Sage 50
Accounting
Basics
Slideshow 1A
Contents
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Two types of accounting software
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Modular System 3
Integrated System 5
Sage 50 Accounting Basics
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3
9
Session Date 10
The Sage 50 Accounting HOME Window
– Classic View
12
– Enhanced View 13
Dashboard
15
The LOOKUP Button 16
Using HELP 17
Drilldown 18
Graphs 19
GAAP
20-29
Slideshow 1A
12
There are two types of
computerized accounting
systems: modular and
integrated.
Modular System
In the modular system, each
component of the accounting
software works independent of the
General Ledger and of each other.
This is commonly used in large
companies, especially when
company operations are
conducted in separate
departments.
Study the illustration at right.
Click to continue.
Accounts Receivable
Accounts Payable
General
Ledger
Payroll
Inventory
Order Entry
Modular System
(continued)
At the end of an accounting period,
or whenever financial statements are
required, the data from the various
modules are consolidated with the
General Ledger.
Click.
It is only when the data from the
subledgers have been consolidated
with the General Ledger that
accurate financial statements may be
produced.
Examples of this type of system are
ACCPAC ERP series, Great Plains,
Solomon, etc.
Click to continue.
Accounts Receivable
Accounts Payable
General
Ledger
Payroll
Inventory
Financial
Statements
Order Entry
Integrated System
An integrated accounting system
works very differently. Although
there are different modules, they
are connected as one united
system, with the GENERAL
LEDGER as the hub.
Sage 50 Accounting is a good
example of an integrated system
Study the basic structure of Sage
50 Accounting at the right.
Accounts
Payable
Accounts
Receivable
Click to continue.
Projects
General
Ledger
Payroll
Inventory &
Services
Integrated System
(continued)
When a transaction is entered in
one module, all other related
modules are updated.
For example, if you enter a sale of
merchandise on credit in the Sales
Journal of the RECEIVABLES
module,
Click.
…the ACCOUNTS RECEIVABLE
account in the General Ledger is
increased,
Click.
Client
SubLedgers
Receivables
Projects
Payables
General
Ledger
Inventory
& Services
…and the corresponding client’s
record is updated.
Click to continue.
Vendor
SubLedgers
Payroll
Integrated System
(continued)
Similarly, when the company pays
for a purchase on credit, you
would enter the payment in the
Payments Journal of the
PAYABLES module.
Click.
The vendor’s record is updated,
Client
SubLedgers
Receivables
Click.
…and the CASH and ACCOUNTS
PAYABLE accounts in the
GENERAL LEDGER are updated
accordingly.
Projects
Payables
Vendor
SubLedgers
General
Ledger
Inventory
& Services
Click to continue.
Employees & Payroll
Integrated System
(continued)
As in the modular system,
financial statements are printed
from the General Ledger module.
The integrated type of accounting
software is commonly used in
small-to-medium-size companies,
especially when all accounting
functions are done in one office.
Examples of this type of
accounting software are Sage 50
Accounting and QuickBooks.
Click to continue.
Client
SubLedgers
Receivables
Projects
Payables
Vendor
SubLedgers
General
Ledger
Employees &
Payroll
Inventory
& Services
Financial
Statements
Sage 50 Accounting Basics
The standard modules in Sage 50
Accounting include:
- COMPANY (contains G/L)
- Customers & Sales (Receivables)
- Vendors & Purchases (Payables)
Time & Billing*
- Employees & Payroll
- Inventory & Services
- Projects
- Banking
You can change the name of any
module, if desired. Study the
relationship of the various modules to
the COMPANY module and to one
another.
Client
SubLedgers
Receivables
Payables
COMPANY
Projects
Inventory
& Services
Click.
Another module, Time & Billing, is
also available to record details of
hours spent on clients in order to
determine billable hours for invoicing.
Time & Billing is in Appendix S.
The features illustrated in the slides
that follow apply to all modules. Other
