Dynamics GP Workbook PDF

IMPORTANT INFORMATION FOR INSTRUCTORS
Initial Registration with DynamicsCloud

1. Before using this e-book, please contact support@dynamicscloud.com and provide the following information:
• Name
• Email address you wish to use for the cloud access information and communications
• College or University name
• Course in which you are considering using this textbook
• Approximate number of students expected to be enrolled (per semester), if you decide to use this textbook
• Expected semester(s) of use: Fall 2014, Spring 2015, and/or Summer 2015
2. After sending an email to support@dynamicscloud.com, within 24 hours you will receive a user name and password
to log into DynamicsCloud. At his point you can follow the instructions starting on the bottom of page 1-10, beginning
with “After registration, you will receive an email…”
3. Contact support@dynamicscloud.com for any technical issues. Contact adpub@armonddalton.com with textbook
inquiries.
The above steps register you on a temporary instructors-only cloud access site, where you will access the Microsoft Dynamics
GP software in the cloud as you work through the Armond Dalton textbook for evaluation purposes.
If you decide to use this cloud-based book in your course(s), contact support@dynamicscloud.com so that information can be
sent to you for joining the Microsoft Dynamics Academic Alliance (DYNAA). After registering with the DYNAA, you will then be
provided a school-specific cloud site for you and your students to access throughout the semester(s) you will be using the
textbook.
Important Changes for the 7th Edition

The textbook price for students includes the cloud-access fee. Students will use the one-time-use code from the
scratch-off sticker on the front cover of the Instructions & Assignments book to register with DynamicsCloud. Each
code is good for 120 days, so students should be instructed not to rent the textbook and not to purchase a used
copy.
The textbook comes with two company datasets: Fabrikam, Inc. (shared with other classmates) and Waren Sports
Supply (specific to student). Previous editions of the textbook included five companies. In order to keep each
student’s cloud-access fee to a reasonable level, we tailored the project to this two-company model.
All students at a school will SHARE one Fabrikam, Inc. (Microsoft’s sample company) to use during the Familiarization
and Practice chapters. Sharing one company will give the students a real world experience because they will learn
that their work affects everyone else working with the software.
Each student will have access to his or her own Waren Sports Supply Company. Waren Sports Supply is the same
company that is used in the Systems Understanding Aid (SUA). Many instructors use both the SUA and the Microsoft
Dynamics GP textbook, so having a separate Waren Sports Supply for each student facilitates the grading process and
provides better integration with the manual results from the SUA.
Professors will receive access to the shared Fabrikam dataset and access to all student datasets. The professor will
also be given the System Administrator (sa) credential where they can reset student GP passwords as needed.
Unlike the desktop version of the software, the Web client version of Microsoft Dynamics GP does not have a backup
and restore function available to student users. Students should be encouraged to read the Reference book
instructions carefully in order to avoid errors. For students who have unrecoverable errors in Chapter 8 (Waren Sports
Supply’s main chapter), DynamicsCloud can restore the Waren dataset for an additional $10 fee. Students can request
a database restore and pay for the restore through PayPal by going to the sign up page at DynamicsCloud.
Thank you for taking the time to evaluate this e-book. Desk copies of Computerized Accounting in the Cloud Using Microsoft
Dynamics GP 2013, 7th Edition will be available soon. If you have questions, please contact us at adpub@armonddalton.com or
call us at 517-351-8520. ARMOND DALTON PUBLISHERS, INC.
08/19/2014 - RS0000000000000000000000016547 (Joel Helquist) - Computerized Accounting in the

Cloud Using Microsoft Dynamics GP 2013
COMPUTERIZED
ACCOUNTING
USING
IN THE CLOUD
MICROSOFT DYNAMICS GP 2013
7 TH EDITION
Alvin A. Arens, D. Dewey Ward, and Claire Kamm Latham

with Mary Kay Copeland
Instructions & Assignments

Images used within this publication were obtained under license from Shutterstock, Inc.
© 2014
Copyright by Armond Dalton Publishers, Inc.
Okemos, Michigan
All Rights Reserved. No part of this publication may be reproduced, stored in an

information retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher.
“Microsoft” is a registered trademark of Microsoft Corporation in the United States and/

or other countries and is used by Armond Dalton Publishers, Inc., under license from
owner. Computerized Accounting in the Cloud Using Microsoft Dynamics GP 2013 is an
independent publication not affiliated with Microsoft Corporation.
ISBN 978-0-912503-50-9
Printed in the United States of America

Instructions &
Assignments
Chapter iNtroDuCtioN AND

1 ClouD-BAseD soFtwAre iNstruCtioNs
Materials Included in the Package . . . . . . . . . . . . . . . . . . . . . . . . . 1-2
System Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-3
Error Correction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-3
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-3
Key Activities Included in the Project . . . . . . . . . . . . . . . . . . . . . . . 1-5
Register with DynamicsCloud . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-6
Sign In to DynamicsCloud to
Access the Microsoft Dynamics GP Software . . . . . . . . . . . . . . . . 1 - 10
Sign out of Microsoft Dynamics GP and
DynamicsCloud at the End of Every Work Session . . . . . . . . . . . . . 1 - 14
Sign Back In to the System After an Unexpected Termination . . . . . . . . . 1 - 14
Helpful Hints and Troubleshooting Tips (a.k.a. README!) . . . . . . . . . . . 1 - 16
Chapter
2 FAMiliAriZAtioN
Entering the Microsoft Dynamics GP Program and Opening a Company . . 2-2
Opening Another Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-5
Application Window Content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-5
Using and Customizing Navigation Pane Buttons . . . . . . . . . . . . . . . . 2-6
Functional Areas and Cycles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-8
Microsoft Dynamics GP Categories . . . . . . . . . . . . . . . . . . . . . . . . . 2-8
Summary of Categories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 - 10
Practice Selecting Windows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 - 10
A Typical Microsoft Dynamics GP Window . . . . . . . . . . . . . . . . . . . . 2 - 12
Moving Through Boxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 - 13
Entering Information into Boxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 - 15
(continued on the following page)

CoNteNts
Chapter
2 FAMiliAriZAtioN (continued)
Microsoft Dynamics GP Help Menu . . . . . . . . . . . . . . . . . . . . . . . . . 2 - 21

Microsoft Dynamics GP Help Menu Practice . . . . . . . . . . . . . . . . . . . 2 - 21
Exiting the Microsoft Dynamics GP Program . . . . . . . . . . . . . . . . . . . 2 - 22
Chapter Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 - 22
Preparation for Question Pages . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 - 24
Questions About Familiarization . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 - 25
oVerView oF MAiNteNANCe,
Chapter trANsACtioN ProCessiNg,
3 AND other ACtiVities
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-2
Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-2
Examine Existing Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . 3-3
Adding a New Record . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-7
Transaction Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-7
Correcting a Transaction Before Posting . . . . . . . . . . . . . . . . . . . 3-9
Deleting a Transaction Before Posting . . . . . . . . . . . . . . . . . . . . . 3 - 10
Correcting a Transaction After Posting . . . . . . . . . . . . . . . . . . . . 3 - 10
Other Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 - 11
Chapter Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 - 11
Questions About Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 - 13
Questions About Transaction Processing . . . . . . . . . . . . . . . . . . . . . 3 - 17
oVerView oF
Chapter oBtAiNiNg iNForMAtioN,
4 iNCluDiNg rePorts
Transaction and Other Information Review . . . . . . . . . . . . . . . . . . . . 4-2

Inquiry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-3
Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-5
Closing a List Window. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-6
Conclusions About Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-8
SmartList . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-8
iv CONTENTS

CoNteNts
oVerView oF
Chapter oBtAiNiNg iNForMAtioN,
4 iNCluDiNg rePorts (continued)
Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 - 11
General Ledger Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 - 12
Subsidiary Ledger Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 - 12
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 - 12
Chapter Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 - 12
Questions About Inquiry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 - 13
Questions About Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 - 17
Questions About SmartList . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 - 19
Requirements for Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 - 21
Chapter PrACtiCe —
5 MAiNteNANCe ACtiVities
Maintenance Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-2
Maintenance Practice Task #1 — Add a New Customer Record . . . . . . . . 5-4
Maintenance Practice Task #2 — Add a New Vendor Record . . . . . . . . . 5-8
Maintenance Practice Task #3 —
Change Information in an Existing Vendor Record . . . . . . . . . . . . . 5 - 12
Maintenance Practice Task #4 — Add a New Site Location Record . . . . . 5 - 14
Maintenance Practice Task #5 — Add a New Inventory Item Record . . . . . 5 - 16
Maintenance Practice Task #6 — Add a New Employee Record . . . . . . . . 5 - 22
Chapter Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 - 26
6 eXPeNDitures CyCle ACtiVities
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-3
Practice Transaction #1 —
Prepare a Purchase Order for Inventory Items . . . . . . . . . . . . . . . . 6-4
Receive Goods from a Purchase Order . . . . . . . . . . . . . . . . . . . . 6-6
Pay a Vendor’s Outstanding Invoice . . . . . . . . . . . . . . . . . . . . . . 6-9
Chapter Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 - 12
Problems Dealing with the Expenditures Cycle . . . . . . . . . . . . . . . . . . 6 - 13
CONTENTS v

CoNteNts
7 reVeNue CyCle ACtiVities
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-2
Practice Transaction #1 — Make a Credit Sale . . . . . . . . . . . . . . . . . . 7-3
Practice Transaction #2 — Receive Goods on a Sales Return . . . . . . . . . 7-6
Collect an Outstanding Account Receivable . . . . . . . . . . . . . . . . . 7 - 10
Chapter Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 - 14
Problems Dealing with the Revenue Cycle . . . . . . . . . . . . . . . . . . . . . 7 - 15
reCorDiNg trANsACtioNs
AND ADJustMeNts AND
Chapter PerForMiNg MoNth-eND AND
8 yeAr-eND ClosiNg ProCeDures
Option A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-3
Option B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 - 31
Option C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 - 63
Chapter
9 iNterNAl CoNtrols
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-2
Controls Over Processing Transactions . . . . . . . . . . . . . . . . . . . . . . . . . 9-3
Automatic Entry Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-3
Automatic Calculation and Posting Controls . . . . . . . . . . . . . . . . . . . 9-3
Complete Data Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-3
Valid Data Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-4
Exceeded Limits Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-4
Accounts Receivable Hold and Inactivate Controls . . . . . . . . . . . . . . . 9-4
Error Correction Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-4
Access Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-4
Adding and Deleting Users. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-4
Separation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-5
Restricting Access Using Security Roles . . . . . . . . . . . . . . . . . . . . . 9-5
Restricting Access to Parts of a Series . . . . . . . . . . . . . . . . . . . . . . 9-5
Restricting Access to System Changes . . . . . . . . . . . . . . . . . . . . . . 9-5
Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-7
vi CONTENTS

New Authors
New Authors
We are pleased to welcome two new authors to our 7th edition.
ClAire KAMM lAthAM, PhD, CPA, CFe, has been on the faculty at Washington State University
Vancouver since 1994. Formerly an auditor with Coopers & Lybrand, she has over 20 years in
teaching and presenting in internal control, accounting information systems, auditing, the
AICPA Code of Professional Conduct, professional ethics, accountant’s legal liability, financial
accounting, and CPA Exam preparation. Dr. Latham has mentored over 300 business-student
partnerships in her Accounting Information Systems and Internal Control class, which also
relies heavily on the Systems Understanding Aid and Computerized Accounting in the Cloud using
Microsoft Dynamics GP 2013.
Dr. Latham has been published in numerous journals including Research in Accounting Regulation;
the Journal of Forensic Accounting: Auditing, Fraud, and Taxation; Issues in Accounting Education;
Advances in Behavioral Accounting Research; and the Journal of Accounting Literature. Professor
Latham has twice been the recipient of the Washington State University College of Business
Outstanding Faculty Award and twice awarded Student Organization Instructor of the Year. She
serves as a Board Member of the Washington State University President’s Teaching Academy and
is currently Past President of the Western American Accounting Association.
MAry KAy CoPelAND, PhD, MBA, CPA, contributing author, teaches accounting and accounting
information systems at St. John Fisher College in Rochester, NY. Her research interests include
entrepreneurial finance, financial management and leadership, practice improvement in the
accounting profession, and ethical leadership. In addition to her work with Armond Dalton, she
has published twelve articles and one book chapter.
Prior to teaching, Dr. Copeland had a 30-year career in public accounting and consulting. During
this time, she founded and grew a regional consulting firm that provided software selection
and implementation services for several mid-market accounting software solutions, including
Microsoft Dynamics GP. Her expertise includes strategic financial planning, budgeting and
forecasting, management reporting, cost restructuring, process improvement, financial systems
implementations and optimization, business planning, and start-up consulting. She has developed
training classes and materials for Microsoft Dynamics GP for over 25 years.
NEW AUTHORS vii

ACKNowleDgMeNts
Acknowledgments
The help and involvement of Carol Borsum in all aspects of the project is immensely appreciated.
Also greatly prized are the exceptional efforts of Lynne Wood for word processing in preparation
of the manuscript, Patricia Naretta for extraordinary proofreading and other assistance, as well
as Jennifer Leverett and Aaron Borsum for their work in testing the materials with the cloud
software.
Finally, this cloud-based book would not be possible without the technical knowledge, guidance,
and extreme patience of Doug Pitcher from DynamicsCloud. Doug’s vision of having Microsoft
Dynamics GP available in the cloud for AIS and other students was the driving force behind this
book, and we cannot thank him enough for his ongoing contributions.
viii ACKNOWLEDGMENTS

Chapter 1
Materials Included in the Package . . . . . . . . . . . . . . . . . . . . . . . . . 1-2

System Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-3
Error Correction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-3
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-3
Key Activities Included in the Project . . . . . . . . . . . . . . . . . . . . . . . 1-5
Register with DynamicsCloud . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-6
Sign In to DynamicsCloud to
Access the Microsoft Dynamics GP Software . . . . . . . . . . . . . . . . 1 - 10
Sign out of Microsoft Dynamics GP and
DynamicsCloud at the End of Every Work Session . . . . . . . . . . . . . 1 - 14
Sign Back In to the System After an Unexpected Termination . . . . . . . . . 1 - 14
Helpful Hints and Troubleshooting Tips (a.k.a. README!) . . . . . . . . . . . 1 - 16

Chapter 1
Welcome to learning Microsoft Dynamics® GP. You will be using these materials to learn how to
use a sophisticated accounting package by following a carefully designed approach.
Materials included in the Package

The materials that you have purchased are made up of four items:
1. Instructions & Assignments Book — This book is the starting point for all assignments. It
will guide you through Microsoft Dynamics GP. Unless your course instructor informs
you otherwise, you should start with Chapter 1 and proceed through the materials
without skipping any parts.
2. One-time Use Code for Access to Cloud Software — The sticker in the lower-left corner of the
Instructions & Assignments book cover includes the one-time-use code you will need to
access the Microsoft Dynamics GP software and datasets via DynamicsCloud. The code is
hidden by a scratch-off coating in the middle of the sticker. Information about how to use
the cloud access code begins on page 1-7.
The software is a Web-based version of the Microsoft Dynamics GP 2013 program. This
version of the software is the same software used commercially by thousands of companies,
except that your cloud access is limited to 120 days after registration.
3. Reference Book — The Reference book provides instructions for using each of the windows
discussed in these materials. You will be referring to the Reference book frequently in
later chapters. You will be instructed when to use the Reference book as you go through
the Instructions book.
4. Reference Summary Card — The laminated Reference Summary Card is designed to help
you locate the appropriate pages in the Reference book for recording transactions or
doing other activities.
1–2 CHAPTER 1 — Introduction and Software Instructions

Chapter 1
system requirements
In order to access and work with the Microsoft Dynamics GP software via DynamicsCloud, your
computer must meet the following minimum system requirements.
r oPerAtiNg systeMs (both 32-bit and 64-bit) — Microsoft Windows® 8 Professional

Edition, Microsoft Windows® 8 Ultimate Edition, Microsoft Windows® 7 Professional
Edition, or Microsoft Windows® 7 Ultimate Edition
r iNterNet Browser — Up-to-date version of Internet Explorer, Google Chrome, or

Firefox. If using Internet Explorer, you must have Microsoft Silverlight® 5.0 installed.
r MiNiMuM AVAilABle rAM — 2 GB recommended

r CoMPAtiBle VersioNs oF MiCrosoFt oFFiCe — Microsoft® Office 2010 or higher
r other APPliCAtioNs — Microsoft .NET Framework® 4.0 or later
Note that although the system requirements listed above are for Windows machines,
DynamicsCloud technical support was able to successfully sign in to the system using a MacBook
Pro with Firefox as the browser.
error Correction
Instructions for correcting errors are located in Appendix A of the Reference book. In addition,
Microsoft Dynamics GP has an extensive Help menu you can use to learn more about specific
windows and functions within the program. The Help menu is discussed more fully in Chapter 2.
introduction
By doing this project you will learn about Microsoft Dynamics GP, which is a widely used
commercially available accounting software package used by many medium-sized and larger
companies throughout the world. More importantly, you will learn what this type of system
offers companies to more effectively operate their businesses. Some of the things you will learn
include the following:
r How to capture economic events and process them with Microsoft Dynamics GP.
r The effects of processing transactions on a wide variety of data files in the system that
help companies operate their businesses more effectively.
CHAPTER 1 — Introduction and Software Instructions 1–3

Chapter 1
r How to make inquires of the data files as a part of managing a business.

r The nature of the internal controls included in the system to prevent and detect errors.
r Ways the system helps a company process data and prepare reports efficiently and quickly.
r How a company enters information such as its general ledger, vendor, and customer
accounts into the system.
An important distinction between a paper system and computerized system such as Microsoft
Dynamics GP is that much of what takes place is not visible in a computerized system because it
is electronic. The challenge with this lack of visibility is that many students have difficulty
understanding what is happening in the system. This lack of understanding in turn causes many
users to either use the system improperly or fail to take advantage of all of its capabilities.
This project is intended to help you bridge the gap between what you know about a paper-based
and a computer-based accounting information system. The benefit to you is an enhanced ability
to contribute immediately to a business in a computer environment as an accountant, auditor, or
user of information generated by such a system.
As you go through the different learning steps, you will be asked to identify where and how data
are captured, do inquiries into the system to analyze the data, make customized changes to the
system, establish and test controls, and prepare traditional reports to support business decision
making. You will learn these things by following the guidance provided as you proceed through
the materials.
Three important characteristics of accounting software are (1) its ability to generate multiple-use
information without entering information more than once, (2) the incorporation of shortcut
methods to enter data, and (3) the embedding of internal controls in the software to detect and
prevent errors. There are hundreds of examples of all three characteristics in most accounting
software. An example of the first is the automatic update of sales and receivable reports, the
master file of accounts receivable, sales journal, general ledger, and inventory and accounts
receivable master files when a sales invoice is prepared. An example of the second is the automatic
inclusion of a customer’s name and address when the customer’s identification number is entered
in the system. An example of the third is the rejection of an accounting transaction where
relevant information, such as the customer’s name, is not entered for a transaction.
There is a wide variety of accounting software available for companies to purchase and modify
for their company’s needs. Examples of accounting software for small companies are Sage 50
Accounting and QuickBooks. The software used in this project, Microsoft Dynamics GP, is widely
used by larger businesses and is commercially available from Microsoft. The software is intended
for medium size and larger companies, but would probably not be appropriate for a Fortune 1000
company. The reason for selecting Microsoft Dynamics GP for this project is the relative ease of
using the program, while including some of the sophistication of more complex software.

Chapter 1
An important characteristic of Microsoft Dynamics GP is the ability to modify the software to

deal with small businesses or more complex ones. The authors have simplified the software to the
degree practical without eliminating its essential features.
Key Activities included in the Project

Accountants perform several types of activities when they use accounting software such as
Microsoft Dynamics GP to keep accounting records for companies. You will do many of these
activities during the project. These activities are introduced in Chapters 1 and 2 and are dealt
with more extensively in later assignments. It is very important that you go through Chapters 2
through 9 in consecutive order, as assignments build on each other. Following are key activities
you will be doing in the project:
r Register with DynamicsCloud and sign in to the system. The first step is to register with
DynamicsCloud using the one-time-use cloud access code from the front of the Instructions
& Assignments book.
r Enter the Microsoft Dynamics GP program and a company. You must be able to access Microsoft
Dynamics GP and the company for which you will be performing activities.
r Do maintenance. An important characteristic of accounting software is the automatic
performance of many mechanical activities by the computer. To permit the computer to
do these activities, maintenance is done to provide an adequate database of information.
For example, Microsoft Dynamics GP permits a user to enter a customer’s identification
number and the software will automatically include the customer’s name and address on
a sales invoice. In this example, maintenance is done to associate the customer name and
address with the customer identification number.
r Enter transactions, including all information needed for recordkeeping. Accountants spend
most of their time recording transactions. This is a major emphasis of the project. An
example of recordkeeping for transactions is entering data to bill customers for shipped
goods, preparing the sales invoice, and recording the sale and related accounts receivable,
including updating subsidiary records for accounts receivable and inventory.
r Inquire About Recorded Information. Management and other employees of companies
frequently need information about data in the system. For example, if a customer calls
about an apparent incorrect billing, it is important to respond quickly. Microsoft Dynamics
GP provides access to data in a variety of ways to permit many different types of inquiries.
r Review and Print Reports. Users of accounting information need reports in a proper format
with an adequate level of detail for their decision making. Examples include an aged trial
balance for accounts receivable, an income statement and a report of sales by sales person
or product. Microsoft Dynamics GP permits many different reports to be prepared and
printed and allows tailoring to meet users’ needs.

Chapter 1
register with DynamicsCloud
Note
For the entire project, the following symbol is used to indicate that you are to perform a step using your
computer:
Whenever you see this symbol in the left margin, you should complete the related step, which is shown
in italics. You should not begin doing an activity with your computer until the symbol is shown.
The Microsoft Dynamics GP software is now available in the cloud through DynamicsCloud.
After registering with DynamicsCloud and learning how to sign in and out of the system, you
will be able to access the Microsoft Dynamics GP software from any location that has an adequate
Internet connection. Because the software is in the cloud, and not installed on a hard drive, you
can access the software and datasets from any computer that meets the system requirements
listed on page 1-3.
PC users: As noted in the Helpful Hints and Troubleshooting Tips section on pages 1-16 through 1-19,
we recommend Google Chrome for your Internet browser.
Macintosh users: As noted in the Helpful Hints and Troubleshooting Tips section on pages 1-16 through
1-19, we recommend Firefox for your Internet browser.
To register with DynamicsCloud, complete the following steps:
Navigate to www.dynamicscloud.com. The following window opens.

Chapter 1
Click the Students tab (in the upper-left corner). Click “Sign up” to open the following
window.
Complete all of the information in the window, including selecting Armond Dalton in the
“Please select the book you purchased” box.
After selecting Armond Dalton’s book, the “Book code serial number” box becomes visible. This
is where you will type in the cloud access code from the bottom-left corner of the cover of this
book.
Note
If the book you purchased already has the scratch-off coating removed, you need to return your book
and purchase a new copy. As explained on page 1-2, the code can only be used one time for registration
and cloud access to the software.
Type the cloud access code from the front of the Instructions & Assignments Book into
the “Book code serial number” box.

Chapter 1
The following window illustrates a completed screen, except that X’s are used for the cloud access
code for presentation purposes. Review your screen to make sure all items are complete, including
the exact code from the front cover of this book.
When all of the information has been correctly entered, click Submit.
After submitting your information, the following Thank You window will open. It is important
to document this step for your instructor, so the next step asks you to take a screenshot of this
page.

Chapter 1
Before closing the Thank You window, click the PrntScr key on your keyboard (it is
usually located somewhere above your Backspace key), open Microsoft Word, and then
click Paste. (For Mac users, use the keyboard shortcut [Command] + [Shift] + [3] to
perform a screenshot.) Save the Word file as proof of your registration. Your instructor
will tell you what to do with the screenshot, but for now just save the Word file.
After registration, you will receive an email from DynamicsCloud no later than 9AM PST the
following business day. The email will include two user names: one for the DynamicsCloud login
(cloud login) and one for the Dynamics GP Web Client login (GP login). Note that the only
difference between the two is that the cloud login user name starts with “dynamicscloud\”.
Record your cloud login User Name here Record your GP login User Name here
The email will also include a password. Initially, you will use this password for both the cloud
login and the GP login. Later, you will change your GP password so that no other students can
access your work, but the original password will remain as your cloud login password. Write the
emailed password in the space provided below so that you know where to find it later.
Record the password provided in the DynamicsCloud email here

Chapter 1
sign in to DynamicsCloud to
Access the Microsoft Dynamics gP software
As discussed in the previous section, you should receive an email from DynamicsCloud that
includes your user names and a password. To sign in to DynamicsCloud, complete the following
steps:
Navigate to https://dynaa.dynamicscloud.com/GP/Views/LogOn.aspx. The following

DynamicsCloud sign in window appears:
Type your cloud login User Name (dynamicscloud\ws.001, for example) and password
into the appropriate boxes and click the Sign In button. The following welcome window
opens, although the Server box might be different on your screen.
1 – 10 CHAPTER 1 — Introduction and Software Instructions

Chapter 1
Type your GP login User Name (ws.001, for example) into the User ID box. Type the
password into the Password box. Click the OK button. After a few seconds, the Company
Login window opens.
Select Fabrikam, Inc., in the Company box and then click the OK button.
You will receive a message that you are using a sample company with the date automatically set
to April 12, 2017.
Click OK to acknowledge this message. Because this is your first login, the Select Home
Page window opens.
CHAPTER 1 — Introduction and Software Instructions 1 – 11

Chapter 1
The default Home Page layout shows Education for the Industry and Accounting Manager for
the Role. These settings are consistent with the materials in this project.
Click the OK button to accept the default settings for the Home Page.
The following Microsoft Dynamics GP main window opens.
If your screen is mainly blank with a generic description in the top-left corner (ws.0001’s HOME,
for example), you need to reset the Home Page.
If your Home Page is mainly blank, click any of the buttons in the bottom-left corner
(Financial, Sales, or Purchasing) and then click the Home button in that same lower-left
location. These steps should restore the Home Page so that it looks like the one above.
Next, you will access the User Preferences window to change the default report destination from
Printer to Screen. You will also use this window to change your GP password so that others
cannot access your work.
Click User Preferences in the upper-left corner, under the Home icon. The User Preferences
window shown on the following page opens:

Chapter 1
Change the default report destination from Printer to Screen in the middle of the window.
Click the Password button to open the following User Setup Password window.
Type the old password in the first box, and then type the new password in the remaining
two boxes. Click OK to return to the User Preferences window. Click OK again.
It is very important that you record your reset GP password below. If you forget this password or
your GP login does not work, contact your instructor first before contacting DynamicsCloud
technical support. Your instructor will have the ability to reset passwords.
Record your reset GP login password here
You will learn more about this Home Page, as well as all of the other a pages, in Chapter 2. For
now, we will concentrate on how to manage the cloud aspect of this project. The next two sections
cover how to properly sign out of a work session and sign back in when the previous session was
terminated unexpectedly.

