
tab by selecting invoice number from the Invoice list boxes. E.g. Select Invoice number
CRSI-001, Write description: ‘Fully collected’, or ‘Partially collected’; and click on a Pay
box if the collection is full, or enter the amount of collection if the collection is partial.
 Under Apply to Revenue, select an appropriate GL account to record Advance Profit Tax, and
check exempt (2) in the tax box, and enter the amount using a negative sign or in a bracket, in the
amount box, to make it recorded on debit side, and select appropriate cash account.
 Enter Deposit ticket ID.
NB: For full collection of above 10,000 ETB from sales of goods and above 500 ETB from sales
services before VAT, all the legal entity buyers (PLCs, Corporations, Share Cos, Partnerships, NGOs,
and Public Bodies), except proprietors, withhold 2% of the price, and issue withholding receipts. The
seller records Advance profit tax (Withholding tax receivable) on a debit side; and deduct it from its
profit tax payable at the end of the year.
When goods/services are sold to Federal/regional government offices, they deduct VAT and issue VAT
receipt; the seller debits VAT payable as refund with a negative sign.
Example:
January 22/2018- Received CRSI-001 fully from Office Tech, CRV-0848. Office Tech withheld 2% of
the payment. The deposit ticket is 1/22.
i. Identify type of the transaction- Collection of credit sale
ii. Identify the document to prepare- (CRV)
iii. Identify the journal entry to pass- Cash Receipt journal
P a g e | 44
Figure 23: Collection of credit sales transactions
Steps to see/print Cash Receipt Journal

i. Go to Reports and Forms
ii. Select Accounts Receivable
iii. Double click on Cash Receipt Journal
Figure 24: Collections of Credit sale
Exercises:
January 25/2018- Received full settlement for CRSI-01522 and CRSI-01523 from Kid Tech PLC,
with CRV 0849, and deposited at CBE-checking account with deposit ticket ID
1/25A. Kid Tech withheld 2% tax.
January 25/2018- Received birr 10,000 from Gladder Technology PLC for partial settlement of
CRSI-01525 with CRV 0850, and deposited with deposit ticket ID 1/25B.
March 8/2018- Received birr 4,830 from World Tech PLC for full settlement of CRSI-01524
with CRV 0851, and deposited with deposit ticket 1/31.
P a g e | 45
Steps to Record Cash Sales Transactions
When goods/services are sold for to a cash customer, follow these steps
 Task Receipt
 Enter Deposit ticket ID, select Customer ID, or enter a cash customer name for new customer,
Reference, Receipt No. & transaction Date,
 Under Apply to Revenue:
 When selected customer has no open invoice (direct cash sales transaction), use this tab by
entering quantity, item type and unit price;
 Select a proper sales account from GL account;
 Under sales tax, select VAT,
 Write description, select appropriate GL account to record advance profit tax and check exempt in
the tax box, enter the amount with a negative sign in the amount box, for all cash sales of above birr
10,000 for goods and birr 500 for services.
Example:
February 16/2018- Sold 2 PCS of Sonny Scanner at birr 2,000 each, to cash customers Ato Nebiyou
Mohammed, CSI-0446, Fs.No.001, plus VAT. The unit cost of the scanner was birr 1,200. Deposit
ticket ID is 1/16.

i. Identify type of the transaction- Cash sales
P a g e | 46
Figure 25: Cash sales transaction
Steps to see/print Cash Receipt Journal

