Before you start reading this User's Manual, see page xx. CPA-LEDGER (Version 3.3) by TRONOLONE & FOSTER, PC CERTIFIED PUBLIC ACCOUNTANTS 9108 VOLUNTEER DRIVE ALEXANDRIA, VIRGINIA 22309 For technical assistance always contact: James E. Foster, CPA 8529 Greeley Blvd. Springfield, Virginia 22152 (703) 569-2254 (after 7:30 PM weekdays or anytime during the weekend) A Few Preliminary Notes to You: CPA-LEDGER is available for corporations, partnerships, and sole proprietorships. Also, for each of the three, versions are available for hard disk only, hard disk (CPA-LEDGER) and floppy disk (general ledger data files), and floppy disk only (with CPA-LEDGER on drive B: and the general ledger on the A: drive. Thus, nine different versions are available. See Appendix B for details. Ordering information begins on page 99-6. APPENDIX B CONTAINS INFORMATION ON HOW TO LOAD CPA-LEDGER ON YOUR MICROCOMPUTER. PLEASE READ THE APPENDIX. ----->Before you attempt to use CPA-LEDGER, you should possess a knowledge of double-entry bookkeeping. See the discussion that begins on page 3. ----->Before starting your own general ledger, be sure to read Chapter 3 and Appendix D, paying close attention to "account classifications" used by CPA-LEDGER. It is very important that you include each of your accounts in the proper "account classification". ----->Also, be SURE to read the last paragraph on page 1 of 2 of the READ.ME file on the Program Disk & Practice Disk. COPYRIGHT 1986, 1988, 1989 TRONOLONE & FOSTER, PC ii DISCLAIMER. CPA-LEDGER (which includes the computer programs, the practice diskette, and the User's Manual) is distributed on an as is basis without warranty or guarantee. In no event will Tronolone & Foster be liable to you, any other person, or any other entity for any loss, damage, or compensation, for any reason, that is caused or is alleged to be caused by any part of the CPA-LEDGER system. This disclaimer applies to any and all copies of CPA-LEDGER that you may have, regardless of source. Disclaimed losses, damages, and compensation include, but are not limited to, regardless of reason, interruption of service; lost profits; lost savings; loss of business; inability to use or delays in the use of CPA-LEDGER upon initial receipt or anytime after it has been initially received; and anticipatory profits or consequential losses or damages related to use of the CPA-LEDGER computer programs, the CPA-LEDGER practice diskette, or the CPA-LEDGER User's Manual. PERMISSION TO COPY. Individuals and organizations are granted permission to copy the CPA-LEDGER computer programs, the CPA-LEDGER practice diskette, and the CPA-LEDGER User's Manual as a complete unit for distribution to others, PROVIDED that (1) no changes are made to the CPA-LEDGER computer programs as released by Tronolone & Foster, PC; the CPA-LEDGER practice diskette; or the CPA-LEDGER User's Manual, as each of the three were originally received from, or as subsequently changed by, Tronolone & Foster; (2) the CPA-LEDGER computer programs, the CPA-LEDGER practice diskette, and the CPA-LEDGER User's Manual are distributed together; (3) there is no charge in ANY form to the individual or organization that receives the copy. Individuals or organizations using CPA-LEDGER are granted permission to make as many internal copies as are needed. In all other cases, not specifically covered above, written permission should be obtained from Tronolone & Foster before copies are made of the CPA-LEDGER computer programs, or the CPA-LEDGER practice diskette, or the CPA-LEDGER User's Manual. Also, see "USER SUPPORTED SOFTWARE", below. HOW TO ORDER THE EXPANDED VERSION OF CPA-LEDGER. If you find CPA-LEDGER be useful, your contribution would be appreciated. Complete ordering information is included in Appendix B, together with an explanation of the nine versions available to you. Order from Tronolone & Foster, PC. The address is on the cover sheet of this manual. Your contribution will entitle you to: 1. Up to twenty hours of consultation, without charge, by mail or telephone, on how to use CPA-LEDGER. These consultations, however, are limited to an explanation of the technical aspects of CPA-LEDGER computer processing and will not include any accounting or bookkeeping consultations or services in any form. iii All consultations will be on a time available basis at the convenience of Tronolone & Foster and will be between the hours of 7:30 PM - 10:00 PM (Virginia time) weekdays and anytime weekends. All telephone toll charges will be at the expense of the person or entity making the call. Long distance calls will not be returned. (We hope that you can understand this policy - returning scores of long distance calls can become quite expensive.) 