Chapter Four

CHAPTER FOUR: TRANSACTIONS

OVERVIEW

Transactions are financial exchanges between a business and its customers, vendors and other people
associated with a business. As we have seen Peachtree window, it has Menu Bar on the top which
includes the following menus within its main window: File, Edit, Lists, Maintain, Tasks, Analysis,
Options, Reports & Forms, Services, Window, and Help. Basically, we have used Maintain Menu
when we set up chart of accounts, default records, maintained customers or vendors, and so on.

In this chapter, we will use Tasks Menu to enter transactions and other task-related information, for
instance, to enter invoices, pay vendors, receive payments from customers, enter bank deposits, pay
employees, and make adjustments to general journal. In addition, we can make entries to the account
register, reconcile bank account, void checks, to change the accounting period, manage action items, and
launch the Peachtree Year-End wizard.

4.1. Sales and Accounts Receivable (Customers Transactions)

If we want to enter a cash sale from customer, we would use the Receipts window on the Tasks menu,
not the Sales/Invoicing window. The Sales/Invoicing window is for credit customers only. Here is a
way to remember the difference between Receipt and Sales/Invoicing: if the transaction involves a
credit sale, enter it in the Sales/Invoicing window; if the transaction is in cash, enter it in Receipts
window. Thus, Sales/Invoicing task is the Sales Journal. Whereas, the Receipts task is the Cash
Receipt Journal. Peachtree organizes and monitors the money that comes into business from customers.
The money that received from customers is tracked in accounts receivable (also known as sales). In
Peachtree, we can create quotes, sales orders, proposals sales invoices, receipts (customer payments), or
create deposit tickets for customer receipts.

 Quotes: is entering an estimate of costs that can be printed or sent electronically to customer; no
accounting happens (not a transaction).
 Sales Orders: is creating an order that will be filled at a later time. Sales orders reserve inventory
items.
 Proposals: is a draft estimate for services that will be performed by the company.
 Sales Invoices: is a billing of customer for goods shipped and services performed.
 Receipts: is entering payments from customers and it can be applied to an open invoice.
 Select for Deposit: is creating a deposit slip for customer payments.

Depending on the business, we may or may not use all of these options. For instance, if the company do
not take orders and ship the order later, most likely the company would not use sales orders, but it would
invoice the customers directly. Similarly, if the company do not grant credit for customers, but work on
a cash basis only, the company would not need to create sales invoices. Instead, we could enter items
shipped and monies received using the Receipts task.

4.1.1. Entering Sales Invoices

Invoices are document that lists the goods shipped or services performed with their price, and the terms
of sale. Thus, sales invoices are documents that list goods and services that customers receive from the

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business. Customer invoices are entered or maintained in the Sales/Invoicing window. All entries made
here are posted to General Ledger, customer records, and possibly job and inventory records. We can
use this window for a variety of customer billing functions, including filling sales orders and proposals,
invoicing customers, and billing and receiving payments. The following steps are used to enter sales
invoice.

1. From the Tasks menu, select Sales/Invoicing. The following window will appear:

Select the Layout toolbar button, and choose the Predefined Product template, Predefined
Service or Professional template from the pull-down menu.
2. Enter or select the customer ID. When the customer is selected, Peachtree supplies the customer
default information, including billing and shipping addresses, sales account, shipping method,
payment terms, and sales tax ID.
3. If this customer has open sales orders, the Apply to Sales Order tab appears in front. To enter
new items on the invoice, select the Apply to Sales tab.
4. Leave the Invoice # field blank if you want Peachtree to print an invoice. Peachtree will increase
the invoice number by one when it is printed. Otherwise, enter an invoice number or other
reference number. (If you print the invoice with an invoice number assigned or print it again
later, the invoice will have the word DUPLICATE on it.)
5. Enter the date of the transaction if it is different from the displayed date.
6. Peachtree will automatically enter the Contact and Ship To information for the address marked
as Ship To Address 1 on the customer record. You can select another contact and shipping
address from the choices available in the Ship To drop-down list, or manually enter another
address in the Ship To fields.

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7. If you have entered a default P.O.# in the customer's record, it will appear on the invoice. If not,
you can enter the customer's purchase order number now or change the default to any other piece
of information that will identify this invoice to the customer.
8. If you have entered a default shipping method in the customer's record, it will appear. You can
select the Ship Via button if you want to select a different shipping method. You can also enter a
ship date.
9. Peachtree uses the default terms you have entered for the customer, but you may want to select
the Terms button to change the default discount dates or amounts for this invoice. When a receipt
that qualifies for an early-payment discount is applied against the invoice, Peachtree will
calculate the discount.
10. If you entered a default Sales Rep in the customer's record, it will appear. Otherwise, select the
rate of the sales representative, if applicable.
11. Enter the information for each item included on the invoice on a separate line, including the
item's quantity, item ID, description, unit price, sales tax status, and job information.
12. Select the sales tax ID for this sale.
13. If you intend to charge freight for shipping this order, include an amount in the Freight field.
14. If you have received a partial or full payment for this invoice at the time of the sale, select the
Amount Paid at Sale button. Peachtree displays the following Receive Payment window, where
you can enter receipt information.

