About Accounts

An account tracks the money spent or earned by business activities, such as the following:

Paying Bills
Receiving Payments
Generating Payroll Checks
Purchasing Supplies
Paying Rent

The system uses default accounts for specific types of transactions. Account numbers to use for transactions are often automatically assigned from code and parameters forms.

Customer order and purchase order lines use account numbers defined on the Product Codes form. An item is assigned a product code, and each product code has account numbers associated with it. When an item is sold, it is entered on a customer order line item. When the voucher is entered, the system credits the inventory account (taken from the product code) with the proper amount.

Account Number Setup

The account number is the central location for domestic currency amounts. The account number spans the system. Use the Chart of Accounts form to maintains all amounts for all parts of the system. Accounts must be set up for each of the following account types:

Assets
Liabilities
Owner's Equity
Revenue
Expenses

You can also set up accounts for the following account types:

Allocation
Statistical: You can only use Statistical Accounts within Financial Statements, the Chart of Accounts form and the Chart of Accounts Budget and Plan form, where they are maintained.
Analytical: This account type is available only if you have selected the Analytical Ledger option on the General Parameters form.

For each account, you can also determine whether unit codes will be used. The Unit Code tabs display valid unit codes. There are also utilities to help you add, copy, and remove ranges of unit codes.

We recommend that you set up all accounts to be the same number of digits. For example, if you will have accounts up to 999999, then all accounts should have 6 digits. This makes it easier to run utilities with account ranges. If your account numbers are different lengths, for example, 600 to 999 and 100000 to 999999, and you enter the range 600 to 999999 in a utility, it will not process all accounts. You must run the utility for the range 600 - 999 and again for 100000 - 999999.

Note: Accounts can be deleted; however, you cannot delete accounts with data posted to them. You also cannot delete accounts that are referenced on any parameters form (for example, Purchasing Parameters or Accounts Payable Parameters), or any account record if it has any associated Unit Codes (1 through 4).

Control Accounts

On the Chart of Accounts form, select the Control Account check box to identify the current account as a control account. For more information about how control accounts are used, see About Control Accounts.

Currency Translation Methods

The currency translation method that is defined for each account is used to calculate exchange rates at different points in time; for example, at the time of a transaction posting, the end of an accounting period, or the average exchange rate within a period. They can only be updated for financial entities that report to other financial entities.

Note: To comply with FASB 52 or GAAP standards, you must set the currency translation method to Average for revenue and expense accounts and End for asset and liability accounts.