2. CPA-LEDGER's Balance Sheet AND footnote capabilites for the unadjusted trial balance, Income Statement and Balance Sheet. 3. CPA-LEDGER's financial statement analysis (ratios) capability. 4. "New enhancements" to CPA-LEDGER. See "A NOTE FROM JIM", on the following page. 5. The latest version of CPA-LEDGER, anytime that you wish. THIS OFFER IS LIMITED TO THE VERSION OF CPA-LEDGER THAT YOU ORDERED FROM TRONOLONE & FOSTER. For example, if you ordered from Tronolone & Foster the partnership version for hard disk only, this offer extends only to the partnership version for hard disk. See Appendix B, beginning on page 99-3, if you would like to have another version of the system. To receive an updated copy of the version that you have (#5, immediately above), send your name, address & $5 for postage and diskette handling. If you did not order your version of CPA-LEDGER from Tronolone & Foster, the updating service is not available to you. ---> PLEASE REMEMBER THIS - this manual discusses the full capabilities of CPA-LEDGER, some capabilites that are in the public domain and some that are not. If you obtained CPA-LEDGER from the public domain and have not ordered the expanded system from Tronolone & Foster, CPA-LEDGER capabilites not in the public domain (items 2 & 3 above and all items discussed in "A NOTE FROM JIM" below) are NOT included on the disks that you ----> have. PLEASE REMEMBER THAT AS YOU READ THIS MANUAL. USER SUPPORTED SOFTWARE. Individuals and organizations are granted permission to change, at their own risk, the system so that it better serves their own personal accounting needs or the organization's own internal accounting needs. Individuals or organizations who demonstrate or distribute CPA-LEDGER to others are NOT given permission to change any part of the CPA-LEDGER system without prior written approval from Tronolone & Foster. Also, if you change any part of the CPA-LEDGER system, you are NOT authorized to distribute any part of CPA-LEDGER, including the User's Manual, to others. Also see "PERMISSION TO COPY", above. iv A NOTE FROM JIM. If you have questions on how to use the CPA-LEDGER computer programs, please do not hesitate to contact me! Your contribution entitles you to that. I enjoy talking to CPA-LEDGER users and your call or letter will be most welcome. Call me anytime after 7:30 PM weekdays (Virginia time) or anytime during weekends. My phone number and address are on the cover sheet of this manual. CPA-LEDGER has been changed from processing described in previous versions of the User's Manual. Here are the major changes: . CPA-LEDGER is available for partnerships and sole proprietorships, as well as for corporations. See Page 99-3. Also see Chapters 18 and 19. There is one thing you should know about CPA-LEDGER User's Manuals that are in circulation. Beginning in July, 1988, we released CPA-LEDGER versions for partnerships and sole proprietorships. The old User's Manual makes no mention of partnerships or sole proprietorships. This User's Manual was updated for partnerships and sole proprietorships by adding two new chapters - Chapters 18 & 19. Also, partnerships and sole proprietorships are referred to briefly in selected places throughout this User's Manual. Chapters 18 & 19, however, contain the detailed information. . New Enhancements (But see the next-to-last paragraph on page iii.) . Option 5 (Print General Ledger Accounts With Details Of All Debits and All Credits) of the DAILY menu has been enhanced by allowing you to summarize any account(s) that you wish. This enhancement could prove helpful (and save printing time) if you wish to review transactions posted to only a limited number of accounts. See Chapter 10. . Option 3 (Print Financial Statements) of the DAILY menu has been changed and it should be much more useful to you. Option 3 can now print an income