In the Receive Payment window fill the following fields

 Deposit Ticket ID: Cash deposit number can be entered if it is deposited when cash is received
 Reference: Enter the check number, credit card number, or the word cash in this field. This is a
required field.
 Customer ID: This appears based on the customer selected on the invoice and cannot be
changed here.
 Date: The date is the invoice date and cannot be changed here.
 Name: The customer's name and billing address are displayed and cannot be changed here. This
information can be changed on the invoice, and any changes made will be reflected here too.
 Receipt Amount: Enter the amount the customer is paying at this time.
 Payment Method: From the list, select the method of payment this customer is using. The
payment methods are entered on the Pay Methods tab of the Customer Defaults window.

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 Cash Account: The account that appears here when you open the Receive Payment window is
the last Cash Account that was used on the Receipts window. You can select a different account
or add a new one here. Note: If you want to apply an alternate G/L account (an account that uses
an account type other than Cash) for this payment receipt, you must select the Journal button.
After entering the above information, the Net Amount Due field displays what the customer
currently owes for the sale.

15. At the bottom left corner of the window, the selected customer's balance, credit limit, and credit
status is displayed. You can click the arrow button to the right of the customer balance to display
the current Customer Ledgers report for this customer.
16. Select the Print button if you want to print and save the invoice. Otherwise, click the Save
button.

4.1.2. Receipts
When customers’ pays for goods and services sold to them, we have to record the receipt. Most receipts
are applied to sales invoices. However, we can also enter cash sales (transactions in which no invoice is
entered or required), prepayments, and customer refunds. This allows us to enter all checks, cash, and
credit card slips we receive and deposit them in checking account. The process of entering a receipt is
different depending on whether the receipt is against an invoice or a cash sale. If the sale is to a
customer who is not in company’s database, we can enter the customer's name without keeping a record
on that customer. There are two ways you can account for receipts in Peachtree:

 If you sent an invoice to a customer, you apply the receipt to the invoice. Invoices entered in the
Sales/Invoicing window appear as distribution lines when you enter the customer ID. You can
check the Pay column beside each invoice being paid in full by this receipt.
 If you made a direct sale that didn't require an invoice, you use Receipts and enter it on the
Apply to Revenues tab. This requires you to specify a check number and sales account.

4.1.2.1. Apply a Customer Payment to an Invoice

When a customer pays an invoice, enter the amount in the Receipts window. To enter customer payment
on an invoice use the following steps:
1. From the Tasks menu, select Receipts. Peachtree displays the following Receipts window.
2. Enter a deposit ticket ID that can easily represent the type and source of payment. This will make
account reconciliation easier to manage.
Peachtree automatically enters the deposit ticket ID as a numeric representation of the current
date. All receipts that use the same deposit ticket ID will appear as one lump sum in Account
Reconciliation. If you want this transaction to be reconciled as a separate item, enter a unique
deposit ticket ID.
3. Enter or select the customer ID. To display a list of existing customers, type ? in this field, or
select the Lookup button.
If there are unpaid invoices for this customer, Peachtree lists them on the Apply to Invoices tab.
If there are no unpaid invoices, Peachtree displays the Apply to Revenue tab.

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4. Enter a reference number that will help identify the receipt (for example, the customer's check
number).
5. If you are recording deposit tickets within the Receipts window, enter or accept the suggested
Deposit Ticket ID. Otherwise, leave this field blank. You can record deposit ticket IDs in the
Select for Deposit window.
6. Select a payment method (for example, Cash or Check). Payment methods are set up in
Customer Defaults; these are quite useful in reports when managing receipts.
7. In the Cash Account list, enter or select the bank account in which the receipt is deposited.
8. On the Apply to Invoices tab, select the Pay check box next to each invoice that the customer is
paying.
o If the customer has paid the invoice in full, place the cursor in the Amount column for the
invoice, and select the Pay check box. Peachtree will fill in the Amount Paid field.
o If the customer has only paid a partial amount on the invoice, enter that amount.
Peachtree will automatically select the Pay check box.
Note: If your customer overpays the amount, a credit is made to the customer's ledger; for
underpayments, the payment amount is applied to the invoice balance. You will need a reference
number in order to post or save the record.
9. Select the Print button if you want to print and save the receipt. Otherwise, click the Save button.

