About General Ledger
General Ledger (G/L) is the core of financial applications in the software. It maintains the records of all of your company's financial transactions. The General Ledger application is not just a method of record keeping but an information system that stores, measures, processes, and communicates financial information.
The information you enter in one part of the system is available to other parts of the system. Therefore, the general ledger application can be automatically updated. For example, you can specify that the financial transactions in Order Entry, Accounts Payable, and Accounts Receivable automatically be sent to the General Ledger application when you perform your day-end procedures. The General Ledger database stores this information in the appropriate general ledger batch.
Since financial transactions are stored in one database, you can use this information to measure the overall profitability of your business. For example, you can print the General Ledger Journal Report and list the grand totals for your beginning, current, and ending periods.
Also, each type of financial transaction is stored in its appropriate G/L batch. For example, accounts receivable information is stored in G/L batch number 9000. This means you can compare one activity against another or simply report on the profitability of one type of transaction.
An important part of determining your gross profit is tracking your cost of goods sold. The cost of goods sold represents the total manufacturing costs attached to an item. This figure (also known as the cost of production) is computed according to the following:
Beginning inventory + any new inventory purchases + labor and other production costs - inventory at the end of the accounting period.
There are several ways to determine the cost of goods sold. You can use the Sales Journal Report, the Inventory Extended Dollars Report, the Purchasing Account, the Sales Analysis Recap Report, and the Inventory Extended Dollars Report. You can also create a cost of goods sold batch and let the information automatically flow to G/L. The cost of goods batch is created by running the Cost of Goods Sold Batch Report. This report is created from the information in the sales journal file for the period you specify. When you print this report, you can update your general ledger with this information. If you choose to update G/L with this information, the cost of goods sold batch is created, and the information automatically flows to your general ledger.
Note: The system-generated batch number for cost of goods sold is 9996.
It can be difficult to maintain the accuracy of your records at year-end. With the General Ledger application, you can close the old fiscal year and begin to make current postings to the new year. Any postings for the old fiscal year are automatically posted to period 12 or 13. This ensures that you do not mix information from the old fiscal year with information from the new fiscal year.
If you have adjustments to post to the previous year, but not to any particular month, you can post to period 13. For example, if you have a yearly depreciation total to post to the year, you could post to period 13.
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