i. Go to Reports and Forms
ii. Select Accounts Receivable
iii. Double click on Cash Receipt Journal
Exercises:
February 28/2018- Sold 2 PCS of Dell computers at birr 16,800 each, and 4 PCS of Cannon photocopy
6317 at birr 9,000 plus VAT each, CSI-0447 and Fs.No. 002 to Ministry of Health, and
deposited with 1/28. MoH withheld 2% tax.
March 13/2018- Sold 3 PCS of HP laser jet at birr 3,200 each, and 2 PCS of KTC scanners at birr 900
each to Kid Tech plus VAT, CSI-0448 and Fs,No.003, deposited with deposit ticket
1/13. Kid Tech withheld 2% tax.
P a g e | 47
Steps to Record Collection of Other Income, Receivables and Investments
These are transactions which occur when companies collect other income, receivables, investments and
etc from their cash and/or credit customers.
 Task Receipt
 Enter Deposit ticket ID, select Customer ID for existing customer, or enter cash/credit customer
name for new customer, enter Reference, Receipt No. & transaction Date
 Under Apply to Revenue:
 Write description (the reason of the collection),
 Select appropriate GL account and check exempt (2) in the tax box, enter the amount in the
amount box.
Example:
February 25/2018- Collected interest income of birr 2,500 from outstanding Notes Receivable from
CBE, Addis Ababa branch, CRV-0852. The cash was deposited to Cash@CBE-
Checking Account with deposit ticket ID 1/25.

i. Identify type of the transaction- Collection of interest income
P a g e | 48
Figure 26: Collection of Interest Income
Exercise:
January 31/2018- Collected birr 1,000 plus VAT from Ato Daniel Arega for repair and maintenance
with CRI-0449 and Fs.No.004, and deposited to checking account with deposit ticket
ID 1/31.
DEPOSIT
Deposit can be made in two ways:
Single transaction deposit:- every cash collection is deposited separately. When we make single
transaction deposit, we use Deposit ticket box in receipt window, and enter the deposit slip month and
date.
Group Transactions deposit:- is a type of deposit of cash receipts in group.
Steps to Record Group Cash Deposit Transactions
 Task Select for Deposit,

 Select Bank Account ID,
 Enter the date of the transaction
 Click on Open menu in Select for Deposit window Select the invoices to be deposited Save
P a g e | 49
Inventory Adjustment
It is a type of transaction which occurs when a physical count of stock is not equal to the record of the
stock items. It also occurs when there is inventory damage, spoilage, missing, failure to record, etc.
Example: The following inventory adjustment occurred on January 31/2018, reference JV-01/31 for 2
PCS of HP ink jet failed to use. Assume the cost of the HP ink jet is birr 1,700.

i. Identify type of the transaction- Inventory adjustment
ii. Identify the document to prepare- (JV)
iii. Identify the journal entry to pass- Inventory adjustment journal
Steps:
 Task Inventory Adjustment,
 Enter Item ID, Reference and Date,
 Select GL account, and enter units of adjustment with a negative sign in Adjust quantity by box,
 Write description as FAILED TO USE in a Reason to adjust box.
Figure 27: Inventory Adjustment wizard
Account ID Description Debit Credit

5100-20 Cost of Printers 3,400
1200-20 Inventory of Printers 3,400
P a g e | 50
General Journal Entry
This is a type of transaction which occurs when to record non-cash transactions, (Adjusting and closing
entries). Non-cash transactions are evidenced by Journal Voucher (JV).
Example: The following expenses are incurred during the month of January, 2018 for the accounts that
are initially recorded as asset. Record the adjusting entry using JV-02/18.
Office supplies expense- birr 4,200
Store supplies expense- 3,200
Insurance expense- 1,200

i. Identify type of the transaction- Adjustment
ii. Identify the document to prepare- (JV)
iii. Identify the journal entry to pass- Adjusting entry
Steps:
 Task General Journal Entry,

 Enter the Date of the transaction and Reference,
 Enter the Debits and Credits, separately, selecting appropriate GL accounts and writing descriptions.
 Save and Close
P a g e | 51
Figure 28: General Journal Entry
Exercises:
1. The following adjustment occurred for the month of January 31/2018. The book value of Office
equipment is equal to Cost minus Accumulated depreciation (100,800 – 20,160 = 80,640). The
depreciation expense is equal to 20% of the book value (80,640*20% = 16,128). Reference JV04.
2. The following adjusting entry occurred to offset VAT payable against VAT receivable of the month
January with JV05.
Account ID Description Debit Credit