Chapter 1
sign out of Microsoft Dynamics gP and

DynamicsCloud at the end of every work session
Because there are hundreds of students working with DynamicsCloud at any given time during
each semester, it is important that you remember to sign out of the system every time you are
done with a work session. Doing so will help ensure that the cloud resources are sufficient for
everyone throughout the semester. Signing out of the system is simple.
To sign out of both Microsoft Dynamics GP and DynamicsCloud, click Sign Out in the
upper-right corner of the Microsoft Dynamics GP main page. After a successful sign-
out, the following window opens:
Notice that this screen includes a message that says “You have been successfully signed out. Enter
your credentials again to sign in or close your browser.” When you see this screen and this
message, you know you have successfully signed out.
Occasionally, a work session will be unexpectedly terminated because of Internet connection or
other issues. The next section discusses the procedures you need to follow to sign back in to the
system.
sign Back in to the system

After an unexpected termination
If your previous work session terminated before were able to sign off properly, you will see a
screen similar to the following when you attempt to log back in to DynamicsCloud:

Chapter 1
Your screen will have different information on it, and yours might also show multiple work
sessions that are still on record. Either way, you can choose to connect to a previous session or
create a new session. Whenever possible, choose to reconnect to an existing session. Doing so
will avoid confusion and minimize the number of open sessions you have in the system.
To connect to an existing session, click on the line that contains the session information
and then click the Connect to Existing Session button.
To start a new session, click the Create New Session button.
If there was an unexpected termination and you subsequently create a new session, you will
likely receive the following error message when attempting to open the company that was open
just prior to termination:
This screen lists all companies that still have an open session. You can delete the session that is
blocking you from accessing a company.
Click Yes if you want to continue trying to log in to the company listed on the screen. This
opens a window that lists all of the current login activity for your User Name.
Click once on the line for the company you are attempting to open, and then click the
Delete button. You should now be able to open the company to continue your work.

Chapter 1
helpful hints and troubleshooting tips (a.k.a. README!)
Having the Microsoft Dynamics GP software in the cloud eliminates many of the technical issues
that instructors and students experienced in the past when the software had to be loaded in a
computer lab and/or on the students’ individual computers. Despite the vast improvements that
having the software in the cloud provides, some issues may arise while you are working with the
software in this environment. This section is designed to give you some tips to make your
experience with using the software in the cloud a smoother and more productive one. During
our preparation of this book, we also identified several hints and troubleshooting strategies that
will reduce your time and frustration.
Note
PLEASE READ THIS ENTIRE SECTION CAREFULLY BEFORE YOU START WORKING WITH
THE MICROSOFT DYNAMICS GP SOFTWARE VIA DYNAMICSCLOUD.
1. Reset your GP Login Password if You Haven’t Already Done So — Because all students initially
have the same password for their GP logins (the second login), you should reset your GP
login password before starting any work in the project. Instructions for resetting your GP
Login password are included on pages 1-12 and 1-13.
2. Preferred Browsers — While the system requirements state that Internet Explorer (with
Silverlight 5) is supported, our experience has shown that PC users should use Google
Chrome and Mac users should use Firefox. During the testing phase of this project,
Internet Explorer appeared to cause some issues for PC users, while Google Chrome did
not. When we tested the system with a Mac Book Pro, it would only work with Firefox.
3. Help Menu Not Visible with Popup Blocker Running — If you are having trouble viewing any
aspect of the Help menu, check to make sure that your system is allowing popups from
DynamicsCloud. If it is blocking popups from DynamicsCloud, change the settings so that
popups from this site are allowed. This should reinstate full Help Menu functionality.
4. Students Share One Fabrikam, Inc., Database – Although each student has his/her own
Waren Sports Supply database for use in Chapter 8, all students are each school share one
Fabrikam, Inc., database. While this provides an important teaching point that makes
this project comparable to the real world, it can also cause some issues in the classroom.
Great care has been taken in writing these materials so that multiple students can work
through the same transaction without interfering with each other’s work. However, you
also need to do your part. It is imperative that you carefully follow the instructions in
Chapters 2 through 7 whenever you are working in Fabrikam. Anything you do to the
dataset will affect all students at your school. Consult your professor if you do not fully
understand this concept as it relates to Fabrikam.

Chapter 1
5. No Backup/Restore Option for Students — In the desktop version of the software that was
used in prior editions, students could choose to back up their company data files at any
time. Students could also restore a previous backup of a company if they decided to start
over with a chapter’s requirements. No such options exist for the Web client of the
Microsoft Dynamics GP software. It is in your best interest (and your fellow classmates’
best interests) for you to carefully read the Reference book instructions for every
transaction or other activity in the project. We encourage you to use the Quick Reference
Tables, the window illustrations, and the Detailed Instructions for each section. Doing so
will help you avoid having to pay the $10 fee for restoring Waren (see item #6). Because
Fabrikam is shared by all students, it will only be restored if your instructor makes special
arrangements with DynamicsCloud technical support.
6. $10 Restore Fee for Waren — If you make a series of errors while completing the Chapter 8
requirements for Waren Sports Supply, you can request that DynamicsCloud technical
support restore the Waren dataset for a $10 fee. Contact support@dynamicscloud.com for
instructions to start this process.
7. The Order of Chapters 5 through 9 is Important — Your instructor will provide you with
instructions for completing the chapter requirements. Please note that because (1) all
students will be sharing one Fabrikam and (2) there is no backup/restore option in the
Dynamics GP Web client, it is important that you complete Chapters 5 through 9 in the
order they appear in the textbook. For example, do not attempt to complete Chapter 9 on
Internal Controls prior to completing Chapter 8 with Waren Sports Supply. Some of the
tasks you will complete in Chapter 9 could alter the Waren dataset so that you cannot
complete Chapter 8. Consult your syllabus carefully.
8. Be Prepared to Take Screenshots throughout the Project — You have already captured one
screenshot during the registration process. See the instructions on page 1-9 for how to
efficiently capture a screenshot. Make sure you are comfortable with those procedures
before you start the project. Several chapter requirements ask you to save a screenshot for
your instructor’s later review.
9. Close All Report and Other Windows when you are Done Working with Them — Several times
throughout the project, you will print various reports to the screen for your review. When
you are done viewing a report window, close the report. If a report remains open, you will
not be able to generate another report. Reports and other windows that are still open
show at the bottom of the Microsoft Dynamics GP window, near the company name and
your user name. These items are shown as a small computer screen icon with the Microsoft
Dynamics GP logo on them ( ). To view an item that is open, move your cursor over the
icon. A smaller version of the report or window will appear near the icon so that you can
tell what it is. You can close the report or other window by clicking on the red X in the
top-right corner of the smaller version of the open window.

Chapter 1
10. Your Computer Freezes During a Work Session — Occasionally your computer will freeze
while working in the cloud. Do not panic! If your computer freezes and you cannot sign
out normally, simply click on the in the top corner of the main Microsoft Dynamics GP
window. The following window appears:
Click the Leave this Page button. Then follow the instructions in the previous section on
pages 1-14 and 1-15 to sign back in to the system after an unexpected termination.
11. Your Work Session Terminates Unexpectedly — Occasionally a work session terminates
unexpectedly because of Internet connection or other application errors. When this
happens, an Application Error window such as the following will appear on the screen.
Do not panic!
Click the in the top-right corner of the Microsoft Dynamics GP main window. Click the
Leave this Page button. Follow the instructions in the previous section on pages 1-14 and
1-15 to sign back in to the system after an unexpected termination.

Chapter 1
12. Save Excel Files to your Desktop — Some of the problems in this project require you to save
an Excel file. It is much easier for you to save the Excel file to your desktop than to work
with the Microsoft Dynamics GP program restraints for saving the Excel files.
13. Technical Support — If you have carefully reviewed the previous items in this list and have
not found an answer to a software issue you’re experiencing, please send an email to
support@dynamicscloud.com. All homework-related questions should be directed to
your instructor. The technical support available through DynamicsCloud is for cloud
and software issues only.

This page is intentionally blank.

Chapter 2
Entering the Microsoft Dynamics GP Program and Opening a Company . . 2-2

Opening Another Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-5
Application Window Content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-5
Using and Customizing Navigation Pane Buttons . . . . . . . . . . . . . . . . 2-6
Functional Areas and Cycles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-8
Microsoft Dynamics GP Categories . . . . . . . . . . . . . . . . . . . . . . . . . 2-8
Summary of Categories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 - 10
Practice Selecting Windows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 - 10
A Typical Microsoft Dynamics GP Window . . . . . . . . . . . . . . . . . . . . 2 - 12
Moving Through Boxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 - 13
Entering Information into Boxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 - 15
Microsoft Dynamics GP Help Menu . . . . . . . . . . . . . . . . . . . . . . . . . 2 - 21
Microsoft Dynamics GP Help Menu Practice . . . . . . . . . . . . . . . . . . . 2 - 21
Exiting the Microsoft Dynamics GP Program . . . . . . . . . . . . . . . . . . . 2 - 22
Chapter Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 - 22
Preparation for Question Pages . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 - 24
Questions About Familiarization . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 - 25

Chapter 2
This chapter illustrates features of Microsoft Dynamics GP and provides practice using the
program so that you will be able to complete assignments for the project. Do not skip this chapter.
The discussion assumes that you have a working knowledge of Windows. If you need additional
guidance for using Windows, consult your Windows user manual.
entering the Microsoft Dynamics gP Program

and opening a Company
Starting now, you will be using the computer to perform tasks with Microsoft Dynamics GP. In
this chapter, the instructions are reasonably detailed to make certain that you understand how
to use Microsoft Dynamics GP correctly and efficiently.
The Instructions book and the Reference book provide instructions and display window
illustrations in a Windows XP 7 format. If you are using another version of Windows, certain
window functions and the appearance of the windows will differ slightly. However, the Microsoft
Dynamics GP elements and functions are identical between different versions of Windows.
Do not be concerned about making mistakes while performing familiarization activities in this
chapter. It is important that you practice each activity and learn by doing.
Sign in to DynamicsCloud following the instructions in Chapter 1. When you have

successfully signed in, the following Company Login window opens:
2–2 CHAPTER 2 — Familiarization

Chapter 2
This window is used to select the company you want to work with.
Use the Company drop-down list button to select the sample company, Fabrikam, and
click the OK button at the bottom of the window.
The following Microsoft Dynamics GP Home application window appears. Note: Your window
may show different tasks.
Click OK when you receive a message that you’re using a sample company with a 2017
year-end.
Observe that the bottom-left portion of the window provides the default date of April 12, 2017,
for Fabrikam ( the company you now have open) or the current date for Waren Sports Supply and
your user ID. The company name is especially useful because it shows which company you have
accessed. This is helpful to you because you will work with two different companies throughout
this project.
You will change the date several times in these materials when you begin processing transactions.
It is easy to do.
Click anywhere on the date in the bottom-left corner of the window to open the User
Date window shown on the following page.
CHAPTER 2 — Familiarization 2–3

Chapter 2
The date can be changed in two different ways.
If the date is not already highlighted, move the cursor over the entire date in the window
to highlight it.
Type 70614 and then click OK to change the date to July 6, 2014. This date will remain as
the user date until you change it again or close the program. When you close and reopen
the program, the user date defaults to the April 12, 2017, for Fabrikam or the current
date for Waren Sports Supply.
or
Click on the square marked 15. A calendar will pop up highlighting the current date ( or
July 6, 2014, if you have not changed back to the current date). You can select any day,
month, and year by highlighting that date and clicking the OK button.
Note
You will use these methods to enter dates in different date windows throughout the project. Note that
for the month you need not enter a zero for the first nine months of a year, but you must always enter a
zero for the first nine days of a month.
The Home application window is important in using Microsoft Dynamics GP because it is the
starting point for all other activities when you first open a company. You must feel comfortable
entering and exiting the window.
Click sign out in the top-right corner to exit the program. Reopen the Microsoft Dynamics
GP program and Fabrikam again.
Repeat these steps until you feel comfortable that you can sign out and enter the Microsoft
Dynamics GP Home application window and access Fabrikam.

Chapter 2
opening Another Company

Click the Fabrikam company name in the lower-left corner. The Company Login window
will appear. In the Company Login window, click the drop-down list arrow to the right of
Company. Click Waren Sports Supply to highlight that company and click OK. Observe
that Waren Sports Supply is now shown on the lower-left side of the window when that
company’s Home application window is opened.
Change the Company back to Fabrikam.
Application window Content

The opening window when you first open a company, and when you select an area such as Sales
to work in, is an application window. You therefore need to understand its content and how to
use that content.
Click the Sales button on the bottom-left side of the window to open the Sales application
window. You should see the following window, without the circled letters.
C
A
B
D D D
B1 e e e
D D D
B2 e e e
Following is a description of the parts of the window that you will be concerned with. These are
all included in one place for your future reference.
A Application window — This is the name for the entire window. The Sales application
window is now open. Sales is included in several places in the window to indicate that
it is open.