special features will be shown in
relevant chapters where they can be
used to best advantage.
Click to continue.
Vendor
SubLedgers
Employees & Payroll
Banking
Sage 50 Accounting Basics:
Session Date
Session date is the current working
date. Never click the box for “Do not
show this message again “ if you
wish to keep track of the session
date. When you click the CALENDAR
beside the Session Date box...
Click calendar now (see red arrow)
…you can select one of the dates by
clicking on it.
Click 30 on the April calendar.
A warning appears.
Click OK.
The new session date will display.
You may change it if desired.
Click OK now.
Notice that the current session date
automatically becomes the default
transaction date for all transactions
until you change the session date.
However, you may change the
transaction date when necessary.
You will learn more about session
dates in the next slideshow.
Click to continue.
Session Date (continued)
Changing the Session Date while in
Sage 50 Accounting
The Session date box automatically
comes on as soon as you open a
company file in Sage 50 Accounting.
You may accept the current session
date or change it to a new date by
clicking the calendar beside the
current session date at the upper
right corner of the Home window (see
red arrow).
Click to continue.
The Sage 50 Accounting HOME Window – Classic View
There are two options available to view the HOME page: The CLASSIC or ENHANCED View. Study the Sage 50
Accounting Home window in CLASSIC view below. Notice that all the modules are displayed.
As in any other Windows applications, the Sage 50 Accounting window has a title bar, a main menu bar, and a toolbar
with icons on top of the screen. The module titles are shaded, followed by the corresponding ledgers. The various journals
provide windows where you would input transactions.
The history (quill) symbol indicates that the module is ready to accept historical transactions, but not new transactions.
Click to continue.
The Sage 50 Accounting COMPANY Module Window – Enhanced View
In the ENHANCED View, only one module is displayed at any one time. This is the ENHANCED View of the COMPANY
module which includes the Chart of Accounts and the GENERAL JOURNAL (see red arrows).
You may change the name of any of the modules to suit your company’s setup. Study the COMPANY window now.
Click.
You can find
detailed information
about the Home
Window in a 7minute tutorial at
the LEARNING
CENTRE. Study
what tutorials you
can find in the
Learning Centre.
Click to continue.
modules
The Sage 50 Modules
Click each of the modules below from top
to bottom and read the corresponding
explanation at the right.
The RECEIVABLES module contains the customer files and keeps
track of sales and payment transactions with customers.
The PAYABLES module contains the vendor (supplier) files keeps
track of money owed and paid by the company to vendors
The INVENTORY & SERVICES module contains the Inventory files
and keeps track of Inventory quantities and costs.
The EMPLOYEES & PAYROLL Module is used to keep track of
employee records, income and deductions. Sage 50 Accounting
automatically keeps track of taxes and remittances due to specified
payroll authorities.
Click to continue.
The PROJECTS module allows you to allocate assets, purchases,
revenue and expenses for particular business activities to or to
projects, division, department or job sites.
The BANKING module is where BANK (or CASH) transactions are
tracked. It also allows you to perform Bank Reconciliation with the
company records (referred to as ACCOUNT RECONCILIATION).
It is in the COMPANY module that you would create company files
including the Chart of Accounts. General Journal transactions are
entered in the Company module.
Dashboard
The Dashboard offers you a visual snapshot of your company's performance and activities that enable you to
make informed decisions in a timely manner. The Dashboard button (see below) is above the module listing on the
Home page.
Click each circled number below and study the explanation of each
part of the Dashboard.