2200 VAT payable 25,050
1170 VAT receivable 25,050
P a g e | 52
CHAPTER FIVE
PAYROLL SETUP
Example:
January 31/2018- Paid salary for Melala Dinkisa, basic salary birr 10,470, overtime birr 400, and
transportation cost birr 1,500 which is non-taxable up-to 10% of the basic salary; using CPV-013 and
Ck.No.14616.

i. Identify type of the transaction- Payroll
ii. Identify the document to prepare- Check Payment Voucher (CPV)
iii. Identify the journal entry to pass- Payroll journal
Required: Calculate
a. Gross earning e. Pension expense,
b. Taxable income, f. Total deduction, and
c. Income tax, g. Net pay,
d. Pension contribution, h. Journalize.
i. Gross earning = Basic salary + Overtime + Allowance
= 10,470 + 400 + 1,500 = 12,370
ii. Taxable income = BS + OT + Taxable transportation
= 10,470 + 400 + 1047 = 11,917
iii. Income tax = 2,821.45
iv. Pension contribution = BS *7%
= 10,470 *7% = 732.9
v. Pension expense = BS *11%
= 2000 *11% = 1,151.7
vi. Total deduction = Income tax + Pension contribution
= 2,821.45 + 732.9 = 3,554.35
vii. Net pay = Gross earning – Total deduction
= 12,370 – 3,554.35 = 8,815.65
viii. Journalize
Code Description Dr Cr
Salary expense 10,470
Transportation expense 1,500
Pension expense 1,151.7
Overtime expense 400
Cash@CBE- Checking account 8,815.65
Income tax payable 2,821.45
Pension fund payable 1,884.6
P a g e | 53
STEPS FOR PAYROLL SETUP IN PEACHTREE ACCOUNTING
STEP 1 Setup Payroll Formula
a. Maintain income tax:

 File Payroll Formulas User maintained,
 Formula ID: ETHIO 18,
 Name: ETHIO 18,
 Effected on gross pay: Subtracts from Gross,
 Filling status: All,
 How do you classify this formula: Tax,
 Tax agency: Federal,
 Formula: ANSWER=-TABLE(ADJUSTED_GROSS), add without space
 Click on Setup Tax Brackets,
If taxable income is over: Amount to withhold Percentage

600 0.00 10
1,650 105.00 15
3,200 337.50 20
5,250 747.50 25
7,800 1,385.00 30
10,900 2,315.00 35
 OK Save New
b. Maintain pension fund:
i. 7% Employee contribution:
 Formula ID: PAYEE 18,
 Name: PAYEE 18,
 Effect on gross pay: Subtracts from Gross,
 Filling status: All,
 How do you classify this formula: Tax,
 Tax agency: Federal,
 Formula: ANSWER=-7%*(ADJUSTED_GROSS),
 Save New.
ii. 11% Employer contribution:
 Formula ID: PAYER18,
 Name: PAYER18,
 Effect on Gross Pay: Subtracts from Gross,
 Filling Status: All,
 How do you classify this formula: Tax,
 Tax Agency: Federal,
 Formula: ANSWER=-11%*(ADJUSTED_GROSS),
 Save New
P a g e | 54
c. Enter total earning:
 Formula ID: ADDIT 18,
 Name: ADDIT 18,
 How do you classify this formula: Benefit,
 Effect on Gross Pay: Add to Gross,
 Filling Status: All,
 Formula: ANSWER=(ADJUSTED_GROSS),
 Save and New.
d. Enter total deduction:
 Formula ID: DEDUC 18,
 Name: DEDUC 18,
 How do you classify this formula: Deduction,
 Effect on Gross Pay: Subtracts from Gross,
 Filling Status: All,
 Formula: ANSWER=(ADJUSTED_GROSS),
 Save,
 Click on the Next step to Add this Formula to Employees Defaults,
 Select Yes to open the payroll setup wizard Now Click Next,
 Select Do It Yourself In-House option (Default), Next,
 Select Do It Yourself option Next Next Select state AA Next
 Select Salary under Pay Types option,
 Select GL account Number- ‘Salary expense’ from dropdown list Next
 Don’t check any benefit option under Benefits your Company offers Next,
 Select Income tax payable under Tax liability account no,
 Select Pension fund expense under Tax expense account no Next Finish.
 Save Close
e. Enter employees’ default information:

 Maintain Default Information Employees Employee tab
 ROW1: 
 Field name: Income_Tax
 GL account: Income tax payable
 Calculate: Checked
 Formula: ETHIO
 ROW2: 
 Field name: Pension_EE
 GL account: Pension fund payable
 Formula: PAYEE
P a g e | 55
 ROW3: 
 Field name: Trans_Allow
 GL account: Transportation expense
 Calculate: Unchecked
 ROW4: 
 Field name: Advance_EE
 GL account: Employee advance
 ROW5: 
 Field name: OT
 GL account: Overtime expense account
 Go to Income tax field, (Row 1)
 Click on Adjust continue button
 Check the Use option in the OT field: OT OK
 ROW6: 
 Field name: Other_Ded
 GL account: Suspense account
 ROW7: 
 Field name: Tran_Tax
 GL account: Transportation expense
 Got to Income tax field, (Row 1)
 Click on Adjust continue button
 CheckedTran_Tax field Ok
 ROW8: 
 Field name: TTL_Earning
 Formula: ADDIT
 Memo: Checked
 Click on continue button under Adjust column
 Checked the Use option in order to get the subtotal
E.g. Gross, Trans_Allow, OT, Tran_Tax, and any other additional field Ok
 ROW9: 
 Field name: TTL_Deduction
 Formula: DEDDUC
 Click on continue button under Adjust column
 Checked the Use option in order to get the subtotal
E.g. Income tax, Pension_EE, Advance, Other_Deduc Ok
P a g e | 56
 ROW10: 
 Field name: Signature
 Under Company field tab:
 Field name: Pension_ER
 Liability: Pension fund payable
 Expense: Pension fund expense
 Formula: PAYER
 Delete other rows Ok
STEP 2 Setup Employee ID, Name, Basic Salary, Benefit and Deductions
Maintain Employees/Sales Reps

 Employee ID: Melala
 Employee name: Melala Dinkisa
 Go to Pay info tab:
 Pay method: Salary
 Pay frequency: Monthly
 Salary Pay Rate: Enter Gross (Basic) salary, birr 2,000
 Go to Employee Fields, use positive value to enter Benefits & negative to enter Deductions,
 Unchecked Trans_Allowance, and enter 1,500, (non taxable)
 Unchecked OT, and enter 400,
 Unchecked Tran_Tax, and enter 453, (taxable)
 Save and New, continue other employees.
STEP 3 Post Payroll Entry Using CPV and CKs

 Go to Task menu Select for Payroll entry Enter Pay end date Ok Close
 Do you want to print this check, when this command box appears, select Yes,
 Enter payroll check no. E.g. CPV-013/Ck-14616,
 Select Print in order to get payroll slip for each employee,
 When the command box asks Did the checks print properly, and it is ok to assign check numbers
to the checks, select Yes.
 Task Payroll entry
 Select List, select Each employee and adjust check number by given alphabetical order after
each check No. E.g. CPV-013/CK-14616A, CPV-013/CK-14616B, …, etc to get same check
number to all employees.
 Enter Date, E.g. January 31/2018
 Click on Journal,
 Save, continue adjusting to all employees.
P a g e | 57
STEP 4 Design Payroll Sheet
 Go to Reports and Forms Payroll

 Double click on Payroll register,
 Select Column icon in order to adjust column order,
 Show column, select None,
 Select Show check name boxes the necessary column in order to appear in the NAT PAY report,
adjust column position by selecting Move up or Move down under Column order list,
E.g. Employee name, Gross, OT, Trans_Allow,Trans_Tax, TTL_Earning, Income Tax, Pension_EE,
Pension_ER, Advance_ER, Advance_EE, Other_Deduc, TTL_Deduc, Amount, Signiture,
 Ok,
 Select Save,
 Report name: Net Pay,
 Save.
Exercise:
Maintain these employees, and pay them using CPV-013 and Ck.No.14616.
ID Name Basic salary Trans- Allownc Empl.Adv OT

