ACT 3305

Computer Based Accounting

Semester VI
Course Facilitators

Ms.Y.M. Hewage
Mr. R.D.S.B. Rajapaksha

Department of Accounting
Faculty of Management & Finance
University of Colombo

ACC:2323 - Computer Based Accounting

Assessment Methods

Continuous Assessment 30
Final Examination (3 Hours) 70
Total Marks 100
Summary of Course Outline
 Introduction to Computer Based Accounting
 Introduction to Sage 50 Accounting
 Creating a Company
 Setting up General Ledger
 Entering Beginning Balances and Prior Period
Adjustments
 Setting up Accounts Payables
 Setting up Inventory
 Setting up Customers
 Summary of Course Outline
Cont…
 Using Accounts Payable (Suppliers)
 Using Inventory (Stocks)
 Using Account Receivable (Customers)
 Setting up Jobs
 Customer Receipts & Other Income Receipts
 Vendor Payments and Other Payments
 Using General Journal and Banking Tasks
 Accessing Reports/Forms and Running the Year-End
reports
 Developing Budgets
 Final discussions
What is Computer Based Accounting?

 Carrying out functions in the accounting process

using a computer software.

 There are three ways of computer based accounting.

◦ Using a spread sheet package (e.g. Ms Excel)
◦ Using a Accounting Software Package (e.g. Sage)
◦ Using an Enterprise Resource Planning System – ERP (e.g.
SAP)
What is Computer Based Accounting?

 Advantages
◦ Accuracy
◦ Speed
◦ Storage capacity
◦ Cost reduction
◦ Up-to-date reports
◦ Analyzing capabilities

 Disadvantages
◦ Initial cost
◦ Replacement requirements
◦ Human errors
◦ System errors
Accounting software Vs ERP

Accounting
software

ERP
Accounting Software Packages
 General  Special (Customized)
(Tailor-made) ◦ Stock control systems
◦ MYOB ◦ Payroll systems
◦ Account Pro ◦ General ledger systems
◦ Peachtree/Sage 50 ◦ Debtors/Creditors
modules
◦ DacEasy
◦ Cash books
◦ ACCPAC
◦ SAGE
◦ Tally
◦ Quick Book
Accounting Software Packages

 Accounting software packages can be supplied in

◦ Individual (stand – alone) or
◦ Total Integrated Package

 In a stand alone system, modules are purchases separately, the transfer

of values to the GL or to other modules
◦ Printing control total and posting them
◦ Creating transfer file for posting

 In an integrated system , all modules are supplied together and

operated together
 Information created in one module automatically flows to other
modules
Accounting Software Packages
 An accounting package organizes an accounting
database comprising a number of files to
provide accounting information required by the
users.
 These files are fallen into three categories:
◦ ………………………….
◦ ………………………….
◦ ………………………….
 1.Master Files

 Master files contain relatively static data plus some

quantitative values which are periodically updated
by entry of transactions
◦ Debtors master file
◦ Creditors master file
◦ General ledger master file
◦ Stock master file
◦ Fixed asset register
◦ Payroll master file
2.Transaction Files
 Transaction files summarize data available in source documents,
◦ Purchase/ Sales Orders
◦ Invoices
◦ Return Notes
◦ Receipts
 Normally used to update balances in the master files

3.Temporary/ Working Files

 Temporary files are short term files, kept for specific purposes,
data in which will be deleted when the purpose has been
fulfilled.
◦ Suspense Account
◦ Waiting on Bill
◦ Advances Received
 Sage 50

 Is a comprehensive solution that provides advanced

features like
◦ Multi company
◦ Consolidation
◦ Progress billing
◦ Serialized inventory
◦ Crystal reports
◦ Customization capabilities
◦ Comparative budgeting
◦ Integration with Excel
Sage 50
 Provides advanced analysis tools and 140+
customizable reports and financial statements
 It is ideal for people who want accuracy and
control, so they can achieve better business
results.
 It can be installed to the Single/Stand-Alone
Computer or a Network
 Introduction to Sage 50

Tasks which intended to do with the Sage 50 are as follows;

1. Create Your Company – creating company profile, selecting a
suitable Chart of Accounts, Posting Method, Accounting Method
2. Set Up Your Company- Set up Chart of Accounts, Enter Beginning
Balances, Default and Record information for Customers,Vendors,
Inventories, Employees
3. Run Your Company- Record transactions and print forms (checks,
invoices, etc.)
4. Analyze Your Business- Print reports and financial statements
Sage 50
There are several ways to open Sage 50

 From the Taskbar

Select Start – Select Program – Select Sage 50
Accounting 2013 - Click Sage 50 Accounting 2013
icon

 From the Desktop

Double-click Sage 50 Accounting 2013 icon
Creating Your Company
 Business Types –
◦ Select from over 70 samples, or create your own
 Accounting Method –
◦ Cash or Accrual
 Posting Method –
◦ Batch or Real-time
 Fiscal Year, Accounting Periods-
◦ Define up to 26 periods
 How to create a New Company

Click Create New Company Button – Click Next – Enter Your

Company Information's – Type the Company Name “ ABC
Company Ltd” – Click Next – Select the Method to Create your
Company – Select Distributor – Click Next – Choose an
Accounting Method – Select Accrual – Click Next – Choose a
Posting Method – Select Real Time – Click Next – Choose an
Accounting Period Structure – Select 12 months – Click Next –
Choose the fist period of your fiscal year – Select January 2013 –
Click Next – Click Finish
 Business Type field

 The business type defines the kind of business you run and determines
 the makeup of the Equity section of your chart of accounts.
 You can change the business type at any time. You can choose from the
following
◦ Corporation
◦ S Corporation
◦ Partnership
◦ Sole Proprietorship
◦ Limited Liability Company
 Accounting Methods
 Cash Basis Accounting
◦ In cash-basis accounting, you recognize income and expenses when you
receive or spend cash

◦ Many small, service-type businesses (accountants, lawyers,

consultants) like cash-basis accounting.

 Accrual Accounting
◦ In accrual accounting, you recognize income and expenses when you send
or receive an invoice
◦ Accrual Accounting gives you the truest picture of how your business is
doing because it includes booked sales and purchases (Accounts
Receivable and Accounts Payable).
◦ Income and expenses are recognized when they are earned or incurred,
regardless of when they are received or paid.
 Posting Methods

 Another thing to think about is your favored method of

posting transactions.
 There are two options:
◦ Batch
 In batch posting, the transactions you enter are saved to a temporary holding
area, where you can review them before posting the batch to the General
Ledger.
◦ Real time
 In real-time posting, the transactions you enter are both posted and saved
when you click the Save button.
 Accounting Periods

 A really important thing to think about is the starting date for

converting to Sage 50.
 If possible, the start date should be the end of the previous fiscal
year.
 A special feature of Sage 50 is that you can have two years open
at once (up to twenty-six periods)
 Sage 50 lets you have from one to thirteen periods in your fiscal
year; a twelve-period fiscal year based on the calendar year is
standard
 The Sage 50 Desktop Window
Title Bar
Menu Bar

Button Control Bar

Navigation Centers

Short Cuts Business Status Center

Navigation Bar
Thank You!