4.1.2.2. Enter a Cash Sale

When a customer pays for an item and there is no invoice, enter a cash sale. Follow these steps to enter a
cash sale:

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1. From the Tasks menu, select Receipts. Peachtree displays the Receipts window (see the above
figure).
2. Enter a reference number for this transaction. This must be a unique number and is generally the
customer's check number. Avoid entering "CASH" as the reference for more than one
transaction.
3. In the Cash Account list, enter or select the bank account in which the receipt is deposited.
4. If you are recording deposit tickets within the Receipts window, enter or accept the suggested
Deposit Ticket ID. Otherwise, leave this field blank. You can record deposit ticket IDs in the
Select for Deposit window.
5. Select the Apply to Revenues tab. Then, enter the line items on the receipt the same way as you
do in Sales/Invoicing.
7. Select the Print button if you want to print and save the receipt. Otherwise, click the Save button.

4.1.3. Deleting, Editing, or Voiding an Invoice

If you would like to edit or delete an invoice for a customer and you have already entered a receipt, you
may need to first delete the receipt before you can edit or delete the invoice. You need to delete the
receipt if you want to change the invoice number or the customer on an invoice or if you want to delete
the invoice. Follow these steps:
1. From the Tasks menu, select Receipts. Then, select the List button so you can delete the receipt
you entered for the invoice.
2. From the list, select the receipt and then OK.
3. Once the receipt is displayed, select the Delete toolbar button to remove it.
4. From the Tasks menu, select Sales/Invoicing. Then, select the List button so you can edit the
original invoice.
5. From the list, select the invoice you want to edit, and click OK.

Once Peachtree displays the original invoice, make any necessary changes. If this invoice is for items
ordered on a sales order, you cannot change the customer ID. If you want to remove the transaction,
select the Delete toolbar button. If you were editing the invoice select the Save button. You will have to
enter the receipt for the payment again.

Void an Existing Sales Invoice

1. From the Tasks menu, select Sales/Invoicing.
2. To find and select the invoice you want to void, click the List button, and select the desired
invoice.
3. Now, click the Delete toolbar button; and from the drop-down menu, select Void.
The Void Existing Invoice window appears.
4. At The following invoice will be voided as of, Peachtree offers the system date as default void
date. Accept the default, or enter a new date.
5. Click OK.

Peachtree automatically does the following:

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 voids the invoice and issues a zero-dollar receipt to cover both the original and voided entries
 makes an entry for this transaction in the Cash Receipts Journal
Note: When you view the voided invoice in the Sales/Invoicing window, you'll notice that it has the
same number as your original invoice but with a "V" appended to it. Also, a large "Void" notice appears
in red letters.
All totals and subtotals for the invoice appear as negative values:
 If the original invoice covers an existing sales order, negative values appear for the quantities
shipped.
 If the original invoice did not originate with a sales order, negative values appear for the
quantities sold.

4.2. Purchases and Accounts Payable (Venders Transactions)

Peachtree organizes and monitors accounts payable, the orders we make and the money we pay to
suppliers. When we enter and post inventory items, three things happen:
 The amount of the item in stock is updated.
 The inventory value is updated.
 For stock items, the inventory account is debited to offset the credit to Accounts Payable.

Overview of Vendor Tasks

 Purchase Orders: Enter purchase orders one at a time, or let Peachtree generate a series of POs
based on inventory-stocking needs.
 Purchases/Receive Inventory: Receive items into inventory as they arrive from the vendor, or
just create a purchase invoice.
 Payments: Use Write Checks to create individual payments on the fly; use Payments to pay a
single vendor when we need to track inventory or jobs; use Select for Payment, Paper Checks to
pay more than one vendor at a time.
 Electronic Payments: If we’re signed up for the Peachtree Bill Pay service. Use Select for
Payment, Electronic Payments to choose vendors and invoices to pay; then use Transmit
Electronic Payments to send the transactions to be processed.
 Vendor Credit Memos: Enter information for returns to and credits from vendors.

4.2.1. Purchases/Receive Inventory

This window allows either to enter vendor purchase invoices or receiving inventory from purchase
orders:

 Apply to Purchase Order tab: When we select a vendor who has open purchase orders,
Peachtree displays this tab, allowing us to select which purchase order to receive items against
(not discussed in this course).
 Apply to Purchases tab: If we select a vendor with no open purchase orders, by default
Peachtree displays this tab, where we enter a purchase that did not originate on a purchase order.
In addition, if items were included on the purchase invoices that are not included on the purchase
order, we can add them here.