Tinbite Tinbite Isayas 10,730 500 500
Fasika Fasika Derese 6,670 700 300 1,700
Tesgera Tesgera Abriha 11,370 1,200 2,100
 Note: All the transportation allowances are non-taxable up-to 7% of the basic salary.
P a g e | 58
CHAPTER SIX
BANK RECONCILIATION
Bank Reconciliation:- is a process of making agreement between records of the company ledgers with
the bank statement. Here are the basic reasons for the numeric differences between the two ledgers:-
1. Deposits in transit: the amounts of money added into the company’s ledger, but not yet
included in bank statement because of a time lag of the deposit as of the bank statement date. So,
deposits in transit are added to a bank balance.
2. Outstanding checks: the of money deducted from the company’s ledger on the issuance checks,
but not arrived the bank yet as of the bank statement date. So, outstanding checks are ii5educted
from the bank balance.
3. Credit memos: the amounts of money added to a bank balance, but not to a book balance. These
memos represent collection of receivables and/or interests by the bank on the behalf of the
company.
4. Debit memos: are the amounts of money deducted from the bank balance, but not from the book
balance yet, and represent bank service charges and other payments for which the depositor is
not notified before the date of the bank statement.
5. NSF checks: represent the amounts checks received from customers and sent to bank for deposit
(debited to Cash at bank), but insufficient to transfer the amount from the issuer’s balance. These
will be deducted from book balance.
6. Bank/Depositor errors: any type of errors that can either overstate or understate the bank or the
book balance.
Illustrations:
Bank Statement
Commercial Bank of Ethiopia
As of January 31/2018
Date Check No. Dr Amount Cr Amount Balance
Balance 341,900.00
1/05/2018 Ck.No.14608 6,900.00 335,000.00
1/10/2018 Ck.No.14605 70,805.00 264,195.00
1/10/2018 Ck.No.14611 2,000.00 262,195.00
1/20/2018 Cash deposit1/20 68,208.00 330,403.00
1/20/2018 Ck.No.14604 10,000.00 320,403.00
1/20/2018 Ck.No.14612 16,950.00 303,453.00
1/20/2018 Collection of NR 15,000.00 315,453.00
1/25/2018 Cash deposit1/25A 76,650.00 395,103.00
1/25/2018 Ck.No.14613 (Rent exp) 25,000.00 370,103.00
1/25/2018 Bank service charge 50.00 370,053.00
1/25/2018 Cost of Check 30.00 370,023.00
1/25/2018 Cash deposit1/25A 10,000.00 380,023.00
1/29/2018 Cash deposit1/29 12,882.00 392,905.00
1/31/2018 Ck.No.14614 35,000 359,385.13
Ending balance 357,905.00
P a g e | 59
Steps to Prepare Bank Reconciliation
 Task Account reconciliation,
 Select the bank account from the Accounts to Reconcile field,
 Enter statement date, (adjust the date from Peachtree main bar)
 Enter the statement ending balance,
 Select the Clear check box under status next to each item that included on the bank statement,
 Select the Adjustment icon to enter adjustment journal entries.
 If you enter adjusting entries, select the Clear box under status next to each item,
 One Un-reconcile difference is zero Ok,
 Click on Reports and Forms, click on Accounts reconciliation and double click Accounts
reconciliation.
Figure 29: Accounts reconciliation
P a g e | 60
CHAPTER SEVEN
DESIGNING & PRINTING REPORTS
General Ledger Accounts
General Ledger Accounts are books of all accounts which include assets, liabilities, capital, revenues,
cost of sales and expenses.
Note: The ledgers that are opened when a Peachtree accounting is created are required to be printed and
submitted to ERCA at the end of the fiscal year.
Steps to see or print the General Ledger Accounts:

