QG To FundAcc PDF

QUICK GUIDE TO
FUNDAMENTALS OF
ACCOUNTING using SAP
Business One
TABLE OF CONTENTS
Chapter 1 Introduction to Fundamentals of Accounting
Chapter 2 Chart of Accounts
Chapter 3 Subsidiary Ledgers

QUICK GUIDE TO FUNDAMENTALS OF ACCOUNTING using SAP Business One
Chapter 4 Stock Cards
Chapter 5 The Accounting Cycle
Chapter 6 Journalizing
Chapter 7 Special Journal Sales
Chapter 8 Special Journal Purchases
Chapter 9 Special Journal Receipts
Chapter 10 Special Journal Disbursements
Chapter 11 Ledgers
Chapter 12 Trial Balance
Chapter 13 Adjustments
Chapter 14 Financial Statements
Chapter 15 Closing Entries
Chapter 16 Post-Closing Trial Balance
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CHAPTER ONE:
INTRODUCTION TO FUNDAMENTALS OF ACCOUNTING
Accounting is the method in which financial information is

gathered,processed, and summarized into financial statements and reports.
The purpose of accounting is to provide information used in decision

making. Accounting may be viewed as a system (a process) that converts data
into useful information.
Every business has numerous processes. Some simple, others are

complex and cumbersome. But as the business grows, acquires new
customers, enters new markets and keeps pace with constant changes in

statutory regulations... the company will need to maintain highly accurate
and up-to-date accounting, inventory and statutory records.
This is where a computerized accounting helps simplify, integrate,

and streamline all the business processes, cost-effectively and easily.
Salient Features of Computerized accounting
1. Fast, Powerful, Simple and Integrated
Computerized accounting is designed to automate and integrate all

the business operations, such as sales, finance, purchase, inventory
and manufacturing. With Computerized accounting, accurate, up-to-
date business information is literally at the fingertips. The
Computerized accounting combine with enhanced MIS, Multi-lingual
and Data organization capabilities to help the company simplify all
the business processes easily and cost-effectively.
2. Complete Visibility
Computerized accountings giving the company sufficient time to plan, increase the customer base, and
enhance customer satisfaction. With Computerized accounting the company will have greater visibility
into the day-to-day business operations and access to vital information.
3. Enhanced User Experience
Computerized accounting allows the company to enter data in a variety of ways which makes work a
pleasure. Adapting to the specific business needs is possible.
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4. Accuracy, Speed
Computerized accounting has User-definable templates which provides fast, accurate data entry of the
transactions; thereafter all documents and reports can be generated automatically, at the press of a
button.
5. Scalability
Computerized accounting adapts to the current and future needs of the business, irrespective of its
size or style.
6. Power
Computerized accounting has the ability to handle huge volumes of transactions without
compromising on speed or efficiency.
7. For Improved Business Performance
Computerized accounting is a highly integrated application that transforms the business processes with
its performance enhancing features which encompass accounting, inventory, reporting and statutory
processes. This helps the company access information faster, and takes quicker decisions.
Computerized accounting also guarantees real-time optimization of operations and enhanced
communication.
8. Quick Decision Making
Generates real-time, comprehensive MIS reports and ensures access to complete and critical
information, instantly.
9. Complete Reliability
Computerized accounting makes sure that the critical financial information is accurate, controlled and
safe from data corruption.
Advantages of Computerized accounting
Automation of tedious clerical jobs

Speed and accuracy
Low cost of packages
Automatic generation of standard reports
Redundant data storage permits efficient generations of some reports
Increase revenue while lowering operating costs and enhancing competitive advantage of the
company.
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Accounting and SAP Business One
SAP software can help you become a best-run business in fact, it's the choice of more than 80,000 small
businesses and midsize companies.
SAP software is:
Affordable for small businesses and midsize companies

Every business is unique, which is why we offer a complete portfolio of business management and
business intelligence solutions designed to fit the way you do business and your budget.
Designed with your company in mind
SAP solutions for small and midsize companies are designed to be complete offering the breadth
and depth of functionality you need to run your business; easy to use enabling quick adoption with
little training; and flexible they can scale and adapt as you grow your business. Every solution we

offer is based on best practices learned from more than 35 years of SAP's experience working with
best-run companies.
Did You Know
SAP is the world's largest software company in business for more than 30 years.
SAP has more than 109,000 total customers 80,000 of which are small and midsize enterprises.
SAP has customers in more than 50 countries and more than 4,500 channel partners worldwide.
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Exercise 1.1
1. Log in to SAP Business One
From your desktop, click SAP Business One.
2. When the log in screen is prompted, do not yet enter your ID and password. Instead, click Change
Company button.
3. Create a new company.
Caution: This shall be your company every time you use SAP Business One. Errors may have
irreversible effects. Extra care must be observed in the creation.
After clicking Change Company button, a new window Choose Company will appear. Click New. Enter
the following details:
SITE PASSWORD: B1Admin
Company Name : ABC Enterprises

Database Name: ABC
Local Settings: United Kingdom
Chart of Accounts: User-Defined
Define Posting Periods: (click button)
A new window will appear Posting Period.
Period Code: 20XX (must be the same for posting, due and doc below)
Period Name: 20XX (must be the same for posting, due and doc below)
Sub-Periods: Months
No. of Periods: (will automatically change to 12)
Dates (Posting, Due, Doc)(defaults to the year of system date)
Click Continue. Click OK. For a few minutes, the system will create the new company. Afterwards, you
will be prompt to enter a new password, type 1234as your new password.
4. Hide modules which are not to be used Sales Opportunities, Production, MRP, Service, Human
Resources and Reports.
Click Form Settings in the Toolbar (or go to Tools - Form Settings). Uncheck Sales Opportunities,
Production, MRP, Service, Human Resources and Reports.
Click Update. Click OK.
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5. Hide documents and reports which are not to be used.
a. Administration
Hide Exchange Rates and Indexes; Data Import/Export; Approval Procedures; License; Add-ons;
Alerts Management
Go back to Form Settings in the Toolbar. Expand the Administration module by clicking the yellow
arrow before it. Uncheck Exchange Rates and Indexes, Data Import/Export, Approval Procedures,
License, Add-ons, Alerts Management. Click Update. Click OK.
b. Financials
Uncheck everything under Financials except Chart of Accounts, Edit Chart of Accounts, Journal Entry,
Journal Vouchers, and Financial Reports.

Go back to Form Settings in the Toolbar.Expand the Financials module by clicking the yellow arrow
before it. Uncheck everything under Financials except Chart of Accounts, Edit Chart of Accounts, Journal
Entry, Journal Vouchers, and Financial Reports. Click Update. Click OK.
c. Sales AR
Show only A/R Invoice, A/R Invoice + Payment and Sales Reports.
Go back to Form Settings in the Toolbar.Expand the Sales - AR module by clicking the yellow arrow
before it. Uncheck everything under Sales-AR except A/R Invoice, A/R Invoice + Payment and Sales
Reports. Click Update. Click OK.
d. Purchasing - AP
Show only A/P Invoice and Purchasing Reports.
Go back to Form Settings in the Toolbar.Expand the Purchasing-AP module by clicking the yellow arrow
before it. Uncheck everything under Purchasing-AP except A/P Invoice and Purchasing Reports. Click
Update. Click OK.
6. Show your Main Menu. Submit to your Instructor.

The Main Menu shall contain the created
Company ABC Enterprises.
Under it must be the user manager.
Only 7 modules are visible.
7. Exit from the system. File > Exit
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Exercise 1.2
2. Choose company name and enter your User Code and Password. Click OK.
When the log in screen is prompted, do not yet enter your ID and password instead, click
Change Company button. The Choose Company window will appear.
Click the Company Name that you have created in Exercise 1.1. The line will be highlighted.
Enter User Code (manager) and the password that you have created in Exercise 1.1. Press
Enter.
3. Enter company details.
Street / PO Box 1234 Graham Avenue

City Quezon City
Zip Code 1100
Country Philippines
Go to Administration > System Initialization > Company Details > General tab
Enter the above data.
4. Setup Philippine Peso as the company currency.
Go to Administration > System Initialization > Company Details > Basic Initialization tab
In the Local Currency field, click the dropdown list to view available currencies. Since Philippine
Peso is not yet defined, click Define New. A new window Currencies Setup will appear.
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Type the following under their respective columns (ignore other fields):
Code CurrencyIntl Code Intl DescriptionHundredth Name English English Hundredth Name
PHP Phil Peso PHP Phil Peso cent PHP cent

Set Phil Peso in the System Currency as well by clicking the dropdown list and choose Phil Peso.
Collapse the module Administration by clicking Administration.
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Chapter Two:
CHART OF ACCOUNTS
A chart of accounts is a listing of the names of the accounts that a company has identified and made
available for recording transactions in its general ledger. A company has the flexibility to tailor its chart
of accounts to best suit its needs, including adding accounts as needed.
Within the chart of accounts you will find that the accounts are typically listed in the following order:
Balance sheet accounts
Assets
Liabilities
Owner's (Stockholders') Equity
Income statement accounts

Operating Revenues
Operating Expenses
Non-operating Revenues and Gains
Non-operating Expenses and Losses
Within the categories of operating revenues and operating expenses, accounts might be further
organized by business function (such as producing, selling, administrative, financing) and/or by
company divisions, product lines, etc.
A company's organization chart can serve as the outline for its accounting chart of accounts. For
example, if a company divides its business into ten departments (production, marketing, human
resources, etc.), each department will likely be accountable for its own expenses (salaries, supplies,
phone, etc.). Each department will have its own phone expense account, its own salaries expense, etc.
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Exercise 2.1
Enter.

3. Identify the classification of the Chart of Accounts.
Go to Financials > Chart of Accounts

The drawers on the left side of the screen represent the major classifications.
1. Assets
2. Liabilities
3. Equity
4. Turnover (Revenue)
5. Cost of Sales
6. Operating Costs
7. Non-Operating Income and Expenses
8. Taxation and Extraordinary Items
Exit by clicking the

a. x button on the upper right corner of the window Chart of Accounts; or
b. Cancel button at the lower left side of the window
4. Add the following classification of Assets title accounts:
Code Description
A100000 Current Assets
A200000 Noncurrent Assets
Click the Edit Chart of Accounts under the Financials module.

Check Assets. Click OK. The Edit Chart of Accounts will then appear with the buttons Add Same
Level or Add Sub Level shown at the bottom part of the window Edit Chart of Accounts.
Click Add Sub-Level Account. A highlighted line will appear after Assets. The system is now
ready to accept a new entry.
Title must be chosen by clicking the button on the left side of the screen under G/L Account
Details (if you are not yet there).
Type A100000 in the field G/L Account. Type Current Assets in the field Account Name.
Click Update. Do not click OK yet!
To add Noncurrent Assets, there are two options: 11
1. Highlight Current Assets by clicking on it then click Add Same-Level Acct; or
2. Highlight Assets by clicking on it then click Add Sub-Level Acct
Type A200000 in the field G/L Account. Type Noncurrent Assets in the field Account Name.
5. What level is Assets? Current and Noncurrent Assets?
1st Level; 2nd Level
6. Add the following classifications of Current Assets
Code Description
A110000 Cash and Cash Equivalents
A120000 Trade and Other Receivables

A130000 Inventory
A140000 Accruals
Click Current Assets so that the line will be highlighted.

Click Add Sub-Level Acct
Type A110000 in the field G/L Account. Type Cash and Cash Equivalents in the field Account
Name.
Follow the same procedures for A120000, A130000 and A140000.
Note: To edit a G/L Account or Account Name, just click the desired account and re-type the fields for
G/L Account or Account Name. To delete, right-click the desired account, click Advanced, click Delete
Account.
7. What level is Cash and Cash Equivalents? Inventory?

3rd Level
8. Add the following accounts:
Cash and Cash Equivalents Code Description

A111000 Cash on Hand
A112000 Cash in Bank
A112100 Cash in Bank - MBTC
A112200 Cash in Bank BDO
A112300 Cash in Bank - Clearing
Click Cash and Cash Equivalents so that the line will be highlighted.
Click Add Sub-Level Account.
Type A111000 in the G/L Account field and type Cash on Hand in the Account Name field. Click
12 Active Account since this is a posting account, no account is under this account anymore.
Click Update.
Follow the same procedures for Cash in Bank, Cash in Bank-MBTC, Cash in Bank-BDO and Cash
in Bank - Clearing. Title must be chosen for Cash in Bank. Active Account must be chosen for
Cashin Bank-MBTC and Cash in Bank-BDO. MBTC, BDO and Clearing are sub-levels of Cash in
Bank.
Exit by clicking OK.
9. What level is Cash on Hand and Cash in Bank? Cash in Bank-MBTC and Cash in Bank-BDO?
Level 4; Level 5
10. Later during the transactions, how will the system identify the Cash accounts as cash accounts?
Activate.

Click Cash on Hand. The G/L Account Properties is shown in the lower left corner of the screen.
Check Cash Account box and click Update.
Do the same for Cash in Bank- MBTC, Cash in Bank BDO.
Do not check Cash Account box for Cash in Bank Clearing.
11. View the updated Chart of Accounts. Submit to your instructor.
Currency of the accounts is set at Philippine peso

Proper leveling is shown
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Exercise 2.2
3. What are the classifications of Assets? Current Assets?
4. Add the following accounts under Trade and Other Receivables:
Code Description Level

A121000 AR Net Realizable Value 4(Title)
A121100 Accounts Receivable 5(Active)
A121200 Allowance for Doubtful Accounts 5 5(Active)
5. Change the description for Accruals to Other Current Assets. Add the following account:

A141000 Input Tax 4(Active)
6. Add the following accounts under Noncurrent Assets:

A210000 Land 3 (Active)
A220000 Machinery NBV 3 (Active)
A221000 Machinery 3 (Active)
A222000 Acc. Dep. - Machinery 3 (Active)
A230000 Office Equipment NBV 3 (Active)
A231000 Office Equipment 3 (Active)
A232000 Acc. Dep. Off. Equip. 3 (Active)
7. Add the following level 2 accounts as active accounts in their respective drawers:
Code Description
Liabilities L100000 Accounts Payable

L200000 Notes Payable
L300000 Withholding Tax Payable
L400000 Deferred Income
L500000 Accrued Expenses Payable
L600000 Output Tax
Capital and Reserves C100000 Aquino, Capital

C200000 Aquino, Personal
C300000 Income Summary
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Turnover (Revenue) R100000 Service Income
R200000 Discount for Services
Cost of Sales CS100000 Cost of Sales - Service
Operating Costs O100000 Salaries & Wages

O200000 SSS Contribution Expense
O300000 Philhealth Contribution Expense
O400000 Rent Expense
O500000 Supplies Expense
O600000 Light Expense
O700000 Water Expense
0800000 Communication Expense
O900000 Transportation Expense
O1000000 Depreciation Expense Machinery
O1100000 Doubtful Accounts Expense
O1200000 Taxes and Licenses

Non-Operating Income & Expenditure
N100000 Interest Income

N200000 Interest Expense
N300000 Miscellaneous Income
N400000 Miscellaneous Expense
Taxation and Extraordinary Items T100000 Provision for Income Tax
9. View your Chart of Accounts. Submit to your instructor.

10.
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Chapter Three:
SUBSIDIARY LEDGERS
What is the purpose of control accounts?
A control account is a summary account in the general ledger. The details that support the balance in
the summary account are contained in a subsidiary ledgera ledger outside of the general ledger.
What is the purpose of subsidiary ledgers?
A subsidiary ledger contains the details to support a general ledger control account. For instance, the
subsidiary ledger for accounts receivable contains all of the information on each of the credit sales to
customers, each customers remittance, return of merchandise, discounts, and so on. With these
details in the subsidiary ledger, the Accounts Receivable account in the general ledger can be a control
account. As a control account, it will simply report the aggregate amounts of the accounts receivable
activity.
By having the details of the accounts receivable activity in a subsidiary ledger, a company can better
control its financial information. For example, the credit manager and others in the credit department
of a company will have access to any and all of the credit sales information through the subsidiary
ledger without having access to any other account in the companys general ledger.
In SAP Business One, outstanding balances of customers or vendors can be retrieved through the Account Balance field. Once the
navigation arrow is clicked, details of the debits and credits are shown.
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Exercise 3.1
Enter User Code (manager) and the password that you have created in Exercise 1.1.Press Enter.
3. What module and document will for the maintenance of the Subsidiary Ledger?

Business Partners > Business Partner Master Data
4. What are the prerequisites before adding a new vendor or customer?
a. Credit Term
The credit term is the Payment Terms in the system. This is found in the field Payment Terms
under the Payment Terms tab.
b. Controlling Account
Under the Accounting tab, a field for Accounts Receivable or Accounts Payable is found. This is
for the setup of the posting account or control account of the customer or vendor. Example, a
customers control account must be Accounts Receivable. This field must be filled up with the
account Accounts Receivable.
c. VAT Setup
5. Add a new payment term with a description of 2/10, n/30.
a. Go to Administration > Setup > Business Partners > Payment Terms. Alternatively, you can go to
Business Partners > Business Partner Master Data > Payment Terms > Payment Terms > Define New
(click the Add icon in the toolbar to view Define New).
b. In the Payment Terms Code field, type 2/10, n/30.
c. In the days field, type 30. This is to set the credit term.
d. To setup the early payment discount, click the Cash Discount Name field so that you will have an
option to define a new term. Click Define New. A window Cash Discount will appear.
e. Type 2/10, n/30 in the Code and Name field.
f. Type 10 in the Cash Discount Days Field and 2 in the Discount % field.
g. Click Add. The current window will disappear.
h. Click Add again.
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Note: To view the payment terms made, in the window Payment Terms Setup, click Previous Data
icon, click again until the desired term is found.
6. How will the system know that the Accounts Receivable, Allowance for Doubtful Accounts (if aging
method is chosen), Accounts Payable, Notes Payable and Deferred Income are control accounts?
Activate.
20 Go to Financials > Chart of Accounts
Click Accounts Receivable so the line is highlighted
Check Control Account box in the G/L Account Properties found in the lower left corner of the
current screen
Follow the same procedures for Allowance for Doubtful Accounts, Accounts Payable, Notes
Payable and Deferred Income.
Click OK.

Note: Once you click update the font color of the account selected will become green.
7. Setup VAT Input and Output at 12%.
a. Go to Administration > Setup > Financials > Tax > Tax Groups
Tax Groups Setup window will appear
b. Setup VAT Input.
For the 12% Input.

Go to the last line and click the field under the column code.
Enter/Type:
Code Name Category Tax Account
IT Philippine Input Tax Input Tax A141000
Do not click Update/Add yet!
Click Tax Definition found at the lower right corner of the window.
Set effective from January 1, 20XX by clicking the calendar icon
Set rate 12 (for 12 %).
Click Update. Click OK. The Tax Definition Setup will exit.
In the window Tax Groups Setup, click Update.
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For the 0% Input.
Enter/Type:
ITX Philippine Input Tax Exempt Input Tax A141000
b. Setup VAT Output.

Go to line 20 and click the field under the column code.
Enter/Type:

OT Philippine Output Tax Output Tax L600000

For the 0% Output.

Enter/Type:
OTX Philippine Output Tax Exempt Output Tax L600000
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8. Defaults in SAP Business One for the equivalent of special journals in a manual system.
Module Document Default
Sales-AR AR Invoice Debit to AR and Subsidiary Ledger

AR Invoice + Payment Debit to Cash
Purchasing-AP AP Invoice Credit to AP and Subsidiary Ledger
Banking Incoming Payments Debit to Cash

Credit to AR and Subsidiary Ledger
Banking Outgoing Payments Credit to Cash

Debit to AP and Subsidiary Ledger

Tips:
1. Tag Cash On Hand, Cash in Bank - MBTC and Cash in Bank BDO as Cash Accounts
Click Cash on Hand so the line is highlighted
Check Cash Account box in the G/L Account Properties found in the lower left corner of
the current screen
Follow the same procedures for Cash in Bank - MBTC and Cash in Bank -BDO
Click OK.
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2. Setup GL Account Determination for Sales and Purchasing modules.
Go to Administration > Setup > Financials > GL Account Determination
a. Go to Sales tab > General subtab, assign appropriate Account Code for each
required Type of Account.
b. Follow the assignment below.
c. Assign Philippine Output Tax for both Sales Tax Group Items and Service under
the Tax tab.
d. Click Update. Click OK to exit.
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a. Go to Purchasing tab > General subtab, assign appropriate Account Code
for each required Type of Account.
b. Follow the assignment below.
c. Assign Philippine Input Tax for both Sales Tax Group Items and Service
under the Tax tab.
d. Click Update. Click OK to exit.

8. For cash sales transaction, setup the document AR Invoice + Payment so that it will have a system-
generated entry every time it will be used. Call this kind of customers as One-Time Customers.
a. Create a master data labeled as One-Time Customers, code is CU100000. Payment Terms is Cash.
Go to Business Partners > Business Partner Master Data

Change default mode of Find to Add by clicking the Add icon in the toolbar (after telescope
icon)
Enter/Choose/Type:
Code CU100000
Name One-Time Customers
Type Customer
Group Customers 25
Payment Terms Cash Basic
Accounts Receivable Accounts Receivable (Found under the Accounting tab; General sub-
tab. Click the blank field so that a selection list will appear. Choose
Accounts Receivable by double-clicking)
Tax Status Liable (found under the Accounting Tab; Tax sub-tab)
Tax Group Click the selection list or press tab in the field and choose OT for Phil
Output Tax.
Click Add. Exit.
b. Setup document to have a default of One-Time Customer. Test by opening the document AR
Invoice + Payment.
Go to Administration > Setup > Financials > GL Account Determination > click Sales Tab
There are two sub-tabs under the Sales tab General and Tax. Click General.
Click the selection list from the blank field of Default Customer for AR Invoice and Payment
A new window List of Business Partners will appear.
Choose One-Time Customers by double-clicking.
Click Update. Click OK. Collapse the Administration module.
To test, go to Sales-AR > AR Invoice + Payment
26 The document will show default customer One-Time Customers. The document is now ready for
a cash sales transaction. The document number is 1. EXIT.
9. Add customers.
Code Name Payment Terms Control Account Tax

CU200000 Kris Aquino 2/10, n/30 Accounts Receivable Liable-OT
CU300000 KC Concepcion 2/10, n/30 Accounts Receivable Liable-OT

