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PC-GL Version 3.4 Copyright 1989, Jerry Medlin PROGRAM DESCRIPTION PC-GL is a double entry accounting program which allows a small to medium size business to rapidly and accurately produce financial reports. The program runs on a IBM PC or compatible computer with at least one disk drive, and requires at least 256k memory. PC-GL is a Shareware program. You are encouraged to give copies to anyone who might use it. If you use the program, please send $35 to: Jerry Medlin 1461 Sproul Avenue Napa, Ca. 94559 Your contribution entitles you to a copy of the latest version of the program and a telephone number for limited telephone assistance should you require it. You also receive a program which allows you to customize some features of PC-GL. A complete description of this customizing program is contained at the end of the manual. The system consist of two files. PC-GL.EXE - The compiled program written in Turbo Pascal. PC-GL.COA - A standard chart of accounts to use or modify for your purposes. To run the program, simply type "PC-GL". If you want to specify a drive designation and path for your data, add the drive and path description after the program name. i.e. type "PC-GL B:" to use the B drive for data files. If you are going to use the standard chart of accounts, be sure the file PC- GL.COA is on the specified drive and subdirectory. Each time you run the program, a menu is displayed for operator selection: Enter or Change Chart of Accounts Enter or Change Transactions Print Chart of Accounts Listing Print Transaction Listing Print General Ledger Print Income Statement Print Balance Sheet Print Account Summary Report Year End Update End of Processing Make a selection by using the up or down arrows to highlight the desired function, then press <return>. PC-GL allows a maximum of 800 items in the chart of accounts and 6000 transactions per accounting period. With 256k of memory, the number of transactions is reduced to about 500 per accounting period. The number of additional transactions you can enter is printed at the bottom of the menu screen. This number is limited by either disk space or memory available, and is subject to an absolute maximum of 6000 transactions. When inputting information, the plus <+> key has the same effect as the return or enter key. The minus <-> key enters a negative number. This makes using the numeric key pad even easier. THE PROCESSING CYCLE Usually accounting is done on a monthly cycle, but the PC- GL program allows you to use any length of accounting period. Checks and journal entries for the accounting period are entered using the second menu selection (Enter or Change Transactions). Debits are entered as positive <+> numbers and credits are entered as negative <-> numbers. When the transactions have been entered and checked you may begin printing reports. Reports may be printed in any order and as often as desired. Reports may be printed to the screen first to check their accuracy. Should you discover a posting error after examining the reports, correct the error and rerun the reports. The only report that must be printed to the printer each period is the General Ledger Report. If the General Ledger Report has not been printed to the printer (not just the screen), you are not allowed to end an accounting period and start another. The General Ledger Report shows the opening balance for each account, all of the transactions posted to the account for the accounting period, followed by the closing balance for each account. Once you start a new accounting period, the printed General Ledger Report is your only audit trail. Starting a new accounting period without printing the general ledger would leave no trace of how an account arrived at its present balance. Since organizations like the IRS want to know how you arrived at those numbers on your tax return, the General Ledger Report is required. If it hasn't been printed the program never asks "Do you want to start a new accounting period?". To start a new accounting period, you must answer "Y" to the question "Do you want to start a new accounting period?". The question is asked immediately upon running PC-GL, if you printed the General Ledger Report during your last processing session. If you answer with a "N", the latest transactions are loaded and you may add additional entries - continuing on with the old period. If you answer "Y", the current period balances will be set to zero and the transactions for the previous period are saved for later review. You may then begin entering transactions for the new period. DOUBLE ENTRY ACCOUNTING Double entry accounting requires the total of all debit <+> entries to be the same as the total of all credit <-> entries. It does not mean there must be a credit for every debit, only that all of the entries must add up to zero. Each accounting period consist of a series of balanced entries with equal pluses and minuses. All of the checks written during a month are posted to the various expense accounts as debit <+> amounts. Then the total of all of those checks is then posted to the CASH IN BANK account as a single credit <-> amount. The net of all the transactions posted is therefore zero, making a balanced series of entries. All income amounts are entered as credit <-> amounts and a corresponding debit <+> entry is made to the Cash in Bank account or to Accounts Receivable. The PC-GL program helps you when posting transactions, by displaying the balance of all transactions posted at the upper right of the screen. When all of the transactions for the accounting period have been posted, the balance displayed should be zero. If you are unfamiliar with double entry accounting, it is beyond the scope of this manual to completely cover the subject. However, all is not lost. The PC-GL system can also be used as a simple single entry system. Just enter all your