statement for any whole month, or series of consecutive whole months. For example, you can have CPA-LEDGER print an income statement for January, or for February, or for January through March, or for February and March, etc. This enhancement will be useful if you are interested in comparing income statements for differing periods. The old Option 3 printed financial statements from the beginning of the accounting period through the last transaction that you entered, and you could not control the period covered in the printout. This feature has been retained, with the added capability of an income statement for a whole month or series of consecutive whole months. See Chapter 8. v . Five of the Daily Menu options have been enhanced so that you can direct output to either the printer or your computer's screen. These enhancements will be useful if you don't need printed output and you wish to, say, quickly search for a previous transaction or to review all debits and credits to a particular account. The five options that have both screen and printout capabilities are: . Unadjusted trial balance. See Chapter 7. . Print transactions that have been posted to the general ledger. See Chapter 9. . Print general ledger accounts with details of all debits and all credits. See Chapter 10. . Print bank deposits and checks written. See Chapter 11. . Print general ledger accounts and their balances. See Chapter 12. . Option 1 of the DAILY menu (the one you use to post the general ledger): . Now displays the account title when you enter an account number. That makes it easier to make sure that your are using the proper account as you supply CPA-LEDGER with posting information. . Displays the cumulative total value of debits and credits as you proceed with each entry. This makes it easier for you to keep track of the accuracy of your debit and credit values. (Don't worry - CPA-LEDGER watches what you do and will NOT post your general ledger unless the total value of debits equals the total value of credits. The display information is merely to let you know what CPA-LEDGER knows.) . Can now sum a long list of debits and credits, saving you time and frustration. For example, assume that you have entered 10 debits to various expense accounts and that the sum of the debits is to be credited to your bank account. Rather than sum the 10 debits, you can have CPA-LEDGER do that for you - automatically. See Chapter 6, which tells you to enter "?" for the debit/credit indicator of the last account number and CPA-LEDGER will automatically credit the bank account. After that, you enter the check number and purpose of the transaction and the entry is complete. . Will let you correct your mistakes while entering a journal entry, thus saving you more time and frustration. Here is how CPA-LEDGER does that - at the end of each complete line of debit or credit information, CPA-LEDGER vi asks if all of your input is correct. If you answer "yes", you are asked to enter the next debit or credit. If you answer "no", however, CPA-LEDGER ignores your erroneous input on that line and asks for new information. So, if you press the "Enter" key and THEN see an error, you are allowed to correct that error before going on to the next debit or credit. In old versions of CPA-LEDGER, you had no choice but to proceed and to reject the entry after a long series of unproductive processing. No more. See Chapter 6 for details. . Option 10 of the DAILY menu is new. See Chapter 15. Option 10 allows you to: . Save standard transactions for automatic posting, in the future. . Automatically post transactions that you previously saved. . Automatically post your bank account (or the bank account of your choice if you have more than one such account) at the end of a journal entry. See Chapter 15 - a new chapter. The new Option 10 is intended to save you time and to make it easier for you to use CPA-LEDGER. . Option 4 of the SETUP menu is also new. It allows you to automatically start your general ledger after the first year's operation. It is no longer necessary to reenter all of your general ledger information. See Chapter 16, a new chapter. From time to time, I make changes to CPA-LEDGER. If you have any suggestions, please do not hesitate to contact me. As you have probably found by now, I