We can enter the purchase of an item on account and that did not originate from a purchase order using
the following procedure:

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1. From the Tasks menu, do one of the following:
 Select Purchases/Receive Inventory or
 Select Bills and then Enter Bills. The following window will appear:

2. Enter or select the vendor ID. To display a list of existing vendors, type ? in this field, or select
the Lookup button. To add a new vendor, type + or double-click the field, which displays the
Maintain Vendors window. When the vendor is selected, Peachtree supplies the vendor default
information, including name, remit address, shipping method, and payment terms.
3. Enter the vendor's invoice number in the Invoice # field. This is a required field.
If you have not yet received a vendor invoice (bill) for this shipment, select the Waiting on Bill
from Vendor check box. Once your vendor sends you the bill, edit this invoice; clear the Waiting
on Bill from Vendor check box; and enter the invoice number. Then, when you post the invoice
with the invoice number, you will be able to select the invoice for payment.
Note: If you have received inventory from a vendor by entering a purchase using the Waiting on
Bill from Vendor option, Peachtree will warn you when you select this vendor so you don't enter
the invoice for this vendor's order twice by mistake.
4. Enter the date of the transaction if it is different from the displayed date.
5. Change the shipping address if necessary and the method of shipment. Click the Ship To drop-
down arrow to display ship-to information. To change the shipment method, select the method
from the Ship Via drop-down list.
6. Enter discount, terms, and A/P account. The Displayed Terms field automatically fills in with the
default terms. If the vendor used special terms, enter the new term information here.

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7. Enter the information for each item on a separate line, including the item's quantity, item ID,
U/M (displays if multi-packs enabled in Inventory Item Defaults), description, unit price. The
default unit price is the last posted price for this item.
8. At the bottom left corner of the window, the selected vendor's balance is displayed. You can
click the arrow button to the right of the vendor balance to display the current Vendor Ledgers
report for this vendor. Continue entering items until you have completed the purchase invoice.
9. If you have paid a partial or full payment at the same time you received this invoice, enter the
amount in the Amount Paid at Purchase field. The Reference field and Cash Account field will
appear allowing you to enter payment information. The Net Amount Due displays what you
currently owe for the purchase.
10. When finished, select the Save button to record the purchase.

4.2.2. Payments (Cash Purchase or cash payment)

This allows us to write checks for vendor invoices, for payments that don't have a vendor invoice, and
for prepayments or discounts. The fields of the distribution box differ depending on whether we are
applying the payment to invoices or new purchase. If a vendor has open invoices, the Apply to Invoices
tab will be in front. However, if we are entering a payment to a one-time vendor not in the system, the
Apply to Expenses tab is default. There are two basic methods of paying vendors:
 Apply vendor invoices: pay invoices that were previously entered in the Purchases window.

 Apply to New Purchase (cash purchase): pay a vendor without using a vendor invoice. See Enter
a Cash Purchase for further information.
Use the following procedure to apply payments to vendor invoices:
1. From the Tasks menu, do one of the following:
 Select Payments or
 Select Bills and then Pay Bills. The following window will appear:
2. Enter or select the vendor ID that you want to pay. To display a list of existing vendors, type ? in this
field, or select the Lookup button. If there are unpaid invoices for this vendor, Peachtree lists them
on the Apply to Invoices tab. If there are no unpaid invoices, Peachtree displays the Apply to
Expenses tab.
3. Enter check # and cash account
 If you are entering a handwritten check, enter the check number in the Check Number field. If
you want Peachtree to print the check, leave this field blank.
 Enter or select the cash account from which you will be writing the check.
4. Select invoices to pay: Once you've entered vendor and check information, on the Apply to Invoices
tab, select the Pay check box next each the invoice that you want to pay.
 If you want to pay an invoice in full, place the cursor in the Amount column for the
invoice, and select the Pay check box. Peachtree will fill in the Amount Paid field.
 If you want pay a partial amount on the invoice, enter that amount. Peachtree will
automatically select the Pay check box.

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5. If you want to print the check, select the Print button; for step-by-step instructions on printing from
the Payments window. Otherwise, select the Save button to record the payment.
The program debits Accounts Payable for the total amount and credits the cash account for the net check
amount and also credits the discount-taken account (if applicable).
Enter a Cash Purchase and Print Checks
A cash purchase can either be a check that you write to a vendor or other payee that you have not
entered a purchase for, or it can be a purchase for which you have actually paid cash. A cash purchase
needs to be applied to expenses.

1. From the Tasks menu, do one of the following:

 Select Payments.

 Select Bills and then Pay Bills.

2. Enter or select the vendor ID that you want to pay. To display a list of existing vendors, type ? in
this field, or select the Lookup button. Or, press ENTER to skip the Vendor ID field, and type in
the name in the Pay to the Order of field.

3. If you want to print a check, leave the Check # field blank. If you paid cash for the purchase,
enter CASH01, CASH02, and so on.

4. If you chose a vendor with existing invoices, select the Apply to Expenses tab.

5. Enter the line items on the payment the same way as you do in Purchases/Receive Inventory.
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If the line item contains serialized inventory, you will need to either add or select serial numbers for the
item(s). Select the line item with the serialized inventory item, then select the Serial No button to enter
or select serial numbers. Either the Serial Number Entry or the Serial Number Selection window
appears, depending upon whether you entered a positive or negative quantity. To find out which window
will appear. Enter or select the serial numbers you need and select OK when you're finished to return to
the Payments window. However, if the transaction has more than one line item that contains serialized
inventory, you can select the OK/Next button to save the current entry and move to the next serialized
item.

