Enter transactions:
1. owner contributes $6,00 cash
2. $2,000 in revenue on account
3. $1,500 cash from debtors
4. Rent expense cash $400
5. $300 in cash for salaries
invested $2,500 in a certificate of deposit(terms - 12 months, rate of interest - 8%)
Adjusted enteries at end of accounting period
7. Accrued salary expense $1,200
8. Accrued intest revenue on the CD
Required:
a. enter the preceeding data in peachtree and an online applications (Quickbooks Simple start free edition)After making enteries record effect of each event on the accounting equation for the accounting period.
b. Prepare income statement of changes in equity, the baance sheet and the statement of cash flow for the physical year.
What are the diffeerences found between Peachtree and Quickbooks. Discuss data entry, compare the reports the reports produced and indicate your preferance.
To enter the preceding data in Peachtree and QuickBooks, you would follow these steps:
1. Peachtree:
a. Open Peachtree and create a new company file.
b. Enter the company information and set up the chart of accounts.
c. Begin entering the transactions one by one, making sure to select the correct accounts for each transaction (e.g., Cash, Revenue, Debtors, Rent Expense, Salaries, etc.).
d. For transaction 6, record the investment of $2,500 in a certificate of deposit by creating a new account for the CD and entering the details of the investment.
e. For transaction 7 and 8, record the accrued salary expense and accrued interest revenue by entering the appropriate accounts and amounts.
f. Once all transactions are entered, save the data and generate reports as needed.
2. QuickBooks:
a. Open QuickBooks Simple Start Free Edition and create a new company file.
b. Set up the company information and the chart of accounts.
c. Enter the transactions one by one, similar to the steps in Peachtree, selecting the appropriate accounts for each transaction.
d. For the investment in the certificate of deposit (transaction 6), create a new account for the CD and enter the investment details.
e. Enter the accrued salary expense and accrued interest revenue (transactions 7 and 8) using the appropriate accounts and amounts.
f. Save the data and generate reports as needed.
Recording the effect of each event on the accounting equation for the accounting period would involve updating the assets, liabilities, and equity based on the transaction details. For example:
1. Transaction 1: The owner contributes $6,000 cash.
- Increase Cash by $6,000
- Increase Owner's Equity by $6,000
2. Transaction 2: Revenue of $2,000 on account.
- Increase Accounts Receivable by $2,000
- Increase Revenue by $2,000
3. Transaction 3: $1,500 cash from debtors.
- Increase Cash by $1,500
- Decrease Accounts Receivable by $1,500
4. Transaction 4: Rent expense paid in cash, $400.
- Decrease Cash by $400
- Decrease Owner's Equity by $400 for the Rent Expense
5. Transaction 5: Salaries paid in cash, $300.
- Decrease Cash by $300
- Decrease Owner's Equity by $300 for the Salaries
6. Transaction 6: Investment of $2,500 in a certificate of deposit.
- Increase Cash by $2,500
- Decrease Cash by $2,500 for the Investment in certificate of deposit
7. Transaction 7: Accrued salary expense of $1,200.
- Increase Accrued Salary Expense by $1,200
- Decrease Owner's Equity by $1,200 for the Accrued Salary Expense
8. Transaction 8: Accrued interest revenue on the CD.
- Increase Accrued Interest Revenue by (amount based on interest calculation)
- Increase Owner's Equity by (amount based on interest calculation) for the Accrued Interest Revenue
To prepare the income statement, statement of changes in equity, balance sheet, and statement of cash flow for the fiscal year, you would need to analyze all the transactions entered and categorize them accordingly.
Now, let's discuss the differences between Peachtree and QuickBooks:
1. Data Entry:
- Both Peachtree and QuickBooks have user-friendly interfaces for data entry.
- Peachtree offers more complex accounting features, making it suitable for larger businesses.
- QuickBooks Simple Start Free Edition is more basic and easier to use for small businesses or individuals.
2. Reports Produced:
- Both software can generate various financial reports, including income statements, balance sheets, and cash flow statements.
- Peachtree offers more customization options for reports, allowing for greater flexibility and control.
- QuickBooks provides ready-made templates and offers simpler options for basic reports.
3. Preference:
- The preference between Peachtree and QuickBooks depends on the specific needs and preferences of the user or business.
- If the business requires advanced accounting features and custom reporting options, Peachtree might be more suitable.
- For small businesses or individuals with simple accounting needs, QuickBooks Simple Start Free Edition can be a more straightforward and cost-effective choice.
Ultimately, the preference between Peachtree and QuickBooks will depend on the specific requirements and complexity of the business's accounting operations. It is recommended to evaluate both software based on your specific needs, available resources, and budget before making a decision.