want you to be pleased with CPA-LEDGER. You will find that I will welcome your ideas! I have been programming too long to think that ANY computer program can be what EVERYONE wants. Far from it. First, I can only generalize what hopefully will be the most useful in the most number of cases. Second, I, like you, am human. I gave up perfection LONG ago. So, I have learned to listen very carefully to the suggestions of others - there is strength in numbers. That (constructive ideas), mixed with a generous portion of patience usually gets the job done, reasonably well. We do NOT have a program of notifying you each time that CPA-LEDGER is changed. Contact me from time to time. I will advise you of the latest changes, if any. After talking to me, if you want the latest release, just sent $5 for postage and handling and I will rush the latest version to you. See item 5 on page iii. vii A FEW MORE THOUGHTS - FROM ALL OF US. Before proceeding, there are several points that need to made clear. The disks you received are called "Program Disk" and "Documentation Disk". They contain (1) the CPA-LEDGER computer programs (2) A PRACTICE GENERAL LEDGER, and (3) the User's Manual. Here is how to distinguish between files on the disks - (1) CPA-LEDGER computer programs have an extension of ".BAS". (2) Files that comprise the practice general ledger have an extension of ".FIL". (3) User Manual files have an extension of ".TXT". (The "practice general ledger" is already set up and is for practicing on how to use the system - it is NOT intended for use as the general ledger that you will use in your business.) Second, CPA-LEDGER is programmed NOT to accept any date that you enter UNLESS that date is January 1, 1986 or thereafter. The examples in this manual and the prompts given by CPA-LEDGER illustrate the FORMAT of required dates - NOT the dates that you should enter. So, please remember, always use the actual transaction date - which should be January 1, 1986 or a date after January 1, 1986. Date formats are described later. (Some clients have a special need to enter dates before 1986. If you ordered from us and wish to enter dates before 1986, call Jim. He will change the programs for you.) Third, please do not overlook Chapters 18 and 19. Those two chapters tell you about CPA-LEDGER processing for partnerships and sole proprietorships. viii PREFACE AN AUTOMATED GENERAL LEDGER AND FINANCIAL STATEMENT SYSTEM. CPA-LEDGER is an automated general ledger and financial statement system. The public domain version comes with income statement capability. Balance Sheet capability is available from Tronolone & Foster - see "HOW TO ORDER THE EXPANDED VERSION OF CPA-LEDGER", above. Accounts receivable, accounts payable, and payroll capabilites are not part of CPA-LEDGER, either in the public domain or expanded versions of the system. You can keep these accounts in your general ledger, but related subsidiary capability is not available. CPA-LEDGER is designed for commercial non-manufacturing businesses which offer products for sale (and, consequently, a cost of sales section on the income statement), AND for service businesses without inventory (and without a cost of sales section on the income statement). Separate accounts can be set up for different product or service lines; however, the system is not designed to prepare separate financial statements for each of the lines. Various small businesses may find CPA-LEDGER useful. Some of them include retail merchandising businesses, grocery stores, hardware dealers, hobby supply shops, landscaping gardeners, restaurants, and service establishments such as veterinarians, non-profit organizations and accountants. Test the system and find out if CPA-LEDGER suits your needs. Then, make a decision on whether it is useful to YOU. You should know, however, that CPA-LEDGER is generalized in the sense that it was designed to meet the needs of a large number of businesses. There is no guarantee that it will meet your specific needs. Only YOU can make that decision. Use the "Program Disk" & the practice general ledger files (see the INTRODUCTION and CHAPTER 1) to test the system. Then decide if CPA-LEDGER will satisfy your requirements. (The practice general ledger is for a business with a cost of sales section on the