6. If you need to enter retainage that you are withholding from this vendor, select the Apply to
Expenses tab and enter a new line item, specifying Retainage as the description, selecting an
appropriate Payable Retainage account, and entering the amount of retainage in the Amount field
as a negative number. This will ensure that the amount is subtracted from the total and that the
retained amount is tracked properly.

7. If you want to print the check, select the Print button. Otherwise, select the Save button to record
the payment.

4.3. Entering Customer Credit Memos (Sales Return and Allowance)

On occasion, you will have to grant a customer credit—an item arrived damaged, they received a
discount that was not applied, or they returned items to you. For this type of transaction, you will enter a
credit memo. You can apply this credit to an existing unpaid invoice immediately, or you can save it and
apply it later. All entries made on this window are posted to General Ledger, customer records, and
possibly inventory and job records.

To enter a credit memo and apply it immediately to an invoice, follow these steps:
1. From the Tasks menu, select Credit Memos. The following window will appear:
2. Enter or select the customer ID.
3. In the Credit # field, enter the ID that you want to apply to the credit memo.
Note: You may want to connect the application amount to the credit memo. For example, if this
credit memo is based on an existing invoice no. 106, you may want to type 106-C to indicate that
the credit memo is applied to the invoice.
4. If the transaction date is different from the one displayed, enter or select a new date.

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5. Do one of the following:

 If the credit memo is to be applied to an existing invoice for the customer, on the Apply to
Invoice # tab, use the drop-down list to select the appropriate invoice. When line-item
information for the invoice appears, find the item or items to be returned, and in the Returned
column enter the quantity. Peachtree will automatically restore this quantity to inventory.
 If the credit memo is to be applied to a sale for which there is no existing invoice, on the
Apply to Sales tab, enter line-item information for the item or items to be returned or credited,
including quantity. Peachtree will automatically restore this quantity to inventory.
7. If you want to print the credit memo, it is recommended printing it at this time and not from the
Select a Report or Form window. To print the credit memo, select the Print button.
8. When finished, select Save.
Note that, in some cases (for example, when payment is not received at the time the invoice is entered or
when the sale is not invoiced), you will need to issue a refund check to your customer. Thus, cash or
check refund required and the tasks described as follow:
To print a refund check, do the following:
1. From the Tasks menu, select Payments.
2. Select Customer for the type of ID you want.
3. Enter or select the customer ID that you want to pay.
4. Go to the line-item grid, and in the Description field, enter a reason or reference for the refund.
5. In the Amount field, enter the amount of the refund.
6. Select the Print button.
7. From the dialog box, select the check disbursement form that you want to use.
9. Select the Print button.

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Apply a Customer Refund to a Credit Memo
When you issue a customer refund, you must apply that refund to the original credit memo in order to
clear both transactions from the ledger. Do the following:
1. From the Tasks menu select Receipts.
2. Enter or select the customer ID.
3. Both the credit memo and refund check appear in the line-item list of the Apply to Invoices tab.
4. Select the Pay check box for both transactions.
5. Enter a receipt reference number, and select Save. This will clear both the credit memo and
refund check from the Customer Ledger.

4.4. Entering Vendor Credit Memos (Sales Return and Allowances)

Use the Vendor Credit Memos window to enter credit memos for returns to and credits from a vendor;
you can apply credit memos to any existing vendor invoices that have not been paid. All entries made on
this window are posted to General Ledger, vendor records, and when applicable, inventory and job
records. You have the choice of applying memos to jobs through the distribution list box. When you
enter an item ID, the quantity on hand is reduced by the quantity entered. A vendor may issue you
credit:
 If the credit is issued on a purchase without an invoice, you enter it on the Apply to Purchases
tab of the Vendor Credit Memos window.
 If the credit is issued on an existing invoice, you enter the credit on the Apply to Invoice tab of
the Vendor Credit Memos window.
Entering a Vendor Credit on an Existing Invoice
1. From the Tasks menu, select Vendor Credit Memos. The following windo will appear:
2. Enter or select the ID of the vendor who is issuing the credit.
3. In the Credit # field, enter the ID that you want to apply to the credit memo. Note: You may want
to connect the application amount to the credit memo. For example, if the existing invoice
number is 106, you may want to type 106-C to indicate that the credit memo is applied to the
invoice.
4. If the transaction date is different from the one displayed, enter or select a new date.
5. Select the Apply to Invoice tab.
6. Use the drop-down list that appears at the top of the tab to select the original invoice to apply the
credit memo to. The grid displays all line items that appear on the original invoice.
7. In the Return column, enter the quantity of any item that you want to credit or return. The
quantity that you enter here will appear on the completed credit memo; Peachtree will
automatically remove this quantity from your inventory item records.

