Overview
This article provides an overview of the Default GL Accounts that are available as part of Configurations in Accounting Seed.
Do you want to review information for:
- Multi-Currency Settings
- Accounting Close
- Accounts Receivable
- Accounts Payable
- Revenue & Expense Amortization Defaults
- Project Accounting
- Product Costing
Multi-Currency Settings
Note: The Multi-Currency Settings will only be available on the Default GL Accounts screen if you have Multi-Currency enabled.
GL Accounts in the Multi-Currency Settings section include the Currency Gain/Loss GL Account and the CTA GL Account.
Currency Gain/Loss GL Account
Note: If you have Multi-Currency enabled, this is a required system account.
A realized gain or loss on currency exchange happens when the following occurs:
- The currency exchange rate on the day the customer was billed is different from the day cash was collected from the customer.
- The currency exchange rate on the day the vendor invoice was recorded (or the initial Inventory Receive Date was recorded) is different from the day cash was paid to the vendor.
Accounting Seed will automatically calculate, and record realized gains or losses for you. These will be posted to the default Currency Gain/Loss GL Account that is set up in the Multi-Currency Settings, The calculations and recordings to the default account include the following:
- Cash Receipts - When a foreign denominated Cash Receipt is applied to a related foreign denominated Billing, the realized gain or loss on currency exchange will be calculated upon cash settlement and recorded to the Currency Gain/Loss GL Account.
- Cash Disbursement - When a foreign denominated Cash Disbursement is applied to a related foreign denominated Payable, the realized gain or loss on currency exchange will be calculated upon cash settlement and recorded to the Currency Gain/Loss GL Account. This includes when the Pay & Post button is used in the Payable intermediate screen with a Cash Disbursement batch. Once a batch is posted, any realized gain or loss will also post to the default Currency Gain/Loss GL Account.
CTA GL Account
The Cumulative Translation Adjustment (CTA) GL Account is used in the Consolidations process as a plug to balance the Trial Balance after Foreign Currency Translation using various exchange rates.
Accounting Close
The GL Accounts in the Accounting Close section of the Default GL Accounts screen include the following:
- Current Year Earnings GL Account is used to track the current year’s earnings/net income in the Balance Sheet. When an Accounting Period is closed, the net income from the Profit & Loss will flow through to this Balance Sheet GL account.
Important: Once transactions are posted to the system, this setting cannot be changed. This is a required system account and transactions cannot be manually posted directly to this account. - Retained Earnings GL Account is used in the month end close process at year end (automatically posted when the final Accounting Period of the year is closed) to roll the prior year’s net income into the Balance Sheet.
Important: Once transactions are posted to the system, this setting cannot be changed. This is a required system account.
Accounts Receivable
The GL Accounts in the Accounts Receivable section of the Default GL Accounts screen include the following:
- AR Control GL Account should be set to the Accounts Receivable GL Account.
Important: Once transactions are posted to this GL account, it cannot be changed. - Default Revenue GL Account should be set to the main revenue account associated with your Billings. This is just the organization-wide default, and other Billing functionality will override this like the Revenue GL account associated with a product, and the Revenue GL account entered on a Billing Line.
- Customer Payment Adjustment GL Account is used when taking payment discounts.
- Unapplied AR GL Account is used as a clearing account when cash is received but not yet applied to a Billing/Customer Invoice. This is a required account. It should be a Balance Sheet account, with Sub Type 1 of Assets and, most likely, a Sub Type 2 of Current Asset. Non-profit organizations may want to set this GL Account to a revenue account if they do not use Accounting Seed’s Billing functionality.
Accounts Payable
The GL Accounts in the Accounts Payable section of the Default GL Accounts screen include the following:
- AP Control GL Account should be set to the Accounts Payable GL Account.
Important: Once transactions are posted to this GL account, it cannot be changed. - Vendor Payment Discount GL Account is used when taking payment discounts due to vendor terms in the Cash Disbursements process.
- Prepaid Expense GL Account is used as the default for the Debit GL Account on the Cash Disbursement in the case when the Cash Disbursement does not originate from one or many Payables and the Debit GL Account field is left blank upon entry.
Revenue & Expense Amortization Defaults
The GL Accounts in the Revenue & Expense Amortization Defaults section of the Default GL Accounts screen include the following:
Amortize Revenue
- Default Debit GL Account is used when amortizing a Billing.
- Default Credit GL Account is used when amortizing a Billing.
Amortize Expense
- Default Debit GL Account is used when amortizing a Payable.
- Default Credit GL Account is used when amortizing a Payable.
Project Accounting
The GL Accounts in the Project Accounting section of the Default GL Accounts screen include the following:
- Labor Clearing GL Account will be the GL Account that is credited when a time card is posted. The design for the Labor GL Account is to be a liability account like accrued payroll or payroll clearing. You would relieve this liability when you post your payroll entry from your payroll provider. When a time card is posted, a debit to the Labor GL Account on the project task and a credit to this Labor Clearing GL Account is created for each time card day.
- Default Project Task Labor GL Account is used to set the Labor GL Account automatically on the project task. When a time card is posted, a debit to the Labor GL Account on the project task, (or if blank this Default Project Task Labor GL Account) and a credit to the Labor Clearing GL Account is created for each time card day.
Note: The same GL Account can be used to populate both the Labor Clearing GL Account and the Default Project Task Labor GL Account fields.
Project Costing
The GL Accounts in the Product Costing section of the Default GL Accounts screen include the following:
- Vouchers Payable GL Account is a clearing account used for received inventory that does not yet have a related Payable transaction.
Important: Once transactions are posted to this GL account, it cannot be changed. - Work in Process GL Account is used as the WIP account in Accounting Seed’s manufacturing process when building inventory.
- Inventory Variance GL Account is used as the purchase price variance account between Standard Cost and the actual price paid for inventory.
Note: If Weighted-Average Cost is enabled, the Inventory Variance GL Account field does not display as it is not applicable when using this inventory valuation methodology.
Edit Default GL Accounts
- Navigate to Accounting Home and click the Setup tab. Then, under the Configurations menu, click Default GL Accounts. The Default GL Accounts screen displays.
Note: Required GL Accounts display with a red (*) asterisk.
Note: Click here to view the above image in full screen. - Click the Pencil icon that displays to the right of Default GL Accounts. Then, edit the Default GL Accounts, as necessary. Some default accounts include the Lookup icon, which you can click to search for a GL Account number. Otherwise, just enter the GL Account number.
Important: Please keep in mind that for some Default GL Accounts (as mentioned above in this article), once transactions are posted to the GL account, it cannot be changed.
Note: Click here to view the above image in full screen.
Note: If you want to edit a GL Account record, do not click the Pencil icon. Instead, mouseover the GL Account. Then, click Edit.
The Edit dialog box will display. Edit the record, as necessary. Otherwise, click View if you only want to view the record. - Click Save.
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Summer ’22 Release
- With the Summer '22 release, the Cumulative Translation Adjustment (CTA) GL Account has been added.
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- This article was new with the Magnolia - Home release.
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