 Reports and Forms,
 General Ledger,
 Double click on General Ledger,
 Click on Options tab in the General Ledger window,
 Click on Time Frame box to select period Range,
 Select a period of one year, E.g. from 1(1/1/18) to 12(12/21/18),
 From Select a filter option, select GL Account ID,
 From Select an option, select Range,
 Select from E.g. (1100) Cash at CBE_Checking to (1100) Cash at CBE_Checking,
 Ok,
 Click on Print or Excel to make design and print
Figure 30: Illustration of General Ledgers
P a g e | 61
Balance Sheet
Balance sheet shows a company’s financial position at a specific date. It is an open or permanent
account and its balance is forwarded to the next fiscal period. The equality of the sum of all assets and
all liabilities plus Equities is always maintained.
Steps to see or print the Balance sheet:

 Click on Financial Statements,
 Double click on <Standard> Balance sheet,
 From Options tab, click on Time frame box, select range,
 Select from Period 1, (1/1/18) To Period 12, (12/31/18)
 Ok
 Click on Print or Excel to make/design and print.
Figure 31: Illustration of Balance sheet
Income Statement
Income statement is a statement that shows the company’s financial performance (profit or loss) for a
specific period. It is a closed/temporary account that will be closed to retained earnings or capital. In the
income statement, total revenues minus total cost of sales will give us Gross Profit, and Gross Profit
minus total expenses is equal to Net Income/Loss.
P a g e | 62
Steps to see or print the Income Statement:
 Click on Financial Statements,
 Double click on <Standard> Income Statement,
 From Options tab, click on Time frame box, select range,
 Select from Period 1, (1/1/18) To Period 12, (12/31/18)
 Ok
 Click on Print or Excel to make design and print.
General Ledger Trial Balance: is used to check the equality of the total of Debit & Credit sides, and
also used to check whether the accounts have normal balances/sides.
The General Ledger Trial balance accounts are:-
1. Assets 4. Revenues
2. Liabilities 5. Cost of sales
3. Capital 6. Expenses
Steps to see or print the General Ledger Trial Balance:

 Click on General Ledger,
 Double click on General Ledger Trial Balance,
Cash Receipt Journal: is a special journal in which all cash collections are recorded.
Steps to see or print the Cash Receipt Journal:
 Click on Accounts Receivable,
 Double click on Cash Receipt Journal,
Cash Payment Journal: is a special journal in which all cash payments are recorded.
Steps to see or print the Cash Payment Journal:
 Click on Accounts Payable,
 Double click on Cash Payment Journal,
Sales Journal: is a special journal in which all credit sales transactions are recorded.
Steps to see or print the sales Journal:
 Double click on Sales Journal,
P a g e | 63
Sales Order Journal: is a special journal in which all sales orders are recorded.
Steps to see or print the sales order Journal:
 Double click on Sales Order Journal,
Purchase Journal: is a special journal in which all credit purchase transactions are recorded.
Steps to see or print the Purchase Journal:
 Double click on purchase Journal,
Purchase Order Journal: is a special journal in which all purchase orders are recorded.
Steps to see or print the Purchase order Journal:
 Double click on Purchase order Journal,
Customer Ledger: is a ledger used to control credit customers’ balances.

Steps to see or print customer ledgers:
 Double click on Customer Ledgers,
Vendor Ledger: is a ledger used to control credit Vendor balances.

Steps to see or print Vendor ledgers:
 Double click on Vendor Ledgers,
Inventory Valuation Reports: is a report which shows the total value of the ending inventory.
Steps to see or print Inventory Valuation Reports:
 Click on Inventory,
 Double click on Inventory Valuation Reports,
P a g e | 64
Inventory Profitability Reports: is a report which shows the gross profit percentages of the inventory
sold.
Steps to see or print Inventory Profitability Reports:
 Double click on Inventory Profitability Reports,
Item Costing Reports: is a report which shows the quality of purchase items, sold items and the ending
inventory with their costs.
Steps to see or print Item Costing Reports:
 Double click on Item Costing Reports,
Cash Account Register: is a register that shows the total cash receipts, payments, and balance
remaining in the bank or on hand.
Steps to see or print Cash Account Register:
 Double click on Cash Account Register,
Chart of Accounts: is a list of Accounts ID, Accounts description (name) and accounts’ type.
Steps to see or print Chart of Accounts:
 Double click on Chart of Accounts,
P a g e | 65
CHAPTER EIGHT
YEAR-END CLOSING PROCEDURES USING PEACHTREE XXXX
STEPS TO CLOSE FINANCIAL DATA
1. Go to Task menu, select System, select Year-End Wizard,

