General Instructions for the Accounting Cycle Project:
Each semester students in ACCT 205 are required to complete an Accounting Cycle Project. The project consists of recording transactions, posting the journal entries to the general ledger, and preparing the financial statements for a golf course for 3 months – April, May and June 2012. To account for the golf course over 3 months, will use a freeware accounting software called “Double Entry”.
Setting Up the Accounting Cycle Project
Downloading the “Double Entry” software
To get a copy of the “Double Entry” software, students need to go to a SugarSync website to download the software. Neither BSU nor MAL will allow this software to be emailed or posted because it is an executable file. Consequently the website was set up for students to access and download the software. Please go out and download a copy of the software for your use.
You need to go to the website below to download the accounting software you will use for the case.
You may be able to just touch the website in the PDF document and the system will take you directly to the website. If not copy and paste the website address above into your web browser. At the website you will see the following:
If you hit Download and your system blocks the download, open the popup blocker at the top of the screen and choose allow. Then hit Download again.
When you download the “Double Entry” software program select SAVE, not run. If you select run the program will not work. So save the file to a flashdrive. If you paste the program to your computer screen this is what the program looks like:
MONTHLY DATA FILES
1. After you have downloaded the “Double Entry” software program you will need a data file. Actually you will need a separate data file for each month of the project - a separate data file for April, May, and June.
2. The data file will be emailed. Fred Christensen will send an email with the data file attached at the start of each months’ project. The file will have an .acc file extension. You use the “Double Entry” program to open the data file that you use each month. When the data file is emailed to you it will be titled with the appropriate month. (the files below are pictures, they will not open).
3. Transfer both the Double Entry software and the data file onto a flash drive. You can run the program from the flash drive on any Windows computer. The Double Entry software will NOT run on a MAC or iPad. Rename the .acc to your team members' last names (example: April 2012 Smith-Jones.acc).
One of the limitations of the “Double Entry” software is that it is a Demo. You can use the “Double Entry” software as many times as you would like, to work on as many company data files as you want. However the individual company data files are limited to 30 journal entries. In the Project we make more than 30 journal entries over the 3 month period. To work around this, we send out new data files each month with the opening balances posted as the first journal entry. In other words the April ending balances on the April trial balance are posted as a comprehensive entry in the May data file.
“Double Entry” software:
The accounting software is very simple and easy to use. There will be a learning curve, but the students figure it out fairly quickly. The data file has been set up with a chart of accounts for the project. Once the data file is opened you can record journal entries, see the general ledger where the entries have been posted, look at the trial balance and generate a balance sheet and income statement. The software will not prepare a statement of cash flows, so the students prepare this using the cash T-Account.
When you open the Double-Entry software this is what you will see.
To open the data file go the File>Open Project> Then select the file for the month you are working on.
Information about Accounts
? On the menu bar under Settings>Account Settings you can see the chart of accounts that have been set up for the Happy Go Lucky project. On the left hand side of the screen are the accounts, in the middle are the account numbers. On the right hand side of the screen are the account types – Revenue, Expense, Current Asset, etc.
? If you hover the mouse over an account title on the left, you will see the account type slightly depress on the right. For example, if you hover your mouse over Cash you will see Current Asset depressed on the right.
? Remember there are more accounts than what you initially see on the screen. Too see all the accounts move the slide bar on the right down the screen.
How to Add a New Account
WARNING: Do not click on the account type buttons on the right side of the account window until you have added the new account. If you do, you will be changing the account type of whichever account is selected.
Go to the Settings menu and select Account Settings.
Click on the account under which you want to add the new account, and select Accounts>Insert or press Ctrl-I. The new account will be inserted under the account you selected.
Enter the name of the new account into the empty line, assign it a unique account number, and select the account type by clicking the button on the right side of the window that corresponds to the account type. If you select the wrong account type, it will show up in the wrong place on the statements you print out.
Entering Journal Entries:
To use the Double Entry Software you begin by making journal entries. The initial screen is the journal entry screen.
Lets record the first journal entry - the issuance of the Common Stock to start the company. The entry is:
Common Stock $300,000
To record issuance of Common Stock
The chart of accounts is already set up in the data file. To select an account use the drop down button on the right hand side of the screen just before the $ sign. Select the account then enter in the dollar amount of the transaction. The journal entries will automatically be numbered for you BCEC1, BCEC2, etc.
After you have made several journal entries, you can see the first entry by clicking on the arrow pointing to the left on the right hand side of the menu bar by the New Entry tab. You can use these arrows to move through the entries you have recorded. Use this to change, correct or delete journal entries you have recorded in the software.
Please put explanations on all journal entries.
Dates: When entering a journal entry, the software automatically inputs the current date. Please change the date each time to be the end of the month that is being worked on. For example, if today’s date is 11/08/2012 that is the date the software will enter for the transaction.
If you are entering data for the month of April and the input date is 11/08/2012, no numbers will appear when you try to print out a trial balance or balance sheet for April. That is because the software thinks the data is for November not April. Make sure that each time you input a journal entry, that you change the date to April 30 for all the April transactions or May 31 for all the May transactions.
Remember everything you look at in the Double-entry software is based on dates. If you want to look at a balance sheet make sure you have the correct date input in the screen (April 30, 2012). If you want to look at the income statement make sure you have the correct range of dates entered into the screen (April 1 – April 30, 2012).
Saving the Data File:
The Double Entry software does not automatically save transactions. So save often, save a backup copy of the file with a slightly different name.
There is nothing more frustrating than redoing the project because you did not save the transactions.
Viewing the T-Account Ledgers, Trial Balance, Income Statement, Balance Sheet.
After you have recorded the transactions for April in the journal you will want to see the results for the month. At the top menu you can select various views. For example you can view the T-Account Records, the Running Balance Ledger, the Trial Balance, the Income Statement and the Balance Sheet. You can only view the T-Accounts one account at a time. So enter the account you want to see and the appropriate date.
You can move between T-accounts using the arrows on the right. Notice that the for the cash account, the software shows you the source of the cash entry - $300,000 from the sale of Common Stock on April 27. This will become very handy when you have to prepare the statement of cash flows.
Here is the T-account for Common Stock:
Notice the date range, the drop down menu to select the account and the arrows to move between accounts.
The trial balance is prepared as of a single day. We have only recorded one transaction, so we will only see two accounts on the trial balance.
Remember the income statement is prepared for a period of time. The period is April 1 to April 30, 2012. Since only one transaction has been recorded that affected only Balance Sheet accounts, there are no revenue and expenses.
Balance sheet: Remember the balance sheet is prepared as of a single day.
MAL Shared Documents Folders
Accounting Cycle April Documents, Accounting Cycle May Documents, Accounting Cycle June Documents:
These folders contain the Project Case for each month. The Project Case is a PDF document entitled Happy-Go-Lucky month 1 for April. The document contains the transactions, requirements etc. for the month.
Each month’s folder also contains an Excel workbook. There are 3 tabs in each workbook. A template to prepare the bank reconciliation at the end of each month and prepare any required journal entries. A FIFO Inventory worksheet used to keep track of 4 different inventory items that the golf course sells. A Statement of Cash Flows template to prepare the statement for the month. At the end of each month, after all the transactions are recorded the students will print out the cash account from the general ledger and then use the cash account to prepare the Statement of Cash Flows.
Good luck with the Project