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Accounting Overview |
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The General Ledger system tracks budget and actual financial data in order to produce financial statements such as an Income Statement and Balance Sheet, the Trial Balance Report, General Ledger Report, GL Totals Screen, GL History Screen, and the Bank Book.
Data is passed to the GL system from the AP and AR automatically via Journal Vouchers with expenses and revenues converted from foreign currency to domestic currency. "You can trade globally in multiple currencies while your books remain in domestic currency". For more info on multi-currency operation see Multi-currency Overview.
Data is keyed directly to the GL system via Journal Vouchers to record
See Examples of Journal Vouchers.
Year-end closing entries are generated by the system.
GL account numbers are comprised of the main account and 3 optional subaccounts, which can be used for branch, division, department, project, product group or whatever. These don't have to be built into the main GL account number. So for data entry, when selecting the main account (responsibility) you don't have to scroll past all the various subaccounts. Nor do you have to set up every combination of main and subs that will occur. And financial statements can be run for selected subaccounts without having to set up separate statement formats. For example an income statement (profit and loss) for product group "Frozen Pies", and/or division "West", etc. Or select no subs to get a summary consolidated report.
A subaccount can apply to any GL account, not just one. So for example, a business that sells musical instruments could have a subaccount for instrument type: drums, guitars, keyboards. Revenues and expenses could then be tracked by instrument type and this would facilitate financial statements by type (drums only, guitars only) or summarized (all instrument types) using the same financial statement and selecting instrument type when they select the report. So they could see the profitabillity of the drums side of the business, or guitars, etc. The same could apply to department, branch, division, project, etc.
So instead of just main accounts: 4000 Sales 5000 Cost of Goods Sold 5126 Advertising
You could use a subaccount for instrument type: 10 Drums 20 Guitars 30 Keyboards
And therefore the following GL accounts would be possible: 4000-10 Sales - Drums 4000-20 Sales - Guitars 4000-30 Sales - Keyboards 5000-10 Cost of Goods Sold - Drums 5000-20 Cost of Goods Sold - Guitars 5000-30 Cost of Goods Sold - Keyboards 5126-10 Advertising - Drums 5126-20 Advertising - Guitars 5126-30 Advertising - Keyboards
Where 4000, 5000, and 5126 are main accounts and 10, 20, and 30 are subaccounts. Note: Each subaccount only has to be defined once (not for every account) and can be used for any GL account.
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