Note for Setting Up New Companies

If you are setting up new books for a company which is already in existence and has a history, you will need to enter the beginning balance for the account and net transaction data for each preceding month of the current year. Make these entries in the column titled, ``Current Year Net Transactions''. (Note, only Assets, Liabilities, and Owner Equity accounts can have an Opening Balance.)

If you want to prepare income statements comparing the current year to the prior year you should also enter Prior Year data (this is optional).

When you select Edit or View Account the General Ledger Account Maintenance Window will appear and you can enter the appropriate amounts.

Figure: GL Account Maintenance Window

NOTE: When entering amounts for each month enter only the amount of the net transactions for the month; that is, the net change in the account for the month. Do not enter the balance at the end of that month. The programs automatically calculate the balance of each account when reports are generated. As you post transactions throughout the month the net amount for each account for that month is automatically changed and updated.

Net transactions are the only amounts stored in the monthly Net Transaction Amount for an account - never the balance. So, when setting up a new company only enter the net transactions for each account in the appropriate month's amount field. If there are no transactions for that month for the account leave the amount field at zero or blank.

(Example: In the example company the first month of the fiscal year is April. In the Merchant's National Bank checking account you have $1000 at the beginning of the year. You should enter 1000 in the Opening Balance for this account. Enter only a number, no currency symbol. During the first month, April, you write checks that total $500 and make deposits that total $250. The net transaction amount is the difference between the checks and the deposits, or $250. Withdrawals by check are $250 greater than deposits. That is a $250 decrease in the balance of the bank account for the first month. You would enter this in the field for April as -250. (You use a minus sign before the number since you are decreasing an Asset account.) When reports are generated the program will automatically calculate and show $750 as the new balance of the Merchant's National Bank account at the end of April. )

You may get help in deciding when to use a positive or negative number by double clicking on any amount field. This will produce a quick help tip window telling you what to do if you want to increase or decrease the amount (balance) in an account. (See section on Recording Checks for an example of this help feature.)