expenses and income to the proper account, and run the system normally. Expenses are entered as positive <+> amounts and (this is important!) income amounts are entered as negative <-> amounts. To enter a negative amount, first enter the number then press the minus<-> sign. SETTING UP THE CHART OF ACCOUNTS A standard chart of accounts is provided with the program. Although any sequential numbering scheme will work with the general ledger program, the one provided is in common usage by accountants. To use the standard chart of accounts, simply run the program with the file PC-GL.COA on the data disk drive. The chart of accounts can be added to at any time during the processing period. All chart of accounts setup and modification is done using the <Enter or Change Chart of Accounts> selection on the menu. This section allows you to add new COA items, delete or change existing ones, or examine the COA by scrolling up and down the screen. All commands are listed at the bottom of the screen and are selected by a single keystroke. Upon entering this section, you may immediately begin adding items to the chart of accounts or, by pressing the Escape key, you may go to the command mode and insert, delete or change items in the chart of accounts. You will not be allowed to delete an account with a balance or change balance amounts. Changing amounts is done by posting transactions to the account. This way you have that all important audit trail. Upon exiting the chart of accounts section, the chart of accounts is automatically sorted in account number order. The following information is contained in each chart of accounts: 1) ACCOUNT NUMBER - A three digit number between 000 and 999 which will be used for posting transactions. 2) ACCOUNT CODE - A two digit number which determines how, and on which reports, the item will be printed. (See the section on COA coding for details.) 3) PRIOR YEAR % - This number will be printed on the income statement and is for informational purposes only. If no prior year % is desired just press return for this entry and none will be printed on the income statement. The prior year % is updated automatically at the end of the year, by the Year End Update procedure. 4) ACCOUNT DESCRIPTION - Up to 27 characters are allowed for the account description. 5) CURRENT AMOUNT - This is the balance of all transactions entered to this account for the current accounting period. If an asterisk <*> is entered during setup, this chart of accounts entry will be treated as a title account on reports. Title accounts are used to provide headings and totals on reports. Transactions cannot be posted to a title account. Press any other key during setup to enter a zero beginning balance for current and year to date. 6) YTD AMOUNT - This is the balance of all transactions entered to this account for the current year. Opening account balances cannot be entered when the chart of accounts is set up. They must be posted as transactions. Remember to look at the bottom of the screen, when in doubt. Your options are printed there. The first item in the chart of accounts should contain the name to be printed on all reports. If you are using the standard chart of accounts, change the description of the first account from STANDARD CHART OF ACCOUNTS to the name you want printed on your financial statements. Once the chart of accounts has been setup, you won't use this section, except to occasionally add new items to the chart of accounts or delete unwanted accounts with zero balances. ENTERING TRANSACTIONS All checks and journal entries for the accounting period are entered using the <Enter or Change Transactions> selection of the menu. This selection also allows you to examine entries by scrolling up and down the screen and to insert, delete or change entries. You may also obtain a total for a particular account and you can search all of the transactions for any string of characters. All commands are listed at the bottom of the screen. Each transaction contains the following information: 1) DESCRIPTION - Allows up to 21 characters to describe the entry. Pressing <return> or <+> causes the previous entry to be repeated. To enter a blank description, press the space bar, then <return>. 2) CHECK NO. - A five digit check or reference number. Numbers or letters may be used. Pressing <return> causes the previous number to be repeated. Pressing <+> enters a number equal to the previous number plus one. (This is useful when entering a series of checks with sequential check numbers.) 3) DATE - The date must be entered in MODA form. i.e. 0108, for January eighth. Pressing <return> or <+> repeats the previous date. Any day of the month higher than 80 causes the transactions to be posted to the year to date balance only. (In other words, a transaction with a date of 0185 does not affect current balances when posted, only year to date balances.) 4) ACCOUNT NUMBER - You must enter a three digit account number. Once the account number has been entered, the program checks to see if the number is a valid account number. If it is not, you are asked to reenter the account number. Once a valid account number has been entered, the corresponding account description from the chart of accounts is displayed at the bottom of the screen. If you don't remember the account number, enter the number 999. You are then able to use the up and down arrow keys to search the chart of accounts for the correct account number. 