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General Ledger Startup Transaction Entries

This Help File Page was last Modified on 11/08/2013

General Ledger Startup Transaction Entries

This Help File Page was last Modified on 11/08/2013

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General Ledger Startup Transaction Entries

This Help File Page was last Modified on 11/08/2013

Previous topic Next topic  
If you are reading this chapter:
You should have read Understanding a General Ledger and the General Ledger Setup Overview.
Completed your General Ledger related Maintenance Entries
Summarized the Startup Transactions.
Successfully run the General Ledger Setup Wizard
You have decided on which method (Month by Month or Lump Sum) you will use to enter the transactional history (see "How to proceed from here" below).
And therefore it is now the time to make your General Ledger Startup Transaction Entries.
We strongly suggest that, before beginning, you completely read this entire chapter.

 

How to proceed from here:
There are basically two options:
1.Individually post each month's data, close that month, and repeat until you are current with the General Ledger System.
2.Use the various reports outlined in the Summarizing the Startup Transactions chapter, but summarize All Transactions for all of the Closed Months (by entering the appropriate Date Range) and only post those combined summary values.
The current month's transactions must still be posted as recommended regardless of which option is used.
The timetable for completing these entries - whichever method you choose - is not as "immediate" as you might think.
As long as you have your Transaction Summary spreadsheet document with the itemized Month End Summarized Transactions (as detailed in the Summarizing the Startup Transactions chapter), the actual entry of these transactions may be done at any time - now or in the future.
Just remember that, until each Closed Month's data is entered in the General Ledger System, those Financial Statements will be unavailable.
In other words, the Sooner the Better!

 

The following is an outline of the step-by-step procedures that should follow the successful completion of the Setup Wizard procedure for creating the initial set of Financial Statements within MKMS:
General Ledger Startup Transactions - This is the step-by-step process that you will perform to input the initial set of Financial Transactions derived from your previous General Ledger (refer to the "Entering the General Ledger Startup Transactions" section below this outline for detailed instructions):

 

1.Using the General Journal, make your starting entries dated for the last day of that closed Month or your last Fiscal Year (whatever the last closed month is).

 

2.Close that Month in the MKMS Accounts Receivable module (do not close this month unless you have completed step 1. above).
From the Main Menu Select File and Choose the Accounts Receivable sub-menu then Click Month Close.
The procedure is virtually automatic. MKMS knows what month needs to closed.

 

HelpFilesCloseMonthConfirmation

oClick Yes to accept the offered Close Date.
When the process is completed (it only takes a second or two), you will be asked if you want to Generate Late Fee Invoices.

 

HelpFilesGenerateLateFees

oAnswer Yes to the Generate the Late Fees question, or answer No if you do not want to calculate Late Fees at this time.

 

3.Close that Month in the MKMS Accounts Payable module, also (do not close this month unless you have completed step 1. and step 2. above)..
On the Main Menu, Select File and Choose the Accounts Payable sub-menu, then Click Month Close.
Confirm that this is the month you want closed.

 

HelpFilesAccountsPayableMonthClose

oAnswer Yes, and the closing takes place immediately.

 

4.Close that Month in the MKMS General Ledger System indicating that you want to Automatically Distribute Profit or Loss for this Period.

 

HelpFilesGeneralLedgerCloseMonthPostProfit

a.For that month, print the Trial Balance,
b.Print the Profit & Loss Statement,
c.Print the Balance Sheet.

 

5.Then, using the General Journal, make any additions or corrections entries, as needed.
a.Re-close the month indicating that you want to Automatically Distribute Profit or Loss for this Period
b.Re-print the Trial Balance, the Profit & Loss Statement and Balance Sheet.
c.Also, See the Important Note in Step 5. below.

