Chart of Accounts—Basic Data and Requirements Exercises

Main Exercises

Define Chart of Accounts

Purpose: The purpose of this exercise is to set up the structure of different segments for reporting purposes. Also define the different connections to sub ledgers, such as Fixed Assets, Costing, Project Accounting.

Windows:
Define Code String

1. Open and populate the window. The ten different segments are shown in the table.
2. Change the structure to the following:

3. Save the entry.
4. The code string will be used as follows:

• Account is used for legal entity reporting
• Cost center is used to keep track of all revenues and costs per business unit.
• Sales is used for the sales representative on each sale made.
• Region is used to follow-up the defined markets and customers.
• Fixed assets are long-lived assets used for the production of income, such as real estate, buildings, and equipment.
• Projects are both short and long-term investments.
• Currency segment is used to follow up the sales and purchases per currency code. It is also used to distinguish the cash currencies on the foreign currency bank accounts.
• Elimination is used to control the internal trade between cost centers within a company, or between companies in a consolidation structure.
• Product is used to follow up sales and costs of different products.
• Consolidation is used and reserved for consolidation codes from subsidiaries.

Note: Select the Base for Project Cost/Revenue Element check box to set the corresponding cost/revenue element as the base for project cost/revenue elements.

Account Types

Purpose: The purpose of this exercise is to categorize and set up default values for code part requirements for posting control reasons.

Windows:
Account Types

1. Open and populate the window. In the Account Type list you will (at least) see the following account types:

• Assets
• Cost
• Liabilities
• Revenues
• Statistics

2. Enter a new type called Owners Equity. The logical account type is liability since this is a liability type. Click Save.
3. The required segments now appear. Regarding owners equity, all the code parts requirements should be changed so that they are Blocked.
4. Also make sure that all revenue and cost accounts have the following requirements set:

Later on, the asset code part will be opened for depreciation cost accounts. Also, some revenue and cost accounts will have a more controlled posting control.

5. When saving your changes, click Yes to update the requirements for all accounts.

Account Groups

Purpose: The purpose of this exercise is to enter new account groups and later on connect them to different accounts.

Windows:
Account Groups

1. Open the window and populate.

2. Click New and add the following groups (if they are not already entered):

3. Save the records.

Accounts

Purpose: The purpose of this exercise is to enter new accounts and to connect these and other accounts to the previously created account groups.

Windows:
Account

1. Open the window and click New.
2. Enter the following accounts in the Basic Data tab. You can modify the information as per your requirement.

3. Save the records.

Chart of Accounts Segments - New Code Part Values

Purpose: The purpose of these exercises is to add new regions, sales representatives, product family segments and independent cost centers to the company.

Windows:
Code Part Values

Add New Cost Centers

1. Open the window and go to the Cost Center tab.
2. The following lines should already be present in the Racing companies:

3. If they are not present, enter the lines above.
4. Click New and enter the following secondary cost centers:

5. Save to complete your entry.

Add New Sales Representatives

1. In the Code Part Values window, click the Sales tab.
2. Enter the following lines in the Racing company:

3. Save the information.

Add Regions

1. In the Code Part Values window, click the Region tab.
2. Enter the following lines in the Racing company:

3. Save the information.

Add Product Family Segments

1. In the Code Part Values window, click the Product family tab.
2. Enter the following lines in the Racing company: