Understand Accounting Signs. Reference Guide

Size: px

Start display at page:

Download "Understand Accounting Signs. Reference Guide"

Willis Wilkerson
6 years ago
Views:

1 Understand Accounting Signs Reference Guide 1

2 Fiscal Year and Accounting Period The 12 month period used for Princeton s annual financial reporting. Begins July 1st and ends June 30th. Each consecutive month within a fiscal year is considered an individual Accounting Period. Financial transactions are posted to the General Ledger in an Accounting Period. July is period 01, August is period 02, September is period 03, etc. When you are working in an Open Accounting Period report balances will change from day-to-day as transactions are posted. 2

3 Our Accounting Periods The Accounting Period closes four business days into the next month.

Accounting Periods close four business days into the new/next month Last day of the current month Day 1 of new month Day 2 of new month Day 3 of new month Day 4 of new month Deadline to get journals

4 Accounting Periods close four business days into the new/next month Last day of the current month Day 1 of new month Day 2 of new month Day 3 of new month Day 4 of new month Deadline to get journals approved and included in current month Current month s books closed. RSS notification sent. Journals approved within the first 2 business days of the new month will still be included in the previous period s books. The period/month will be closed on the 4 th business day of the next month. 4

5 Our Accounting Method Princeton utilizes a double-entry (balanced) accounting system. This means that entries of equal and opposite amounts are made to our financial systems for each transaction. In other words, for every debit there is an equal and offsetting credit. A Journal Entry (Journal or JE) is the accounting method used to record accounting transactions in our General Ledger. The Journal Entry is composed of Journal Lines. The lines of an entry record the individual detail transactions to Chartstrings. A Journal Entry includes at least two lines: a debit (Dr) and credit (Cr) line. The sum of the debit line(s) and credit line(s) must equal zero. The number of debit lines does not need to be the same as the number of credit lines. But, the total dollar amount of the debits must equal the total dollar amount of the credits. So a Journal might have one debit line totaling $100 and three credit lines totaling ($100).

6 Debits and Credits Chartstring Debit Line(s) Increases expense amount. Decreases revenue amount. Decreases Spendable Balance. When entered in Prime Financials, requires no special sign notation in front of the amount e.g., $ Displays as a positive amount in Ledger Detail. Chartstring Credit Line(s) Decreases expense amount. Increases revenue amount. Increases Spendable Balance. When entered in Prime Financials, requires a minus sign in front of the amount e.g., -$ Displays as a negative amount in parentheses in Ledger Detail. 6

7 Accounting Signs Summary Account Type Increase Decrease Revenue Credit Debit Expense Debit Credit Spendable Balance Credit Debit Asset Debit Credit Liability Credit Debit Prime Displays Debit Credit Journals - Prime Financials $ 1,000 $-1,000 Spendable Balance and Revenue and Expense Report Revenue Spendable Balance and Revenue and Expense Report Expense Ledger Detail and Monthly Actuals Report $(1,000) $ 1,000 $ 1,000 $(1,000) $ 1,000 $(1,000) 7

How Reports Display Accounting Data Three Financial Management Summary

If the revenue chartstring has a debit balance, it is indicated with

When drilling from Summary reports to Detail reports, you are drilling

The revenue display on the Spendable Balance, Revenue and Expense, and

8 How Reports Display Accounting Data Three Financial Management Summary reports display revenue chartstring balances as positive amounts. If the revenue chartstring has a debit balance, it is indicated with parentheses. When drilling from Summary reports to Detail reports, you are drilling from overall total amounts to individual actual transaction amounts. The revenue display on the Spendable Balance, Revenue and Expense, and Individual Portfolio are the only reports where the signs are the opposite from the Detail reports. The Monthly Actuals summary report displays revenues with their natural sign, and will match the Detail reports. Detail reports display transaction amounts as they are actually entered. 8

Spendable Balance Revenue Column Increases Revenue Increases Spendable Balance Decreases Revenue Decreases Spendable Balance Parentheses indicate a negative balance, or decrease of revenue from a

9 Spendable Balance Revenue Column Increases Revenue Increases Spendable Balance Decreases Revenue Decreases Spendable Balance Parentheses indicate a negative balance, or decrease of revenue from a particular chartstring. The negative revenue of (150.00) indicates that revenue decreased the spendable balance of that chartstring. The positive revenue of 41, indicates that the chartstring has received revenue, and increased the spendable balance of that chartstring. 9

Drill from Negative Revenue (150.00) to Ledger Detail Report The larger original transaction of 650.00 was a Fund Assignment-Out.

10 Drill from Negative Revenue (150.00) to Ledger Detail Report The larger original transaction of was a Fund Assignment-Out. Fund Assignments-Out are entered as debits in Prime Financials. Debits are entered as positive amounts in Prime Financials. Ledger Detail displays how the transaction was originally entered in Prime Financials. 10

11 Drill from Positive Revenue 41, to Ledger Detail Report The original transactions were an Investment Income Distribution and a Fund Assignment-In. Incoming revenues are entered as credits in Prime Financials. Credits are entered as negative amounts in Prime Financials. Ledger Detail displays how the transaction was originally entered in Prime Financials. 11

12 Spendable Balance Expense Column Expenses are displayed with their natural signs. Actual expenses to date e.g. Prime Marketplace and purchasing card transactions are reflected in the Expense column of the Spendable Balance report. Decreases Expenses; Increases Spendable Balance Increases Expenses; Decreases Spendable Balance 12

13 Drill from Positive Expense 5, to Ledger Detail Report For Expenses, the Ledger Detail displays the same sign as the Spendable Balance. 13

14 Drill from Negative Expense (1,000.00) to Ledger Detail Report For Expenses, the Ledger Detail displays the same sign as the Spendable Balance. 14

Chapter 8. Recording Adjusting and Closing Entries

Chapter 8. Recording Adjusting and Closing Entries Chapter 8 Recording Adjusting and Closing Entries Adjusting Entries Adjusting Entries - journal entries recorded to update general ledger accounts at the end of a fiscal period (Supplies & Prepaid Insurance).