To add Kris Aquino:
Go to Business Partner > Business Partner Master Data
a.Change default mode of Find to Add by clicking the Add icon in the toolbar (after telescope icon).
b. Type the customer code in the Code field, CU200000. Choose Customer in the next field.
c. Type the customers name in the Name field, Kris Aquino.
d. Choose the appropriate Group which is Customers.
d. Choose the Payment Term 2/10, n/30 under the Payment Terms tab.
e. Choose Accounts Receivable in the Accounts Receivable field under the Accounting tab, if default is
not activated.
f. Choose Liable in the Tax Status field found under the Tax sub-tab of the Accounting tab. In the Tax
Group field, choose OT for Philippine Output Tax.
g. Click Add.
To add KC Concepcion
a. You must be in the Add mode.
b. Type the customer code in the Code field, CU300000. Choose Customer in the next field.
c. Type the customers name in the Name field, KC Concepcion.
d. Choose the appropriate Group which is Customers.
e. Choose the Payment Term 2/10, n/30 under the Payment Terms tab.
f. Choose Accounts Receivable in the Accounts Receivable field under the Accounting tab, if default is
not activated.
Group field, choose OT for Philippine Output Tax.
g. Click Add.
11. Add vendors.
Code Name Payment Terms Control Account Tax

SU100000 CAT Equipment 2/10, n/30 Accounts Payable Liable-IT
SU200000 Shellix Oil 2/10, n/30 Accounts Payable Liable-IT
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To add CAT Equipment
a. Type the vendors code SU100000 in the Code field. The field next to it must be Vendor.
b. Type the vendors name CAT Equipment in the Name field.
c. Choose the appropriate Group which is Suppliers.
d. Choose the appropriate Payment Term 2/10, n/30 under the Payment Terms tab.
e. Choose Accounts Payable in the Accounts Payable field under the Accounting tab, if default is not
activated.
Group field, choose IT for Philippine Input Tax.
g. Click Add.
To add Shellix Oil

a. Type the code SU200000 in the Code field. The field next to it must be Vendor.
b. Type the vendors name Shellix Oil in the Name field.
c. Choose the appropriate Group.
d. Choose the appropriate Payment Term 2/10, n/30 under the Payment Terms tab.
e. Choose Accounts Payable in the Accounts Payable field under the Accounting tab, if default is not
activated.
Group field, choose IT for Philippine Intput Tax.
g. Click Add.
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12. View the list of all business partners. Submit to your instructor.
Go to Business Partners > Business Partner Master Data > type * in the first field (must be in Find mode)
> press Enter
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Exercise 3.2
3. Add new payment terms:
Code Description Credit Term Early Payment Discount

n/30 n/30 30 days none
10-20-30 10-20-30 30 days 5% if paid within 10 days; 3% if paid after 10th day
but within 20 days
2YR 2YR 24 months none
SOLUTION:
1. n/30
a. Go to Administration > Setup > Business Partners > Payment Terms. Alternatively, you
can go to Business Partners > Business Partner Master Data > Payment Terms >
Payment Terms > Define New (click the Add icon in the toolbar to view Define New).
b. In the Payment Terms Code field, type n/30.
d. Click Add.
2. 10-20-30
b. In the Payment Terms Code field, type 10-20-30.
d. To setup the early payment discount, click the Cash Discount Name field so that you will
have an option to define a new term. Click Define New. A window Cash Discount will
appear.
e. Type 10-20-30in the Code and Name field.
f. Type 10 in Cash Discount Days and 5 in the Discount % field.
g.Type 20 in Cash Discount Days and 3 in the Discount % field.
h. Click Add. The current window will disappear.
i. Click Add again
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3. 2YR
b. In the Payment Terms Code field, type 2YR.
c. In the months field, type 24. This is to set the credit term.
d. Click Add.

4. Add customers:
Code Name Payment Terms Tax
CU400000 Kim Kardashian n/30 Liable- OT
CU500000 Dwayne Wade n/30 Liable- OT
CU600000 Erik Spoelstra 10-20-30 Liable- OT
CU700000 Phil Younghusband 10-20-30 Liable- OT
SOLUTION:
1. Kim Kardashian
a. Go to Business Partner > Business Partner Master Data
b. Change default mode of Find to Add by clicking the Add icon in the toolbar (after
telescope icon).
c. Type the customer code in the Code field, CU400000. Choose Customer in the next
field.
d. Type the customers name in the Name field, Kim Kardashian .
e. Choose the appropriate Group which is Customers.
f. Choose the Payment Term n/30 under the Payment Terms tab.
g. Choose Accounts Receivable in the Accounts Receivable field under the Accounting tab,
if default is not activated.
h. Choose Liable in the Tax Status field found under the Tax sub-tab of the Accounting
tab. In the Tax Group field, choose OT for Philippine Output Tax.
i. Click Add.
j. Do the same for Dwayne Wade
2. Erik Spoelstra
telescope icon).
c. Type the customer code in the Code field, CU600000. Choose Customer in the next 31
field.
d. Type the customers name in the Name field, Erik Spoelstra .
e. Choose the appropriate Group which is Customers.
f. Choose the Payment Term 10-20-30under the Payment Terms tab.
g. Choose Accounts Receivable in the Accounts Receivable field under the Accounting tab,
if default is not activated.
tab. In the Tax Group field, choose OT for Philippine Output Tax.
i. Click Add.
j. Do the same for Phil Younghusband
5. Add vendors:
SU300000 PLDT n/30 Liable- IT
SU400000 Social Security Systems n/30 Exempt
SU500000 Philhealth n/30 Exempt
SU600000 Bureau of Internal Revenue n/30 Exempt

SU700000 LMN Financing 2 years Exempt
(posting account is Notes Payable for LMN Financing)
SU800000 Global Equipment 10-20-30 Liable- IT
SOLUTION:
1. PLDT
telescope icon).
c. Type the code SU300000 in the Code field. The field next to it must be Vendor.
d. Type the vendors name PLDT in the Name field.
e. Choose the appropriate Group.
f. Choose the appropriate Payment Term n/30 under the Payment Terms tab.
g. Choose Accounts Payable in the Accounts Payable field under the Accounting tab, if
default is not activated.
tab. In the Tax Group field, choose IT for Philippine Input Tax.
i. Click Add.
2. Social Security Systems

telescope icon).
d. Type the vendors name Social Security Systems in the Name field.
f. Choose the appropriate Payment Term n/30 under the Payment Terms tab.
h. Choose Exempt in the Tax Status field found under the Tax sub-tab of the Accounting
tab. In the Tax Group field, choose ITX for Philippine Input Tax Exempt.
i. Click Add.
32
j. Do the same for Philhealth andBureau of Internal Revenue
3. LMN Financing
telescope icon).
d. Type the vendors name LMN Financing in the Name field.
f. Choose the appropriate Payment Term 2YR under the Payment Terms tab.
g. Choose Accounts Payable in the Notes Payable field under the Accounting tab, if
h. Choose Exempt in the Tax Status field found under the Tax sub-tab of the Accounting
tab. In the Tax Group field, choose ITX for Philippine Input Tax Exempt.
i. Click Add.

4. Global Equipment
telescope icon).
d. Type the vendors name Global Equipment in the Name field.
f. Choose the appropriate Payment Term 10-20-30 under the Payment Terms tab.
tab. In the Tax Group field, choose IT for Philippine Input Tax.
i. Click Add.
8. View the list of all business partners. Submit to your instructor.
33
Chapter Four:
Perpetual Inventory System
The major difference between the two methods of recording for inventory is the extent to which stock
movements are monitored.
The physical system of recording for inventory does not keep records of the movements of stock. The
only information in the ledger concerning merchandise is the recording in the stock account of the
total inventory determined by a physical stock-take at the end of each accounting period.
Under the perpetual (continuous) method, individual items of merchandise are recorded on stock
cards and a stock control account is kept continuously up to date by recording movements of all
inventories into and out of the business.
Perpetual inventory involves keeping records of all stock movements throughout the accounting
period. (It is also known as the continuous inventory method.) This method updates the balance of
stock on hand on a continuous basis throughout the period. Every time stock moves in or out of the
business, the inventory balance is updated. When stock is purchased, the balance is increased. When
sales are made, the balance will be decreased.
Sales returns have the effect of increasing stock on hand and purchase returns decrease the stock on
hand. Withdrawals of inventory by the proprietor must also be accounted for, as this will decrease the
balance of stock. As inventory is always recorded at cost price, there is a need to have access to
information regarding the cost price of stock throughout the accounting period.
ADVANTAGES OF PERPETUAL INVENTORY
1. There is greater control over stock because up-to-date information is available throughout the
accounting period. This means management is able to make better decisions relating to inventory.
2. Slow moving and fast moving lines of inventory can be identified. A stock card is used to record all
movements of a particular item of inventory.
3. Reordering of inventory is more efficient. Part of perpetual inventory involves keeping a record of
how many units of each type of stock are on hand at any time. When the number of units reaches a
certain level (known as the reorder point) an order can be dispatched to the relevant supplier. This
helps to avoid the problem of running out of stock.
4. Interim profit reports can be prepared without doing a stock take. Gross profit figures can be
calculated on a monthly/weekly even daily basis, and estimated net profit figures can be calculated for
each week or month.
5. The level of stock losses or gains can be measured. The perpetual method can identify the stock
actually sold and the goods which have been lost (due to theft and breakages).
34
Screenshot of the Item Master Data from SAP Business One.

Stock Movements
SAP Business One records goods

receipts and goods issues in any warehouse
and allows you to track your
stock transfers from one warehouse
to another. By integrating individual
item prices or price lists, the application
simultaneously updates inventory
valuation. SAP Business One also fully
integrates inventory and accounting
transactions. As a result, when stock
levels are adjusted, inventory accounts
are immediately credited or debited,
and applicable inventory variances
are accounted for as soon as a stock
movement is posted.
35
Chapter Five:
ACCOUNTING CYCLE
Tour the accounting cycle of the system.
Steps SAP Business One
1. Journal General Journal Financials > Journal Entry
Special Journals
a. Sales Journal Sales - AR
b. Purchases Journal Purchasing - AP
c. Cash/Check Receipts Banking - Incoming
d. Cash/Check Disbursements Banking - Outgoing
2. Ledger General Ledger Financials > Financial Reports > Accounting

>General Ledger
Subsidiary Ledger Financials > Financial Reports > Accounting

>GL Accounts and Business Partners
Business Partner >

Business Partner Master Data
Stock Cards Inventory > Inventory Reports

> Inventory Posting
Inventory > Item Master Data
3. Trial Balance Financials > Financial Report > Financial

> Trial Balance
4. Adjusting Entries Financial > Journal Entry

Click Adjustment box
5. Financial Statements Financial > Financial Report > Financial

> Profit and Loss Statement (Income
Statement) or Balance Sheet
36
6. Closing Entries Administration > Utilities > Period End
Closing

7. Post-Closing Trial Balance Financials > Financial Report > Financial
Trial Balance > Check Add Closing Balances
8. Reversing Entries Financials > Journal Entry

Click Reversal box
37
Chapter Six:
JOURNALIZING
A Journal is a book in which transaction are recorded in the order in which they occur i.e. in
chronological order.
A Journal is also called book of prime entry because all transactions are entered first in this
book
The process of recording a transaction in Journal is called a Journalizing
An entry made in Journal is called Journal Entry
Special Journals
Sales Journal - The Sales Journal is a special journal designed to record a single type of frequently
occurring transaction -- in this case, credit sales. This tutorial covers the concept of the sales journal
from the original transactions through the posting process.
Cash Receipts Journal - The Cash Receipts Journal is a special journal designed to record a single type of
frequently occurring transaction -- in this case, cash receipts. This tutorial cover the concept of the cash
receipts journal from the original transactions through the posting process.
Purchases Journal - The Purchases Journal is a special journal designed to record a single type of
frequently occurring transaction -- in this case, credit purchases. This tutorial cover the concept of the
purchases journal from the original transactions through the posting process.
Cash Payments Journal - The Cash Payments Journal is a special journal designed to record a single type
of frequently occurring transaction -- in this case, cash payments. This tutorial cover the concept of the
cash payments journal from the original transactions through the posting process.
The majority of journal entries in SAP Business One come from one of the other modules; sales,
purchasing, payment, and inventory documents post transactions automatically to the G/L. However,
in GAAP accrual-based accounting, you sometimes need to make manual journal entries in the G/L,
such as depreciation entries, accrual entries, correcting entries, and the likeanything, in other words,
that would not come from one of the other SAP Business One modules. When a journal entry is added
manually, it is recorded immediately and cannot be deletedonly reversed.
The purpose of manual journal entries is to record transactions that are not automatically initiated
from asubledger or from another process within SAP Business One. For example, a manual journal
entry might be used to record a finance charge to a customer account or a service fee to a bank
account.
38
Exercise 6.1
Enter User Code (manager) and the password that you have created in Exercise 1.1.Press Enter.
3. Navigate to the section of the system where manual journal entries are to be posted.

