Specifications

4  Lesson 7 Computer Tutorial 3
Use meaningful names for account descriptions
In the G/L Account window, each account is assigned a description. It is important to use
meaningful names for these account descriptions. The benefits are:
You minimize the chance of error when posting transactions if the account description clearly
indicates the nature of the account.
You are less likely to make a format error when designing custom reports.
People who use your financial statements will be able to understand the information more
easily.
Compare the following partial chart of accounts:
1000 Cash
1100 Bank account – Royal
1120 Bank account – Scotia
1130 Bank account – CIBC #1
1140 Bank account – CIBC #2
with this partial chart of accounts that uses more descriptive names:
1000 Petty cash
1100 Royal Chequing #1234567
1120 Scotia Chequing #234987
1130 CIBC Chequing #9870123
1140 CIBC Savings #0136790
Although account descriptions can contain up to 60 characters, most reports do not show or
print the full version of the account description field. So, avoid using unnecessary spaces and
characters if possible. Use a brief, clear identifier for an account, such as the bank account
number for bank accounts.
Standardize the chart of accounts
Once you have developed a satisfactory chart of accounts structure, adopt the same general
structure for all other general ledgers. This does not mean that every general ledger should
have identical accounts. However, if you use the same structure (for example, number all
current asset accounts from 1000 to 1499 and place all accumulated amortization accounts
after the corresponding asset accounts), your general ledger work will be simplified.
TOPIC 7.2
Maintenance procedures
When working with a computerized general ledger, it is important to develop a set of standard
operating procedures and to follow it. This ensures consistency in all accounting work,
regardless of who is handling it. You should have become familiar with some of these
procedures in the preceding lessons. The following is a summary.
Backups
You should develop a backup plan and follow it. At minimum, you should back up data:
before posting batches or daily, whichever is more frequent
before reconciling
before restoring backups or clearing data
at least monthly or whenever you close a fiscal period, whichever is more frequent