AMC-ttl.doc, printed on 02/13/98, at 12:21 PM. Last saved on 02/13/98 12:20 PM. ACCPAC INTERNATIONAL Simply Accounting Accounting Manual Canadian Version AMC-ttl.doc, printed on 02/13/98, at 12:21 PM. Last saved on 02/13/98 12:20 PM. ACCPAC INTERNATIONAL © Copyright 1998 ACCPAC ® INTERNATIONAL, INC. All rights reserved. ACCPAC INTERNATIONAL, INC., Publisher No part of this documentation may be copied, photocopied, reproduced, translated, microfilmed, or otherwise duplicated on any medium without written consent of ACCPAC INTERNATIONAL. Use of the software programs described herein and this documentation is subject to the ACCPAC INTERNATIONAL License Agreement enclosed in the software package. This software and its documentation are intended to provide guidance in regard to the subject matter covered. They are sold with the understanding that the author and publisher are not herein engaged in rendering legal, investment, tax, or other professional services. If such services are required, professional assistance should be sought. All product names referenced herein are trademarks of their respective companies. Accounting Manual iii Amctoc.doc, printed on 12/05/97, at 4:30 PM. Last saved on 12/05/97 4:30 PM. Confidential ACCPAC International Contents Chapter 1: Listing the Things a Business Owns and Owes Starting a Business 1–1 Chapter 2: The Balance Sheet Assets, Liabilities and Equity 2–1 Changes in Assets, Liabilities and Equity 2–2 Chapter 3: Changes in Equity Changes Caused by Withdrawals 3–1 Changes Caused by Earnings 3–1 Chapter 4: Recording How Earnings Were Made Revenues and Expenses 4–1 When to Record Revenues and Expenses 4–3 Chapter 5: Recording Changes to the Balance Sheet Recording Transactions 5–1 Debits and Credits 5–4 Debits and Credits on the Balance Sheet 5–7 Revenues and Expenses 5–8 iv Simply Accounting Amctoc.doc, printed on 12/05/97, at 4:30 PM. Last saved on 12/05/97 4:30 PM. Confidential ACCPAC International Chapter 6: A Separate Income Statement Why and How 6–1 Debits and Credits Affect Both Statements 6–2 Chapter 7: The Journal Why and How 7–1 National Construction's Journal 7–3 Chapter 8: The Ledger Why and How 8–1 Posting 8–2 Chapter 9: Manual Accounting Systems Chapter 10: Classified Financial Statements The Balance Sheet 10–1 Assets 10–1 Liabilities 10–2 Equity 10–2 The Income Statement 10–3 Revenues 10–4 Expenses 10–4 Net Income 10–4 Chapter 11: Adjusting Entries When and Why 11–1 Prepaid Expenses 11–2 Accounting Manual v Amctoc.doc, printed on 12/05/97, at 4:30 PM. Last saved on 12/05/97 4:30 PM. Confidential ACCPAC International Use of Supplies 11–3 Bad Debts 11–3 Depreciation 11–4 Accrued Expenses 11–5 Accrued Revenues 11–7 Chapter 12: The Finished Financial Statements Chapter 13: Starting the Next Accounting Period Closing the Books 13–1 Opening the Books 13–3 Chapter 14: Summary of Financial Statement Preparation Chapter 15: Other Types of Legal Organizations Partnerships 15–1 Corporations 15–3 Chapter 16: Subsidiary Ledgers Why and How 16–1 Accounts Receivable 16–2 Accounts Payable 16–2 Payroll 16–3 Inventory 16–3 vi Simply Accounting Amctoc.doc, printed on 12/05/97, at 4:30 PM. Last saved on 12/05/97 4:30 PM. Confidential ACCPAC International Chapter 17: Open Invoice Accounting for Payables and Receivables Late Payment Charges 17–1 Discounts 17–1 Bad Debts 17–2 Prepayments 17–3 Chapter 18: Payroll Accounting Determining an Employee's Gross Earnings 18–3 Regular Pay 18–4 Overtime Pay 18–4 Salary 18–5 Commission 18–5 Taxable Benefits 18–6 Vacation Pay 18–6 Determining the Employee's Deductions 18–8 CPP Contribution 18–9 EI Premiums 18–10 Registered Pension Plan Contributions 18–12 Union 18–13 Income Tax 18–13 Medical 18–14 GST Payroll Deductions 18–15 Calculating the Employer's Associated Expenses 18–16 CPP and EI Expenses 18–16 Employer's WCB Expenses 18–17 Updating the Employee's Payroll Record 18–17 Creating the Journal Entries 18–19 Remitting Funds to the Receiver General and Other Agencies 18–19 Ontario Employer Health Tax 18–20 