Accounts Types

Posting Accounts are the accounts where all transactions are posted. Though there are several more account types, only posting accounts can have transactions posted to them.

  Note: Bank accounts are posting accounts.
  

All posting accounts must add to a Total account on the same report as the posting account eg. you cannot add a posting account that is assigned to the Profit & Loss statement to a total account that assigned to the Balance Sheet.

Posting accounts have a ‘natural sign’ ie. they normally have either a debit balance or a credit balance. This affects how the accounts are displayed as well as how the transactions are generated in the system. For instance, a revenue account normally has a credit balance; an asset account normally has a debit balance. When an account has a balance that is the same as its natural sign it is shown as a positive balance. When an account has a balance that is the opposite to its natural sign, it is shown as a negative balance.

There are two exceptions to this:

1) where you set an account to have a different name when its balance is the opposite to its natural sign, or
2) where you ‘pair’ the account with a non-posting

account so that it appears in a different part of the same financial statement when it has a balance the opposite to its natural sign.

Bank accounts (called Bank, but actually just another kind of posting account) are often set up with a Paired account. When the posting account has a balance opposite to its natural sign, the balance appears against the paired non-posting account in the section of report set for the paired non-posting account. In the case of a bank account, where it has a debit balance it normally appears in Current Assets. Where it has a negative balance, it could be paired with a ‘Bank Overdraft’ account that appears in Current Liabilities. A Paired account is a specific type of non-posting account set up for this purpose. Posting Accounts have a Totaling Mode that determines how the transactions and the balances on the account are handled at the end-of-period and end-of-year reset. Accounts that are revenue or expense type accounts have a Period-To-Date totaling mode, and are reset at the end of each period so that they start each period with a zero balance. Year-to-date balances are stored but are reset to zero after the end-of-year rollover. Accounts with a period-to-date totaling mode have their balance transferred to a Reset account at the end of the period and the end of the year. The Reset account must have a Cumulative totaling mode. In the chart supplied with JobBag the reset account is 8200 – Retained Earnings Brought Forward, but this may be changed. Balance Sheet accounts have a Cumulative totaling mode. Cumulative accounts do not have their balance reset to zero at the end of the period and end of the year. PAIRED (NON-POSTING) ACCOUNTS A Paired (non-posting) account is an account that is paired to a posting or total account. It has no other purpose. When the posting or total account to which it is paired has a negative balance the paired non-posting account appears on the financial statement instead of the account to which it is paired. Consequently, paired non-posting accounts must have the opposite ‘sign’ to the account to which they are paired. Ie. if the posting or total account has a debit natural sign, the paired nonposting account must have a credit natural sign. A paired non-posting account must appear on the same financial statement as the account to which it is paired, and must add into a total account which appears on the same financial statement. A paired non-posting account can only be paired with a total account if the accounts that add into the total account do not appear on the same report. An example of a paired non-posting account is where you have a Bank account in Current Assets that is paired with a Bank Overdraft in Current Liabilities. The Bank account is the posting account; the Bank Overdraft account is the paired non-posting account. Chapter 14 — General Ledger – Chart of Accounts - p8 ACCOUNT TYPES … Cont’d TOTAL ACCOUNTS Total accounts are accounts that accumulate the totals of those accounts added to them. Like posting and paired non-posting accounts, total accounts have a natural sign, a totaling mode and must add to another total account. Total accounts cannot be mapped to kinds, bank accounts or job types, as they cannot have transactions posted to them. A total account does not reset to another account, as its value is derived from other accounts which may or may not be cleared depending on their status. SUPPLEMENTARY ACCOUNTS Supplementary accounts are total accounts that only appear in user-defined reports. Supplementary accounts do not participate in the main chart of accounts and do not appear in the main financial statements, the Profit & Loss, Profit & Loss Appropriation and Balance Sheet. These accounts are used to accumulate totals for the accounts that add to them when a supplementary account is nominated as the Supplementary account when setting the characteristics for an account. Supplementary accounts are generally used when you want to produce a financial report that analyses figures for a division, department or employee. Example: You may have individual posting accounts for each expense type for each employee. In the main chart all of these accounts add to the totals account Total Operating Expenses. However, each posting account could add to a supplementary account for each employee, you can then create a user defined report that lists each posting account for an employee and the Supplementary Total account for that employee, giving you additional analysis over an above that which is gleaned from the normal profit & loss statement. Supplementary accounts can also add to other supplementary accounts, so that each employee’s supplementary total account could add to a departmental Supplementary total account, giving you totals for each employee as well as a total for each department. TEXT ACCOUNTS Text accounts are used to provide headings on financial statements. Text accounts do not participate in the structure of the chart in a financial sense as they do not hold any balances nor can transactions be posted to them. Consequently they have no natural sign, totaling mode nor supplementary relationships to other accounts in the chart. CREATING A NEW ACCOUNT The same Create a New Account window is used for creating the six different account types. The window seen here displays all the fields required for creating a new Posting account. Picture 14.6 There are certain rules that apply to the different account types. These rules are available to be viewed by clicking the Help button on any of the Create New windows.