5) AMOUNT - Enter the amount calculator style without using the decimal point. Debit entries are entered as positive numbers and credit entries are entered as negative numbers. To enter a negative number, enter the number in the regular manner followed by the minus <-> sign, instead of the enter or plus <+> sign. If you press the <Return> key without entering an amount, an amount is entered equal to the net of all of the transactions for the period, but with the opposite sign. In other words, a balancing entry is created. If the net of all of the transactions so far is +1234.56 and you press the <Return> key without entering an amount, 1234.56- is entered. This feature is especially useful for those users who want to enter a debit for each credit. The net amount of the current check, and the net of all the transactions posted for the period are constantly displayed at the upper right of the screen. The check balance is useful when posting a single check to multiple accounts. For double entry accounting, the net amount of all transactions should be zero when you finish with posting for the period. When using the <C> Change selection to change a chart of account item or a transaction, you don't have to reenter each field. Press the return key, to skip to the next field. The <T> Total selection for transaction entries is useful for checking balances. It can, for instance, be used to add up all the purchases, so you can make an ending inventory calculation based on a desired cost of sales. If you are using the PC-AP Accounts Payable program and have ended a PC-AP accounting period, you will have an additional menu item available at the bottom of the screen. <R> Read PC-AP Transactions allows you to read all of the checks written by PC-AP into the PC-GL program. Transactions from PC- AP are not posted to PC-GL until you select <R> Read PC-AP Transactions. PRINTING REPORTS To print any of the available reports, select the report from the main menu. First, you are asked to input a report date to be printed on the report. Alphabetic and numeric dates are acceptable. i.e. January 31, 1987. Pressing return enters the system date for the report date. After a date is entered, you can choose printing to the printer, the screen or to a file. If you choose to print to a file, you are prompted for a file name. The program prints the report to this file exactly as it would have been printed to the printer. These files are regular ASCII files, and are read by most word processors. Specifying a file name of LPT2: allows you to print to a second printer. You may optionally leave off the report headings, when you print to a file, so that the data can be easily imported into a spread sheet or data base. ACCOUNT SUMMARY REPORT Each time you start a new accounting period by answering "Y" to the question "Do you want to start a new accounting period?" at the beginning of the program, the transactions for the prior period are saved. Eventually, up to 12 accounting periods (months) are saved. The most recent transactions are in a file named GL1.TRN, and the oldest transactions are in a file named GL12.TRN. The account summary report allows you to print a summary of transactions for a single account. You can also sort the transactions, before they are printed by description, date, check number or account number. You will be asked for an account number and the number of months to go back. Inputting zero for the number of months will look at only the current period. If you enter ALL for the account number, you may also print a General Ledger Report going back up to 12 months. This is a useful report to print at the end of the year so that you can review the year's activity with one General Ledger Report instead of having to look at 12 individual reports. YEAR END CLOSEOUT At the beginning of a new accounting year, all profit and loss account balances are set to zero, using this selection. In addition, the prior year percentages are updated to reflect the year just ended. The program asks for the account number of your capital account, then the profit or loss for the year just ended is posted to that account. If you are using the Standard Chart of Accounts, the capital account is account number 465. This section should be used only once a year, and cannot be done unless the General Ledger has been printed. END OF PROCESSING When processing is completed, you must exit the program using this selection. You are asked if you want to end processing. A yes "Y" answer saves the chart of accounts, and all of the current transactions. Any answer other than "Y" returns you to the main menu. CHART OF ACCOUNTS CODING If you use the standard chart of accounts or a modified version of the standard chart of accounts, it is not necessary to be familiar with chart of account coding. Just delete the unwanted chart of account items. This information is provided for those who want to use their own chart of accounts, or produce special reports. The first number of the two digit code is a number from 1 to 9 which determines the account type. 1. ASSETS 2. LIABILITIES 3. INCOME (OR SALES) 4. COST OF SALES 5. GROSS PROFIT 6. OPERATING EXPENSES 7. OTHER INCOME 8. OTHER EXPENSES 9. NET PROFIT The GROSS PROFIT (#5) and PROFIT OR LOSS (#9) are generally used only once in each chart of accounts, for totaling purposes. The COST OF SALES (#4), GROSS PROFIT (#5), OTHER INCOME (#7) and OTHER EXPENSES (#8) can be omitted, if your applications don't require those categories. When printing the income statement, the sign for the balances of accounts with odd numbered account codes is reversed. So, income amounts (#3) which normally have a credit balance and are carried as minus numbers in the general ledger are printed on the income statement as positive numbers. The second number of the two digit code determines the totaling level for an account on the income statement and balance sheet. The total level is used to determine what totals and subtotals appear on reports. Each higher total level totals all previous lower account numbers. The best way to understand how the totaling level works is to experiment. Change the number and reprint the report to see how it looks. Chart of account coding can be changed at any time without causing problems. Total Level: 0 The balance and description will print only on the general ledger report. When printing the balance sheet or income statement, the balance (if any) is totaled and printed into the next higher number. i.e. The total for a series of 0 coded accounts prints into the next account numbered 1 or higher. 