Go to Financials > Journal Entry
5. The system is now ready for a new posting. What would be the Journal Entry document number if
this entry is to be posted?
On the upper left corner there is a field Primary. Next to it would be the document number. Since the
system is still without posted transactions, the document number in this case should be 1.
6. How to add a debit account and debit amount?
In the table, click the first field under the column G/L Account / BP. A selection list will appear. This list is
the Chart of Accounts. For the debit amount, click the field under the column Debit and enter the
amount in figures. The system will just automatically put in currency.
7. Journalize the initial investment of Noypi Aquino in the amount of P100,000 in cash.
Go to Financials > Journal Entry (Document Number is 1)

Set date to Jan. 2, 20XX
Enter the following in the first two line of the table:
A111000 Cash on Hand 100,000

C100000 Aquino, Capital 100,000
Click Add.
Exit by clicking Cancel or x.
39
7. For journal entries that are not to be posted yet (DRAFT) where shall it be recorded initially in the
system?
Journal Vouchers
8. How to use journal vouchers?
You can use journal vouchers to review a batch of financial transactions before posting them. Before
you post the entries as journal vouchers, you have the opportunity to edit, change, or delete entries, as
required. Lets consider a couple of situations in which you would use journal vouchers. Perhaps youre
training a new employee, and rather than risking that some or all of the new employees journal entries
might have to be reversed, you can allow the new employee to create journal vouchers that you can
review. This eliminates the risk that the new employee could post incorrect journal entries that would
have to be reversed later.
In other systems, a journal voucher is sometimes used for a single journal entry. In SAP Business One, a
journal voucher is always used for a batch of transactions which means that you enter multiple journal
entries in one voucher. When you post the voucher to the general ledger, all the journal entries
contained in the voucher are posted together.
9. Add the following entries to the Journal Vouchers. NOTE: Date January 2, 20XX
A210000 Land 1,000,000

C100000 Aquino, Capital 1,000,000
40 A221000 Machinery 10,000

A111000 Cash on Hand 10,000
To add the first transaction of journal voucher #1:
a. Go to Financials > Journal Vouchers
b. When the Journal Vouchers window appears, click Add Entry to New Voucher.
c. Set date to Jan. 2, 20XX
d. Click the first field under the column G/L Account / BP Name so that a selection list will appear.
e. Click the selection list so that the Chart of Accounts will appear and choose or double-click Land.
Alternatively, you may type A2100000 in the Find field.
Note: The default of the system is that the list of account titles is sorted according to the account codes.
You cannot type account title in the Find field to search for an account title. To sort it according to their
account codes, double-click Account Name. You will notice that the small triangle is transferred from
the Account Number to the Account Name.
f. Type 1,000,000 in the Debit column.

g. Click the 2nd field under the column G/L Account / BP Name so that a selection list will appear.
h. Click the selection list so that the Chart of Accounts will appear and choose or double-click Aquino,
Capital. Alternatively, you may type C100000 in the Find field.
i. Type 1,000,000 in the Credit column.
j. Click Add to Voucher.
k. Click Close.
To add the second transaction of journal voucher #1:
a .In the Journal Vouchers window, click to highlight Journal voucher 1 and click Add Entry to Existing
Voucher.
b. Set date to Jan. 2, 20XX
c. Click the first field under the column G/L Account / BP Name so that a selection list will appear.
d. Click the selection list so that the Chart of Accounts will appear and choose or double-click
Machinery. Alternatively, you may type A221000 in the Find field.
e. Type 10 000 in the Debit column.
f. Click the 2nd field under the column G/L Account / BP Name so that a selection list will appear. 41
g. Click the selection list so that the Chart of Accounts will appear and choose or double-click Cash on
Hand. Alternatively, you may type A111000 in the Find field.
h. Type 10 000 in the Credit column.
i. Click Add to Voucher.
j. Click Close.
k. Click Update and click OK to exit from the current screen.
10. Submit the journal entry vouchers to your instructor.

42
Exercise 6.2
3. Add the following entries to the Journal Voucher #2. NOTE: Date January 3, 20XX
O900000 Transportation Expense 1,000

O1200000 Taxes and Licenses 4,000


SOLUTION:

e. Click the selection list so that the Chart of Accounts will appear and choose or double-click
Transportation Expense. Alternatively, you may type O900000 in the Find field.
f. Type 1,000 in the Debit column.
h. Click the selection list so that the Chart of Accounts will appear and choose or double-click Cash on
i. Type 1,000 in the Credit column.
j. Click Add to Voucher.
k. Click Close.
To add the second transaction of journal voucher #2:

a .In the Journal Vouchers window, click to highlight Journal voucher 2 and click Add Entry to Existing
Voucher.
b. Set date to Jan. 3, 20XX
c. Click the first field under the column G/L Account / BP Name so that a selection list will appear.
d. Click the selection list so that the Chart of Accounts will appear and choose or double-click Taxes and
Licenses. Alternatively, you may type O1200000 in the Find field.
e. Type 4 000 in the Debit column.
f. Click the 2nd field under the column G/L Account / BP Name so that a selection list will appear.
g. Click the selection list so that the Chart of Accounts will appear and choose or double-click Cash on
h. Type 4 000 in the Credit column.
i. Click Add to Voucher.
j. Click Close.
k. Click Update and click OK to exit from the current screen.
43
4. Add the following entries to the Journal Voucher #3. NOTE: Date January 4, 20XX
A112100 CIB-MBTC 20,000

A112200 CIB-BDO 20,000
SOLUTION:

e. Click the selection list so that the Chart of Accounts will appear and choose or double-click Cash in
Bank - MBTC. Alternatively, you may type A112100 in the Find field.
f. Type 20,000 in the Debit column.
h. Click the selection list so that the Chart of Accounts will appear and choose or double-click Cash in
Bank - BDO. Alternatively, you may type A112200 in the Find field.
i. Type 20,000 in the Debit column.
j. Click the 3rd field under the column G/L Account / BP Name so that a selection list will appear.
k. Click the selection list so that the Chart of Accounts will appear and choose or double-click Cash on
l. Type 40,000 in the Credit column.
m. Click Add to Voucher.
n. Click Close.
5. Submit the following:

Voucher 1 2 Transactions
Voucher 2 2 Transactions
Voucher 3 1 Transaction
44
Chapter Seven:
SPECIAL JOURNAL - DISBURSEMENTS
Cash disbursements occur in business when a company makes a payment. A number of different
transactions can incur a cash disbursement. Companies record these transactions, as every
disbursement results in a lower cash balance. Disbursements will either result in a use or exchange of
assets. Many companies report disbursements in a separate accounting journal.
Disbursement Journal
Companies usually will maintain a cash disbursement journal as part of their general ledger. Frequent
cash disbursements can quickly fill the general journal, resulting in this subunit of the overall
accounting ledger. Only cash disbursements go in this journal. Companies that initially purchase goods
on credit will record the entry into the purchases journal. Once the payable is due, the company must

disburse cash. This entry is part of the cash disbursements journal.
Outgoing Payments in SAP Business One
With the banking and reconciliation functionality in SAP Business One, you can manage all incoming
and outgoing payments. You can post these payments manually and choose from payment methods
such as check, bank transfer, credit card, or cash. The payment wizard allows you to reconcile and clear
multiple accounts receivable and accounts payable invoices in batch mode by creating a payment run
that generates the payment and automatically posts the journal entry transaction.
45
Exercise 7.1
Enter User Code (manager) and the password that you have created in Exercise 1.1.
3. Navigate to the section of the system where receipts or collections are to be posted.
Go to Banking > Outgoing Payments > Outgoing Payments
4. What is the default payer in this document? Is it possible to change it? What are the other
options?
Vendor is the default payer.

It is still possible to change this default.
The other options are Customer and Account. Customer is chosen if a payment is to be made to a
Customer. Account is to be chosen if neither Vendor nor Customer is to be chosen, this will give the user
the option to choose from the chart of accounts, which account is to be debited.
5. Enter the following payments. Disregard VAT.
Date Description
Jan. 5, 20XX Licenses and registration fees to the city treasurer, P4,000 cash.
Office supplies for P2,000 in cash.
Jan. 7, 20XX Paid P15,000 in cash for 3 months rent.
Jan. 10, 20XX Paid P3,000 in cash for additional supplies.
a. Go to Banking > Outgoing Payments > Outgoing Payments

From Vendor, click Account
You are now ready to make the first payment.
Your Outgoing Payment document number is 1.
Change posting, due and document dates to January 5.
46
b. Enter expense account as your debit.
In the first line of the table, under the column GL Account, click the field so that a selection list
icon will appear.
Click the selection list so that a list of GL accounts will appear.
Choose Taxes and Licenses by double-clicking on it.
Type 4,000 (no currency) under the Net Amount field of the same line.

Since this type of transaction is equivalent to Disbursements Journal, default credit is cash. But,
cash payments may be in different modes. So that, lets do the next step.
c. Enter cash payment as your credit.

Click the money bag icon which is the payment means in the toolbar. A new window Payment
Means will appear.
Click the Cash tab.
Click the G/L Account field so that a selection list icon will appear. Click the selection list icon.
A list of GL accounts will appear.
Choose Cash on Hand by doing a single click on it. Notice that you are readily provided with the
balance in the Overall Amount field.
In the Total field, type 4000.
Alternative:
1. Click on the calculator icon and enter the amount 4000 then click Copy to Field.
2. Right click on the Total field, click Copy Balance Due.
47
Click OK.
Click Add.
A system message will appear: You cannot change this document after you have added it
Continue?
Click Add.
Notice that the system is now ready for the second transaction. Notice that the document
number is already 2.
d. Retrieve the journal entry made in Outgoing Payment document number 1.

