On 20 Feb 2002, Jonny Birkelund wrote:
> | > = AR_amount
> | AR = accounts receivable
> | amount = amount charged to "Accounts Receivable" general ledger account
> Is this documented somewhere. There is quite a few others here, and
> not very easy to understand (at least for me)
As I recall your question, I'm not sure where you are getting
these codes from. If from an accounting system, there should be
some way to inspect/maintain/print the "chart of accounts" this should
link these codes (or these variables values) to descriptive names,
an ordering key, whether the account is a balance sheet account or not,
whether it is a debit or credit account, and whether it is a
controlling account.
Learning bookkeeping from the source or behavior of a computer accounting
program is futile. It appears that you need to come up to speed on
accounting or need an "expert" at your elbow.
To clarify some of the terms I've used.
o- Chart of accounts is the list of all the general ledger accounts.
There are conventions on the ordering of accounts, first liquid
assets working to fixed assets. Then immediate liabilities phasing
to long-term liabilities. Etc. You only need to set up the
accounts you will use, but you need to have a plan for the
accounts you will add later. The chart is the first thing you
need.
o- Accounting is just telling the tale of the money.
o- A control account or controlling account is comprised of
other accounts. The "Accounts Receivable" is the usually the total
of all the customers' balances.
o- A balance sheet tells what the entity owns and owes as of a certain
date. The accounts in the chart are listed with their balances, and
various sub-categories are totaled. Balance sheet accounts are the
accounts which show these items. If you figure what you are worth
you are building some kind of balance sheet.
o- An expense sheet tells what the entity spent and recieved in a
period of time. Expense and income accounts accumulate these amounts,
when the books are "closed" these accounts are set to zero and the
offsetting entry adjusts a balance sheet account.
If you figure where all your money came from and went to in the
last year you are making a expense report.
o- Debit means left. Credit means right. For every credit entered,
there needs to be an equivalent debit entered somewhere.
o- It is convenient (w/ computers) to think of accounts as debit or credit
accounts then a credit is added to a credit account, a debit is
added to a debit account, otherwise the entry is subtracted from
the account.
Assets and expenses are debit accounts.
Liabilities, revenues, and capital are credit accounts.
Your bank may confuse you because they are the other party holding
your money so things are reversed.
o- A ledger contains a list of balances.
o- A journal contains a list of transactions.
o- The General Ledger is the ledger giving the top level summary of the
state of the business.
o- The General Journal is the miscellaneous journal. Everyday transactions
don't belong here. In a small business the occasional bounced check
would be recorded in the general journal.
rob Live the dream.
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