Accounts for Fictional Company Created using Peachtree Premium
There were some steps involved in between getting the output from Peachtree and the getting the output into a web presentable htm format.
Here are some examples of output I produced using Peachtree Premium Trial Download, set to record a fictional company I inputted into the program. The links are accompanied by my comments re what a particular financial report reveals or does not reveal, or confuses or clarifies.
http://www.angelfire.com/ma/vincemoon/working_trial_balance_oe.htm
http://www.angelfire.com/ma/vincemoon/balance_sheet_oe.htm
http://www.angelfire.com/ma/vincemoon/cash_flows_oe.htm
http://www.angelfire.com/ma/vincemoon/GL_account_summary_oe.htm
http://www.angelfire.com/ma/vincemoon/two_year_income_statement_oe.htm
http://www.angelfire.com/ma/vincemoon/income_statement_oe.htm
http://www.angelfire.com/ma/vincemoon/account_register_oe.htm
http://www.angelfire.com/ma/vincemoon/chart_of_accounts_oe.htm
http://www.angelfire.com/ma/vincemoon/general_ledger_oe.htm
Notes re http://www.angelfire.com/ma/vincemoon/working_trial_balance_oe.htm
The trial balance shows each account's negative or positive balance. The idea is that all the balances should add up to zero if the accounting has been done properly. The trial balance starts off with a negative number in "beginning balance equity" to balance all the positive beginning balances in the various asset accounts. Thus it starts out with everything adding up to zero.The totals in some of the accounts are counted as negative and in other of the accounts they are counted as positive when the totals are added up in the count that should add up to zero. When the number in an account counted positively in the summary is increased, the number in another positively counted account is decreased, or the number in a negatively counted account is increased so that the balance is maintained. A lack of balance is an indicator of a careless error.
Looking at the trial balance you immediately notice how the consulting income sale is unusual, marked negative, and furthermore I have the personal knowledge that I messed up the accounting of the consulting income on purpose for to learn lessons.
The history of the corruption connected with consulting income here, is that the regular checking account lost 6667 through a payment to a strip club. This was supposed to be balanced out in the accounts, by an expense account entry. But the employee was devious. He balanced the expenditure in the accounts with an not an expense account but an income account, the consulting income account. Thus +6667 was listed as the consulting income account value for trial balance computation purposes.
After this, in a properly handled transaction, regular checking took in 25k in fees, reg checking went up +25k in value and for trial balance purposes, this was balanced by a 25k posted increase to consulting income, .where the number in the account is treated as a negative for trial balance purposes, and where therefore the trial balance purpose value went to -25k.
The checking account behaved normally, its balance went down by 6667 for trial balance computation purposes; but since the consulting income account was designated the balancing account, its value for balancing purposes was changed by +6667. The consulting income account is different from the regular checking account in that totals in the consulting income account are subtracted from the balance when the trial balance and other balances are computed.
When there has been a high level of consulting income and the number in the consulting income account is high this high number will be subtracted from the balance for computing the trial balance. The software adjusted the consulting income account essentially to declare that the consulting income account had been recorded as doing the opposite of earning money, which is reasonable seeing that a payment to outside the company not an earning had been attributed to the consulting account.
Basically the consulting account was labeled as being at 6667 below even or zero, but this 6667 below even is counted as 6667 above even for trial balance purposes because that is the way consulting account income is treated for trial balance purposes and other balance purposes. Also later the properly handled 25000 coming in to the checking account increased the checking account by 25000 and also increased the consulting income account by 25000 because a second account besides the regular checking account is connected with transactions going by the balanced dual entry system of accounting.
The 25000 brought the consulting account up from 6667 below even to 18333 above even, the 18333 to be counted negatively for balances such as the trial balance. The consulting account is handled differently than the assets account because it is increased by increasing the credit column not the assets column, because it is calculated via credits minus assets not assets minus credits, and because it is counted negatively as opposed to positively when balances such as the trial balance is computed. Thus when balances such as the trial balance are computed, if the consulting income account is in the red it will register as a positive number for trial balance purposes and when it is in the black it will register as a negative number for trial balance purposes. Equity and liability accounts ae treated like the consulting income account for trial balance and other purposes.
It all makes you wonder whether the supposed advantages of the inconsistent application of terminologies such as credits and debits is a case of pros outweighing cons. 25000 came in to the regular checking account for consulting work done. The asset column in the regular checking account went up 25000 its credit column stayed the same. 25000 was also recorded as coming in to the consulting income account, but for the consulting income account the credit column was increased 25000 while the debit column stayed the same. The after transaction totals were calculated in opposite ways in the regular checking account compared to the consulting income account. For balancing purposes the regular checking account was treated as a positive the consulting income account negative. Few people explain such matters as clearly as I do but things are still intimidatingly complex. The accounts record is that 25000 frome outside the company came in to the company and in to a department of the company; but the two events which are similar and paralell are treated as oppposites handles in methodologically opposite ways. I suspect that at one time this preoccupation with inconsistency in debits and credits served the purpose of limiting fraud and absent minded error; I wonder if times have changed so we should pay less attention to debits and credits.
In the Peachtree software these details regarding info such as what happened between the regular checking account and the consulting income account is found via Tasks-account register--regular checking account. The account register gives details for the cash, savings, and checkings accounts that are not given for the other accounts. The account register accounts give activity by day instead of monthy summaries; they give details such as the two accounts posted to; the part paid or paying, whether the transaction was a payment or a receipt.
The accounts not in the account register are accessed via Lists-Chart of Accounts--click on account in list.
Unfortunately, seems there is in the Peachtree program, no report that can be generated and saved or exported, that gives all the info that is found in an important account such as 'account register -- regular checking account'. The general ledger comes close but it leaves out important info.