Still in Outgoing Payment window, click the first data icon in the toolbar.
You are led to document 1.
To view the journal entry made, click the golden arrow after Transaction No.
You will be led to the next screen.
48
Click OK or Cancel to exit from the current screen. The clicking of Cancel does not mean
cancellation of the document. Real cancellation requires reversal.
You are now back in the Outgoing Payments window document 1.
To add a new payment, click the Add button in the toolbar (next to the telescope icon which is
Find for searching)
e. For Jan. 5 (2nd transaction), 7 and 10. Repeat steps A to C with consideration of the correct dates,
amount. For step B, make sure that you have properly chosen the correct expense account.
49
Exercise 7.2
3. Navigate to the section of the system where payments are to be posted.
Banking > Outgoing Payments > Outgoing Payments
options?
Vendor; Yes; Customer and Account
5. Enter the following cash payments.
Date Description
Jan. 20, 20XX Pay dates for the employees are

1. 20th of the current month for the 1st 15 working days of the month
2. 5th of the following month for the last 15 working days of the
month
Details for each payroll:

Gross SSS (Emp sh)Philhealth(Emp sh)W/H TaxNet Pay
20,000 800 400 500 18, 300
Record and pay the employees through cash for their net pay.
Jan. 21, 20XX Paid P10,000 in cash for mobile phone prepaid load.
Jan. 22, 20XX Paid P1,000 in cash for additional supplies.
6. View all entries made through the Transaction Journal Report. Go to Financials > Financial Reports
> Accounting > Transaction Journal Report. In the field Original Journal, choose All Transactions. Set
your posting dates range. Click OK.
7. Submit your Transaction Journal Report to your instructor.
50
51
Chapter Eight:
SPECIAL JOURNAL - PURCHASES
Special Journal Purchases
The purchases journal lists all credit purchases of merchandise. Entries in this journal usually include
the date of the entry, the name of the supplier, and the amount of the transaction. Some companies
include columns to identify the invoice date and credit terms, thereby making the purchases journal a
tool that helps the companies take advantage of discounts just before they expire. The purchases
journal to the right has only one column for recording transaction amounts. Each entry increases
(debits) purchases and increases (credits) accounts payable.
Each day, individual entries are posted to the accounts payable subsidiary ledger accounts. Creditor
account numbers (or check marks if the creditor accounts are not numbered) are placed in the
purchases journal's reference column to indicate that the entries have been posted. At the end of the
accounting period, the column total is posted to purchases and accounts payable in the general ledger.
Procurement under SAP Business One
The flow of information between purchasing, sales, and accounting is much smoother now. . . . With
SAP Business One, we have achieved major savings in terms of time and money.
Sunday Odubote, Financial Accountant,
City Business Computers Limited
With SAP Business One, you gain a detailed view of your vendors and support for an integrated,
centralized vendor data repository so you can make more effective purchasing decisions, identify
opportunities for cost savings, and better manage supplier relationships.
Master data management is a cornerstone of process integration in SAP Business One. Item and
vendor master records are maintained centrally in the system and integrated in all necessary
businesstransactions.
Automating Procurement Processes
SAP Business One offers best-practicefunctionality to support your core

procurementactivities,integrating theentire purchasing process from ordercreation through inventory
updates toinvoice payment.Using the master data that is maintainedcentrally in the system,
purchaseorders can be created in a few straightforwardsteps and mailed, faxed, ore-mailed directly to
the vendor fromwithin the application. To help ensurethat the appropriate levels of goodsare in the
warehouse for timely orderdelivery, SAP Business One also allowsyou to create purchase orders
fromsales orders.
52
Exercise 8.1
Enter.

3. Navigate to the section of the system where purchase invoices are to be posted.
Go to Purchasing-AP > AP Invoice

Once opened, the system is now ready to accept new sales transaction.
4. Fields for entering the vendor name and vendor code, is keying in or typing required like the name
of the vendor?
No. Since a master data is maintained for each customer (subsidiary ledger), just click the field so that
the selection list will appear. When this icon is clicked, the list of customers is shown. Just click the
desired customer.
5. Is the due date to be manually inputted?
No. When the master data for the vendor was created (subsidiary ledger), Payment Terms or Credit
Term was already defined.
6. What are the options in the Item / Service Type?
a. Items This is chosen if the sales is merchandise.
b. Service This is chosen if the sales is service. The table will no longer show Item. Instead, the field
required will be G/L Account.
7. Enter the following January purchases on account and other payables. Add VAT to the base price.
Date Description
Feb. 5, 20XX Bought two computer machines at CAT Equipment for P70,000.
Credit term is 2/10, n/30. Expected life is five years with a salvage
value of P10,000.
53
Feb. 6, 20XX Bought computer peripherals at CAT Equipment for the
machines bought the previous day, P30,000.
Feb. 7, 20XX Bought machinery to be used in servicing clients automobiles at
Global Equipment, P300,000. Expected life is ten years with P30,000
salvage value. Term of credit is 10-20-30.
a. Go to Purchasing-AP > AP Invoice
AP Invoice document 1 will appear
b. Enter the vendor. This will also set the credit of your document control account Accounts Payable
through the subsidiary which is the vendor.
Click the vendor field. Click the selection list.

Choose CAT Equipment.
Type 05.02 (Feb 5, 20XX) in the Posting Date field.

Press tab. The system automatically assigns the due date field which is 30 days after the
posting and document dates. The reason for this is that during the creation of the subsidiary
ledger for CAT Equipment, the payment term chosen was 2/10; n/30.
c. Enter the appropriate account for the debit.
In the Item/Service Type field, change Item to Service by clicking the dropdown list.
In the first line of the table under the column G/L Account, choose office equipment. In the
column Total (LC) of the same line, type 70,000.
Press tab. Document total is now at P78, 232 since VAT is added.
Click Add or press Enter.
Click Yes when System Message prompts: You cannot change this document after you have
added it. Continue?
The system has just posted AP Invoice document 1.
54
d. View the journal entry made in AP Invoice document 1.
AP Invoice must still be open.
Click the 1st data icon in the toolbar.
When in document 1, click the Accounting tab.
Click the golden or navigation arrow after Journal Remark.
You are led to Journal Entry of the Financials module.
Click OK or Cancel to exit.

e. Add the Feb 6 purchase.
In the AP Invoice, make sure that the system is ready to accept a new posting. This must be
document number 2 of AP Invoice. If the document number is still at 1, click the Add icon in the
toolbar. After clicking, the system is now ready as evidenced by the Add button found in the
lower left corner of the document instead of OK.
Choose CAT Equipment.
Type 06.02 ( Feb 6, 20XX) in the Posting Date field.
Press tab. Document total is now at P33,528.00 since VAT is added. 55
added it. Continue?
e. Add the January 7 purchase.

Choose Global Equipment.
In the first line of the table under the column G/L Account, choose Machinery. In the column
Total (LC) of the same line, type 300,000.
Press tab. Document total is now at P334,200.00 since VAT is added.
added it. Continue?
The system has just posted AP Invoice document 3

.
6. What are the balances for Machinery and Office Equipment?
Go to Financials > Chart of Accounts > Click Machinery > Balance field on the right side
Repeat the same procedures for Office Equipment, Accounts Payable and Notes Payable
The balances are: 300,000; 100,000; 445,960 and 0, respectively.
56
7. Support the total amount of Accounts Payable through the outstanding liability of each vendor.
Go to Financials > Financial Reports > Accounting > General Ledger > Uncheck Accounts and Click
OK

8. View all entries made through AP Invoice in the Transaction Journal Report. Go to Financials >
Financial Reports > Accounting > Transaction Journal Report. In the field Original Journal, choose AP
Invoice. Set posting dates range from the 1st day to the last day of the month. Click OK.
57
Exercise 8.1
3. Navigate to the section of the system where purchase invoices are to be posted.
Go to Purchasing-AP > AP Invoice

Once opened, the system is now ready to accept new sales transaction.
4. Enter the following January purchases on account and other payables. Add VAT to the base price.
Date Description
Tip: To post below transactions, go to Administration > System Initialization > Posting
Periods. Click the golden or navigation arrow pointing to 20XX-01. Change the due date. It should be
01.01.XX to 31.12.XX plus two Years.
Feb 10, 20XX Purchased land in the amount of P500,000.00 through financing
from LMN Financing. Choose ITX for the Tax Code. Credit Term is
two (2) years. Annual interest is 12%.
Feb. 15, 20XX Bought additional machinery at Global Equipment, P100,000.

Expected life is ten years with P10,000 salvage value. Term of
credit is 10-20-30.
SOLUTION:
1. Go to Administration > System Initialization > Posting Periods.

a. Click the golden arrow pointing to 20XX-02.
b. The posting period window will appear
c. Change the due date from 31.12.XX to 31.12.XX plus two years
d. Click Update. Click OK.
e. Click OK
NOTE: If you forgot to adjust the posting period, you will not be able to add your Feb 10 transaction.
58 You will also be prompted by an error message:
2. Add the Feb 10 purchase.
a. Click the vendor field. Click the selection list.
b. Choose LMN Financing.
c. Type 10.02 ( Feb 10, 20XX) in the Posting Date field.
d. In the Item/Service Type field, change Item to Service by clicking the dropdown list.
e. In the first line of the table under the column G/L Account, choose Land. In the column
Total (LC) of the same line, type 500,000.
f. Click Add or press Enter.
g. Click Yes when System Message prompts: You cannot change this document after you
have added it. Continue?
h. The system has just posted AP Invoice document 4.
3. Add the Feb 15 purchase.

i. Click the vendor field. Click the selection list.
j. Choose Global Equipment.
k. Type 10.02 ( Feb 10, 20XX) in the Posting Date field.
l. In the Item/Service Type field, change Item to Service by clicking the dropdown list.
m. In the first line of the table under the column G/L Account, choose Machinery. In the
n. Click Add or press Enter.
o. Click Yes when System Message prompts: You cannot change this document after you
p. The system has just posted AP Invoice document 4.
5. Give the balances for

a. Machinery - 400,000
b. Office Equipment 100,000
c. Accounts Payable - 557,360.00
d. Notes Payable 500,000
Go to Financials > Chart of Accounts > Click Machinery > Balance field on the right side
Repeat the same procedures for Office Equipment, Accounts Payable and Notes Payable 59
6. Support the total amount of Accounts Payable through the outstanding liability of each vendor.
60

Chapter Nine:
SPECIAL JOURNAL - SALES
Special Journals
Entering transactions in the general journal and posting them to the correct general ledger accounts is
time consuming. In the general journal, a simple transaction requires three linestwo to list the
accounts and one to describe the transaction. The transaction must then be posted to each general
ledger account. If the transaction affects a control account, the posting must be done twiceonce to
the subsidiary ledger account and once to the controlling general ledger account. To speed up this
process, companies use special journals to record repetitive transactions that affect the same set of
accounts and have a consistent description. Such transactions can be documented on one line in a
special journal. Then, instead of separately posting individual entries, each column's total is posted at

the end of the accounting period.
Although companies create special journals for other types of repetitive transactions, almost all
merchandising companies use special journals for sales, purchases, cash receipts, and cash
disbursements.
Sales Journal
The sales journal lists all credit sales made to customers. Sales returns and cash sales are not recorded
in this journal. Entries in the sales journal typically include the date, invoice number, customer name,
and amount. Invoices are the source documents that provide this information. In its most basic form, a
sales journal has only one column for recording transaction amounts. Each entry increases (debits)
accounts receivable and increases (credits) sales.
Notice the dates and posting references applied to each entry in the illustration to the right. Each day,
individual sales journal entries are posted to the accounts receivable subsidiary ledger accounts so that
customer balances remain current. Customer account numbers (or check marks if customer accounts
are simply kept in alphabetical order) are placed in the sales journal's reference column to indicate that
the entries have been posted. At the end of the accounting period, the column total is posted to the
accounts receivable and sales accounts in the general ledger. Account numbers are placed in
parentheses below the column to indicate that the total has been posted.
Many companies use a multi-column (columnar) sales journal that provides separate columns for
specific sales accounts and for sales tax payable. Each line in a multi-column journal must contain equal
debits and credits. For example, the entries in the sales journal to the right appear below in a multi-
column sales journal that tracks hardware sales, plumbing sales, wire sales, and sales tax payable.
Individual entries are still posted daily to the accounts receivable subsidiary ledger accounts, and each
column total is posted at the end of the accounting period to the appropriate general ledger account.
61
Exercise 9.1
3. Navigate to the section of the system where sales invoices are to be posted.
Go to Sales-AR > AR Invoice (Once opened, the system is now ready to accept new sales transaction.)
4. In completing the fields, is keying in or typing required like in the case of the name of the
customer?
No. Since a master data is maintained for each customer (subsidiary ledger), just click the field so that
the selection list will appear. When this icon is clicked, the list of customers is shown. Just click the
desired customer.
5. Is the due date to be manually inputted?
No. When the master data for the customer was created (subsidiary ledger), Payment Terms or Credit
Term was already defined.
6. What are the options in the Item / Service Type?
a. Items This is chosen if the sales is merchandise.