Chapter 2
B Navigation pane — Included on the left side of the application window. It includes two
parts:
B1 Navigation pane lists — Used to select lists for obtaining information in data files.
Sales lists is now open. You will use lists in Chapter 3.
B2 Navigation pane buttons — Used to select the area page. The Sales Navigation Pane
button is now highlighted.
C Content pane — Used to select categories within area pages. The Sales area page is now
open.
D Categories — Used to divide area pages into broad categories. The categories include:
Transactions, Cards, Reports, Inquiry, Routines, Utilities, and Setup. You may have to
scroll down to see Setup. You will use the first five of these categories extensively, so
they are circled in the Sales area page illustration on page 2-5.
e Tasks — Used to select the window in which the user performs one or more activities
within a category. For example, the Sales Transaction Entry window is opened by
selecting the Sales Transaction Entry task within the Transactions category of the Sales
area page.
F Status bar — Shows the date, the company that is open, and the user ID.
using and Customizing Navigation Pane Buttons

Every activity in Microsoft Dynamics GP involves using one or more windows. There are dozens
of windows in Microsoft Dynamics GP, with each permitting an efficient and effective way to
perform activities. The following two sections deal with how you will open windows in Microsoft
Dynamics GP.
There is more than one way to open a Microsoft Dynamics GP window. To keep the materials as
simple as possible you will be shown only one way.
You will use the Navigation Pane buttons extensively in these materials as the first step to open
windows. You clicked the Sales Navigation Pane button earlier to open the Sales area page. You
can see that the Sales Navigation Pane button is highlighted and Sales appears several times in
the page.
Click the Purchasing Navigation Pane button to open the Purchasing area page. Click
other Navigation Pane buttons and again see that a different area page is opened with
similar characteristics, except the name changes.

Chapter 2
Because you will be using these Navigation Pane buttons throughout the book, it is desirable to
have the ones you will use conveniently displayed.
Click the single arrow button pointing downward on the bottom of the Navigation Pane.
Click Navigation Pane Options to open the Navigation Pane Options window shown
below. Do not be concerned if the order is slightly different in your window.
Remove the check marks from Administration, Manufacturing, Project, and Field
Service.
Next, use the Move Up and Move Down buttons to move the following five options to the
top of the list, in the following order: Financial, Sales, Purchasing, Inventory, and HR &
Payroll, then click OK to close the Navigation Pane Options window. You will see the HR
& Payroll buttons now in the displayed list of buttons ( Note: You may need to maximize
the Navigation Pane buttons area by putting your cursor over the line above Home and
moving the line up slightly ). If HR & Payroll is not visible in the pane, you will see the
HR & Payroll symbol directly below the pane.
If the Navigation Pane buttons are not displayed in the order listed earlier ( Home,
Financial, Sales, Purchasing, Inventory, and HR & Payroll ), use the buttons in the
window to put them in that order now. These Navigation Pane buttons will now be in
the same order for both Fabrikam and Waren Sports Supply.

Chapter 2
Functional Areas and Cycles

The five Navigation Buttons listed after Home are called functional areas: Financial, Sales,
Purchasing, Inventory, and HR & Payroll. It is useful to think of the last four functional areas as
representing accounting cycles, a term that is commonly used to describe different parts of an
accounting system.
The four most common cycles in accounting systems are the following:
1. Sales and cash receipts ( Sales in Microsoft Dynamics GP )
2. Purchases and payments ( Purchasing in Microsoft Dynamics GP )
3. Inventory ( Inventory in Microsoft Dynamics GP )
4. Payroll ( HR & Payroll in Microsoft Dynamics GP )
The Financial button is used in these materials, but it is not a cycle. The Home button is not used,
but it is the opening contents page for all companies.
Microsoft Dynamics gP Categories

The reasons why companies use computerized accounting software such as Microsoft Dynamics GP
are to process accounting information that results in transactions and to obtain information from
the system that is useful to management and other users. An example of processing information
is to process the shipment of goods that results in a sales invoice and recording the sale in the
general ledger and accounts receivable master file. An example of obtaining information is to print
a list of all sales transactions for a week and the balances in accounts receivable at a point in time.
Click the Sales Navigation Pane button and examine the Sales page shown below.
(T) (C) (RE)
(I) (RO)

Chapter 2
There are five circled categories shown in the Sales area page and two similar ones that are not
circled. ( Note: Utilities and Setup may not be visible on the screen, but you can see them if you
use the scroll bar on the right side of the window). All seven are called categories. Utilities and
Setup are not discussed in the early chapters of the book. All of the five circled categories are
used throughout the book. The following describes these five categories. The first letter (or first
two letters for Reports and Routines ) of each category is included in parentheses and is used later
to identify the category.
1. trANsACtioNs ( t ) — Includes a list of tasks that are used to open windows in which
transactions are processed. Processing a shipment of goods is an example of processing a
transaction. Most of the work performed for this project is done through Transactions.
2. CArDs ( C ) — Includes a list of items that are used to open windows to create and maintain
master file information, such as customer and vendor records.
3. rePorts ( re ) — Includes a list of items that are used to open windows to view or print
reports.
4. iNquiry ( i ) — Includes a list of items that are used to open windows to review information
in the system for recorded transactions and other records.
5. routiNes ( ro ) — Includes a list of items that are used for items such as aging receivables,
preparing monthly customer statements, and performing year-end closing procedures.
Each category has a list of items or tasks shown below the category name to select from. You can
hide the list of items or tasks.
Click the up arrow to the far right of the Inquiry category to close the list. Then click other
up and down arrows until you feel comfortable opening and closing the lists. Items and
tasks on these lists are used to select the Microsoft Dynamics GP window the user
wants to use to process transactions or obtain information.
The materials use the following to instruct you to open the Sales Transaction Entry window:
Click Sales Transactions Sales Transaction Entry. This means that you are to click
the Sales Navigation Pane button to open the Sales area page first. When the Sales area
page opens, you are to then locate the Transactions category ( T in the previous
illustration) and then click the Sales Transaction Entry task within the category.
Click Sales (not necessary at this time because you are already in the Sales area page)
Sales Transaction Entry in the Transactions category. This opens the Sales Transaction
Entry window in the content pane.
Close the Sales Transaction Entry window.

Chapter 2
Click the HR & Payroll button on the Navigation pane. Observe that the same categories
are included with different tasks. Only payroll tasks are included because HR tasks do
not focus on accounting activity and, as such, are not accessed in this project.
Open other windows using the Navigation pane buttons and note that most have the
same five categories that were circled in the illustration on page 2-8, but the order of the
categories in the window varies.
summary of Categories
The matrix below summarizes the five area pages and the five most commonly used categories
within each area page. The last four items listed in the first column represent Microsoft Dynamics
GP’s labeling of cycles. The item in each box of the matrix is the item listed first for each category
in the area page.
CAtegory
Area Page Transactions Cards Reports Inquiry Routines
Financial General Account F i n a n c i a l Summary Reconcile to GL
Statements
Sales Sales Transaction Customer Trial Balance Transaction Post Scheduled

Entry by Customer Payments
Purchasing Purchase Order Vendor Trial Balance Transaction Post Scheduled

Entry by Vendor Payments
Inventory Transaction Entry Item Item Item Year-End Close
HR & Payroll Transaction Entry Employee Employee Lists Check History Year-End Closing
Before proceeding, click the Sales Navigation Pane button to open the Sales area page.
Practice selecting windows

To practice accessing Microsoft Dynamics GP windows using the Navigation Pane and lists
complete the following steps:
Click Sales Transactions Cash Receipts to access the Cash Receipts Entry window,
which is shown on the following page. You may need to use the small scroll bar within
the Transactions category to find the Cash Receipts Entry selection.
This window is used to enter a cash receipt. The top of the window should read Cash Receipts
Entry. Again, do not worry if your window contains different default data.
2 – 10 CHAPTER 2 — Familiarization

Chapter 2
Click the Minimize button on the top of the Cash Receipts Entry window to hide the
window.
Move your mouse over the taskbar at the bottom of the screen. You can see that the Cash
Receipts window is listed there.
Click the Cash Receipts Entry button on the bottom of the screen to restore the window.
Close the Cash Receipts Entry window to return to the Sales page by clicking the in the
top-right corner of the Cash Receipts Entry window.
Click Inventory Cards Item to access the Item Maintenance window. This window
is used to add, delete, or modify an inventory item. Do not close this window yet.
Click Financial Reports Financial Statements to access the Financial Statement
Report window. Notice that the Item Maintenance window is now behind the Financial
Statement Report window. But, the window did not close. Additionally, both the Item
Maintenance and Financial Statement Report windows are at the bottom of the
financial page the same as when you use minimize. You can switch back and forth
between the windows by clicking on either button at the bottom of the financial page.
This happens regardless of the Navigation Pane button you click.
Close both the Financial Statement Report and Item Maintenance windows to return to
the Microsoft Dynamics GP window.
CHAPTER 2 — Familiarization 2 – 11

Chapter 2
Note
Both this book and the Reference book contain several sections with instructions for recording
transactions and performing maintenance and other tasks using Microsoft Dynamics GP windows. To
limit repetition in the project, the two books do not instruct you to close each window when you have
finished recording a transaction, completing maintenance, or other tasks. When you are done using a
window, close it by using the in the top-right corner of the window.
A typical Microsoft Dynamics gP window

In this section, you will explore a typical Microsoft Dynamics GP window and practice using
some common features. You will be using Transactions to learn about these features, but they
also apply to the other activities you will be doing later.
Click Sales Transactions Sales Transaction Entry.
The Sales Transaction Entry window appears on the screen. Your window should look like the
one on page 2-15, except it will not include the circled letters and will have slightly different
default information. This window is an example of a typical window for recording transactions
in Microsoft Dynamics GP. You will be using this type of window extensively in later assignments.
Click the maximize button to maximize the view of the window. You should do that for
all windows to see all of the information on the window. Notice that the Sales
Transaction Entry button is on the bottom of the screen.
You will now use the Sales Transaction Entry window to examine common Microsoft Dynamics
GP features. The window includes many description fields, entry boxes that are completed with
default information, empty entry boxes, and various symbols. These will be explained in the
next few pages and you will practice using them.
r Description fields. These fields include labels which describe the information that must
be typed, selected, or accepted to complete the window. For example, Type/Type ID,
Document No., and Date are all description fields in the Sales Transaction Entry window
on your screen and on page 2-15.
r Entry boxes. Entry boxes are typically located to the right or directly below the
description fields, but are sometimes located elsewhere. For example, the word “Quote”
is included in the entry box directly to the right of the description field “Type /Type
ID,” whereas the entry box next to Batch ID is blank. At the bottom right of the window,
there are entry boxes with zeroes in them to the right of Trade Discount, Freight, and
so on. For simplicity, the term “box” will be used throughout the remainder of the project,
instead of “entry box.”

Chapter 2
r Default information. Observe that the Type/Type ID box now includes “Quote.” Quote
is the default setting for Type/Type ID box, which means that you can accept Quote in
that box without entering any information. The Type/Type ID drop-down menu includes
other types such as Invoice, which will be used a great deal. Default settings are established
through maintenance to reduce the time needed to enter information. Default settings
are one of the most important benefits of using computerized accounting software.
Moving through Boxes

The simplest way to move forward through the boxes is to use the Tab key. You may also use the
Tab key to move the cursor backward through boxes that already include information or ones
that have been skipped. If you use this approach, hold the Shift key down while pressing the Tab
key. You may also use the mouse to move the cursor. For now, you are only learning to use Tab
and Shift/Tab keys without concern for the contents of the boxes.
Use the drop-down menu for Type/Type ID and select invoice.

Move to the Customer ID box using the Tab key three times.
Next, hold the Shift key down and press [Tab] only once to move the cursor back to the
Type/Type ID box.
Practice using the Tab and Shift/Tab keys to move through boxes. You can also use the
mouse to enter boxes, but be aware that sometimes you need to enter information into
previous boxes before Microsoft Dynamics GP will let you move to subsequent boxes in
a window.
Observe that the Customer ID description field, as well as other description fields in the window,
is shown in bold. This indicates that these are required boxes and you must enter data in them
before completing the window, and in some cases, before moving beyond them. Observe that in
addition to Customer ID, Type/Type ID, Document No., Date, Customer Name, and Currency
ID are all required boxes.
To summarize, note that you can move successfully through a window by using the Tab key (and
Shift/Tab keys for reverse movement) or you can enter boxes in any order you choose by using
the mouse.
You should not use the Return key on the keyboard to move through boxes. To show why, do the
following:
Open the Sales Transaction Entry window if it is not already open. With the cursor in
any one of the boxes, press the Return key. You should get an error window which
says, “Please enter a batch ID.” Attempting to use [Return] in a window causes
Microsoft Dynamics GP to attempt to save the entire transaction, rather than the

Chapter 2
contents of the box.

Click the OK button to remove the error message and return to the Sales Transaction
Entry window.
Close the Sales Transaction Entry window that you’ve been practicing in by clicking the
in the top-right corner of the transaction window. If you get a window asking if you
want to save or delete this document, click the Delete button.
Return to the Sales Transaction Entry window by clicking Sales Transactions Sales
Transaction Entry. Observe that you now have an empty Sales Transaction Entry
window.
Use the drop-down menu for Type/Type ID and select Invoice.
Note
In most Microsoft Dynamics GP windows used in this project, there are boxes in which you do not need
to enter information. Either the default information is correct or the information is not applicable to the
transactions. The Reference book instructions for recording each type of transaction in Microsoft
Dynamics GP focus on boxes in which you need to perform some type of activity, such as typing
information or selecting an option from a list of available choices. If a box is not discussed, you do not
have to do anything with that box. For example, if the document number box is not mentioned in the
instructions for a specific Microsoft Dynamics GP window, the default entry is correct and you can
therefore move to the next box.
Next, the inclusion of default information in boxes is discussed. Observe that the Type /Type ID
box includes the word “Invoice” and the Document No. box is blank.
Tab to the Document No. box. Observe that a document number — STDINV 2262, for
example — appears in the Document No. box. Note: Because all students are working
with the same Fabrikam database, your document number may be different than the
one listed here. It does not matter what the actual document number is on your screen
for this activity.
You have moved to a second box and, by doing so, you have accepted Invoice as the default
setting for the Type/Type ID box.
Later, there is a discussion and illustration of changing the contents of a box that includes default
information.

