Tutorial 13 - Defining the Account Prototype

STEP FORWARD's Account Number structure can be a combination of a Prefix (optional) and a General Ledger Account.

The Prefix
If used, the Prefix consists of one or more segments preceding the GL Account for the purpose of narrowing down its usage. For example: Wages (a GL Account) may be applicable to a number of Departments (a Prefix Component) within a business operating out of several Branches (another Prefix component) resulting in a Prefix/GL combination of: Prefix = Branch+Department (concatenated); and the GL Account = Wages. Each Prefix segment can be assigned a size (number of digits per segment).

The General Ledger (GL) Account
It can be thought of as a Key and/or as a repository reference to accounting transactions carrying the same account number.

The Prototype
This is the definition of the Account Structure e.g. how many Prefix Components should we have and the size of the Component Number, plus what size will we use for the GL Account.

The Inventory of Accounts
Once the Prototype has been defined, we can establish an inventory of Accounts e.g. all the General Ledger Accounts that can be used in the enterprise, although not necessarily in each Department, Branch, Division. etc.

The Subledger
Although the Subledger does play an important role in the "account address," it has no part in the Account Prototype definition. In fact the creation of Subledger Templates as carried out in Tutorial 11 can be thought of as producing prototypes for Subledgers.

The Account Chart
This is the STEP FORWARD editor that lets you select from the Inventory of Accounts to establish the actual Chart (define which GL Accounts should be used in conjunction with which Prefixes) and also define which GL Accounts should become Control Accounts by attaching a Subledger Template (prototype) to each of them. You will carry out this process in Tutorial 16.

Exercise 13 - 1, Prototyping the Account Structure
The overall Accounting Tutorial Series will deal with the Bits & Bytes Training Corporation which maintains an Administrative Head Office plus two operating Branches: East Side and West Side. Since no further branches will ever be established, the Prefix identifying the Head Office and Branches can be a single digit; the GL Account will be defined as a 3-digits size (even though we do not need them for our Tutorial, this allows for 900 accounts since each account must contain three digits (901 accounts, if you want to use 000 as an account).

1. Launch the Prototypes editor.
This will display the Accounts Component Tables window.
2. Type Branch into the Prefix Component name cell of Level 1.
Type 1 into the Code Size cell of Level 1.
3. Type GL Account into the GL Component name cell of Level Last.
Type 3 into the Code Size cell of Level Last.
4. Click on the Create button:

This will display this Attention panel:

Press the Create button.
Apart from doing what it said it would do, the Account Component Tables window will have changed its appearance: the button now reads Destroy and the rows of unused Prefix Component cells have been cleared away.

Exercise 13 - 2, Creating the Inventory of Branch Codes and Names
1. Click on the Prefix Component cell entitled Branch.
This will display the Account Edit window with the Component Name in its Title bar.
2. Enter the three Branches (Code and Description) making up the The Tutorial Company:
1 Head Office, 2 East Side, and 3 West Side:

3. Select File > Save.

Exercise 13 - 3, Creating the Inventory of GL Account Codes and Names
In this exercise, you will set up the following accounts (Code and Description):
104 Bank 112 Accounts Receivable
120 Inventory 180 Prepaid Expenses
210 Equipment 211 Accumulated Depreciation - Equipment
214 Furniture & Fixtures 215 Accumulated Depreciation - Furniture & Fixtures
308 Accounts Payable 312 Wages Payable
324 Accrued Expenses 375 Shareholders' Loans
410 Capital Stock 420 Retained Earnings
499 Close Revenue & Expense Accounts 510 Bits
520 Bytes 610 Bits
620 Bytes 710 Advertising
760 Bank Charges & Interest 790 Communications
850 Professional Fees 870 Repairs & Maintenance
890 Rent 910 Wages
999 Close Revenue & Expense Accounts

1. Click on the GL Component cell entitled GL Account.
This will display the Account Edit window with the Component Name in its Title bar.
2. Enter the GL Accounts (Code and Description) listed above.

3. Select File > Save.

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