@2006 David Virgil Hobbs
Here are some examples of output I produced using Peachtree Premium Trial Download, set to record a fictional company I inputted into the program. The links are accompanied by my comments re what a particular financial report reveals or does not reveal, or confuses or clarifies.
http://www.angelfire.com/ma/vincemoon/working_trial_balance_oe.htm
http://www.angelfire.com/ma/vincemoon/balance_sheet_oe.htm
http://www.angelfire.com/ma/vincemoon/cash_flows_oe.htm
http://www.angelfire.com/ma/vincemoon/GL_account_summary_oe.htm
http://www.angelfire.com/ma/vincemoon/two_year_income_statement_oe.htm
http://www.angelfire.com/ma/vincemoon/income_statement_oe.htm
http://www.angelfire.com/ma/vincemoon/account_register_oe.htm
http://www.angelfire.com/ma/vincemoon/chart_of_accounts_oe.htm
http://www.angelfire.com/ma/vincemoon/general_ledger_oe.htm
Notes re http://www.angelfire.com/ma/vincemoon/working_trial_balance_oe.htm
The trial balance shows each account's negative or positive balance. The idea is that all the balances should add up to zero if the accounting has been done properly. The trial balance starts off with a negative number in "beginning balance equity" to balance all the positive beginning balances in the various asset accounts. Thus it starts out with everything adding up to zero.The totals in some of the accounts are counted as negative and in other of the accounts they are counted as positive when the totals are added up in the count that should add up to zero. When the number in an account counted positively in the summary is increased, the number in another positively counted account is decreased, or the number in a negatively counted account is increased so that the balance is maintained. A lack of balance is an indicator of a careless error.
Looking at the trial balance you immediately notice how the consulting income sale is unusual, marked negative, and furthermore I have the personal knowledge that I messed up the accounting of the consulting income on purpose for to learn lessons.
The history of the corruption connected with consulting income here, is that the regular checking account lost 6667 through a payment to a strip club. This was supposed to be balanced out in the accounts, by an expense account entry. But the employee was devious. He balanced the expenditure in the accounts with an not an expense account but an income account, the consulting income account. Thus +6667 was listed as the consulting income account value for trial balance computation purposes.
After this, in a properly handled transaction, regular checking took in 25k in fees, reg checking went up +25k in value and for trial balance purposes, this was balanced by a 25k posted increase to consulting income, .where the number in the account is treated as a negative for trial balance purposes, and where therefore the trial balance purpose value went to -25k.
The checking account behaved normally, its balance went down by 6667 for trial balance computation purposes; but since the consulting income account was designated the balancing account, its value for balancing purposes was changed by +6667. The consulting income account is different from the regular checking account in that totals in the consulting income account are subtracted from the balance when the trial balance and other balances are computed.
When there has been a high level of consulting income and the number in the consulting income account is high this high number will be subtracted from the balance for computing the trial balance. The software adjusted the consulting income account essentially to declare that the consulting income account had been recorded as doing the opposite of earning money, which is reasonable seeing that a payment to outside the company not an earning had been attributed to the consulting account.
Basically the consulting account was labeled as being at 6667 below even or zero, but this 6667 below even is counted as 6667 above even for trial balance purposes because that is the way consulting account income is treated for trial balance purposes and other balance purposes. Also later the properly handled 25000 coming in to the checking account increased the checking account by 25000 and also increased the consulting income account by 25000 because a second account besides the regular checking account is connected with transactions going by the balanced dual entry system of accounting.
The 25000 brought the consulting account up from 6667 below even to 18333 above even, the 18333 to be counted negatively for balances such as the trial balance. The consulting account is handled differently than the assets account because it is increased by increasing the credit column not the assets column, because it is calculated via credits minus assets not assets minus credits, and because it is counted negatively as opposed to positively when balances such as the trial balance is computed. Thus when balances such as the trial balance are computed, if the consulting income account is in the red it will register as a positive number for trial balance purposes and when it is in the black it will register as a negative number for trial balance purposes. Equity and liability accounts ae treated like the consulting income account for trial balance and other purposes.
It all makes you wonder whether the supposed advantages of the inconsistent application of terminologies such as credits and debits is a case of pros outweighing cons. 25000 came in to the regular checking account for consulting work done. The asset column in the regular checking account went up 25000 its credit column stayed the same. 25000 was also recorded as coming in to the consulting income account, but for the consulting income account the credit column was increased 25000 while the debit column stayed the same. The after transaction totals were calculated in opposite ways in the regular checking account compared to the consulting income account. For balancing purposes the regular checking account was treated as a positive the consulting income account negative. Few people explain such matters as clearly as I do but things are still intimidatingly complex. The accounts record is that 25000 frome outside the company came in to the company and in to a department of the company; but the two events which are similar and paralell are treated as oppposites handles in methodologically opposite ways. I suspect that at one time this preoccupation with inconsistency in debits and credits served the purpose of limiting fraud and absent minded error; I wonder if times have changed so we should pay less attention to debits and credits.
In the Peachtree software these details regarding info such as what happened between the regular checking account and the consulting income account is found via Tasks-account register--regular checking account. The account register gives details for the cash, savings, and checkings accounts that are not given for the other accounts. The account register accounts give activity by day instead of monthy summaries; they give details such as the two accounts posted to; the part paid or paying, whether the transaction was a payment or a receipt.
The accounts not in the account register are accessed via Lists-Chart of Accounts--click on account in list.
Unfortunately, seems there is in the Peachtree program, no report that can be generated and saved or exported, that gives all the info that is found in an important account such as 'account register -- regular checking account'. The general ledger comes close but it leaves out important info.
@2006 David Virgil Hobbs
posted by David Virgil at 8:15 AM
0 Comments:
Post a Comment
<< Home