CH-1 An Overview of Computerized Accounting
Introduction - High initial cost of investments
A system is a method of doing something.
It is a set of two or more interrelated components that
interact & work together to serve a common purpose.
It referred to as a set of inter-dependent components
work together which collectively accomplished certain
objectives. A system has three main elements.
Input , Process &Output
Accounting System: a system used to capture, store
and process data to produce information useful for
decision making.
Data: a recorded fact or figure.
Information: knowledge/ meaning derived from data.
Types of Accounting System
- Manual
- Mechanical
- Computerized
Computerized Accounting System (AIS) refers to a
computer based system designed to transform
accounting data into information. It’s includes:
✔ Many Transaction processing system
✔ Use of information technology
✔ Development of information system
Components of AIS
1. ICT Infrastructure: The physical components of a
computer system.
Input Devices, Storage Devices, Processing Devices,
Output Devices & Network (LAN & WAN)
2. Software: A set of instructions that will tell the
hardware what to do.
System Software
- Operating System
- Network & communication
- Utility Programs
Application Software
- In house developed/Custom Designed
- Off the shelf/Commercial/Package/ Canned
3. Procedures: set of detailed instructions to humans.
Accounting Manual,Operation Manual
4. Data: thousands of raw facts about a company’s
business activities. Receipts Payments
5. People: trained human to maintain and
operate the system. Accountants ICT Experts
■ Merits
- It enables to handle complex & large transaction
easily
- It increase efficiency, accuracy, speed, &
timeliness
- It reduces cost in relation to record keeping (cost
per transaction)
- It enables storage, computation, retrieval, & audit
ability
■ Demerits'….
- Initial implementation may be time taking
- It requires specialized skills
- Slow acceptance may there be by employees,
clients, creditors, & auditors
Application Software: a detailed set of instructions to
the hardware that is designed to perform specific user
oriented tasks.
MS word, Finance Software, Medicine Software,
Peachtree, AccPak, Sun System, Quick Books…
There are 2 types of Application Software
1. In House Developed: designed by a company to
satisfy its own unique information needs.
2. Off the shelf /Package/ Commercial/: designed to
satisfy the general info needs of any company. Is a
mass-produced software for market. E.g. Peachtree
Selection criteria includes
- Conformity with specification
- Need of modification
- Performance
- Uses by other company
- Satisfaction of other user
- Documentation
Peachtree Accounting
Peachtree Accounting is one of the most popular
commercially available computerized accounting
software that is capable of analyzing, recording,
summarizing, evaluating and reporting the financial
affairs of Business Enterprises.
The following steps identify the common activities
that a company may accomplish on Peachtree
accounting:
1. Install Peachtree Accounting on the computer
hardware.
2. Create/Setup the company information on
Peachtree Accounting.
3. Setup user record and activate Audit Trail
4. Maintain Chart of Accounts for the company.
5. Insert General Ledger Beginning Balances.
6. Maintain Subsidiary Ledgers
a. Maintain Vendor Ledger
i. Maintain Vendor Default Information
ii. Maintain Vendor Records
iii. Maintain Vendor Beginning Balances
b. Maintain Sales Tax Authorities and Sales Tax
Codes
c. Maintain Inventory Ledgers
i. Maintain Inventory Defaults
ii. Maintain Inventory Records
iii. Maintain Inventory Beginning Balances
d. Maintain Customer Ledgers
i. Maintain Customer Defaults
ii. Maintain Customer Records
iii. Maintain Customer Beginning Balances
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 ▪ When you finish entering information, select the
e. Maintain Employee Ledgers Next button. Peachtree displays the Create New
i. Maintain Employee Defaults Company-Setup Window.
ii. Maintain Employee Records Create New Company-Setup
f. Maintain Fixed Asset Records The create a New Company-Set up window enable
7. Tasks you to determine how you want to set up your
a. Record Purchase Orders company. There are 4 alternatives to establish how
b. Record Purchase Invoices your new company will be set:
c. Record Payments 1. Use a sample business type
d. Record Sales Quotes 2. Copy setting from an existing Peachtree accounting
e. Record Sales Orders company
f. Record Sales Invoices 3. Convert a company from another accounting
g. Record Receipts Program
h. Record Salaries 4. Build your own chart of accounts
i. Record Depreciation 5. Consolidate existing Peachtree Accounting
j. Record Inventory Adjustments Companies
k. Record Account Reconciliation Select the Next button. Peachtree displays the
l. Record Other Transactions Create New Company-Define Account Segments
8. Reports Window.
9. Maintain Backups Create a New Company-Define Account Segments
10. Restore Backups Account Masking lets you filter information on
financial statements by segments that you setup.