income statement. Remember, CPA-LEDGER can also prepare an income statement for service businesses - those that do not need a cost of goods sold section.) YOU SELECT ACCOUNT TITLES AND PREPARE THE GENERAL LEDGER ENTRIES. During design, CPA-LEDGER was changed many times. However, we did keep two of our original ideas. First, we wanted the user to be able to determine the number and the titles of accounts that would be in the system. That capability was retained. ix Second, we wanted CPA-LEDGER to have plenty of muscle in the area of recording even the most complex business transactions. To do that, it soon became evident that a single-entry, canned approach for classifying transactions was not satisfactory. There were too many limitations for today's complex business environment. Regardless of the canned approach used, there were plenty of transactions that just would not fit. Always, important transaction possibilities either had to be ignored, or, possibly, misclassified if they did occur. So, we designed CPA-LEDGER to handle ANY transaction, regardless of its simplicity or complexity. To do that, you and CPA-LEDGER will form a team - you will supply the transactions and CPA-LEDGER will do the processing. ERROR CHECKING. You should know that, to make your job easier, CPA-LEDGER has extensive error checking capabilities. Here are a few. . The system will not accept input that is either too long or too short. Consider, for example, the explanation for a general ledger entry. If you try to bypass the explanation (too short), CPA-LEDGER will tell you what you did wrong, and demand input. If you try to enter an explanation that is too long, the system will ask that your input be the proper length. And, all of this is automatic. . CPA-LEDGER will not accept a transaction unless the dollar values of debits and credits agree. If they do not agree, the system will tell you what is wrong and tell you to correct the information. Thus, the total value of all recorded debits and the total value of all recorded credits will always agree. . Before debit and credit dollars are accepted (assuming that debit dollars equal credit dollars), CPA-LEDGER lists on your computer screen the entire general ledger entry, including account titles. Then, you can accept or reject the entry. CPA-LEDGER lets you decide before it posts your books. . All dollar entries (such as dollar amounts of transactions) are verified before they are accepted. . All calendar date entries are verified. . CPA-LEDGER will not let you add (post) transactions to a general ledger account that is not included in your chart of accounts. This means that you will not have "lost" transactions - lost because of being added to a nonexistent account. x . CPA-LEDGER will not let you start a new account with an illogical debit or credit. For example, you CPA-LEDGER knows that it is illogical to start the account Cash On Hand with a negative amount. It monitors your input and detects this type of error. . CPA-LEDGER will not let you change an account's opening balance, once you open the account with a dollar amount. Nor will it let you erase or change the way a transaction is recorded, once that transaction is accepted by the system. This provides an audit trail and gives you a complete record of everything that went into the CPA-LEDGER. Imagine the confusion if you (or someone else) changed previously recorded data. What a mess that could be. So, CPA-LEDGER simply will not allow it to happen. Order is the word, with everything fully documented and permanently recorded. SOME OTHER CPA-LEDGER FEATURES. How frustrating it is to be using a microcomputer and have to constantly refer to a user's manual for technical explanations of error codes or for instructions on what to do next. This is not only frustrating. It is also inefficient. We solved a large part of that problem. As you use CPA-LEDGER you will notice that: . You will have a choice of having CPA-LEDGER brief you, in simple understandable English, on what it is about to do - before it does it. This briefing contains an explanation of all of the types of input that will be expected. You will know what will happen, before it happens. . When CPA-LEDGER expects more than one item of input on a line, complete instructions appear above that