b. Service This is chosen if the sales is service. The table will no longer show Item. Instead, the field
required will be G/L Account.
7. What is the document to be used in cash sales transactions?
AR Invoice + Payment
To access: Go to Sales A/R > AR Invoice + Payment
8. Enter the following January Sales. Add VAT to the base price.
Date Description
Feb 25, 20XX Serviced the BMW car of Ms. Kris Aquino. Total charges is
P15,000.00. Credit Term is 2/10, n/30.
62
Feb 27, 20XX Serviced the Ferrari car of Mr. Dwayne Wade. Total charges is
16,000. Credit Term is n/30.
Feb 28, 20XX Walk-in clients servicing totaled P10,000 in cash.
a. Go to Sales-AR > AR Invoice
AP Invoice document 1 will appear
b. Enter the customer. This will also set the debit of your document control account Accounts
Receivable through the subsidiary which is the customer.
Click the Customer field. Click the selection list.

Choose Kris Aquino.
Type 25.02 ( Feb25, 20XX) in the Posting Date field.
Press tab. The system automatically assigns the due date field which is 30 days after the
posting and document dates. The reason for this is that during the creation of the subsidiary

ledger for Kris Aquino, the payment term chosen was 2/10; n/30.
c. Enter the appropriate account for the debit.
In the first line of the table under the column G/L Account, choose R100000 Service Income. In
the column Total (LC) of the same line, type 15,000.
added it. Continue?
63
d. View the journal entry made in AR Invoice document 1.

AR Invoice must still be open.
Click the 1st data icon in the toolbar.
When in document 1, click the Accounting tab.
Click the golden or navigation arrow after Journal Remark.
You are led to Journal Entry of the Financials module.
Click OK or Cancel to exit.
e. Add the January 18 sales.

In the AR Invoice, make sure that the system is ready to accept a new posting. This must be
document number 2 of AR Invoice. If the document number is still at 1, click the Add icon in the
toolbar. After clicking, the system is now ready as evidenced by the Add button found in the
lower left corner of the document instead of OK.
Choose Dwayne Wade.
Type 27.02 ( Feb 27, 20XX) in the Posting Date field.
64 In the Item/Service Type field, change Item to Service by clicking the dropdown list.
added it. Continue?
Click Cancel to exit from the current window.
e. Add the January 20 cash sales.

Go to Sales-AR > AR Invoice + Payment
The Customer is already defaulted to One-Time Customers.
In the first line of the table under the column G/L Account, choose Service Income. In the
The system automatically computes for the total document amounting to P11,200.00 found

below the table. VAT output of P1,200.00 is actually system-generated.
Payment Means window will appear for the entry of cash payment.
Click the Cash tab.
In the G/L Account field, choose cash on Hand.
In the Total field, right-click and choose Copy Balance Due.
Click OK and the screen for Payment Means will exit.
In the AR Invoice, click Add.
added it. Continue?
Click Cancel to exit.
65
6. What are the balances for Service Income, Output Tax and Accounts Receivable?
Go to Financials > Chart of Accounts > Click Service Income > Balance field on the right side
Repeat the same procedures for Output Tax and Accounts Receivable
The balances are: 41,000; 4,920; 34,720, respectively.
7. Support the total amount of Accounts Receivable.
Go to Financials > Financial Reports > Accounting >General Ledger

When the screen for General Ledger Selection Criteria appears, uncheck Accounts, and
choose None for the Vendor Group field
Set posting date range from the 1st day of the year to the last day of the year
Click OK. Click OK to exit.
66
8. View all entries made through AR Invoice in the Transaction Journal Report. Go to Financials >
Financial Reports > Accounting > Transaction Journal Report. In the field Original Journal, choose AR
Invoice. Set posting dates range from the 1st day to the last day of the month. Click OK.
67
Exercise 9.2
3. Navigate to the section of the system where sales invoices are to be posted.
Sales A/R > AR Invoice
4. Enter the additional January Sales. Add VAT to the base price.
Date Description
Mar. 2, 20XX Serviced the Toyota Altis car of Mr. Phil Younghusband. Total
charges P11,000.00. Credit Term is 10-20-30.
Mar. 6, 20XX Serviced the Jaguar car of Ms. Kim Kardashian. Total charges is
14,000. Credit Term is n/30.
Mar. 9, 20XX Walk-in clients servicing totaled P20,000 in cash.
SOLUTION:
1. Record Mar 2, 20XX transaction

o In the AR Invoice, make sure that the system is ready to accept a new posting. This
must be document number 4 of AR Invoice.
o Click the vendor field. Click the selection list.
o Choose Phil Younghusband.
o Type 2.03 (Mar 2, 20XX) in the Posting Date field.
o In the Item/Service Type field, change Item to Service by clicking the dropdown list.
o In the first line of the table under the column G/L Account, choose office equipment. In
o Click Add or press Enter.
o Click Yes when System Message prompts: You cannot change this document after you
o The system has just posted AP Invoice document 4.
o Click Cancel to exit from the current window.

o In the AR Invoice, make sure that the system is ready to accept a new posting. This
must be document number 5 of AR Invoice.
o Click the vendor field. Click the selection list.
o Choose Kim Kardashian.
o In the first line of the table under the column G/L Account, choose office equipment. In
68
o The system has just posted AP Invoice document 5.
o Click Cancel to exit from the current window.

o Go to Sales-AR > AR Invoice + Payment
o The Customer is already defaulted to One-Time Customers.
o In the first line of the table under the column G/L Account, choose Service Income. In
o Payment Means window will appear for the entry of cash payment.

o Click the Cash tab.
o In the G/L Account field, choose cash on Hand.
o In the Total field, right-click and choose Copy Balance Due.
o Click OK and the screen for Payment Means will exit.
o In the AR Invoice, click Add.
o Click Cancel to exit.
5. What are the balances for Service Income, Output Tax and Accounts Receivable?
Go to Financials > Chart of Accounts > Click Service Income > Balance field on the right side
Repeat the same procedures for Output Tax and Accounts Receivable
The balances are: 86,000; 10,218; 62,618, respectively.
6. Support the total amount of Accounts Receivable.

Go to Financials > Financial Reports > Accounting >General Ledger
When the screen for General Ledger Selection Criteria appears, uncheck Accounts, and
choose None for the Vendor Group field
Set posting date range from the 1st day of the year to the last day of the year
Click OK. Click OK to exit.
69
70

Chapter 10:
SPECIAL JOURNAL - RECEIPTS
A cashreceiptsjournal is a special record used in accounting, usually by retailers. It involves recording
the details of sales in a specific manner. In turn, the cashreceiptsjournal gathers together the relevant
information in a way that makes it easier to copy across, in aggregate, to traditional double-entry
accounts.
Collection in SAP Business One
We can now acquire the information from restaurants in real time. SAP Business One, connecting
directly with our bank online, enhances the efficiency of collections and payments. Precise daily and
monthly data helps us a lot to make top-level strategic decisions promptly.
Yong-Kyu Choi

Vice President of Accounting
Kraze International Inc.
71
Exercise 10.1
Enter.
3. Navigate to the section of the system where receipts are to be posted.
Go to Banking > Incoming Payments > Incoming Payments
options?
Customer is the default payer.

It is still possible to change this default.
The other options are Customer and Account. Vendor is chosen if a collection is to be made from a
Vendor. Account is to be chosen if neither Vendor nor Customer is to be chosen, this will give the user
the option to choose from the chart of accounts, which account is to be debited.
5. Enter the following collections.
Date Description
Mar. 10, 20XX Kris Aquino settled her account in full. (Cash Collection)
Mar. 10, 20XX Phil Younghusband settled partially, P5,000 through cash.
a. Go to Banking >Incoming Payments >Incoming Payments

Your Incoming Payment document number is 3.
Default is Customer.
b. Enter customer that shall become your credit.

Choose Kris Aquino in the code field by clicking the selection list in the field.
Change posting date to Mar 10.
The system assigns the due date.
72
c. Choose the document for settlement.
In the first line of the table, under the column GL Account, check box under the Selected
column.
Theres no discount since Kris Aquino pays after the 10 cash discount days
Press tab. Balance due is now net of early payment discount.

Do not click Add yet!
d. Enter cash payment as your debit.

Means will appear.
Click the Cash tab.
In the Total field, type 16,764 or right-click the field and choose Copy Balance Due.
Click OK. The Payment Means screen will exit.
Click Add in the Incoming Payments window.
Continue?
Click Add.
73
d. Retrieve the journal entry made in Incoming Payment document number 3.
Still in Incoming Payment window, click the last data icon in the toolbar.
You are led to document 3.
To view the journal entry made, click the golden arrow after Transaction No.
You will be led to the next screen.
Click OK or Cancel to exit from the current screen.

To add a new payment, click the Add button in the toolbar .
e. For the collection from customer Phil Younghusband:
You must still be at Incoming Payments window. Make sure that you are in the Add mode as
evidenced by the Add button found at the lower left-corner of the screen. If not, click the Add
icon in the toolbar.
Choose CU700000 Phil Younghusband in the Code field
Set dates to Mar 10, 20XX
Check the box under the Selected document. The line is then highlighted
In the column Total Payment of the first highlighted line, type 5000.
Press tab. Make sure that under the Total Payment, the amount is still 5000.
Click the money bag or Payment Means icon. The Payment Means window will appear
Click the Cash tab.
74
Continue?
Click Add.
75
Exercise 10.2
3. Navigate to the section of the system where receipts are to be posted.
Banking > Incoming Payments > Incoming Payments
4. Enter the following collections.
Date Description
Mar. 26, 20XX Mr. Dwayne Wade settled her account in full.
Mar. 27, 20XX Phil Younghusband settled partially, P5,000 through check.
SOLUTION:
1. For the collection from customer Dwayne Wade:

Choose Dwayne Wade in the Code field
In the first line of the table, under the column GL Account, check box under the Selected
column.
Theres no discount since he pays after the 10 cash discount days
Click the Cash tab.
Continue?
Click Add.
2. For the collection from customer Phil Younghusband:

76 Choose CU700000 Phil Younghusband in the Code field
Check the box under the Selected document. The line is then highlighted
In the column Total Payment of the first highlighted line, type 5000.
Press tab. Make sure that under the Total Payment, the amount is still 5000.
Click the Check tab.
In the Amount field, type 5,000 or right-click the field and choose Copy Balance Due.
Continue?
Click Add.
77
Chapter 11:
LEDGERS
Exercise 11.1
Company button.
3. Choose your database. Enter the user id and the password. Click OK. The Main Menu will appear.
4. Generate the General Ledger Report.
a. Go to Financials > Financial Reports > Accounting > General Ledger

b. The General Ledger Selection Criteria will appear.
c. Uncheck Business Partner since this would refer to Subsidiary Ledgers of all customers and vendors.
d. The Accounts must be checked.
e. Click x between # and Account.
f. Enter the desired posting date range.
g. Click OK.
78
79
80
6. Submit the general ledger report to your instructor.