Operating Peachtree Accounting Segment can be department, locations or any other type
To begin Peachtree click on the Peachtree accounting of business unit.
icon or Click on start, point on programs, Peachtree ▪ Select the Next button. Peachtree displays the
Complete Accounting 2005 then click on Peachtree Create New Company- Accounting Method
Accounting Icon. At this step you shall see a Start up determines how Peachtree handles General Ledger,
window. Accounts Receivable & Accounts Payable transactions.
Open an existing company There are two methods of accounting in Peachtree:
Create a new company 1. Accrual Accounting
Other Tasks 2. Cash-Basis Accounting ?
Explore a sample company Note: Once you choose the accounting method and
Convert from other Accounting program complete the New Company Setup Wizard, You cannot
Creating a New Company change it.
To create your company, Peachtree provides the New ▪ Select the Next button. Peachtree displays
company set up wizard. Create New Company -Posting Method
Steps to Create a New Company Window.
1. Start Peachtree Posting Method determines how Peachtree processes
2. Choose Create a new company in the Peachtree transactions to journals and to the general ledger. There
Accounting Start up window or from the file are two posting methods provided by Peachtree:
menu. 1. Real-Time Posting Transactions you enter are
3. Select OK. Peachtree displays the Create a New posted as you save them. Peachtree post transaction
Company-Introduction Window. as they are entered (real time).
4. Read the Introductory Information. 2. Batch Posting transactions you enter are saved
5. Select the Next button. Peachtree displays temporary holding area, where u can review before
Create New Company-Company Information posting the batch to the general ledger.
Window You can edit your transaction in either of the methods,
Create New Company-Company Information Window and you change the method any time can.
is used to enter basic information about the company. ▪ Select the Next button. Peachtree displays Create
Name and Address New Company-Accounting Periods Window
Telephone and Fax Numbers Accounting Periods are units of time that divide our
Types of Business fiscal year for reporting purposes. Last step
There are two accounting period options offered by
N.B: You can change company information at any time. Peachtree Accounting:
1. 12 monthly accounting Periods. This match the 12
calendar months.

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2. Accounting Period that do not match the calendar
months. This is a Custom fiscal year structure, for
example Hamle 1 to Sene 30.
▪ Select the Next button. Peachtree displays the
Create a New Company –Fiscal Year enables you
to set the date in which you start the new
accounting year.
Note: The Fiscal year that you establish in this window
cannot be changed.
▪ Select the Next button. Peachtree displays the
Create a New Company-Finish Window.
Create New Company-Finish Window
When you select on the finish button, Peachtree
displays the setup guide, which helps you start with
Peachtree.
To display and use the setup guide:
1. From the File Menu, Select Setup Guide,
2. Click the area you want to setup, Peachtree
displays the appropriate Window.
Open a Company in Peachtree
1. Open a company from the startup screen
i. After starting the Peachtree Program,
Peachtree displays the startup screen.
ii. Select Open an existing company. Peachtree
displays the Open an Existing Company
Window.
iii. Select the name of the company you want to
open from the Company Name list, and select
2. Open a company within Peachtree
i. From the file Menu, Select Open Company.
Peachtree displays the Open Company
Window.
ii. Select the name of the company from the
Company name list box and then select OK
Note: You can only have one company open at a time
in Peachtree.
Close a Company In Peachtree
▪ If you want to open a different company, Peachtree
will automatically close the current company or
Close the Peachtree Program.
Note: When closing a company in Peachtree, you no
longer display the company data. Closing a company
does not close the accounting period or Year.
Peachtree Security Features
Maintain Users
▪ Peachtree can allow custom access for different
individuals.
▪ Each user record is setup with a User ID and
Password that will be required before opening and
working with company data.