line. . When CPA-LEDGER expects one item of input on a line, complete instructions appear on the same line. . CPA-LEDGER does not require long complex input. Instead, you enter brief understandable information and CPA-LEDGER does the rest - like using an account number to look up the account's title and telling you what will be done with your input. . If you make a computer error in giving your input, CPA-LEDGER informs you that you made an error. If necessary, it tells you what it found to be wrong, tells you what to do, pauses for you to determine the correct input, and then continues where it left off. xi . The system provides you with a printed copy of your input. If information on that printed copy is needed at a later time, the system will inform you to get the printout and will give you complete instructions on what to do. . CPA-LEDGER tells you when it has finished processing and gives complete instructions on what you should do next. . A common mistake is for one to forget to turn on the printer. CPA-LEDGER watches for that and informs you if your printer is not ready. Then, it waits for you to do whatever is required. . CPA-LEDGER even tells you when to adjust the paper in your printer and how to adjust it. CPA-LEDGER also has plenty of muscle to record your daily transactions. For example: . Any one general ledger entry may have up to 30 debits and 30 credits. . Each debit and credit may have any value up to $9,999,999.99. . Total values of up to $999,999,999.99 may be printed on the printer. . Checks may be numbered from 1 to 999999 or any other combination of six characters (alphabetic or numeric, or a combination of both). . Documents that support a transaction may be numbered from 1 to 9999999999 or any other combination of 10 characters (alphabetic or numeric, or a combination of both). . You may use any combination of 1 to 30 characters to identify the payee of a check. xii . You may use any combination of 1 to 22 characters to describe the purpose of transaction. . You may use any combination of 1 to 30 characters as the title of a general ledger account. . Your general ledger may have up to 9,999 accounts. CPA-LEDGER will also: . List your chart of general ledger accounts. . Add new general ledger accounts. . Retrieve and print any general ledger entry that you entered into system. . Summarize your general ledger entries by general ledger account and report the results to you. . Provide you the status of any account. . Prepare a listing of all deposits and checks, by bank account. . Prepare a trial balance so that you may review the status of the accounts. . Prepare a formal Income Statement. It will also prepare a formal Balance Sheet, allow you to add footnotes to your financial statements, prepare Statements of Owners' Capital for partnerships and proprietorships, and analyze (using ratios) the financial statements. For partnerships, you can direct CPA-LEDGER to distribute profits/losses automatically, or you may make the distribution manually. See Chapters 18 and 19. . Automatically start your general ledger after the first year. . Allow you to "save" standard transactions for posting at a later time. . Post your bank account, at the conclusion of a journal entry. . Sum previous debits and credits of an entry and determine the dollar amount for the last debit or credit. These are only a few examples. There are more. You will become familiar with all of the features as you use the system. xiii TABLE OF CONTENTS CHAPTER DISCLAIMER, HOW TO ORDER, AND PREFACE ii INTRODUCTION 1 PC-DOS 1 Program Disk and Practice General Ledger 1 PC-DOS, BASICA, Drive A:, Drive B:, Drive C: & the COPY Command 2 Using CPA-LEDGER 2 Equipment Needs 2 PC-DOS and BASICA 3 Your Knowledge of Double-Entry Bookkeeping 3 Automatic Features 3 How This Manual Is Organized 4 1 CPA-LEDGER OVERVIEW 6 Menus - The Way to Access CPA-LEDGER Options 6 How to Begin Using CPA-LEDGER 6 An Overview of the "SETUP" Menu 7 SETUP Option 1 - Establish a New General Ledger 7 and Assign Account Titles SETUP Option 2 - Identify Selected Account Numbers 8 That Are In The New General Ledger And Identify Your Business Name (For partnerships, SETUP Option 2 also asks for the procedure to be followed in allocating profits/ losses to the partners. See Chapter 18.) SETUP