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8. When finished entering transaction information, select the Save button.

Entering a Vendor Credit on a Purchase without Invoice

1. From the Tasks menu, select Vendor Credit Memos. Peachtree displays the Vendor Credit
Memos window.
2. Enter or select the ID of the vendor who is issuing the credit.
3. In the Credit # field, enter the ID that you want to apply to the credit memo.
4. If the transaction date is different from the one displayed, enter or select a new date.
5. In the Quantity column, enter the quantity of an item that you want to credit or return. The
quantity that you enter here will appear on the completed credit memo; Peachtree will
automatically remove this quantity from your inventory item records.
6. Next, enter all information for the returned or credited item, including the item's quantity, item
ID, description, unit price, and job information (if applicable). The default unit price is the last
posted price for this item.
7. When finished entering transaction information, select the Save button.

4.5. Payroll Transactions

Once you’ve set up your payroll defaults and records, all you need to do is select an employee using
payroll tasks, and Peachtree automatically computes the paycheck. In Peachtree, you can print individual
paychecks (Payroll Entry), or print a batch of paychecks (Select for Payroll Entry). Thus, there are two
ways to print payroll checks: individually and in a batch.

4.5.1. To pay a single employee and print a check

The followings are steps involved in this first option.

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1. Select Tasks, then Payroll Entry. The following window will appear:

2. Select the employee you want to pay using the lookup. Once you select an employee, Peachtree
will enter that employee's address information, as well as enter their default pay (based on
settings on the Pay Info tab of Maintain Employees). Deductions will be calculated and
displayed immediately.
3. Enter or select the paycheck date for this payroll period.
4. Select a cash account from which to write the paycheck (for example, Payroll Checking).
5. Enter the Pay Period ending date.
6. Modify earnings information
 If necessary, change the employee's hour or salary amounts for the pay period. This would
include adding overtime hours or bonus pay.
 The default G/L payroll accounts that Peachtree uses for each payroll field are based on the
employee's defaults. To change the account ID, click in the field to display the lookup; then
click the lookup and select another account.
 If necessary, enter or change payroll field amounts. This would include entering vacation or
sick hours taken by the employee during the pay period.
7. When you're finished filling out the check information, select the Print button to print the check.
Otherwise, click Save.
4.5.2. To pay a group of employees and print checks
The followings are steps involved in processing payroll for a group of employees at a time.

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1. From the Tasks menu, choose Select for Payroll Entry. Peachtree displays the following Select
Employees--Filter Section window.

2. Select the pay frequencies, pay types, and the range of employees for whom you want to print
checks.
3. Click OK. Peachtree displays the following Select Employees to Pay window, where you can
edit individual paychecks for hours, amounts, and pay frequencies (number of weeks).

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3. You can enter the date you want on the checks, the pay period ending date, and the cash account
number from which you want the checks to be paid.
4. Select the Pay check box next to the employees you want paid.
 To select all Pay check boxes, click the All (Select) button.
 To clear all Pay check boxes, click the All (None) button.
 Select the Detail button to edit the account and the amount for salaried employees, as
well as the amount and the hours worked for hourly employees.
5. After making your selections, select the Print button. Otherwise, click Save.

4.6. Example (continued): Customers, Vendors, and Payroll Transactions

ABC Inc. has made the following transactions with its customers and vendors for the month of January
2012. In addition the company has processed payroll to pay its employees. Thus, enter the following
transactions in the Peachtree program of ABC Inc.