 

Entering the General Ledger Startup Transactions - This is a more detailed set of instructions for the five (5) step process (outlined above) that you will perform for the purpose of creating the initial set of Financial Statements which will be derived from your previous General Ledger information:

 

Step 1. Make your starting entries dated for the last day of the old General Ledger's last closed Month (or Fiscal Year) in the General Journal.
On the Main Menu Select File, Choose the General Ledger sub-menu, then Click General Journal.

HelpFilesGeneralJournalEntries

General Journal entries

 

You will now use the Account Balances on the Trial Balance which contains the Assets, Liabilities, Equity, Sales and Expense Account Balances of the old General Ledger's last closed Month or Fiscal Year -
oThis the Trial Balance that was created from your old General Ledger's most recently closed month as explained in the "General Ledger Setup Procedure" chapter.
Using the General Journal Form illustrated above, post the appropriate Financial Transactions - the Debit and Credit entries shown on that Trial Balance - until you have completed all of the General Ledger Account entries listed on that Trial Balance.
oClick the Save Icon top record each Transaction Line Item.

 

HelpFilesSaveIcon

Click the Postübutton to save the completed set of ("in-balance") General Journal entries
Note: Saving General Journal Transaction Entries for completion at a later time:
i.If you have not completed the required General Journal Entries but need to leave this Form temporarily, Close the General Journal Form (but Do Not Click the Postübutton).
ii.The current set of General Journal Entries will be saved until you return to this General Journal form (see "Returning to an unfinished General Journal Entry" in the General Journal Entries chapter for more information).
Print you General Journal Listing report and verify your entries.
If necessary, make additional General Journal entries.

 

Step 2. and Step 3. If you have not already done so, Close the month, for which the Financial Transactions were just posted in the MKMS General Ledger System, in the Accounts Receivable and Accounts Payable modules.

 

Step 4. Close the month for which the Financial Transactions were just posted in the MKMS General Ledger System.
On the Main Menu Select File, Choose the General Ledger sub-menu, then Click Month Close.
If this is the first month of the new Fiscal Year, you will only be offered the opportunity to Close that Month.
However, if you have already closed a month in the current fiscal year, you will be offered the opportunity to Re-Close a previous Month, or Close the current Month.
Check Automatically Distribute Profit or Loss for this Period.

 

HelpFilesGeneralLedgerC

GL Close Month dialog

 

For this newly closed month, print the Trial Balance, the Profit & Loss Statement and the Balance Sheet.
Compare these Reports to the old reports of the same type.

 

Step 5. Make any Additions or Corrections entries that may be needed using the General Journal.
If necessary, after checking the new reports against the old ones, make any additional required General Journal entries.
Then, Re-close and Re-print.

 

Important Note: If the set of Financial Transactions entered above represent those for the last month of your Fiscal Year, once you've completed the steps above, Close the Fiscal Year as follows:
Finalize Profit (Loss) - To Finalized this "end of fiscal year" month, in the General Journal, Post your final year-end Profit (Loss) to 9999 using one of the two cases described below:
1.To Distribute a net Profit for the Fiscal Year, Debit your Current Earnings account for the Year's Profit and Credit Retained Earnings for that amount.
2.To Distribute a net Loss for the Fiscal Year, Credit your Current Earnings account for the Year's Loss and Debit Retained Earnings for that amount.
Re-close Month - Re-Close the Month - Period 12 - of the Fiscal Year for a final time but Do NOT Distribute Profit or Loss for this Period automatically, because you have already done so in Step 4. above.
Close the Year - Perform the final Year End Closing procedure.
oOn the Main Menu Select File, Choose Close Year.

 

HelpFilesCloseYear

oClick Yes to Close the Year.
You are now ready, when the appropriate time comes, to Close Months in the (current) Fiscal Year following the year that was just closed.

 

What's Next?

Complete the Final General Ledger Startup Procedure by posting information for the (current) Fiscal Year derived from the MKMS Accounts Payable and/or Accounts Receivable module's Reports.
Read and complete the steps in Post the Summarized Transactions.