Chapter 2
entering information into Boxes

There are different ways to enter information into the boxes of a window or show that information.
The circled letters A through i in the diagram of the Sales Transaction Entry window shown
below correspond with the discussion in the following nine sections: drop-down list buttons,
lookup buttons, date boxes, text boxes, show details and hide details buttons, check boxes,
expansion buttons, link feature, and additional window buttons ( letter F is shown in the
illustration on page 2-18 ). Finally, the refresh function is explained, even though it cannot be
illustrated in the Sales Transaction Entry window that follows.
i
A C
D
B
e
g
h
A DroP-DowN list ButtoNs

Drop-down list buttons are identifiable by a down arrow button, as shown above. Clicking
the drop-down list button allows you to see a list of available choices to select for a box. To
select an item from a drop-down list, click once on the item.
An example of a drop-down list button in the Sales Transaction Entry window is the first
box in the window, the Type/Type ID box. To practice using the Document Type drop-down
list button, complete the following steps:
Make sure you are still in the Sales Transaction Entry window.

Chapter 2
Click once on the Type/Type ID drop-down list button. A list of available document
types appears in the box.
Click once on Return. To the right of the box that has Return in it, you will see the
abbreviation, RTN.
Click the Document Type drop-down list button again and select Invoice as the
option. Observe the abbreviation changes to STDINV. Click on the Document No.
and note it changes to the next default invoice number.
B looKuP ButtoNs
Lookup buttons are identifiable by a magnifying glass symbol. They are an extremely handy
and often-used feature in Microsoft Dynamics GP. Clicking a lookup button allows you to see
a list of available choices for the adjacent box. An example of a lookup button in the Sales
Transaction Entry window is next to the Customer ID box.
To practice using a lookup button, complete the following steps:
Click once on the Customer ID lookup button. The Customers and Prospects
window appears with a listing of all customers for the sample company.
Locate the up/down scrolling arrows on the right side of the Customers and Prospects
window. Use the down arrow button to locate Nova Systems, Inc., Customer ID
NOVASYST0001, and double-click on its line.
Note
There is more than one way to complete many activities in Microsoft Dynamics GP. For example, an
alternative way to select Nova Systems, Inc., is to click once on the line containing NOVASYST0001 to
highlight it and to click the Select arrow symbol at the top of the Customers and Prospects window.
Assume that the goods sold to Nova Systems, Inc., will be shipped from a different location
than that listed in the Default Site box for them (WAREHOUSE).
Click the Default Site ID lookup button (next to the Default Site ID description
field ). WAREHOUSE (Main Site) is highlighted because it is the default entry.
Click the up arrow on the right side of the Sites scrolling window to show another
location, NORTH. Double-click NORTH and the Default Site ID box will now show
NORTH.
Click the Default Site lookup button again and select the WAREHOUSE location.
For additional practice using lookup buttons, use the lookup button for Item Number to bill
the customer for one keyboard, item #3-B3813A.

Chapter 2
Click the Item Number lookup button, highlight item #3-B3813A, and click on select
in the upper-left corner. Alternatively, you can double-click on the item. Note that
you need to scroll down the list of inventory items using the down arrow button to
find the item.
C DAte BoXes
Most Microsoft Dynamics GP windows include Date boxes for entering the date of transactions.
To change the date, move to the Date box, make sure the entire date is highlighted ( you may
have to use the mouse to highlight the date ), and type the date or use the calendar feature
described earlier. Recall that for the month you do not need to enter a zero for the first nine
months of a year, but you must always enter a zero for the first 9 days of a month.
D teXt BoXes
Text boxes are boxes into which you type data. An example of a text box in the Sales
Transaction Entry window is the Customer PO Number box. Nova Systems, Inc., issued
purchase order #RQ68295 for the sale.
Click the Customer PO Number box to enter the box.

Type [RQ68295] in the Customer PO Number box. The purchase order number
should appear in the Customer PO Number text box.
e show DetAils AND hiDe DetAils ButtoNs

You will use the Show Details and Hide Details buttons to provide additional information
on the order.
Click the Show Details button to the right of Extended Price.

Note: The first row of description fields includes: Item Number, D, U of M, Invoice Quantity,
Unit Price, and Extended Price. Below this first row you see additional description fields
such as Description, Markdown, Unit Cost, Requested Ship Date, and Quantity Fulfilled.
To hide the additional lines of information once the Show Details button ( ) has been
clicked, click the Hide Details button ( ).
Click the Hide Details button and then click the Show Details button before moving
to the next section.
The expanded window should appear as shown at the top of the following page:

Chapter 2
F CheCK BoXes
A check box represents an option that is chosen when the box is checked. To “check” such a
box or to remove an existing check mark, click once on the box. For example, in the Sales
Transaction Entry window, the D box ( located between the Item Number and U of M boxes)
is a check box. The D box refers to “Drop Shipment.” Drop Shipment allows you to buy
products individually from a wholesaler and ship them directly to your customer. To practice
using the check box, complete the following:
Click once on the D check box. Observe that a check mark is placed there.
Remove the check by clicking the check box again. Be sure the box is unchecked
before continuing.
g eXPANsioN ButtoNs
An expansion button is used to open a window where information for the box next to the
expansion button can be added, changed, or viewed. In the Sales Transaction Entry window,
an expansion button appears to the right of the Markdown description field. Nova Systems,
Inc. will receive a ten percent markdown on the keyboard. To practice using the expansion
button, complete the following steps:
Click the Markdown expansion button. The Sales Markdown Entry window appears
as shown at the top of the following page.

Chapter 2
Change the markdown from zero to ten percent (10.00%) and click the OK button to
return to the Invoice Entry window. Notice that a ten percent markdown, $10.00,
appears in the Markdown box.
h liNK FeAture
While working in Microsoft Dynamics GP, you will notice that sometimes the cursor turns
into a hand when it passes over certain description fields within a window. The hand indicates
that additional information is available for those fields. When you click the hand on such a
field, the program links (zooms) to a window containing additional information. Link fields
are shown in an underlined font in all windows.
When a link field contains an account balance, you can go all the way back to an originating
transaction window. Link fields containing other information are used to access master file
records, such as customer and vendor records.
Complete the following steps to practice the link feature:
Move the cursor over the Customer ID description field. Note that the cursor must
be directly over the words “Customer ID,” not in the Customer ID entry box. When
the cursor turns into a hand, click once.

Chapter 2
The name of the window that this field links to — Customer Maintenance — shows under the
Customer ID description field.
Click once on “Customer Maintenance.”
The Customer Maintenance window for Nova Systems, Inc., appears on the screen. This
window contains the customer record for Nova Systems, Inc., and is used to view, add, delete,
or change default information for the customer.
Close the Customer Maintenance window to return to the Sales Transaction Entry
window.
i ADDitioNAl wiNDow ButtoNs

To record a transaction in Microsoft Dynamics GP, you must often enter information into
two or more windows. When more than one window is needed to record a transaction,
Microsoft Dynamics GP makes it easy to access the additional window(s) by using the menu
at the top of the main transaction entry window.
For example, in the Sales Transaction Entry window, the Go To menu at the top of the
window contains four additional items: Holds, User-Defined, Distributions, and
Commissions. You will practice using the Distributions option because it appears in many
Microsoft Dynamics GP windows and is necessary to enter general ledger posting information
for most transactions.
Click the Distributions option. The Sales Distribution Entry window appears.
Microsoft Dynamics GP has already distributed the sales transaction to various
general ledger accounts using information it has on file for the selected customer
and inventory items sold.
The default posting account for the markdown is account MARK, but assume the markdown
for this transaction should be posted to account MISC, miscellaneous. Complete the
following steps to correct the posting account:
Use the drop-down menu next to MARK to select MISC.
Click the OK button to save the general ledger account information and return to the
Sales Transaction Entry window. If it tells you there are errors in any accounts and
asks if you wish to save with these errors, select Save. Do not exit the Sales Transaction
Entry window yet.

Chapter 2
Microsoft Dynamics gP help Menu

Now that you have reviewed the features of a typical Microsoft Dynamics GP window, you will
explore the Help menu. Like many Windows-based programs, Microsoft Dynamics GP has
extensive program documentation available for your reference. There are many selections in the
Help menu, but the two most common features that you will use are:
r Contents — Displays an alphabetical list of all help topics. When you enter the Help
Content, type in a keyword for a specific topic that you want to learn more about.
r About This Window — Displays online documentation for an active window.
Microsoft Dynamics gP help Menu Practice
To practice using the Help Contents, complete the following steps while still in the Sales
Transaction Entry window:
Click the Help menu at the top of the Sales Transaction Entry window and then click
Contents.
If you cannot access the Help menu, your popup blocker may be blocking it.
If you see the following at the top-right corner of your address bar: ,
click the red X and then choose “Always allow popups from dynaa.dynamicscloud.com.”
Suppose that you want to know how to record a sales return.
Type [sales returns] in the Search box. Notice that the portion of the Help index now
displayed contains several topics with scores indicating how likely it is that the line
item will contain information on your search.
Double-click the top line that says “Sales Transaction Entry window.” A Help window
appears on the screen that gives an overview of the Sales Transaction Entry window.
Notice the many links ( underlined items) that the Help material provides to other
useful information.
Click on “Entering a return.” A step-by-step description of how to process this transaction
is provided.
Close the Help window.
Sometimes it is helpful to access the Help menu while a specific window is opened. Assume you
are working with the Sales Transaction Entry window and want to know what the Trade Discount
box is used for and how to enter information in the box. Complete the following steps to practice
the About This Window feature:
Click Help About This Window.

Chapter 2
Notice that the same Help window opens as the one you opened by using the Help Content
feature earlier. Type “Trade Discount” in the search box. Your search results should produce
“Sales Trade Discount Entry window” at the top.
exiting the Microsoft Dynamics gP Program

Before exiting Microsoft Dynamics GP, first finish working with any active windows. You
should click the Delete button when asked if you want to save any documents or
transactions.
Click sign out to exit the Microsoft Dynamics GP program.
Note
As explained in Chapter 1, it is extremely important that you sign out of each work session. Failure to
do so will make it more difficult for you and potentially other students to sign in to the cloud in the
future.
Chapter summary
After completing Chapter 2, you have now learned:
r how to open and close companies.

r how to work with various Navigation Panes.
r how to work with the features that are available on the application window content,
including the Navigation Pane buttons, Categories, and Tasks.
r how to move through and enter information into boxes.
r an overview of maintenance and processing information tasks.
r how to access features in the Help menu.
You should now proceed to the Question pages at the end of this Chapter to answer questions
that your instructor assigned.


Chapter 2
Preparation for question Pages

At the end of most chapters, you will find questions dealing with material in the this book.
Answer all questions in the answer spaces provided below each question. Note that all pages in
this book are perforated to enable you to tear out the question /problem pages and hand them in
to your instructor. It will be more convenient if you tear out all question/problem pages for each
chapter as you go. Be sure to write your name in the space provided at the top of each question/
problem page before handing it in.
Some of the chapters in this project include problems as well as questions. While questions
usually require only a written answer in the spaces provided, problems often include printouts of
solution material from the software. Be sure to include your name and the problem number on
all question/problem pages and printouts that you hand in to the instructor.

Name:
Chapter 2
questions About Familiarization

Answer the following questions, starting with this page through page 2-29. It will be more
convenient to answer the questions if you remove pages 2-25 through 2-29 now.
questioN 2-1. Fabrikam

Open Microsoft Dynamics GP to the main window for Fabrikam.
Click the Sales Navigation button.
Required:
List the five Navigation Pane functional activities that you will be using in these materials.

Click Purchasing Transactions Purchase Order Entry
Required:
Briefly explain how to maximize the size of the Purchase Order Entry window to make it
easier to see the entire window.
DO NOT COPY — COPYRIGHTED MATERIALS — DO NOT COPY

Name:
Chapter 2

Click in the PO Number box. The next default purchase order number appears.
Accept the default.
Use the Date box to enter the date of the purchase order, August 8, 2014. Select the
Vendor ID for A Travel Company.
Order 5 of item 100XLG, Phone.
Required:
Briefly explain how you expand and contract the purchase order description window to
show additional information.

What is the total cost of the order from Question 2-3?

You now decide to change the purchase order quantity from Questions 2-3 and 2-5 to 15
instead of 5.
Make the change described.
Required:
What is the total cost of the purchase order now?
Close the Purchase Order Transaction Entry window that you’ve been practicing in by
clicking the in the top-right corner of the transaction window. If you get a window
asking if you want to save or delete this document, click the Delete button.

Name:
Chapter 2

Open the HR & Payroll page. Expand the Inquiry category if it is not already
expanded.
Required:
The name on the top line of the Payroll Inquiry category is Check History. What is the name
on the second line?