1. On January 1, 2012 ABC Inc. sold five Televisions to Cannon Trading with a credit terms of
2/10, n/30. The unit price of the Television was Birr 3,500 and they were subject to Value Added
Tax (VAT). In addition, the sales man sent Invoice Number 3338.
2. On January 2, 2012 ABC Inc. sold two Laptops to Chaplet Enterp at a price of Birr 12,500 and
they are subject to Turn Over Tax (TOT) without a credit terms (no sales discount). Chaplet
Enterp made partial payment of Birr 6,000 at the time of the sale. ABC’s sales man issued
Invoice Number 3339 with Reference Number of 2/1/2012.
3. On January 3, 2012, ABC Inc. made purchase of three Laptops at a unit price of Birr 11,000
with credit terms of 2% 10, Net 30 Days from Dahlia Suppliers and received Invoice Number
2136. In addition, ABC Inc. accountant maintained this new vendor using the following
data: Vendor ID: DAHL, Name: Dahlia Suppliers, Contact: Abdul, Vendor Type: Vendor,
and Telephone 1: +2519110456
4. On January 4, 2012, ABC Inc. received cash in full payment of Invoice Number 3334 from
Archer Limited. During the receipt, ABC Inc. issued Receipt Document with Reference:
4/1/2012 and Receipt Number: 001.
5. On January 5, 2012 ABC Inc. paid the full amount owed to Nae Company of the Invoice
Number 2126.
6. On January 6, 2012, ABC Inc. sold twenty Digital Cameras to Kurtu PLC at a price of 1,250
each and received the total amount in cash including the VAT. While the sale person issued
Receipt Document with Reference: 6/1/2012 and Receipt Number: 002
7. On January 7, 2012, ABC Inc made purchases of five AC, ten Digital Camera and eleven
Televisions at a unit price of Birr 12,250, 1,050, and 2,600, respectively; with credit terms of
2/10, n/30 from Turu Exporter and received Invoice Number 2199.
8. On January 8, 2012, ABC Inc. made purchase of two Desktop Computers at a unit price of Birr
4,900 from Gashy PLC. in cash.
9. On January 9, 2012, ABC Inc. received cash in full amount of Invoice Number 3335 and 3338
from Cannon Trading and issued Receipt Document with Reference: 9/1/2012 and Receipt
Number: 003
10. On January 10, 2012, ABC Inc. paid cash in full the amount owed to Brtu Enterp of the Invoice
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Number 2123.
11. On January 11, 2012, ABC Inc. made purchase of two Laptops at a unit price of Birr 11,000
with credit terms of 2/10, n/30 from Brtu Enterp and received Invoice Number 2277.
12. On January 12, 2012, ABC Inc. received cash from Chaplet Enterp for the Invoice Number
3336 and 3339 and issued Receipt Document with Reference: 12/1/2012 and Receipt Number:
004. Whereas, the amount owned to Invoice Number 3339 is received only Birr 6,500.
13. On January 13, 2012, ABC Inc. sold three AC to Ayat Real-estate at a price of Birr 15,000 each
and received the total amount in cash including the Turn Over Tax (TOT). While the sale
person issued Receipt Document with Reference: 13/1/2012 and Receipt Number: 005
14. On January 14, 2012, ABC Inc. paid the full amount owed to Turu Exporter of the Invoice
Number 2199 and 2127.
15. On January 15, 2012, ABC Inc. paid salary for its five employees for the pay month ended
January 9, 2012.
4.7. GENERAL JOURNAL ENTRY

Journal Entry is an event that has a dollar impact on the company's accounting records. Journal entries
show the effects of business transactions as expressed in terms of debits and credits. Each journal entry
will usually have a transaction date, amount, account number, reference and description.

The General Journal is unique—it’s the only journal in which we provide all the accounting
distributions. In all the other journals, Peachtree automatically distributes certain amounts based on
defaults we establish. But here, in the General Journal, we have to enter both debits and credits balance
of the transaction.

Thus, in the General Journal, we can enter transactions that don’t fit into other journals—for example,
depreciation or transferring funds from one account to another. Just remember that here, we are
responsible for balancing this journal entry—making sure debits equal credits. We can check the
progress in the Out of Balance field. It reads ‘’0.00’’ when the transaction has been entered properly.

We have to use the General Journal to enter those types of transactions that are not readily categorized in
the Tasks menu. Typical General Journal entries include chart of account beginning balances,
depreciation, withdrawal, and account transfers.

4.7.1. Recording General Journal entries

Unlike other screens in Peachtree, we provide all the accounting distributions in the General Journal.
While, Peachtree automatically post the General Journal to the General Ledger when we select the Save
button, if we’re using the real-time posting method.

1. From the Tasks menu, select General Journal Entry. Peachtree displays the General Journal Entry
window.

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2. Enter or select the date of the transactions. Peachtree defaults this date to the Peachtree system
date. If we are in an accounting period that is different from the system date, then Peachtree
displays the first day of that period.

3. Enter a reference for the transaction up to 20 characters. If we enter a number reference,

Peachtree will increase future General Journal entries by one while this window is open.

4. For each line enter or select an account ID.

5. For each line enter an amount in either the Debit or Credit columns. When we enter transactions
in Peachtree, journal entries are automatically created based on generally accepted accounting
principles. Peachtree is a true accounting system that creates both debits and credits. Much of the
accounting is behind the scenes, leaving us to concentrate on the transaction information itself.
The journal entries Peachtree creates are based on various defaults we have set up for the
company. However, we can examine or edit these journal entries through Accounting Behind
the Screens.

6. For each line enter a description for the transaction. The description will appear in General
Ledger and various reports.

7. Once the Out of Balance field is zero (0.00): the total debit amount must equal the total credit
amount, select ‘’Save’’ to record the transaction in the General Journal.

Peachtree has two methods for handling General Journal entries that we make on a consistent basis.
Memorized transactions are like a template that we can quickly flesh out for specific transactions. They
are not posted to the general ledger. Recurring transactions are complete transactions we set up to
happen on a set timetable: monthly, quarterly, yearly, etc. An example would be if we have a contract
with someone to provide a monthly service.

