GOROKA TECHNICAL COLLEGE

Computerised Accounting Systems

Lesson Five

Learning Outcomes
At the end of this lesson the student will:
1. Entering Opening Balances
2. Locate and correct and Opening Balance errors
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ENTERING OPENING BALANCES

When commencing a new accounting period, you are required to bring forward the general
ledger balances from the previous year and if for a new accounting system, the ending
balances of the old accounting systems is used as opening balances. In this section you will
learn how to post the opening balances for a new data file.

Henry and Molly are to share all profits equally, having both contributed cash and computer
equipment to the business. Follow these steps to enter the opening balance for the cheque
account on 1 April 1998.

Follow these steps:

1. At the General Ledger commend centre select Setup from the menu bar.
2. Select Balances.
3. Select Account Opening Balances. The Account Opening Balances dialog
box will open.
4. Click the cheque account opening balance.
5. Enter K2,000 and press enter.
Your screen should look like figure 3.11

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 When this
shows zero, the
postings are
balanced.

Fig: 3.11 Opening Balances window.

Because the accounting entries must balance, MYOB indicates that there is K2,000 left to be
allocated. You should continue to open the other ledger balances until the amount left to be
allocated (displayed in the lower section of the dialog box) is zero.
6. Scroll down and click the opening balance for the Merchandise Inventory
account.
7. Enter K378.
8. Enter K5,500 in the Office Equipment at Cost account.
9. Continue to scroll down the list until you locate the equity accounts.
Remember: equity accounts are prefixed with a ‘3’.
10. Click the opening balance for Henry’s capital account.
11. Enter K3,939.
12. Tab to Molly’s capital account.
13. Enter K3,939 and press enter.
14. Check that the entries balance (that is, the amount left to be allocated equals
K0.00), then click OK.

Locate and correct and Opening Balance errors.

In this lesion you won’t be able to print, however it is important to note how to print reports.
It is also important to note that at the end of each session or month, printouts should be made
to check for errors in posting. Errors may be due to one of the following reasons:
1. Account allocation.
2. Date used.

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 3. Amount.
4. Description of the transaction and reference.
5. Department charged or allocated.
When creating a new data file and you are in the process of bring forward opening balances, a
printout should be made to cross check your work. This enables you to ensure all opening
balances are correctly taken up in the new books of accounts. In the case for general ledger
accounts, from the printouts highlight all differences on your printout. Check for obvious data entry
errors (for example, dates, duplicate entries and incorrect amount).

Correct error in Opening Balance.

Follow these steps:

1. From the General Ledger commend centre select Setup from the menu
bar.
2. Select Balance
3. Select Account Opening Balances. The Account Opening Balances
dialog box will open.
4. Edit the amount that in error.
5. Click OK when complete.

Correct error in General Ledger Accounts.

Follow these steps:
1. From the command centre, click Transaction Journal. Transaction report
window will appear, showing different journals (general journal,
disbursement/payment, receipts, sales, purchases and inventory).
2. Select General.
3. Select the date range of where you think the transaction is which you want
to edit.
(e.g., 8/1/12 to 8/10/12) and press TAB or Enter.
4. Click the zoom arrow next to the transaction you want to edit. The
transaction edit window will appear.
5. Make the adjustments and click OK.

Activity 3.5

a) Henry has just discovered an error in his opening balance. He only had K1,800 in his
cheque account, therefore his and Molly’s equity needs to be reduced by K100 each.
Follow these steps to make this adjustment:

i. At the Accounts command centre click Setup from the menu bar.
ii. Click Balances.
iii. Click Account Opening Balances. The entry for opening balances will
appear.
iv. Click the Cheque Account opening balance and key 1800.
v. Press Enter. The amount left to be allocated will change to K200.
vi. Key 3839 for Henry’s capital account and 3839 for Molly’s capital account.
Your entry will now balance.

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Activity 3.6

a) Start MYOB and open the Henry’s data file drive that you created recently from
your home.

b) Make the following adjustments to the chart of accounts for Henry’s Paint
Wholesalers:

i. Edit the 5.1000 Purchases account. Make it a header account called Paint
Purchases that provides a sub-total. Edit the name of 1.1300 Merchandise
inventory to inventory.
ii. Create the following new cost of sales accounts:
5.1001 Ceiling Paint.
5.1002 Outdoor Paint.
5.1003 Indoor Paint.
5.1004 Furniture Paint.
iii. Delete 4.1005 as you have two ceiling paint income accounts.
iv. Create the following asset accounts:
1.1310 Ceiling Paint.
1.1320 Outdoor Paint.
1.1330 Indoor Paint.
1.1340 Furniture Paint.

c. Enter the following opening balance (check the amount to be allocated as you go).

Account number Account name Opening balance

1.1130 Cash Drawer 100
1.1200 Trade Debtors 3,102
2.1110 Visa 975
2.1200 Trade Creditors 1,250
2.1300 Sales Tax Payable 352
(GST)
4.1001 Ceiling Paint 550
4.1002 Outdoor Paint 2,200
5.1001 Ceiling Paint 875
5.1002 Outdoor Paint 1,250

d. View your answer (in the screen) with the solution in figure 3.12 below. Notice
that the opening balances do not appear as entries. They appear instead as year-to-date
(YTD) debits and credits.

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Reference:
Keeping Account with MYOB by Cathy Grundy & Doug Lyte.