The Performance dashboard displays critical business information
in a graphical format using your company's current financial data.
Each individual section is referred to as a widget.

Account Balances. Active accounts and
their balances. You can display how much
cash your business has, what is owed to
your business, and what your business
owes.
The other type of dashboard is Trends Forecast dashboard. This
type is available only in the Quantum version of Sage 50
Accounting.

Revenue: Year to Date. Shows your company's net
income and how it is derived from your revenues and
expenses. Use this widget to determine how well your
business is doing year-to-date.

Aged Sales Invoices. Displays the invoice amounts
owed to your company based on the aging periods that
you've set up in Sage 50 Accounting.

Aged Purchase Invoices. Displays
amounts owed to your vendors based on
the aging periods that you've set up in
Sage 50 Accounting.
Items on Order. Displays the number of items
currently recorded on sales orders or backordered in sales invoices, and the number of
items currently recorded on purchase orders
or back-ordered in purchase invoices. Use
this widget to quickly see how many items
you have on sales orders, and decide if you
have enough inventory to fill your orders or
whether you should order more.


Revenue versus Payroll Expenses. Provides a side-by-side
comparison of your company's revenue and your payroll expenses.
Used to determine if your company's month-to-month payroll costs are
reasonable relative to revenues earned.
The LOOKUP Button
Whenever you see the LOOKUP
button beside a field, you can click
it…
Click the LOOKUP button beside the
INVOICE field (see arrow)
… a Search box will appear that
will allow you to specify what you
are looking for. In this example,
because the field where the LOOK
UP button is for INVOICE, the
LOOKUP window for Purchase
Invoices (see where arrow is
pointing) will appear.
Click to continue.
Using HELP
HELP in Sage 50 Accounting works very much like Help in other Windows applications.
Click the circled numbers on the Home window and study the various ways you can get HELP.
Type your question here, then
click HELP SEARCH and a help
screen would appear, providing a
number of HELP resources (see
below).