1 Used for most accounts. On the balance sheet the account balance is printed in the first column. 2 Prints total of all previous 0 and 1 accounts. Prints in the middle column of the balance sheet. 3 Prints total of all previous 0, 1, and 2 accounts. Prints in the right hand column of the balance sheet. 4 Used for subtotal accounts such as TOTAL ASSETS, OPERATING PROFIT etc. 5 Used for the NET PROFIT account on both the balance sheet and income statement. If the balance sheet does not contain a level 5 account, the balance sheet will not balance. For complex income statements, an additional total level (6) is available. The second digit is also used to control paging, spacing and underlining. Any number higher than 1 will be preceded by a blank line. A 9 in the second digit causes the printer to start a new page. The use of a 9 to start a new page should be restricted to title accounts. Accounts used only for totaling the balances of previous accounts or for printing titles on a statement are title accounts. A title account is created by entering an asterisk in the current balance column of an account. You cannot post any transactions to a title account. Most accounts with a totaling level higher than 1 are title accounts. You can print an extra blank line on the income statement or balance sheet by entering a title account with a blank description. Underlining on the income statement and balance sheet is accomplished by entering an account, with a non-numerical character in the second digit of the two digit code. (Non- numerical means something other than 0 through 9.) The character will be used to print a line under the last number printed on the income statement or balance sheet. So, an account code ending with a dash <-> prints a single underline and an account code ending with the equal sign <=> prints a double underline. The account's only purpose is to print the underline. The account should be a title account, and it's description will be ignored. USING OTHER PROGRAMS FROM JERRY MEDLIN There are three other programs available from Jerry Medlin: PC-AR - a balance forward Accounts receivable program. PC-PR - a payroll writing program. PC-AP - an accounts payable and check writing program. The only program which integrates directly with PC-GL is the accounts payable program: PC-AP. You must have PC-GL in order to use the accounts payable program. All of the checks or invoices entered in PC-AP are automatically posted to PC-GL. PC-AR and PC-PR are "stand alone" programs and do not automatically post to PC-GL. (To do so would require all of the payroll checks and all of the sales entries to be added to the transactions in PC-GL.) You must post the totals from the accounts receivable program and the payroll program with a short series of journal entries each month, which usually takes no more than a few minutes each month. This provides greater control and flexibility to the whole accounting process. The details of the journal entries from PC-PR and PC-AR to PC-GL depend on your particular situation, but might look something like this: Check Account Check Description Number Date Number Amount >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Cash Received on Acct GJN01 0131 103 22345.67 January Sales GJN01 0131 511 22345.67- January Gross Pay GJN01 0131 708 2045.43 January Fed W/H GJN01 0131 331 190.00- January FICA GJN01 0131 332 146.26- January SDI W/H GJN01 0131 333 24.53- January State W/H GJN01 0131 334 14.70- January Net Pr GJN01 0131 103 1669.94- The first two entries are from the accounts receivable program and the last 6 entries are from the payroll program. The entries would vary depending on cash or accrual basis and, of course, the amounts and accounts involved. PRIOR PERIOD CORRECTIONS You cannot change prior period transactions with PC-GL, even though prior period transactions are saved on the disk in a series of files. Changing prior period transactions creates a number of accounting problems related to the audit trail, and is simply not possible. If you find an error in the previous period and you have not yet started a new accounting period, you can answer "N" to the new accounting period question at the beginning of the program and rerun the period. If the error is from an earlier period, you must make the correction to the current period. You can enter the correction without affecting current period balances, by using a day of the month higher than 80. A date such as 0187, for instance, would tell the program to enter the transaction only in the year to date column, and not post as a current transactions. HANDLING BEGINNING AND ENDING INVENTORY If your application doesn't require the beginning and ending inventory to show on the income statement, you can skip this section. It discusses a commonly used, but somewhat confusing, technique to properly display beginning and ending inventory on a computerized income statement. Any transaction with a date containing a day of the month higher than 80 is posted as a year to date transaction only. It does not affect the current period balance. This is moderately useful for making adjustments to the year to date balances, but it's principal value lies in making the beginning and ending inventory work properly on the income statement. If we assume the inventory at the beginning April was $25000.00, and the inventory at the end of April was $29000.00; the following series of entries are required: Description Ref # Date Acct # Amount >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Inventory GJN04 0430 151 29000.00 Inventory GJN04 0430 151 25000.00- Beginning Inv. GJN04 0430 610 25000.00 Ending Inv. GJN04 0430 696 29000.00- Ending