Option 3 - Assign Beginning Dollar Amounts 9 to New General Ledger Accounts SETUP Option 4 - Start This Year's General Ledger 9 From Last Year's General Ledger An Overview of the "DAILY" Menu 9 DAILY Option 1 - Enter New Transactions In The 10 General Ledger - Not Automatic. See Option 10. DAILY Option 2 - Print An Unadjusted Trial Balance 10 DAILY Option 3 - Print Financial Statement(s) 10 (Note: For partnerships and sole proprietorships, DAILY Option 3 also prints statement(s) of partners'/owner's capital. See Chapters 18 and 19.) xiv TABLE OF CONTENTS CHAPTER 1 DAILY Option 4 - Print Transactions That Have Been 11 Posted to the General Ledger DAILY Option 5 - Print General Ledger Accounts 11 With Details Of All Debits And All Credits DAILY Option 6 - Print Bank Deposits And Checks 11 Written (Check Register) DAILY Option 7 - Print General Ledger Accounts 12 And Their Balances DAILY Option 8 - Add New Accounts To The General 12 Ledger DAILY Option 9 - Print a Post-Closing Trial Balance 13 DAILY Option 10- Enter New Transactions In The 13 General Ledger - Automatic Backing Up Your Data Diskette 13 2 STANDARD MESSAGES AND REMINDERS 14 Printer Reminder 14 Errors in Input 15 Today's Date 16 CPA-LEDGER Briefings 17 3 SETUP MENU - OPTION 1 - Establish A New General 19 Ledger And Assign Account Titles The SETUP Menu 19 What "SETUP" Options 1, 2, and 3 Ask For 20 What Option 1 Is Used For 20 What Option 1 Asks For 21 Option 1 Sequence of Execution and an Illustration 22 Error Messages 24 Printed Output 24 Practice 25 xv TABLE OF CONTENTS CHAPTER 4 SETUP MENU - OPTION 2 - Identify Selected Account 27 Numbers That Are In The New General Ledger And Identify Your Business Name (For partnerships, SETUP Option 2 also asks for the procedure to be followed in allocating profits/ losses to the partners. See Chapter 18.) What Option 2 is Used For 27 What Option 2 Asks For 27 Option 2 Sequence of Execution 27 An Illustration 28 Error Messages 29 Practice 31 5 SETUP MENU - OPTION 3 - Assign Beginning Dollar 32 Amounts To New General Ledger Accounts. What Option 3 is Used For 32 What Option 3 Asks For 32 A Suggested Procedure 32 Option 3 Sequence of Execution 32 An Illustration 33 Error Messages 34 Printed Output 36 Practice 36 NOTE: SEE CHAPTER 16 FOR SETUP MENU OPTION 4, WHICH PROVIDES FOR AUTOMATIC STARTING OF YOUR GENERAL LEDGER AFTER THE FIRST YEAR'S USE OF CPA-LEDGER. 6 DAILY MENU - OPTION 1 - Enter New Transactions In 37 The General Ledger - Not Automatic. See Option 10. The DAILY Menu 37 What Option 1 Is Used For 38 Option 1 Sequence of Execution 38 How to Discontinue Input for a General Ledger Entry 41 Reviewing And Approving Your General Ledger Entry 42 Getting Ready For The Next General Ledger Entry 43 Error Messages 44 Option 1 is continued on the next page. xvi TABLE OF CONTENTS CHAPTER 6 An Illustration 47 Printed Output 50 Practice 50 7 DAILY MENU - OPTION 2 - Print An Unadjusted Trial 52 Balance What Option 2 Is Used For 52 Footnote Disclosures 52 Practice 54 8 DAILY MENU - OPTION 3 - Print Financial Statement(s) 55 (Note: For partnerships and sole proprietorships, DAILY Option 3 also prints statement(s) of partners'/owner's capital. See Chapters 18 and 19.) What Option 3 Is Used For 55 Option 3 Sequence of Execution and an Illustration 55 Error Messages 59 Printed Output 60 Footnote Disclosures 62 Example of a Footnote Disclosure 63 Financial Statement Analysis 64 Ratios Prepared By Option 3 65 Sample Printout - Analysis of Financial Statements 65 Practice 68 9 DAILY MENU - OPTION 4 - Print Transactions That Have 69 Been Posted To The General Ledger What Option 4 Is Used For 69 Option 4 Sequence of Execution and an Illustration 69 Error Messages 72 Printed Output 72 Practice 73 xvii TABLE OF CONTENTS CHAPTER 10 DAILY MENU - OPTION 5 - Print General Ledger 74 Accounts With Details of All Debits and All Credits What Option 5 Is Used For 74 Option 5 Sequence of Execution and an Illustration 75 Error Messages 77 Printed Output 77 Practice 78 11 DAILY MENU - OPTION 6 - Print Bank Deposits and 79 Checks Written (Check Register) What Option 6 Is Used For 79 Option 6 Sequence of Execution and an Illustration 79 Error Messages 81 Printed Output 82 Practice 82 12 DAILY MENU - OPTION 7 - Print General Ledger 83 Accounts And Their Balances