HELP on the
main menu
allows you
Allow you to
several options. do a Basic or
Advanced
search based
on certain
criteria.
Drilldown
In Sage 50 Accounting, you can
go deeper into an entry in many
of the reports or parts of financial
statements to see more detail.
Click.
Move your pointer around the
report (without clicking). Any time
the mouse pointer changes to a
magnifying glass with a plus sign
in it (see red arrow), you can see
more details about the specific
entry. For example, if you wish to
view the details of the HST
Charged on Sales of Santos
Luggage as shown on the
statement, you would place your
mouse over the entry (see the
magnifying glass) and doubleclick on it.
Click.
The corresponding document will
then display.
This feature is available in any
report.
Click to continue.
GRAPHS
A picture is worth a thousand
words. If you wish to display data
in graphic format, Sage 50
Accounting provides some
graphing capabilities. Study the
list that displays by clicking
GRAPHS on the Main Menu (see
right).
Click Sales vs. Sales Due now.
…you can then enter the specifics
for the report.
Click SELECT ALL to view the
resulting graph.
This is a column bar chart. Sage
50 Accounting provides various
types of graphs. HELP gives you
a description of all graphs
available in Sage 50 Accounting.
Click to continue.
Generally Accepted
Accounting Principles
(GAAP)
How would you know how to
interpret and record a business
transaction? Processing
transactions in Sage 50
Accounting is no different from
what you have already learned in
your Accounting course using
Generally Accepted Accounting
Principles (GAAP).
GAAP
A set of policies, procedures and
guidelines that direct accounting
practitioners to record and report
financial information.
Click and study the definition.
GAAP not only guides you in
determining how to treat
transactions and communicate
financial information but it can
also help interpret financial
statements between companies.
Click to continue.
GAAP is published in a handbook
by the Canadian Institute of
Chartered Accountants (CICA).
GAAP (Review):
Representational
Faithfulness
Click and study the Represenational
Faithfulness principle, then read the
example below.
Example: A company should use
and file relevant source
documents (invoices, cheques,
memos, etc.) that can be verified
and are free of any personal bias
and judgment. These source
documents should be part of the
audit trail.
Click to continue.
Representational Faithfulness
Accounting information must be
complete, neutral (truthful,
factual, unbiased), and it must be
reliable (without material
errors/supported by objective
evidence).
GAAP:
Historical Cost Principle
You will apply GAAP when you
complete the exercises in the
various modules. The slides that
follow discuss the principles that
apply to ALL types of transactions.
First is the Historical Cost
Principle.
Click and study the principle, then
read the example below.
Example: A computer bought for
$3,000 is recorded as an asset at
the time of purchase. If the value
of that same computer decreased
in price to $2,500 shortly after
purchasing it, the value in the
accounting records remains the
same. Any change in the market
value of the asset does not get
reflected in the accounting
records.
This principle is followed even
when the value of the asset
increases.
Click to continue.
Historical Cost Principle
Items are recorded at their
acquisition cost transacted
with an outside party.
GAAP (Review):
Full Disclosure Principle
Next is the Full Disclosure
Principle.
Click.
Example: A firm may report an
unusually high amount of a
particular expense on the Income
Statement. To avoid confusion or
misunderstanding, the entry
should include a note explaining
the high expenditure item, thus
following the Full Disclosure
Principle.
Click to continue.
Full Disclosure Principle
Full disclosure requires that all
relevant information pertaining to
the firm that may be important to
the users of the information must
be revealed on the financial
statements.
GAAP (Review):
Business Entity Concept
Click and study the concept of
Business Entity, then read the example
below.
Example: The company’s
financial records should not
include information about the
owner’s personal belongings,
such as a house or a personal car.
The owner should also have his or
her own bank account separate
from the company’s bank account.
If the owner wants to invest more
money into the business, a
cheque or money transfer should
be made to the company and
recorded in the company books as
additional investment.
If the owner takes any item that
belongs to the business(e.g.,
computer equipment) for personal
use, it should be recorded as a
withdrawal.
Click to continue.
Business Entity Concept
A company’s financial information
is recorded and reported
separately from the owner’s
personal financial information.
GAAP (Review):
Time Period Concept
Click and study the principle.
According to this principle, an
organization’s activities are
identified with specific time
periods; e.g., a month, threemonth quarters, or a year.
Most companies prepare monthly
(month-end) reports and use one
year (year-end) as their primary
accounting period.
The annual reporting period
(referred to as fiscal year) is not
always the same as the calendar
year ending December 31. A fiscal
year can consist of any 12
consecutive months.
Click to continue.
Time Period Concept
The economic life of a business
can be divided into time
periods.
GAAP (Review):
Comparability
(Consistency) Principle
Click and study the principle, then
read the example below.
Comparability (Consistency)
Principle
Example: Owners and managers
use information reported on
financial statements when making
decisions. Information from one
year is often compared to
previous years’. If accounting
information is recorded and
reported differently from one year
to the next, the information cannot
be compared.
Click to continue.
In the preparation of financial
statements, the same accounting
concepts are applied in the same way in
each accounting period.
GAAP (Review):
Matching Principle
Click and study the principle and
example below.
Example:
An accounting consultant, Faye
Anderson, bought $600.00 worth of
paper and printing supplies in
December. In the same month, she
collected $2,800.00 consulting fees
from her clients.
Faye entered $600.00 for paper
and printing supplies as prepaid
asset at the time of purchase.
At the end of the month, she
calculated that she used up
$285.00 worth of the supplies she
purchased earlier. When Faye
prepares her monthly financial
statement for December, she
should report the $2,800.00
revenue and her expenses to earn
the revenue, including $285.00 (not
$600.00) for supplies.
Click to continue.
Matching Principle
Expenses are matched with
revenues in the period when
efforts are made to generate
the revenue.
GAAP (Review):
Revenue Recognition and
Realization Principle
Click and review the principle and read
the example below.
Example:
Some businesses sell goods or
services for cash only; other
businesses sell goods or services
on one date and receive payment
from customers on a later date.
If a customer buys merchandise on
June 1 and pays on July 15, the
seller records the sale on June 1,
not on July 15 when payment is
received.
Click to continue.
Revenue Recognition and
Realization Principle
Revenue from business
transactions is recorded at
the time goods or services
are sold for cash or on credit.
Sage 50 Accounting Basics:
Other Common Features
Other Sage 50 Accounting
features will be illustrated as you
do the exercises in the various
modules.
Go back to your text and proceed
from where you have left off.
If you wish to get more information
about the Home window, open a
Sage 50 Accounting company
file, click Learning Centre at the
left panel and view the 7-minute
tutorial THE HOME WINDOW.
Press ESC now and click the
EXIT button.
EXIT