Chapter 12:
TRIAL BALANCE
Exercise 12.1

Company button.
4. Generate the Trial Balance Report

a. Go to Financials > Financial Reports > Financial > Trial Balance
b. The Trial Balance Selection Criteria will appear.
d. The Accounts must be checked. Click x between # and Account.
e. Enter the desired posting date range. Click OK.
f. The Trial Balance Report will be shown. Change to desired level from Level 1 to Level 5.
81
g. You can also hide the titles. Click hide titles checkbox
5. Submit the generated Trial Balance Report to your instructor.
82
Chapter 13:
ADJUSTMENTS
Adjusting entries are journal entries made at the end of the accounting period to allocate revenue and
expenses to the period in which they actually are applicable. Adjusting entries are required because
normal journal entries are based on actual transactions, and the date on which these transactions
occur may not be the data required to fulfill the matching principle of accrual accounting.
The two major types of adjusting entries are:
a. Accruals are for revenues and expenses that are matched to dates before the transaction has been
recorded.
b. Deferrals are for revenues and expenses that are matched to dates after the transaction has been

recorded.
Accruals
Accrued items are those for which the firm has been realizing revenue or expense without yet
observing an actual transaction that would result in a journal entry. For example, consider the case of
salaried employees who are paid on the first of the month for the salary the earned over the previous
month. Each day of the month the firm accrues an additional liability first in the form of salaries to be
paid on the first day of the next month, but the transaction does not actually occur until the paychecks
are issued on the first of the month. In order to report the expense in the period in which it was
incurred, an adjusting entry is made at the end of the month.
Some accrued items for which adjusting entries may be made include:
Salaries
Past-due expenses
Income tax expenses
Interest income
Unbilled revenue
Deferrals
Deferred items are those for which the firm has recorded the transaction as a journal entry, but has
not yet realized the revenue or expense associated with that journal entry. In other words, the
recognition of deferred items is postponed until a later accounting period.
Some deferred items for which adjusting entries would be made include:
Prepaid insurance
Prepaid rent
Office supplies
Depreciation
83
Unearned revenue
Completing the Adjusting Entries
To prevent inadvertent omission of some adjusting entries, it is helpful to review the ones from the
previous accounting period since such transactions often recur. It also helps to talk to various people in
the company who might know about unbilled revenue or other items that might require adjustments.
84
Chapter 14:
FINANCIAL STATEMENTS
Exercise 14.1
Company button.

4. Navigate to the system for the list of journal entries made through the document Journal Entry.
a. Go to Financials > Financial Report > Financial > Balance Sheet/Profit and Loss Statement
b. When Balance Sheet/Profit and Loss Statement/Cash Flow Report

Selection Criteria window appears Enter the desired range dates.
c. Click OK.
85
4. Submit the balance sheet and profit and loss statement to your instructor.
BALANCE SHEET:
NOTE: You may also change the level to see the details.
PROFIT AND LOSS STATEMENT:
NOTE: You may also change the level to see the details.
86
Chapter 15:
CLOSING ENTRIES
Exercise 15.1
Company button.

4. Navigate to the system for the list of journal entries made through the document Journal Entry.
a. Go to Administration> Utilities > Period End Closing
b. When Period End Closing Selection Criteria window appears Enter the following:
Period 20XX
From 20XX-01
To 20XX-03
Retained Earnings Account Aquino, Capital
Period-End Closing Account Income Summary
c. Click Execute
5. In the Period End Closing Window, do the following:

Due date and Document Date: March 31, 20XX
Click approved or click the checkboxes (to close nominal accounts to Aquino, Capital.
Execute
87
6. Generate the journal entries made:

a. Go to Financials > Financial Report > Accounting > Transaction Journal Report
b. When Transaction Journal Report Selection Criteria window appears, choose Closing Balance in the
Original Journal field.
c. Enter the desired range dates: From 31.03.XX to 01.04.XX
d. Click OK.
6. Submit the transaction journal report to your instructor.
88
Chapter 16 :
POST-CLOSING TRIAL BALANCE
Exercise 16.1

Company button.
4. Generate the Trial Balance Report

e. Enter the desired posting date range.
f. Click Add Closing Balances checkbox. Click OK.
g. The Trial Balance Report will be shown. Change to desired level from Level 1 to Level 5.
h. Click Hide Titles checkbox
NOTE: The profit and loss accounts balances must be zero.
5. Submit the generated Trial Balance Report to your instructor. 89

ADDITIONAL EXERCISES
Name: ______________________________________ Course & Year: ______________________
Exercise 1 Disbursement
APRIL
3 Additional Investment of 500,000 (250,000 cash and 250,000 MBTC). (use Journal Entry)
5 Paid business permit (taxes and licenses), P4,000 in cash.
8 Paid Big Bang Shop for training services rendered, P10,000 in cash. (Training Expense)
20 Purchased supplies, P3,500 in cash.
30 Issued check for owners withdrawal, P5,000. Check nos. 10001.

Issued check for payment of electricity, P2,500. Check no. 10002.
Issued check for payment of water, P1,000. Check no. 10003.
Paid rent in cash, P15,000.
Requirements:
1. Record the above transactions. For payments requiring issuance of check use the Metrobank
account.
2. View the transaction journal for the journal entries made for April.
3. Generate the Trial balance and General Ledger for April.
4. Generate Income Statement and Balance Sheet for April.
5. Process closing procedures for April. (Admin-Utilities-Period End Closing)
6. Generate post-closing trial balance for April.
90
Name: ______________________________________ Course & Year: ______________________
Exercise 2 Sales and Collection

MAY
1 Received a call from Kris Aquino to repair her car. The company sent their new hire and billed
Kris Aquino for P18,000.
8 Received a call from Ms.Kardashian. A. Salvador repaired the machine. The office billed
immediately Ms.Kardashian, P22,000.
12 Received a call from Kris Aquino to repair another car. An employee was sent and did the
repair. The office billed Kris for P12,000.

Collected cash as full payment from Ms.Kardashian.
19 Dwayne Wade, called and asked the expertise of A. Salvador. When the engagement was
negotiated, they agreed that Mr. Wade will pay P8,000 in for the service. A. Salvador will do
the repair on the 24thh. (no entry yet)
24 A. Salvador successfully repaired the printer of Mr. Wade. The office immediately issued
invoice.
30 Issued check for owners withdrawal, P5,000 each. Check no. 10004.
Paid salaries in cash, P15,000.
Requirements:
1. Record the above transactions. View the transaction journal for the journal entries made for May.
2. Generate the trial balance and General Ledger for May.
3. Generate Income Statement and Balance Sheet for May.
4. Process closing procedures for May. (Admin-Utilities-Period End Closing)
5. Generate post-closing trial balance for May.
91
Name: ______________________________________ Course & Year: ______________________
Exercise 3 Purchases, Disbursements, Sales and Collection

JUNE
1 Purchased papers and pens, P2,500.
2 Purchased additional supplies on account from Global Equipment, P4,200. (Supplies Expense)
5 Collected from Kris Aquino.(Cash Collection)
20 Received a call from KC Concepcion to repair her Jaguar car. An employee was sent and
immediately billed this client for P43,000.
22 Received a call from ERIK Spoelstra to repair his car. A.Salvador repaired the machine. The
office billed immediately for P28,000.
25 PaidGlobal Equipment in cash.
30 Issued check for partners withdrawal, P5,000 each. Check no. 10008
Issued check for payment of water, P900. Check no. 10010.
Requirements:
1. Record the above transactions. View the transaction journal for the journal entries made for June.
2. Generate the trial balance and General Ledger for June.
3. Generate Income Statement and Balance Sheetfor June.
4. Process closing procedures for June.
5. Generate post-closing trial balance for June.
92
SERVICE CONCERN
SOLUTION
PREREQUISITE

1. Login to SAP Business One. Choose company name and enter your User Code
and Password. Click OK.
When the log in screen is prompted, do not yet enter your ID and password instead, click Change
Company button. The Choose Company window will appear.
Click your company. The line will be highlighted.
Enter manager in the fields User Code and 1234 in the Password.
2. RECORD TRANSACTIONS
A. APRIL
1. Record the transactions for this month.
April 3
Additional Investment of 500,000 (250,000 cash and 250,000 MBTC). (use
Journal Entry)
a. Go to Banking > Incoming Payments > Incoming Payments

Set date to Apr 3, 20XX
Enter the following in the first two line of the table:
A111000 Cash on Hand 250,000

A112100 Cash in Bank MBTC 250,000
C100000 Aquino, Capital 500,000
Click Add.
April 8
Paid Big Bang Shop for training services rendered, P10,000 in cash.
a. Still in Banking > Outgoing Payments > Outgoing Payments

Must be in the Add mode. (click Add icon in the toolbar) 93
Change posting, due and document dates to April 8
In the first line of the table, under the column GL Account, click the selection list icon so that a list
of GL accounts will appear.
Choose Training Expense by double-clicking on it.
Type 10,000 under the Net Amount field of the same line.

Means will appear. Click the Cash tab.
In the GL Account field, choose Cash on Hand.
In the Total field, type 10,000 or right-click then choose Copy Balance Due.
Click OK. Click Add.
Continue? Click Yes. Click Add.

Notice that the system is now ready for the next payment transaction.
April 20
Purchased office supplies, P3,500 in cash.


icon will appear. Click the selection list icon so that a list of GL accounts will appear.
Choose Supplies Expense by double-clicking on it.

Means will appear.
Click the Cash tab.
Choose Cash on Hand for the field GL Account.
April 30
Issued check for owners withdrawal, P5,000 with check no. 10001.

Change posting, due and document dates to April 30.
94
b. Enter account for your debit.
Choose Aquino, Personal by double-clicking on it.
c. Enter check payment as your credit.

Means will appear.
In the GL Account field, choose Cash in Bank - MBTC
In the first line, choose Philippines under the Country field. Choose Account no. in the Account
field. Check box under Manual column. Type 10001 under the Check number column. In the Total
field, type 5,000 or right-click then choose Copy Balance Due.

April 30


Choose Utility Expense by double-clicking on it.

Means will appear.
In the GL account field, choose Cash in Bank - MBTC
April 30

95
Type 1,000 (no currency) under the Net Amount field of the same line.

Means will appear.
April 30


Choose Rent Expense by double-clicking on it.

2. View the transaction journal for the journal entries made.

a. Navigate to the system for the list of journal entries made through the document Journal
Entry.
96 b. When Transaction Journal Report Selection Criteria window appears, choose All Transactions in the
c. Enter the desired range dates. Click OK.