Payroll Accounting in the Province of Quebec 18–22 Accounting Manual vii Amctoc.doc, printed on 12/05/97, at 4:30 PM. Last saved on 12/05/97 4:30 PM. Confidential ACCPAC International Chapter 19: Inventory Accounting Accounting Control of Inventory 19–3 General Ledger Accounts in Inventory Accounting 19–4 Tax Considerations in Accounting for Inventory 19–8 Goods and Services Tax 19–8 Provincial Sales Tax 19–10 Chapter 20: Cost Accounting Project Costs 20–1 Profit Centres 20–2 Chapter 21: Accounting for the GST and PST Preparing for Tax Accounting 21–1 Setting Up General Ledger Accounts 21–1 Accounting for Purchases 21–2 Accounting for Sales 21–3 GST Payroll Deductions 21–4 Adjustments 21–4 Clearing the Tax Accounts 21–5 Glossary Index [...]...Amc1.doc, printed on 12 /05/97, at 11 :55 AM Last saved on 12 /05/97 10 :05 AM Starting a Business Here is the updated summary: National Construction February 4, 19 95 Things Owned: Cash in Bank $40,000 Trucks 22,000 Maintenance Supplies 1, 000 63,000 Claims Against Things Owned: Accounts Payable $ 1, 000 Bank Loan 12 ,000 Jim Brown 50,000 63,000 "Things owned" still... February 4, 19 95 Things Owned: Cash in Bank $ Trucks Maintenance Supplies $ 40,000 22,000 1, 000 63,000 Claims Against Things Owned: Accounts Payable $ 1, 000 Bank Loan 12 ,000 13 ,000 Claims by Owner: Jim Brown 50,000 $ 63,000 You are now ready to go to Chapter 2 to find out more about the balance sheet Accounting Manual Confidential ACCPAC International 1 3 Amc2.doc, printed on 12 /05/97, at 12 :05 PM Last... called the accounting equation Accounting Manual Confidential ACCPAC International 2 1 Amc2.doc, printed on 12 /05/97, at 12 :05 PM Last saved on 12 /05/97 10 :30 AM Changes in Assets, Liabilities and Equity Changes in Assets, Liabilities and Equity Since assets equal liabilities plus equity, we know that if assets increase, then liabilities plus equity must increase by the same amount The accounting equation... Construction Balance Sheet February 4, 19 95 Assets: Cash in Bank $ 40,000 Trucks 22,000 Maintenance Supplies 1, 000 $ 63,000 Liabilities: Accounts Payable Bank Loan Equity: Jim Brown $ 1, 000 12 ,000 13 ,000 50,000 $ 63,000 Our statement "Things Owned = Claims Against Things Owned" can now be rewritten: Assets = Liabilities + Equity This statement is the basis of accounting and is accounting' s single most important... National Construction Balance Sheet February 5, 19 95 Assets: Cash in Bank Trucks Maintenance Supplies Furniture $ 40,000 22,000 1, 000 2,000 $ 65,000 Liabilities: Accounts Payable Bank Loan Equity: Jim Brown $ 3,000 12 ,000 15 ,000 50,000 $ 65,000 On February 7, National buys a front-end loader which costs $20,000, but this time the bank will only lend $15 ,000 and the company must make a down payment... 63,000 You are now ready to go to Chapter 2 to find out more about the balance sheet Accounting Manual Confidential ACCPAC International 1 3 Amc2.doc, printed on 12 /05/97, at 12 :05 PM Last saved on 12 /05/97 10 :30 AM Chapter 2 The Balance Sheet This chapter discusses a company's assets, liabilities, and equity, and shows how changes in any one of these affect the other two Assets, Liabilities and Equity... a down payment of $5,000 Because Brown expects to buy more equipment related to construction, he categorizes the front-end loader as Construction Equipment and puts a value of $20,000 beside it 2–2 Simply Accounting Confidential ACCPAC International . 18 10 Registered Pension Plan Contributions 18 12 Union 18 13 Income Tax 18 13 Medical 18 14 GST Payroll Deductions 18 15 Calculating the Employer's Associated Expenses 18 16 CPP. of Supplies 11 –3 Bad Debts 11 –3 Depreciation 11 –4 Accrued Expenses 11 –5 Accrued Revenues 11 –7 Chapter 12 : The Finished Financial Statements Chapter 13 : Starting the Next Accounting Period Closing. 10 –4 Net Income 10 –4 Chapter 11 : Adjusting Entries When and Why 11 1 Prepaid Expenses 11 –2 Accounting Manual v Amctoc.doc, printed on 12 /05/97, at 4:30 PM. Last saved on 12 /05/97 4:30 PM. Confidential