Briefly explain what is meant by default information and the purpose of having default
information in Microsoft Dynamics GP.
questioN 2-8. FABriKAM

State the name and purpose of each of the following symbols:

Chapter 3
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-2
Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-2
Examine Existing Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . 3-3
Adding a New Record . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-7
Transaction Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-7
Correcting a Transaction Before Posting . . . . . . . . . . . . . . . . . . . 3-9
Deleting a Transaction Before Posting . . . . . . . . . . . . . . . . . . . . . 3 - 10
Correcting a Transaction After Posting . . . . . . . . . . . . . . . . . . . . 3 - 10
Other Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 - 11
Chapter Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 - 11
Questions About Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 - 13
Questions About Transaction Processing . . . . . . . . . . . . . . . . . . . . . 3 - 17

Chapter 3
introduction
This chapter provides an overview of the types of information and activities in Microsoft
Dynamics GP. It is important for you to understand each of these because they will be used
extensively in the remainder of these materials.
As discussed in Chapter 1, there are five related types of information or activities included in
Microsoft Dynamics GP. The five items are:
1. Maintenance
2. Transaction processing
3. Other activities
4. Transaction and other information review
5. Reports
r General ledger balances
r Subsidiary ledger balances
r Financial Statements
Chapter 3 covers the first three items. Items 4 and 5 are covered in Chapter 4.
Maintenance
Maintenance is covered first. Maintenance means establishing the information in the system
that permits the convenient processing of transactions and preparation of reports. Examples
include such tasks as setting up general ledger accounts, customer accounts, and employee
payroll information. To illustrate, after a Customer ID is selected in the Sales Transaction Entry
window to process a credit sale, Microsoft Dynamics GP automatically completes many areas of
the window, such as the customer’s name, address, and the general ledger sales account for sales
to that customer. This automation is possible only when maintenance has been completed.
There are six maintenance windows, and for each window there are three possible maintenance
tasks that can be performed. These are as follows:
Six Maintenance Windows Tasks Three Types of Maintenance
1. Customer Maintenance 1. Add a new record
2. Vendor Maintenance 2. View and change information
3. Employee Maintenance in an existing record
4. Item Maintenance (inventory) 3. Delete a record
5. Account Maintenance (or retire a fixed asset record )
( general ledger account)
6. Asset General Information (fixed assets )
3–2 CHAPTER 3 — Overview of Activities

Chapter 3
Maintenance is time consuming when a company initially uses accounting software such as
Microsoft Dynamics GP, but when it is completed it greatly reduces the time required to process
transactions and increases the available information after processing is completed. You will be
introduced to maintenance to understand what has already been entered into the system.
Maintenance is accessed through Cards on the relevant functional area page.
An important characteristic of maintenance is the inability to add or change any transaction

data by doing maintenance. For example, it is impossible to add, delete, or change sales when
doing customer maintenance and any other maintenance.
eXAMiNe eXistiNg MAiNteNANCe

First let’s view some maintenance that has already been done for Fabrikam, Inc. This is the second
type of maintenance task listed previously.
Sign in to DynamicsCloud following the instructions in Chapter 1.

Open the Fabrikam company.
Click Sales Cards Customer. A blank Customer Maintenance window appears
that looks like the one shown below.
CHAPTER 3 — Overview of Activities 3–3

Chapter 3
Click the lookup button next to Customer ID, which brings up the Customers and
Prospects window like the one shown below.
Select Castle Inn Resort in the Customers and Prospects window.
The Customer Maintenance window appears with information for Castle Inn Resort already
included as shown in the illustration at the top of the following page. The information in the
window has already been entered as a part of maintenance.

Chapter 3
Observe the information in the window. It includes the name, address, shipping method, and
other information for Castle Inn Resort that will make processing the sales transaction faster
and more accurate.
Next, you will examine some of the default information for Castle Inn Resort more closely. For
example, observe that the name next to Salesperson ID in the window is Gary W. The salesperson,
Gary W., is the default salesperson for this customer, which means this is the default entry that
will be shown on the screen when the window first opens. When the Microsoft Dynamics GP
operator processes a sales transaction for a specific customer, several default settings from the
Customer Maintenance window will be shown in the Sales Transaction Entry window. There are
hundreds of default settings in Microsoft Dynamics GP. These default settings are established
through maintenance.

Chapter 3
Click the lookup button next to the Salesperson ID box.
The following window opens, which includes six salespersons’ names. If the user wants one of
the other selections when processing a transaction, he or she will click on the Salesperson ID
lookup button and change it.
Close the Salespeople window, but do not close the Customer Maintenance window for
Castle Inn Resort.
Click several other lookup buttons in the window and observe the large amount of
information in this window.
Click the Accounts tab at the top of the window. The Customer Maintenance - Accounts
window for Castle Inn Resort opens. Observe that there are default general ledger
account settings for different types of transactions. For each account there is also a
lookup button to allow the user to easily change account numbers if necessary.
Click the Options tab at the top of the Customer Maintenance window. The Customer
Maintenance – Options window opens. Again, additional information has been
provided. What is the credit limit for Castle Inn Resort? It is, of course, $40,000.
Close all windows to return to the Sales application page.

Chapter 3
Based on this discussion you should reach two conclusions.
1. A large amount of information can be entered into each type of maintenance window.
2. Much of the information in the maintenance windows was originally set up with the use
of maintenance through the Cards category.
ADDiNg A New reCorD

When a company obtains a new customer or vendor, adds new inventory, or hires a new employee,
new records must be created in Microsoft Dynamics GP. It is important that sufficient information
be included when the new information is added to allow for processing transactions. For example,
if management wants to know, at some future time, the sales territory and salesperson for a given
sale, that information will need to be added during maintenance. You will be setting up new
records in Chapter 5.
transaction Processing
After an accountant is satisfied with maintenance for all six maintenance windows, processing
transactions can begin. Additional maintenance, such as adding a new customer, can and is
often done during the processing of transactions.
Processing transactions is the most time-consuming aspect of any accounting system. For most
companies there are both a wide variety and a large volume of transactions, often every day, but
certainly every week and month.
You have already been introduced to the window for processing sales transactions in Chapter 2.
Starting in this chapter, you will learn about transaction processing. In Chapters 5 through 7 you
will learn and practice the many types of transactions covered in this book.
As an introduction to transaction processing, do the following for processing a sales transaction.
Open Fabrikam if that company is not already open. Click Sales Transactions Sales
Transaction Entry. Select Invoice in the Type / Type ID box.
The Sales Transaction Entry window appears on the screen. The window should look like the one
shown at the top of the following page. This window is an example of a typical window for
recording transactions in Microsoft Dynamics GP. You will be using this type of window
extensively in later assignments.

Chapter 3
Examine the Sales Transaction Entry window to help you understand processing a sales
transaction. Then do the following:
Click in the Document No. box. The next invoice number will appear.
Click the lookup button next to Customer ID and select Nova Systems, Inc., the same
customer you selected in the introduction to maintenance in Chapter 2.
Enter April 6, 2017, in the Date box.
Click in the Currency ID box. The ID “Z-US$” will appear indicating the currency is US
dollars.
Click the lookup button next to Item Number to select the inventory item Surge Protectors
HDWR-SRG-0001. If for some reason the Items window does not open, check to see if it
is already open by looking for a small multicolored rectangle in the bottom-left corner
near your user ID. If there are two rectangles, move your cursor over each one to see if
one of them is the Items window. If it is, click on the rectangle to open the Items window.
Click the Show Details button.
Compare the information on the screen to the information on the blank window shown
previously. Observe that the Customer ID, Type / Type ID, Item Number, and Unit Price, along

Chapter 3
with other information, all resulted from you using two lookup buttons. The sources of this
information are maintenance and the calculation abilities of Microsoft Dynamics GP.
Change the contents of the Quantity box from 1 to 5 ( immediately to the left of the $39.95
unit price ). Tab across. Observe the change in the totals on the bottom of the screen. Click
the Next button at the bottom of the Show Details window, and notice that a blank line
appears so that you would be able to add the next item if necessary.
Click the Hide Details button.
Click the Go To button at the top of the window and select Distributions. Observe that
the general ledger distributions for this transaction have already been determined. The
general ledger distributions were previously decided through maintenance and you
can change the distributions if you want to use different accounts than those in the
default entries.
Close the Sales Distribution Entry window, but do not close the Sales Transaction Entry
window.
You do not want to post this entry, so keep the window open for now, but do not post.
CorreCtiNg A trANsACtioN BeFore PostiNg

Before a transaction is posted, most errors can be corrected by clicking the box with the error
and making the correction. For many errors, you can click the box with the error and reenter the
correct information.
For other boxes, error correction is a bit more complicated. An example of one of these boxes is
the Item Number box. Assume that the last item sold to Nova Systems should have been item
#HDWR-SWM-0100, small switch, instead of item #HDWR-SRG-0001, the surge protector.
Click in the Item Number box for the last item, item #HDWR-SRG-0001. Note: Be sure
to click in the Item Number box, not the Item Number description field.
Click the Item Number lookup button and attempt to select item #HDWR-SWM-0100.
The following error message appears.
Click OK to remove the error message.

Chapter 3
Make sure the cursor is somewhere in any box for item #HDWR-SRG-0001.
Click the Delete Row option ( small X ) to the left of the Show Details / Hide Details buttons.
A message appears asking you if you are sure that you want to delete this item.
Click the Delete button.
Select HDWR-SWM-0100 in the Item Number box.
Certain boxes cannot be changed after they are originally completed. Changes in these boxes can
only be made by deleting the transaction and entering the transaction again, which is described
in the following section.
DeletiNg A trANsACtioN BeFore PostiNg
Note
After a transaction is posted in Microsoft Dynamics GP, it cannot be changed or deleted. This is so
important that it is worth repeating often. You should make every effort to be sure a transaction is
correct before it is posted.
You can delete a transaction prior to posting by clicking the Delete option, which is located
under the Actions menu. Deleting a transaction before posting is useful if there is an error in the
window that cannot be corrected. An example in the Sales Transaction Entry window is the
Customer ID box. For example, assume you discover that you selected the wrong customer for
the practice sale. The sale was made to Advanced Paper Company, customer ID #ADVANCED0001,
not Nova Systems, Inc.
Try to click the Customer ID lookup button. The program will not let you change the
Customer ID. You must delete the transaction and start over again.
Click the Actions menu at the top of the Sales Transaction Entry window. Select Delete.
A message appears asking you if you are sure you want to delete this record.
Click Delete to answer the question. Notice that the Sales Transaction Entry window is
now blank. Do not close the Sales Transaction Entry window yet.
CorreCtiNg A trANsACtioN AFter PostiNg

In using Microsoft Dynamics GP, it is important to avoid posting a transaction that is in error.
After a transaction is posted, you cannot edit or delete the transaction. Depending on the type
of transaction, you must first either void the transaction or record a transaction that removes the
effects of the transaction in error. Next, you must record another transaction with the correct
information. In some cases, error correction is quite difficult.
3 – 10 CHAPTER 3 — Overview of Activities

Chapter 3
Four strategies are suggested to minimize the likelihood of errors.
1. Starting in Chapter 5, follow the guidance in the Reference book for each activity or
transaction. Completing a window may appear simple after you have practiced a couple
of times, but it is easy to make mistakes.
2. Enter all information carefully. There is often a penalty for excessive speed.
3. Read the instructions and hints very carefully as you proceed. The materials have been
class-tested several times and hints are provided where you are most likely to make
mistakes.
4. Review each window carefully before posting or saving. It is worth the time it takes to
review each Microsoft Dynamics GP window. Frequently, check figures are provided to
help you minimize errors.
Specific instructions for error correction are included in Appendix A of the Reference book.
Because Chapters 5 through 7 are for practice, error correction applies primarily to Chapters 8
and 9. You may, however, practice using Appendix A to correct errors you make in Chapters 5
through 7.
other Activities
There are five types of other activities covered in this book:
1. Post transactions to the general ledger
2. Print an accounts receivable statement to a customer
3. Prepare a bank reconciliation
4. Depreciate fixed assets
5. Perform year-end closing procedures
All of these activities are important in the accounting processes. Most of them are self-evident
by their titles. Each will be covered in a later chapter.
Chapter summary
After completing Chapter 3, you have now learned an overview of maintenance activities and
how to process data and correct data entry. You should now answer the Chapter 3 questions and
problems that your instructor assigned on the following pages.
CHAPTER 3 — Overview of Activities 3 – 11


Name:
Chapter 3
questions About Maintenance

convenient to answer the questions if you remove pages 3-13 and 3-15 now.
questioN 3-1. waren sports supply

Select Waren Sports Supply as the company in the Microsoft Dynamics GP drop-down
menu.
a. What is the credit limit for the customer University of Southern Iowa?
b. What is the street address for the employee Jim Adams?
c. When was the fixed asset “inventory handling system” acquired, and what was the
acquisition cost of that asset? Hint: Use Financial Cards General (scroll down to the
Fixed Asset section of Cards to find this information ).
d. Why do you believe there is no address or credit limit for the customer CASHCUSTOMER?

Select Fabrikam as the company in the Microsoft Dynamics GP drop-down menu.
a. What is the account number for the debit to terms discount taken for a sale to the customer
Continental Properties?

Name:
Chapter 3
b. Attempt to delete the customer Leisure & Travel Consultants. What is the message on the
screen when you attempt to delete it?
c. Why do you believe the control preventing you from deleting this customer exists?
d. Explain why it is important to be sure you want to delete any account before you do so.
e. How many general ledger cash accounts does Fabrikam have that are dedicated to specific
countries?
f. What is the commission rate for the salesperson, Nancy Buchanan? How much did she
earn in commissions in February 2017? Hint: Use Sales Cards Salesperson to find
this information.

Name:
Chapter 3
questions About transaction Processing

Answer the following questions. It will be more convenient to answer the questions if you remove
page 3-17 now.

What document is the person processing sales transaction entries likely to use to obtain the
customer name, products shipped, and quantity shipped?

Open Fabrikam if not already open.
Enter the information for the following sales invoice transaction for Fabrikam using
the Sales Transaction Entry window. Use the default invoice number. Do not post
the entry.
Details of the sale follow:
r Customer: Blue Yonder Airlines

r invoice date: 7/02/17
r Po Number: P6712
r Product sold: 3 units of item 3-B3813A
Required:
a. What is the unit selling price of item 3-B3813A?
b. Who is the salesperson for this customer?
c. What are the payment terms for this customer?
d. How many of item 3-B3813A does the company have on hand?