2. Select Yes, and click Next,
3. Select Fiscal and Payroll tax year (Default), and click Next,
4. Select Check All to print the general ledger report (in practice), or select Check None if you do not
want to print (for training).
P a g e | 66
5. (Optional) Select Internal Accounting Review to search common transaction mistakes, and
transactions or conditions that do not adhere the GAAPs, (to check if all the transaction are
recorded accurately), [Reports and Forms Internal Accounting Review] and click Next,
6. Back-up and click Next,
7. Select Archive Company- it creates a separate copy of your company in a Read Only State. You
can view transactions and print reports while in archived company, but you cannot edit or delete
existing transactions or add new transactions. The archive will be a copy of your company data as it
exists prior to closing the year. Click Next,
P a g e | 67
8. Select the Next Fiscal year (Default), click Next,
9. Confirm the Year-End-Close, and Click on Next,
P a g e | 68
10. Click on Begin Close, Finish.
P a g e | 69

Peachtree Training Manual - Final

Uploaded by

Document Information

Original Title

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

Peachtree Training Manual - Final

Uploaded by

Copyright:

Available Formats

Table of the Contents

CHAPTER ONE ......................................................................................................................................... 1

Advantages of Computerized Accounting System

Selection of Accounting Software

Steps to Install Peachtree Software

Flow of Accounting Data

Business transaction Objective material evidence Journal Entry Ledger Reports

New Company Setup

Figure 1: Open an existing Company or create a new Company

Details about your Company

Figure 3: Enter Company information

II. Select method to create your company

III. Accounting Method

IV. Posting Method

V. Accounting Period Structure

Restore (Open Backup)

Steps to maintain Chart of accounts:

Figure 5: Maintain Chart of Accounts

Setting Value Added Tax (VAT) or Turn Over Tax (TOT)

There are two types of VAT registrations:

2. Voluntary VAT registration

Steps to set VAT:

Here is the cash receipt journal behind the screen:

Inventory Items Setup

Steps to set default information for inventory items:

Importing Customers, Vendors and Inventories List from Excel

Assume that your Import/Export file path is C/Documents, and Setting/PC/My

 Open Excel spreadsheet file

In Peachtree file directory:

Steps to Record Credit Purchase Transactions

Steps to Record Credit Purchase Transactions with Down Payments

 Task Purchase/ Receive Inventory,

Analyze the transaction first:

Figure 8: Credit Purchase Journal with down payment

Steps to Record Purchase Order Transactions

 Task Purchase Order

Steps to Record Receipt of Purchase Order Transactions

 Task Purchase/ Receive Inventory,

Figure 11: Receipt of Purchase Order

Steps to Record Purchase Return Transactions

Figure 12: Vendor Credit memo

Steps to Record Settlement of Credit Purchase Transactions

Figure 13: Settlement of credit purchase

Steps to Record Cash Purchase Transactions

Here are steps to record cash purchases:-

Analyze the transaction first:

Steps to Record Payment of Other Expenses & Liabilities

Analyze the transaction first:

Figure 15: Payment of other expenses

Steps to Write Checks

Steps to Record Replenishment of Petty Cash

Analyze the transaction first:

Figure 16: Replenishment of petty cash

Figure 17: Accounting behind the screen

Steps to Record Credit Sales Transactions

Analyze the transaction first:

Analyze the transaction first:

Figure 19: Credit sales with down payment

Analyze the transaction first:

Figure 20: Sales order wizard

Figure 21: Shipment of Sales Orders

Steps to Record Sales Return Transactions

Figure 22: Sales return transaction