What Option 7 Is Used For 83 Option 7 Sequence of Execution and an Illustration 84 Error Messages 85 Printed Output 85 Practice 86 13 DAILY MENU - OPTION 8 - Add New Accounts To The 87 General Ledger What Option 8 Is Used For 87 Option 8 Sequence of Execution and an Illustration 88 Error Messages 91 Printed Output 93 Practice 93 14 DAILY MENU - OPTION 9 - Print A Post-Closing 94 Trial Balance What Option 9 Is Used For 94 Option 9 Sequence of Execution 94 Error Messages 94 Practice 95 xviii TABLE OF CONTENTS CHAPTER 15 DAILY MENU - OPTION 10 - Enter New Transactions In 96-1 The General Ledger - Automatic A note on page numbering 96-1 What Option 10 is Used For 96-1 Option 10 Sequence of Execution 96-3 Practice 96-11 16 SETUP MENU - OPTION 4 - Start This Year's General 96-13 Ledger From Last Year's General Ledger What Option 4 is Used For 96-13 What Option 4 Asks For 96-13 Option 4 Sequence of Execution 96-14 Printed Output 96-16 Practice 96-16 17 SETUP MENU - OPTION 6 AND DAILY MENU - OPTION 11 - Stop All CPA-LEDGER 96-17 Processing And Return Control to DOS 18 CPA-LEDGER & PARTNERSHIPS 96-18 Why a Separate Chapter on Partnerships? 96-18 The SETUP Menu 96-18 SETUP Menu Option 1 96-19 SETUP Menu Option 2 96-20 The DAILY Menu 96-23 Manual Allocation of Profit/Loss to Partners 96-24 Automatic Allocation of Profit/Loss to Partners 96-28 The Balance Sheet (DAILY Menu Option 3) 96-31 Statement of Partner's Capital 96-32 19 CPA-LEDGER & SOLE PROPRIETORSHIPS 96-35 Why a Separate Chapter on Sole Proprietorships? 96-35 SETUP Menu Option 1 96-35 SETUP Menu Option 2 96-35 DAILY Menu Option 3 96-36 A listing of appendices is on the next page. xix APPENDIX A - CPA-LEDGER AND THE INCOME STATEMENT'S COST OF GOODS SOLD SECTION 97 APPENDIX B - INSTALLING AND ORDERING CPA-LEDGER 99 APPENDIX C - SOME COMMENTS ON CAPACITIES 100 APPENDIX D - SOME COMMENTS ABOUT AN ACCOUNTING AND BOOKKEEPING SYSTEM 103 Cash Versus Accrual Basis of Accounting 104 Procedures and Controls 105 The Accounting Cycle 106 Adjusting Entries 108 Reversing Entries 112 The Balance Sheet and the Income Statement 112 READ--------> Account Classifications Used By CPA-LEDGER 113 Accounts To Be Included In Your Accounting System 116 APPENDIX E - SOME FORMS THAT MAY BE USED WITH CPA-LEDGER 117 Discussion 117 FORM 1 - Daily Cash Report 118 FORM 2 - Accounts Receivable Collections 120 FORM 3 - Other Cash Receipts 122 FORM 4 - Cash Payments for Merchandise Purchases 123 FORM 5 - Operating Expenses Paid in Cash (Other Than Salaries and Wages) 124 FORM 6 - Sales Returns Paid in Cash or Sales Returns Credited to Accounts Receivable 125 FORM 7 - Other Cash Disbursements 127 FORM 8 - Sales on Account 128 FORM 9 - Check Payments for Merchandise Purchases 129 FORM 10 - Operating Expenses Paid By Check (Other Than Salaries and Wages) 130 FORM 11 - Sales Returns Paid By Check 131 FORM 12 - Other Disbursements By Check 132 FORM 13 - Salaries and Wages 133 FORM 14 - Purchases on Account 135 FORM 15 - Purchase Returns 136 FORM 16 - Depreciation 138 FORM 17 - Other General Ledger Entries 139 xx This User's Manual can be used for both the public domain and expanded versions for CPA-LEDGER. The manual explains the full capabilities of CPA-LEDGER, and if you are using the public domain version, some capabilities described are not included in the computer programs that you have. Please remember that. Also, the expanded version of CPA-LEDGER comes on three diskettes and the public domain version on two diskettes. The public domain version diskettes are called: . Program Disk & Practice Disk, which contains: . The CPA-LEDGER computer programs (files with an extension of ".BAS". . A practice general ledger (files with an extension of ".TXT". ----->. Portions of the User's Manual (files with an extension of ".TXT> . Documentation Disk, which contains the REMAINDER of the User's Manual (files with an extension of ".TXT"). As you read the User's Manual, you will notice that three disks are referred to (as mentioned above) and that you are advised that the above files are on different diskettes. For example, for the expanded version, the practice general ledger is on disk 2 of the Documentation Disk. Just remember, if you have the public domain version of CPA-LEDGER, disk contents for you are as described above.