3. Generate the Trial Balance and General Ledger
a. Generate the General Ledger Report.
g. Click OK. Click OK to exit.
b. Generate the Trial Balance Report


4. Generate the Income Statement and Balance Sheet.

a. Generate the Profit and Loss Statement
a. Go to Financials > Financial Reports > Financial > Profit and Loss Statement Report
b. The Profit and Loss Statement Selection Criteria will appear.
c. Set the period range. Click OK.
f. The Profit and Loss Statement will be shown. Change to desired level from Level 1 to Level 5.
b. Generate the Balance Sheet.

a. Go to Financials > Financial Reports > Financial > Balance Sheet
b. The Balance Sheet Selection Criteria will appear.
c. Set the cut-off date for the report to be generated. Click OK.
5. Process closing procedures and distribution of profit and loss.
a. Go to Administration > Utilities > Period-end Closing

Set year 20XX. Set months from April 20XX to April 20XX.
Make sure that Income and Expense Summary is chosen in the Period-end closing and Retained
Earnings account fields.
Click Execute.
b. Choose accounts to be closed.

Set document date and posting date to April30.
Click all the boxes in the table on the left side of the screen.
Click Execute.
c. Close income summary to partners drawing accounts.

Set date to April30 97
In the first line of the table, select Aquino, Personal (amount of Income & Expense Summary
balance)
In the second line, Income and Expense Summary (see balance through the golden arrow)
Click Add to post.
d. Close drawing accounts to capital accounts.

Still in the Financials > Journal Entry
Set date to April30
In the first line of the table, select Aquino, Capital
In the second line, select Aquino, Personal (see balance through the golden arrow)
Click Add to post.
5. Generate the Post-Closing Trial Balance.

Go to Financials > Financial Reports > Financial > Trial Balance
The Trial Balance Selection Criteria will appear.
Uncheck Business Partner since this would refer to Subsidiary Ledgers of all customers and
vendors.
The Accounts must be checked. Click x between # and Account. Click Add Closing Entries.
Enter the desired posting date range. Click OK.
The Trial Balance Report will be shown. Change to desired level from Level 1 to Level 5.
View the Print Preview Report Click the Print Preview button from the toolbar.
B. MAY
May 1
Received a call from Kris Aquino to repair her car. The company sent their new hire and billed Kris
Aquino for P18,000.

Choose Kris Aquino in the Customer field.
Set date to May 1
Choose Service in the Item/Service type.
In the table, choose Service Income under the GL Account column.
Type 18,000 in the amount column.
Click Add.
The system is now ready for a new invoice transaction.
May 8
Received a call from Ms.Kardashian. A. Salvador repaired the machine. The office billed immediately
Ms.Kardashian, P22,000.

Choose Ms.Kardashian in the Customer field.
Set date to May 8
Click Add.
98 The system is now ready for a new invoice transaction.
May 12
Received a call from Kris Aquino to repair another car. An employee was sent and did the repair. The
office billed Kris for P12,000.

Choose Kris Aquino in the Customer field.
Set date to May 12.
Click Add.
May 12
Collected cash as full payment from Ms. Kardashian.

a. Go to Banking > Incoming > Incoming Payments
Default is Customer. ChooseMs.Kardashian.
Set date to May 12
In the table, click the box under Selected column so that the line will be highlighted.
b. Enter cash payment as your debit.

Click the payment means icon.
Choose Cash. The GL account field must be Cash on Hand.
In the total field, right click and choose Copy Balance due.
May 19
Dwayne Wade, called and asked the expertise of A. Salvador. When the engagement was negotiated,
they agreed that Mr. Wade will pay P8,000 in for the service. A. Salvador will do the repair on the
24thh.
No journal entry.
May 24
A. Salvador successfully repaired the printer of Elisha Reyes. The office immediately issued invoice.

Choose Mr. Wade in the Customer field.
Set date to May 24.
Click Add.
May 28
Issued check for owners withdrawal, P5,000 each. Check no. 10004.
99
Change posting, due and document dates to May 28.

Choose Aquino Personal by double-clicking on it.

Means will appear.
In the GL Account field, choose Cash in Bank -MBTC
May 28

Change posting, due and document dates to May 28.


Means will appear.
May 28
100
Change posting, due and document dates to May 28

Means will appear.

May 28



May 28

101
Choose Salary Expense by double-clicking on it.

View the Transaction Journal for the journal Entries Made.

Entry.
b. When Transaction Journal Report Selection Criteria window appears, choose All Transactions in the



102
2. Generate the Income Statement and Balance Sheet
d. The Profit and Loss Statement will be shown. Change to desired level from Level 1 to Level 5.

d. The Trial Balance Report will be shown. Change to desired level from Level 1 to Level 5.


Set year 20XX. Set months from May 20XX to May 20XX.
Click Execute.

Set document date and posting date to May 31.
Click Execute.

Set date to May 31
balance)
Click Add to post.

Set date to May 31
In the second line, select Aquino, Personal (see balance through the golden arrow)
Click Add to post.

vendors.
The Accounts must be checked. Click x between # and Account. Click Add Closing Entries. 103
C. JUNE
June 1
Purchased papers and pens, P2,500

Change posting, due and document dates to June 1.

Choose Supplies Expense by double-clicking on it.

Means will appear.
Click the Cash tab.
In the GL account field, choose Cash on Hand.
In the Total field, type 2,500 or right-click and choose Copy Balance Due.
June 2
Purchased additional supplies on account from Global Equipment, P4,200.
Credit term is 2/10, n/30.
a. Go to Purchasing-AP > AP Invoice

Choose Global Equipment in the Vendor field.
Set date to June 2 (may type 2.6.XX).
In the table, choose Supplies Expense under the GL Account column.
In the Accounting tab, make sure credit term is 2/10, n/30 days.
Click Add.
June 5
Collected from Kris Aquino.(Cash Collection)
a. Go to Banking > Incoming > Incoming Payments

104 Default is Customer. Choose Kris Aquinno.
Set date to June 5 (type 5.6.XX)
In the table, click the box under Selected column so that the line will be highlighted.
b. Enter cash payment as your debit.
Click the payment means icon.
Choose Cash. The GL account field must be Cash on Hand.
In the total field, right click and choose Copy Balance due.
June 20
Received a call from KC Concepcion to repair her Jaguar car. An employee was
sent and immediately billed this client for P43,000.

Choose KC Concepcion in the Customer field.
Set date to June 20 (may type 20.6.XX).

Click Add.
June 22
Received a call from ERIK Spoelstra to repair his car. A. Salvador repaired the
machine. The office billed immediately for P28,000.

Choose Erik Spoeltra in the Customer field.
Set date to June22 (may type 22.6.XX).
In the Accounting tab, make sure credit term is 2/1, n/30.
Click Add.
June 25
Paid Global Equipment in cash.
a. In Banking > Outgoing Payments > Outgoing Payments
Default is Vendor
Change posting, due and document dates to June 25 (type 25.6.XX).
b. Choose document for payment

In the first line of the table, click the box under the Selected column so that the line is highlighted.
c. Enter CASH payment as your credit.

Means will appear.
Click the cash tab.
In the GL Account field, choose Cash on Hand
In the Total field, right-click then choose Copy Balance Due.
Click OK. Click Add. 105
March 30
Issued check for owners withdrawal, P5,000 each with check nos. 10008
a. In Banking > Outgoing Payments > Outgoing Payments

Change posting, due and document dates to June 30 (type 30.6.XX).

Choose Aquino, Personal by double-clicking on it.

Means will appear.
In the GL Account field, choose Cash in Bank - MBTC
March 30

Change posting, due and document dates to June 30.


Means will appear.
In the GL account field, choose Cash in Bank - MBTC.
106 Continue? Click Yes. Click Add.
March 30
Issued check for payment of water, P900. Check no. 10010.

Change posting, due and document dates to June 30 (30.6.XX)

Type 900 under the Net Amount field of the same line.

Means will appear.
In the GL account field, choose Cash in Bank - MBTC by doing a single click on it.
field, type 900 or right-click then choose Copy Balance Due.
March 30

Change posting, due and document dates to June 30 (may type 30.6.XX).


107
March 30

Change posting, due and document dates to June 30 (may type 30.6.XX).

Choose Salary Expense by double-clicking on it.

View the Transaction Journal for the journal Entries Made.

Entry.
b. When Transaction Journal Report Selection Criteria window appears, choose All Transactions in the



108
g. View the Print Preview Report Click the Print Preview button from the toolbar.
3. Generate the Income Statement and Balance Sheet

f. The Profit and Loss Statement will be shown. Change to desired level from Level 1 to Level 5.



Set year 20XX. Month is June.
Click Execute.

Set document date and posting date to June 30.
Click Execute.

Set date to June 30
balance)
Click Add to post.

Set date to June 30
In the second line, select Aquino, Personal(see balance through the golden arrow) 109
Click Add to post.
vendors.
The Accounts must be checked. Click x between # and Account. Click Add Closing Entries.
110

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QUICK GUIDE TO

Chapter 1 Introduction to Fundamentals of Accounting

Chapter 2 Chart of Accounts

Chapter 3 Subsidiary Ledgers

Chapter 4 Stock Cards

Chapter 5 The Accounting Cycle

Chapter 7 Special Journal Sales

Chapter 8 Special Journal Purchases

Chapter 9 Special Journal Receipts

Chapter 10 Special Journal Disbursements

Chapter 12 Trial Balance

Chapter 14 Financial Statements

Chapter 15 Closing Entries

Chapter 16 Post-Closing Trial Balance

Accounting is the method in which financial information is

The purpose of accounting is to provide information used in decision

Every business has numerous processes. Some simple, others are

QUICK GUIDE TO FUNDAMENTALS OF ACCOUNTING using SAP Business One

This is where a computerized accounting helps simplify, integrate,

Salient Features of Computerized accounting

1. Fast, Powerful, Simple and Integrated

Computerized accounting is designed to automate and integrate all

3. Enhanced User Experience

7. For Improved Business Performance

8. Quick Decision Making

Advantages of Computerized accounting

Automation of tedious clerical jobs

SAP software is:

Affordable for small businesses and midsize companies

QUICK GUIDE TO FUNDAMENTALS OF ACCOUNTING using SAP Business One

Did You Know

1. Log in to SAP Business One

From your desktop, click SAP Business One.

3. Create a new company.

irreversible effects. Extra care must be observed in the creation.

SITE PASSWORD: B1Admin

Company Name : ABC Enterprises

A new window will appear Posting Period.

Click Update. Click OK.

QUICK GUIDE TO FUNDAMENTALS OF ACCOUNTING using SAP Business One

6. Show your Main Menu. Submit to your Instructor.

7. Exit from the system. File > Exit

1. Log in to SAP Business One

From your desktop, click SAP Business One.

3. Enter company details.

Street / PO Box 1234 Graham Avenue

4. Setup Philippine Peso as the company currency.

Click Update. Click OK.

QUICK GUIDE TO FUNDAMENTALS OF ACCOUNTING using SAP Business One

Balance sheet accounts

Income statement accounts

1. Log in to SAP Business One

From your desktop, click SAP Business One.

QUICK GUIDE TO FUNDAMENTALS OF ACCOUNTING using SAP Business One

Go to Financials > Chart of Accounts

Exit by clicking the

4. Add the following classification of Assets title accounts:

Click the Edit Chart of Accounts under the Financials module.

5. What level is Assets? Current and Noncurrent Assets?

1st Level; 2nd Level

6. Add the following classifications of Current Assets

A120000 Trade and Other Receivables

Click Current Assets so that the line will be highlighted.