▪ If you maintain users access in Peachtree, you must
set up at least one user with the access to the
Maintain Users Window.
Setup User Records and Passwords
To setup the first user record (System Administrator)
1. From the Maintain Menu, Select Users. Peachtree
displays the Maintain Users Window.
2. Enter a User ID and its corresponding Password
3. Select the Control Level for each program area
4. To establish the user record, select save
5. Select the New button and enter user ID and
Corresponding Password and continue to 3-4-5.
6. When you finish, select Close
Note: Passwords are case sensitive and must be unique
Backup Company
It is important that you back up your company data files
on a regular basis in case information is accidentally
deleted or corrupted.
Backups are the only way to ensure the security of the
accounting records you store in Peachtree.
Backup Company
To back up your company data using the Peachtree
format:
1. From the File menu, select Back Up. Peachtree
Displays the Back Up Company Window.
2. Click the Back Up Now button
3. In the Save Back Up As Window, at save In enter
or Select the path where you want to save your
back up company.
4. At File name, enter the name for the backup copy.
5. Click the Save Button
6. Click OK
Open Back Up File/Restore
This process will restore your company data files and
customized forms to a previous state.
To Restore Company Data File:
1. Open the company you want to Restore
2. From the File Menu, select Restore. Peachtree
displays the Open Back Up File Window
3. Choose the folder or hard drive where the back
up file is located.
4. Select the back up file you want to restore
5. To begin restoring data, select the correct .ptb
file and select the open button.
6. To continue select OK.
7. The Restore Options window appears, letting
you decide which files you want to restore.
8. Select the Restore Button
Maintaining Accounts
If you are currently using a manual system for your
accounting, there are several things you need to know
when you set up a chart of accounts:
1. Determine a conversion date, and gather balances
as of that date.
2. If you are setting up a new chart of accounts, you
need to have all your account numbers and names
written down.
Maintain Chart of Accounts
1. Select the Chart of Accounts Option either from
the Setup Guide or from the Maintain Menu.
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 Peachtree displays the Maintain Chart of Accounts
Window.
2. Enter an account ID & Description for the account.
3. Select an Account Type from the Drop-down list
4. Select Save
5. Enter the Beginning Balances
Maintain Chart of Accounts
To setup an account from most windows accessed from
the Tasks Menu:
1. Type + or double-click in the Account ID field.
Peachtree displays the maintain Chart of Accounts
Window.
2. Enter an account ID and description for the account
3. Select an account type from the drop-down list
4. Save
General Ledger Account Beginning Balances
1. From the Maintain Menu, select Chart of
Accounts. Peachtree displays the Maintain
Chart of Accounts Window.
2. Select the beginning balances button.
Peachtree displays the Select Period Window.
3. Select the period in which you want to enter
beginning balances.
4. Select OK. Peachtree displays the chart of
accounts Beginning Balances Window.
5. Click or tab to any of the white cells in the
grid to add an amount.
6. Enter all the beginning balances for the
accounts.
7. Select the OK button when you finish.
Maintain Vendor Information
Many businesses not only sell on credit, but also use
credit to purchase merchandise.
Businesses must, in order to remain successful, have
timely and accurate information about purchases and
accounts Payable.
Setting Up Vendor Defaults
Defaults are information you enter one time that will
automatically appear in windows or is used by the
system.
To set up and review vendor defaults:
1. From the Maintain menu, select Default
Information and choose Vendors. Peachtree will
display a Vendor Defaults Window
2. Default information for vendors includes: Standard
Vendor Payment Terms, General Ledger Accounts
for purchases and discounts, aging information for
invoices due, custom field labels and 1099 settings.
Setting-Up Vendor Records
The maintain Vendor window allows you to enter
and/or update specific information about each vendors.
It is also where you set up government agencies to
whom you pay taxes.
To enter or update vendor information:
1. Select maintain from the menu bar, then select
vendors. Peachtree displays the Maintain Vendors
Window.
2. In the window, you can enter such information as
name, address, vendor history, the General Ledger
Purchase account, terms of payment and credit
limit, your balance with this vendor.
Beginning Balances for Vendors
To enter beginning balances for vendor records:
1. Select the beginning balances button on the
General tab of the Maintain Vendors window.
