About Accounts

This topic describes accounts.

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

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.

Sales 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 sales 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. The Chart of Accounts maintains all amounts for all parts of the system. Accounts must be set up for each of these account types:

Assets
Liabilities
Owner's Equity
Revenue
Expenses

You can also set up accounts for these 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.

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).

Currency Translation Methods

Currency translation methods are 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.