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4.7.2. Edit a Journal Entry Using Accounting Behind the Screens

There are several ways to edit transactions. One method is to examine and modify journal entries using
Accounting Behind the Screens.

1. Open the task window, and enter a new transaction or select an existing transaction using the List
button.

2. With the transaction displayed in the task window, select the Journal button. This opens the
Accounting Behind the Screens window and displays the transaction's corresponding journal
entries.

3. If Peachtree displays more than one journal tab, select the journal we want to examine or edit.
Depending on what type of task is open, the Accounting Behind the Screens window displays
the journal tab(s) that correspond to the particular transaction.

4. To modify a journal entry distribution, select the line item and Account ID field we want to edit.
Then, enter or select an alternate account ID. When we have finished editing the journal entry,
select OK to return to the task window.

5. If we modified any journal entries, select Save

Example (Continued): General Journal Entry

ABC Inc has made the following transaction for the month of March, 2009:

1. On March 2, 2009 ABC Inc. bought a building for Birr 45,000, Reference # 2000.

2. On March 3, 2009 ABC Inc calculated depreciation expense for Furniture, Equipment, Vehicle,
and Building Birr 1,000, 500, 1,000 and 1,000 respectively, Reference # 2001.

3. On March 31, 2009 ABC Inc remitted the entire sales tax to the government, Reference # 2002.

4. On March 31, 2009 ABC Inc paid Birr 5,000 of dividend to the common stock holders,
Reference # 2003.

5. The inventory of supplies on March 31 is determined that Birr 48,000 is on hand, Reference #
2004.

4.8. INVENTORY ADJUSTMENTS

Occasionally, we may need to record adjustments to on-hand quantities of inventory items. Thus, we can
use the Inventory Adjustments task to make changes to on-hand quantities of inventory items, and also
track those changes. The adjustment could be due to loss or theft, adjustments after items are counted, or
for costing items to jobs. There are two types of inventory adjustments: increases in quantity and
decreases in quantity.
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 For An Adjustment Up: we will enter a positive quantity and can also enter a unit cost. This
will increase the quantity on hand and total inventory value much as a purchase would. If we
previously miscounted the inventory and now have more units on hand than we thought the
Company had, we could adjust up.

 For An Adjustment Down: we will enter a negative quantity, but we can't enter a unit cost.
Peachtree will figure out the cost value that these units are being removed at, much like a sale.
An inventory adjustment down will decrease the quantity on hand as well as the total value. If
something was stolen or broken or if inventory was previously miscounted, we could adjust
down.

To Record an Inventory Adjustment

1. From the Tasks menu, select Inventory Adjustments. Peachtree displays the Inventory
Adjustment window.

2. Enter or select the item ID that we want to adjust

3. Enter reference in the Reference field up to 20 alphanumeric characters.

4. Enter or select the date the change in inventory occurred or the date of the physical inventory
count.

5. Enter or select a G/L Source account to take this adjustment out of, and enter a unit cost for the
inventory item (for positive adjustments only).

The default G/L source account is the Cost of Goods Sold Account. The other account affected
by adjustments is the inventory account. The Unit Cost default is the current cost of the item and
must be positive.

G/L Source Account: This identifies the G/L cost of sales account that will be adjusted as a
result of this entry. If we decrease the item quantity, the G/L source account is debited, and the
item's inventory account will be credited. If we increase the item quantity, the G/L source
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account is credited, and the item's inventory account will be debited.

6. Enter the amount to adjust the quantity by.

The Quantity on Hand is already filled in, and Peachtree calculates the New Quantity after
entering the adjustment.

8. If we know the reason for the adjustment, enter it. For example, Found in warehouse or Theft.

9. Save the adjustment. The Cost of Goods Sold, Inventory Total Value, and Inventory G/L
accounts are all updated.

Delete an Inventory Item

We cannot delete an inventory item if it is used in a transaction nor has an established beginning
balance. If this is the case, the only way is, we can remove the item is to display it on the General tab,
select the inactive check box, and use the purging function from the Tasks, System option.

1. From the Maintain menu, select Inventory Items. Peachtree displays the Maintain Inventory
Items window.

2. Enter or select the ID of the item that we want to delete.

3. Select the Delete toolbar button. The system displays a warning message, asking if we're sure to
remove this record.

4. Select Yes.

Enter an Inventory Return

If an item is returned at a cost that is different from the current cost of the item, then Peachtree will
create a purchase return adjustment for it. For example, the average cost of Television is 2,500. A
Television is returned for Birr 2,250. Peachtree makes an adjustment for the difference of Birr 250
between the average cost and the return cost.

To enter a return, we have to: Enter inventory adjustments

Example (Continued): Inventory Adjustment

1. On March 31, 2009, the Stock Custodian reported that one television has got Damage due to
Handling. Consequently ABC’s accountant has made inventory adjustment on this day with
reference number 2000.

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