Financing Cycle Essay

Topics: Generally Accepted Accounting Principles, Balance sheet, Fiscal year Pages: 3 (948 words) Published: December 13, 2010
Monica Douglas-Edwards
3. Financing Cycle (2 pages) Answer the following questions. _ How can you create and maintain the chart of accounts?
If your company is already using Peachtree Accounting for daily activity, beginning balances may only be entered in the prior fiscal year. General Ledger beginning balances are entered through Maintain, Chart of Accounts. Before General Ledger beginning balances are entered, do the following: •Verify that the Chart of Accounts contains the equity account “Equity–Retained Earnings.” •Determine the correct period(s) in which to enter beginning balances. •Determine the correct beginning balance amounts.

•Verify that the beginning balance amounts have an equal number of debits and credits. Verify That Your Chart of Accounts Contains the Equity Account “Equity – Retained Earnings” Before Peachtree can save beginning balance amounts, an account with a type of Equity – Retained Earnings should have been set up in your Chart of Accounts. If you do not see this account listed, add that account now through Maintain, Chart of Accounts. Determining the Correct Period in Which to Enter Beginning Balances The correct period in which to enter beginning balances depends on what type of financial statement you want to generate: If you want a comparative Balance Sheet for the current fiscal year and the last fiscal year, then enter beginning balances for the first period that you wish to have balances, then for each period thereafter enter the period debit/credit change up to the current period.. If you want a comparative Income Statement for the current fiscal year and the last fiscal year, then enter beginning balances for the first period that you wish to have balances, then for each period thereafter enter the period debit/credit change up to the current period. If you want a Statement of Cash Flow for only the current fiscal year, then enter beginning balances for the last period of the prior fiscal year. If you want a...
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