Chapter 4
Transaction and Other Information Review . . . . . . . . . . . . . . . . . . . . 4-2

Inquiry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-3
Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-5
Closing a List Window. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-6
Conclusions About Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-8
SmartList . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-8
Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 - 11
General Ledger Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 - 12
Subsidiary Ledger Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 - 12
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 - 12
Chapter Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 - 12
Questions About Inquiry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 - 13
Questions About Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 - 17
Questions About SmartList . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 - 19
Requirements for Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 - 21

Chapter 4
transaction and other information review

A typical company’s accounting information in Microsoft Dynamics GP includes a wide variety
of data that can be easily accessed. There are alternative ways to access the information. Following
are just some of the many lists of details that can be obtained through Inquiry:
r List of customers
r List of all invoices billed to a customer for a period of time
r Summary of annual amounts billed from and paid to a vendor
r List of all year-to-date transactions posted to a general ledger account
r Summary of quantity on hand, quantity sold, and quantity returned for an inventory
item
Information in Microsoft Dynamics GP can be accessed in different ways, depending on personal

preference and the type of information you want to access. The four ways are:
1. Cards — Accessed through Cards on the relevant functional area page. The Cards category
is used to obtain information about master files such as customers, vendors, and
employees. (As you have already seen, it is also used to add and delete information from
the same master files.)
2. Inquiry — Accessed through Inquiry on the relevant functional area page. The Inquiry
category is used to obtain information about transactions that have been recorded in the
system.
3. Lists — Accessed through primary and secondary lists on the Navigation Pane, which are
located in the top portion of the Navigation Pane. The Lists category is another way to
obtain information about recorded transactions or master file data.
4. SmartList — Accessed through Administration on the Navigation Pane. The SmartList
function is used to analyze and summarize various types of information in the system, as
well as export that information to Microsoft Word and Excel.
Each of these four ways to access information organizes the information into the following
categories:
r Sales
r HR & Payroll
r Financial
r Purchasing
r Inventory
SmartList includes these categories, but the categories are not organized in this manner. You
have already practiced obtaining information using Cards in the Chapter 3 section on
Maintenance. Inquiry, Lists, and SmartList are covered in the following three sections of this
chapter.
4–2 CHAPTER 4 — Overview of Obtaining Information

Chapter 4
inquiry
Transaction and other types of review are useful for evaluating whether information has been
recorded correctly or for obtaining information about recorded transactions or balances for
customers, vendors, and management. Inquiry is one important way to get that information.
To demonstrate the use of Inquiry, you will use the Inquiry category to review a transaction
recorded in January 2017 for Fabrikam. This transaction has already been recorded in the dataset.
Complete the following:

Open Fabrikam and click Sales Inquiry Transaction by Customer.
Select American Science Museum (AMERICAN0001) in the Customer ID box. Click the
maximize button on the Receivable Transaction Inquiry – Customer window to expand
it. You can see in the window that several transactions have been recorded for the
customer. Observe in the left column that several transactions include HIST in the
Origin box. A historical receivables transaction is one that has been fully collected or
applied. Examples of historical receivables transactions include (1) a cash receipt or
sales return that has been fully applied to an outstanding invoice and (2) an invoice
that has a zero balance outstanding.
Click the History check box in the “Include” portion of the window to eliminate the check
mark, and click the Redisplay button on the top of the window to include only open and
work transactions.
Open receivables transactions include all current year transactions plus prior years’ transactions
that are not fully applied. Now observe that there are seven transactions. Also observe that there
are three different document Types shown (SLS, SVC, and PMT).
Click the Show Details button (the two down arrows on the right side of the screen) to
highlight an additional row for each transaction. Observe that some of the dates are
prior to 2017.
To show only transactions for the year ended 6/30/17, click the drop-down arrow next to
the Documents box and select “by Document Date.” Then click the radio button next to
“From” and type 70116 in the From box and 63017 in the To box. Then click the Redisplay
button on the top of the screen. Now observe that there are only three transactions
included and that all three of them are from the current fiscal year.
Highlight invoice #STDINV2253 by clicking anywhere on the line containing
#STDINV2253. Move the cursor over the Document Number description field (it is blue).
Notice that the cursor turns into a hand when it is put over the description field,
indicating a link to another window.
Click once on the Document Number description field.
CHAPTER 4 — Overview of Obtaining Information 4–3

Chapter 4
The Sales Transaction Inquiry Zoom window for invoice #STDINV2253 appears. Observe on the
top of the window that you have no options for deleting or posting the transaction again. Microsoft
Dynamics GP provides this internal control to prevent misstatements and possible fraud.
You can inquire about additional information using the Customer Detail Inquiry and Item Detail
Inquiry tabs at the top of the window and by clicking various expansion buttons to enter other
windows.
Click the Customer Detail Inquiry tab. Observe that the window contains information
about the customer’s address, contact person, payment terms, and so on.
Click Item Detail Inquiry tab. Observe that this window contains information about
inventory item #ACCS-HDS-2EAR, a headset – dual ear, including unit cost, unit price,
and invoice quantity.
Return to the Sales Transaction Inquiry Zoom main window.
You can also inquire about other information using the Go To button at the top of the inquiry
window.
Select the Distributions options under the Go To list of items to enter the Sales Distribution
Inquiry Zoom window and review the account distributions for the sale to American
Science Museum. Close all inquiry windows to return to the Microsoft Dynamics GP
main window.
You can also inquire about the same information that was just shown, using the document
number to find the transaction, instead of the customer ID.
Click Sales Inquiry Transactions by Document to inquire about transactions by

document number. When you maximize the window and use the scroll bar, you will see
that the window includes many sales transactions and customer payments.
Highlight invoice #STDINV2253 in the scrolling window by clicking anywhere on the line
containing invoice #STDINV2253. Move the cursor over the Document Number description
field and click once. Hint: Use the scroll bar to find the document numbers starting
with “STDINV,” which are directly after the document numbers that start with “SLS.”
Observe that you have entered the same Sales Transaction Inquiry Zoom window for
invoice #STDINV2253 that you reviewed earlier. This illustrates that there are alternate
ways to enter inquiry windows. In this case you accessed it by using the document
number. In the previous case you accessed it by using the customer number.
From this window, you can also open the other inquiry windows in the same manner as previously
shown.
Practice opening and closing additional inquiry windows until you feel comfortable
doing so. Then return to the Receivables Transaction Inquiry – Document window.

Chapter 4
To obtain information about the amount still unpaid for a specific invoice, the Amount Remaining
description field is used.
Highlight document #STDINV2134 in the Receivables Transaction Inquiry – Document

window and move the cursor over the Amount Remaining description field until it turns
into a hand. Click once to enter the Applied From Credits window. Observe that the
$1,016.24 invoice was paid in full on 2/11/17.
Close all inquiry windows to return to the Microsoft Dynamics GP main window.
The Inquiry function is also useful to determine the aging of individual accounts receivable.
Click Sales Inquiry Payment Summary to enter the Customer Payment Summary
Inquiry window.
Use the Customer ID lookup button to select Westside Cable Service (Customer ID
WESTSIDE0001). Observe that all $9,265.48 of outstanding invoices are current.
Close this window to return to the Microsoft Dynamics GP main window.
To summarize, transaction review through the Inquiry function provides the ability to obtain
information about such things as recorded transactions, account balances, customers, vendors,
and employees. This information is useful to determine whether a transaction has been recorded
correctly, but it is also used to obtain information for management, employees, customers, and
vendors. Inquiry was shown only for Sales, but the same concepts apply to the other transaction
cycles.
lists
Like Inquiry and Cards, Lists is useful for evaluating whether information has been recorded
correctly or for obtaining information about recorded transactions or balances for customers,
vendors, and management.
Because Lists is similar to Inquiry for obtaining information, the emphasis in this section is on
the differences between the two. Again, Fabrikam is used to illustrate Lists.
Open Fabrikam, Inc., if this company is not already open.

Click Sales in the Navigation Pane. Observe that several descriptions appear under
Sales at the top of the Navigation Pane (Sales, Customers, Prospects, Salespeople, etc.).
These are the Lists that are used to obtain existing information in Microsoft Dynamics
GP.
Click Purchasing in the Navigation Pane and observe that the List descriptions change.
Click successively on HR & Payroll, Inventory, and Financial. Examine the Lists for each
functional area page. The master file for each area, such as Customers in Sales, is
usually the second item on the list.

Chapter 4
Click Sales in the Navigation Pane, then click Customers under Sales Lists. A list of all
customers is provided. Notice that the number of customers is included on the bottom
right of the list.
Click once on American Science Museum in the Customers list. Notice that American
Science Museum’s address and several other types of information that may be useful to
management are shown in the bottom of the window.
ClosiNg A list wiNDow
Note
Because a List provides information that cannot be changed, it is technically not a window even though
it is often called a window. This is only important when you close a List window.
To close the List window, either click a different list title, or click a different Navigation Pane icon than
the one that is open.
Practice closing List windows using each of the methods described above.
Open the Customers list and double-click on American Science Museum. The Customer
Maintenance window for American Science Museum is now shown. This is the third
way that you have accessed a customer’s information. The other two were through
Cards and Inquiry.
Access American Science Museum using Inquiry, then Cards. Hint: First click Sales, then
Customer, then American Science Museum for both Inquiry and Cards. Which one is
identical to Lists and which one is similar but slightly different?
The answer: the two identical ones are through Lists and Cards. Note that it is possible to change
or delete the Maintenance window information for American Science Museum through either
Lists or Cards, but it can only be observed through Inquiry. The Inquiry window is titled
Customer Detail Inquiry (second tab of the Sales Transaction Inquiry Zoom window) and the
other two are titled Customer Maintenance.
Close all windows and lists to return to the Microsoft Dynamics GP main window.
Change the User Date to 4/30/17.
Click Sales in the Navigation Pane, then click All Sales Transactions under Sales Lists.
The number of transactions listed is shown on the bottom right of the window.
Examine the Restrictions area near the top right of the list and notice that there are default
settings for the date range and whether or not historical transactions are included. Recall that
historical transactions are those that have already been collected or otherwise applied. In addition
to being able to customize the date range, you have the option of including or excluding these
transactions.

Chapter 4
You will practice doing four things with the All Sales Transactions list open:
1. Sort a column on the list.
Note
It is often useful to reorder the information in a list window to make it easier to view and analyze. Any
list can be sorted on any column heading, reordering it either alphabetically or numerically. It is done
by clicking the heading for the column you want to be sorted. Microsoft Dynamics GP sorts the list on
the column you clicked without changing the details of any record. It is similar to the Sort command in
Microsoft Excel, except that it is done automatically by Microsoft Dynamics GP after you click the column
heading. Clicking the column heading a second time reverses the ascending or descending order of the
sort that was just done.
Click the Date column heading next to Document Type. Click the Date column
heading again. The order of the dates changes from earliest to latest and back again.
Click the Customer Name column heading to change the order. Scroll down to
American Science Museum and double-click on invoice STDINV2253. The identical
Sales Transaction Inquiry Zoom window is shown that was shown earlier using
Inquiry. After you are in this window, the same information discussed in Inquiry
can be accessed.
Close the Sales Transaction Inquiry Zoom window but remain in the All Sales
Transactions list.
2. Change the order of the columns.
Click and hold Amount on the Amount column and move the column to the left. As
you do so the heading is highlighted. Move it until it is in the leftmost column and
release the click. You can change the location of any column heading using this
method.
Click the drop-down arrow next to All Sales Transactions (read only). Then click
Remove Personalizations on the drop-down list. Select All Sales Transactions (read
only) and then Refresh from the drop-down list to restore the original settings.
3. Select date ranges to display.
Click the Last 90 Days button in the Restrictions area of the list to access the drop-
down list and observe that you can select one of several date range options. Click
Last 7 Days. There are now fewer records shown.
Again click the drop-down arrow next to All Sales Transactions (read only). Click
Remove Personalizations on the drop-down list. Click All Sales Transactions (read
only), then click Refresh to restore the original settings the same as you did earlier.

Chapter 4
4. Restrict the documents on the Document Type drop-down list.

How many different documents types are included in the Document Type Column? The
answer is eight. You can determine this by clicking on the Document Type heading to
alphabetize and then scrolling down the list. The documents types include Back Order,
Fulfillment Order, Invoice, Order, Payments, Quote, Return, and Sales /Invoices. Now assume
you want to know how many quotes were processed in the last 30 days.
Click the Add Filter plus sign, then select Document Type and Quote from the drop-
down menus above the Add Filter sign. Click Apply Filter. Then click the Last 60
Days button in the Restrictions area and select Last 30 Days. The answer is 3.
Return the All Sales Transactions List to the original setting.
CoNClusioNs ABout lists

You can use Lists to obtain some of the same information obtained by using Cards or Inquiry.
More information is available using Inquiry or Cards. This can be observed by examining the
items in Inquiry and Cards for each category of information compared to the items in Lists. An
important difference is the inability to change information in records using Inquiry.
Following are several advantages of Lists when the information is available.
r The number of records is shown at the bottom of the screen.

r Data can be easily sorted using each of the column headings in a list.
r It is often easier to find specific information in a file using Lists by first sorting on the
appropriate column heading.
r It is convenient to change the parameters of the transaction data shown in a window
using Lists by applying various filters.
It is desirable to be familiar with the use of Cards, Inquiry, and Lists.
smartlist
Another useful way to access and use information in a Microsoft Dynamics GP file is by using
SmartList. In addition to allowing users to access and analyze information in a wide variety of
formats and summaries, SmartList enables exporting information to Microsoft Excel and Word.
The organization of SmartList folders is different from Cards (Maintenance) and Inquiry. There
are no primary headings such as Financial, Sales, and Payroll. Instead, all SmartList folders are
included in one list.
Open Fabrikam, Inc., if this company is not already open, and close any windows or lists
to return to the Microsoft Dynamics GP main window.

Chapter 4
Open the Sales page if it is not already open.