Inv. GJN04 0484 696 25000.00 Beginning Inv. GJN04 0484 610 25000.00- Notice the last two entries are year-to-date entries, because the day of the month is higher than 80. If the beginning and ending inventory accounts start at zero (as would be the case at the beginning of the year), the last two year-to- date entries are omitted. USING THE CONFIGURATION PROGRAM The configuration program (GLCONFIG.EXE) is provided to all registered users. It allows you to change certain features of PC-GL. The GLCONFIG.EXE program and the main program (PC- GL.EXE) should both be on the same disk drive and sub directory, when you configure your copy of PC-GL. Run the program by typing GLCONFIG at the Dos prompt. The previous configuration of PC-GL will be displayed. Use the up and down arrows to move the pointer and then press <C> to change an item. The following information may then be changed: Display Colors - If you have a color adapter and monitor, you can change the colors for screen borders, program prompts, data, and background. Allowable colors are from 0 to 15 (except for background color which can only be from 0 to 7). Laser Printer? - You can also change the way PC-GL starts a new page. Usually, PC-GL starts a new page by counting lines until the page total equals 66 lines. If you enter a "Y" for the laser printer question, PC-GL starts a new page by issuing a form feed command. This also works on most other printers, but requires you to set the top of form before you start printing. Zero Balances on Statements? - If you don't want accounts with zero balances to print on the income statement or balance sheet, change this to a "N". Months to Save - The program normally saves the past 12 months of transactions so that they can be reviewed with the Account Summary selection. You can change this time period to any number from 1 to 30. A smaller number requires less disk space, and speeds the new period processing by a few seconds. Disk Drive and Path - Enter a drive and path designation for PC-GL data. If you want the program to read data from the B drive, enter B:. Income Statement Heading - You can change the default heading printed on the income statement report. You will probably need to start with some blank spaces to line up the heading correctly. Sometimes trial and error is the best way. Balance Sheet Heading - You can also change the balance sheet headings. Income Statement and Balance Sheet Footers - A "footer" is a short comment inserted at the end of a report. An example of a footer would be a statement like "Prepared without benefit of audit", or any other meaningless comment your attorney tells you to put on your financial statements. When you have finished making your changes, press the escape key to exit the program. You will then be asked if you want to save the changes. If you answer with a Y, PC-GL is changed, until you run the configuration program again. DATA FILES Data files are created automatically by PC-GL. If you wish to back up data files only, copy these files to another disk using the DOS copy or BACKUP command. PC-GL.COA Chart of account listing with balances. PC-GL.TRN Current period transactions. GL1.TRN, GL2.TRN, GL3.TRN etc contain the previous period transactions. GL1.TRN is the most recent. HELPFUL HINTS Opening balances are entered as transactions, using the Enter or Change Transactions selection. If you enter the opening balances using a day of the month higher than 80 (for example 0189), the opening balances do not affect the current period totals. It is helpful to remember that PC-GL uses data loaded into random access memory. New data is not saved to the disk until you end processing, or select the <S> Save option from the Enter or Change Transactions section of the program. This also means if you make a mistake on the opening question (Do you want to start a new accounting period?), you can boot the computer and start over: your previous data is still on the disk. If you do not get the question "Do you want to start a new accounting period?" when starting PC-GL, it is because you didn't print the General Ledger report to the printer. Changing even a single transaction convinces PC-GL you have not printed the General Ledger report, and prevents the new period question from appearing. The first 12 times you start a new accounting period, more disk space is required for historical files. If you have a large business and you are using floppy disks for data storage, you could run out of disk space. Reduce the number of periods saved using the GLCONFIG program. You can use the Account Summary Report each January to help in summarizing payments for 1099 forms. The 1099 is the form the government wants every year which reports payments to individuals of over $600. The "Zero Balances" selection in the chart of account command mode sets ALL chart of account balances to zero and deletes any transactions entered for the period. There are only two reasons to ever use this command: 1) When you first start using PC-GL you might want to practice a few times before you really get started. Use "Zero Balances" to get a fresh start. If you have run a number of test months, and wish to delete all of the Account Summary data: exit to the disk operating system and type: ERASE GL*.TRN. 2) If you want to use an existing chart of accounts setup on a new application, you could zero the existing balances after copying the chart of accounts file PC-GL.COA to the disk for the new business. This version of PC-GL is completely compatible with all other versions of PC-GL except for the method of saving and recalling old transaction files. If you have been using a version number lower than 3.0 (version 2.9 or lower), you need to convert the historical data if you want to use it with this program. Contact us for instructions on how to convert the old data. PC-GL is written in Turbo Pascal. The source code is available for $95.