INVENTORY LEDGER
Setting-Up Inventory Item Defaults
To set up or review inventory item defaults, select
Default Information from the Maintain menu, and
choose Inventory Items.
Maintain Inventory Items
To set up or review inventory item records, select
Inventory Items from the Maintain menu
Entering Beginning Balance for Inventory
You can enter inventory beginning balance for stock
items and assemblies.
Select the beginning balance button on the General Tab
of the maintain inventory items window. The Inventory
Beginning Balance window displays.
From the list, select the item you want to enter
Beginning Balance for.
Enter two of the three amounts- quantity, unit cost and
total cost. Peachtree Accounting will calculate the third
or remaining amount.
Select ok to save the beginning balance of all items
selected
SETTING UP CUSTOMER AND SALES TAXES
Setting UP SALES TAX AUTHORITIES
To set up sales tax authority from the Maintain main
menu click on Sales taxes. Then choose sales tax
authorities.
SETTING UP SALES TAX CODES
To set up sales tax codes from the main menu select
Maintain the click on the Sales taxes, and then choose
sales tax codes. Make sure you have already set up your
sales tax authorities before you begin setting up sales
tax codes.
Set up Customers
To set up or review customer defaults
From the Maintain menu, select Default Information
and choose Customers.
To set up or review Customer records
From the Maintain menu, select Customers/
Prospects.
PAYROLL
The payroll process in Peachtree Accounting involves
the following steps:
1. Completing Payroll Setup Wizard
2. Maintaining Payroll Tax Tables
3. Entering Employee Default Information
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 4. Maintaining Employee Personal Records New
5. Completing Payroll Tasks Listed
Payroll Tax Tables GL Accounts
Creating payroll tax tables involves the following steps: 100% Use
From the File main menu, select Payroll tax tables, and In Service
then choose Edit company/User-Maintained Life
In the maintain company payroll tax tables window Browse for Assets
complete the following procedures. Disposing of an Asset
Tax ID: Depreciation
Tax Name . Calculating Depreciation
Tax Name must be entered according to strict rules. Steps for calculating depreciation.
The name consists of two parts, separated by a single 1. From the Task menu, select Calculate
space. Name and Year Depreciation
Payroll Tax Formula 2. Check the boxes you want to calculate
Formula - This box helps you to write a formula telling depreciation for.
Peachtree how to calculate payroll deductions, 3. Select the month-end as a cutoff date, through
additions or any other item you want the program to which you want to calculate depreciation.
calculate. 4. Select OK to calculate. You are notified when
For a single equation, a variable is put at the beginning depreciation calculation is complete.
of the equation, followed by an equal sign (=), followed Posting Depreciation
by an expression Steps for posting Depreciation
Below are sample formula for some payroll Print the Fixed assets General Leger Posting report.
deductions/additions. From the tasks menu, select the Post to Ledger. The
Employee Income Tax Post to General Ledger window displays
Tax ID ETHTAX Select the Post icon
Tax Name ETHTAX 07 Reports
Formula ANSWER=-TABLE Peachtree provides you with a versatile reporting
(ADJUSTED_GROSS) program.
Fixed Assets Displaying a Report onscreen
Represents property, plant, or equipment assets that are 1. From the Reports Menu, select the type of report
acquired for use in a business rather than for resale. you want to display. The select a Report window
Setting up Fixed Assets display with your report area selected.
The fixed asset program needs at least three general 2. Scroll through the report list to select a report you
ledger accounts A fixed Asset account, An want to display on screen.
accumulated Depreciation account and a Depreciation 3. For displaying a report on the screen: Double
Expense account. clicking the specific report in the report list.
A. Gain or Loss on Sale of Asset account, with an 4. To Print a report displayed on screen, Select the
account type of Expense. Print icon.
Maintaining Company calendar and Books
Maintain Company calendar window is used to enter
the conversion date and Short tax year information.
Conversion date is the date you begin using Peachtree
Fixed Assets.
Maintaining Company Books tells Peachtree for what
purpose you use the calculated depreciation
Maintaining Assets
Use Maintain Assets Window to add a new asset or edit
information for an existing asset.
Maintain Asset Fields
Asset ID
Description
Date Acquired
Location
Class
Serial Number
Department