Click the single arrow pointing downward on the bottom of the Navigation Pane. Click
Navigation Pane Options to open the Navigation Pane Options. Select Administration and
click OK to add it to the Navigation Pane.
Click Administration Reports SmartList (you will likely need to scroll down to the
bottom of the Reports category). Click the plus sign next to Sales and then click the plus
sign next to Customers. You will see several additional descriptions such as Customer
Balance. Double-click on Customers. The right side of the SmartList window includes a
list of customers, with several columns of information.
Click on each column heading. Similar to Lists, the order is changed by clicking on the
column heading.
Double-click American Science Museum. The same Customer Maintenance window is
shown that was demonstrated earlier using Lists. Close this window, but do not close the
SmartList window.
Scroll down from Customers to locate the Sales Transactions line item and click on it.
Like Customers, Sales Transactions is next to a yellow folder. The bottom-left corner of
the window shows the number of transactions. This total is different from what was
shown using Lists because Lists includes Payments, whereas SmartList does not. Also,
there are no date restrictions in SmartList, and there were date restrictions used in the
Lists example.
Click the Customer Name Column heading (scroll to the right to find this heading).
Scroll down to American Science Museum and double-click on invoice STDINV2253.
Again, this calls up the same Sales Transaction Inquiry Zoom window that was shown
for Inquiry and Lists.
Close all windows and return to the Microsoft Dynamics GP main window.
Although some of the same information that can be accessed by SmartList is also available in
Cards, Inquiry, and Lists, SmartList enables more detailed analysis. This feature will be
demonstrated next.
First, the use of SmartList is demonstrated using accounts receivable. Then you will use SmartList
to access other information.
In demonstrating SmartList for accounts receivable, assume management wants to select all
accounts receivable for Fabrikam with balances in excess of $5,000 in sales territory 6.
Management believes there is an opportunity to increase sales to those customers with a special
promotion plan, but wants to try the plan on an experimental basis. Because management plans
to contact each of these customers, they also want to capture the name of a contact person.
Click Administration Reports SmartList. Click SmartList Options to get the
drop-down menu. In the drop-down menu, select Favorite panes and uncheck Enable
Auto-hide if it has a check next to it.

Chapter 4
Click the plus sign next to Sales, then double-click Customers.

Click the Columns button (to the right of the Refresh button) to access the Change Column
Display window. Observe that there are eight Display Names in the window, but none
of the names include customer balance, sales territory, or contact person.
Click the Add button. Scroll down the additional field names and observe the large
number of additional types of information that can be accessed.
Highlight Customer Balance and click OK to move this information to the Change
Column Display window.
Click Add, then scroll down and highlight Sales Territory and click OK. Do the same for
Contact Person.
To eliminate information that you do not need for this analysis, remove from view the
following four columns: Address 1, Address 2, City, and Zip. Do so by first highlighting
the display name and then clicking the Remove button. Repeat this process for all items
to be removed. This will only eliminate the information from the window, not delete
the underlying data.
Click OK again to close the Change Column Display window.
Click the Search button (to the left of the Refresh button) to access the Search Customers
window. This window allows you to search for the information you want as long as it is
now included in the Change Column Display window you just used.
In the Search Definition 1 section of the window, (1) select Customer Balance in the
Column Name box, (2) select “is greater than” in the Filter box, and (3) type 5000 in the
Value box. In the Search Definition 2 section of the window, (1) select Sales Territory in
the Column name box, (2) select “is equal to” in the Filter box, and (3) type TERRITORY
6 in the Value box.
Click OK. The information you want should now be included in the Customers window.
There should be four items in the list that meet the criteria you selected earlier. Hint:
If you need to redo the search, be sure to delete all prior information in the search
definitions and reenter.
Scroll to the right and make sure a list of customers with balances of more than $5,000 appears
in the Customer Balance column and every territory in the Sales Territory column is Territory 6.
To export the data to Excel, click the Excel button. You will be asked if you trust this
application to save files to your hard drive. Click OK. Hint: You will find it easiest to save
the file directly to your desktop.
Now sort the data in Excel from the highest Customer Balance amount to the lowest and total
the customer balance column. You need not save the Excel file. The results should appear as
follows if you did everything correctly.
4 – 10 CHAPTER 4 — Overview of Obtaining Information

Chapter 4
Return to SmartList. If the Customers subfolders are not showing, click the plus sign to
the left of the Customers folder. These subfolders are the default Search parameters for
the main folder, in this case customers. There are eight folders included below the
Customers main folder. For every main folder the first subfolder has an asterisk ( * ).
Click the asterisk subfolder once. This opens the same window as the main folder.
Double-click the asterisk subfolder. It opens the Search Customers window without
having to use the icon at the top of the screen.
Close the Search Customers window.
Double-click the Past Due Customers subfolder. This Search Customers window has
default past due categories already completed for three search definitions. It is easy for
the user to change these for a different aging preference.
Close the Search Customers window to return to SmartList.
These default subfolders are provided by Microsoft Dynamics GP to make it more convenient to
use SmartList.
Click the minus sign next to the Customers folder to close the Customers subfolders.
Double-click on the Sales Transaction subfolder.
You should see the same number of transactions as you did before when you accessed this folder.
To the right of the total number, there is a statement, “First 1000 Sales Transactions with no
search criteria.” This means that only 1,000 transactions will be listed even if there are more. If
there were more than 1,000 transactions, you would need to increase the maximum number of
records. Increasing the maximum number of records is illustrated next.
Click the Search button. In the bottom-left corner of the Search Sales Transactions
window, change the Maximum Records number to 20,000 (for example) and click the
OK button.
Exit without saving and exit the SmartList window.
reports
Reports are the output of the system and typically are the only things that information users see
that relate to the accounting system. An understanding of reports is useful to help accountants
as they prepare information for users.
There are a wide variety of reports available in Microsoft Dynamics GP. Only a few are included
in this introduction to reports.
CHAPTER 4 — Overview of Obtaining Information 4 – 11

Chapter 4
geNerAl leDger BAlANCes

The general ledger balances are the accounts in an organization’s chart of accounts with balances
at any designated point of time. They are the basis for preparing financial statements. They are
also the result of all transaction processing to the point where the trial balance is prepared.
A general ledger trial balance is a listing of the general ledger accounts, including account
balances at a point of time. It is a report.
suBsiDiAry leDger BAlANCes

A subsidiary ledger maintains detailed records for certain general ledger accounts. An example
is accounts receivable. The accounts receivable general ledger records all transactions affecting
accounts receivable and includes the total balance at a point of time. The subsidiary ledger for
accounts receivable does the same thing for each customer making up the accounts in accounts
receivable. The subsidiary ledger includes the balance due from each customer at a point of time
and the total of all customer balances equals the general ledger balance.
The following four subsidiary ledger accounts are included in this project:
r Accounts receivable
r Accounts payable
r Inventory
r Fixed assets
The preparation of subsidiary ledger balances is done in the same way as any other type of report.
FiNANCiAl stAteMeNts
Two financial statements that are commonly created for most companies are the balance sheet
and the income statement. Companies typically print financial statements on a monthly basis, as
well as annual financial statements. Requirements 4-3 and 4-4 in the next pages provide practice
in printing financial statements.
Chapter summary
After completing Chapter 4, you have now learned:
r how to obtain information from your accounting system using Inquiry, Lists and SmartList.
r how to export information to Excel.
r an overview of reports.
You should now answer Chapter 4 questions and requirements, beginning on the next page, that
your instructor assigned.
4 – 12 CHAPTER 4 — Overview of Obtaining Information

Name:
Chapter 4
questions About inquiry

convenient to answer the questions if you remove pages 4-13 and 4-15 now.

Open Microsoft Dynamics GP to the main window for Waren Sports Supply.
Use both Inquiry and Cards to obtain information about inventory item FB-513. For each
item listed next, write the answer obtained from each source. If the information is not
included, write N/A. The first item is completed as an example.
Item Inquiry Cards

r Product description Storage locker Storage locker
r Quantity on hand
r List price
r Quantity on order
r Inventory valuation method
r Account # for a purchase

Which of the items in Question 4-1 can be changed using Inquiry? Which can be changed
using Cards?

Name:
Chapter 4

Select the HR & Payroll functional pane.
Use Inquiry to answer the following questions about payroll.
a. What was the total dollar amount of gross wages for 2013 year-to-date and for
September 2013? Hint: Use Company Payroll Summary.
b. What was that same information for Nancy Ford? Hint: Use Employee Summary.
c. When did Nancy Ford start to work for Waren Sports Supply?
d. How many separate payroll checks has Jim Adams received starting October 1, 2013?
e. What was Jim Adam’s regular and overtime pay rate for July 2013?

Name:
Chapter 4
questions About lists

page 4-17 now.

How many salespeople does Fabrikam have? (Note that you have to switch to the Sales
functional pane.)

For the customer American Electrical Contractor, what are the customer ID and the current
address?

Attempt to change the street address for American Electrical Contractor to 3522 Sherman
Court. Are you able to make the change?

Use Maintenance (Cards) to select American Electrical Contractor. What is the address after
completing Question 4-6?

Which function allows you to make changes in information: Inquiry or Cards?

Name:
Chapter 4
questions About smartlist

page 4-19 now.

Using SmartList, for the customer American Electrical Contractor (AMERICAN0002),
what are the customer ID and the current address? What steps did you use to obtain this
information?

For customer American Electrical Contractor, attempt to change the street address to 3522
Sherman Court. Are you able to make the change? (If you are, do not save the change. Click
the to exit the Customer Maintenance window).

Which functions allow you to make changes to information: Inquiry, Lists, SmartList, and /
or Cards (Maintenance)?

State the most important differences between SmartList and Lists.

Name:
Chapter 4
requirements for reports
requireMeNt 4-1. waren sports supply

Print and hand in a general ledger trial balance for Waren Sports Supply. Note: The trial
balance automatically includes all transactions recorded to date; there is no specific date you
need to enter. Complete the following steps to print the report:
Make sure Waren is open and click Financial Reports Trial Balance to open the
Trial Balance Report window.
Use the Reports drop-down arrow to select Summary.
Highlight Summary TB in the Options box and then click Insert.
Click the Print button and then print the report to the screen.
Print a hard copy of the report to hand in to your instructor.
Close all windows to return to the Microsoft Dynamics GP main window.

Print and hand in a trial balance of accounts receivable for Waren Sports Supply. As with the
general ledger trial balance, the accounts receivable trial balance includes all balances due;
there is no specific date you need to enter. Complete the following steps to print the report:
Click Sales Reports Trial Balance

Use the Reports lookup button to select Aged Trial Balance in the Reports box if it is
not already selected as the default report.
Select TB in the Options box and then click Insert. Click the Print button and then
print the report to the screen.
Print a hard copy of the report to hand in to your instructor.
Close all windows to return to the Microsoft Dynamics GP main window.
Compare the total on the trial balance with the balance of the accounts receivable account
on the general ledger.

Name:
Chapter 4

Complete the following steps to print a balance sheet as of 9/30/13 for Waren Sports Supply.
Change the User Date to 09/30/13.

Click Financial Reports Financial Statements.
Use the Report lookup button to select Balance Sheet.
Click once on Balance Sheet in the Options box, then click the Insert button. Click
the Print button.
View the report on the screen before printing a hard copy to hand in to your instructor.
requireMeNt 4- 4. waren sports supply

Complete the following steps to print an income statement as of 09/30/13 for Waren Sports
Supply.
Change the User Date to 09/30/13 if you did not already do so. Click Financial
Reports Financial Statements.
Use the Report lookup button to select Stmt. of Income and R/E.
Click once on Income and RE in the Options box, then click the Insert button. Click
the Print button.
View the report on the screen before printing a hard copy to hand in to your instructor.

Chapter 5
Maintenance Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-2

Add a New Customer Record . . . . . . . . . . . . . . . . . . . . . . . . . . 5-4
Maintenance Practice Task #2 — Add a New Vendor Record . . . . . . . . . 5-8
Change Information in an Existing Vendor Record . . . . . . . . . . . . . 5 - 12
Add a New Site Location Record . . . . . . . . . . . . . . . . . . . . . . . . 5 - 14
Add a New Inventory Item Record . . . . . . . . . . . . . . . . . . . . . . . 5 - 16
Add a New Employee Record . . . . . . . . . . . . . . . . . . . . . . . . . . 5 - 22
Chapter Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 - 26

Chapter 5
Maintenance overview
Maintenance activities were introduced in Chapter 3. The following material provides a review
and includes use of the Reference book. Additional practice is provided.
When a transaction is recorded in a Microsoft Dynamics GP window, one of the most useful
features of the program is the default information stored in the system. For example, after a
Customer ID is selected in the Sales Transaction Entry window for a credit sale, the software
automatically completes many areas of the window, such as the customer’s name and address as
well as the general ledger sales account for sales to that customer.
Default information is stored in the system through maintenance. As discussed in Chapter 3,

there are six maintenance windows, and for each type there are three possible maintenance tasks
that can be performed with the window. These are as follows:
Six Maintenance Windows Three Types of Maintenance Tasks

1. Customer Maintenance 1. Add a new record
2. Vendor Maintenance 2. View and change information
3. Account Maintenance in an existing record
(general ledger account) 3. Delete a record (or retire a
4. Employee Maintenance fixed asset record)
5. Item Maintenance (inventory)
6. Asset General Information
(fixed assets)
Maintenance tasks have no effect on transactions already recorded, but certain types of
maintenance tasks affect the amounts recorded in subsequent transactions. For example, changing
an inventory item’s cost and selling price has no effect on previously recorded sales transactions,
but it will affect the amount of sales revenue and cost of goods sold posted to the general ledger
for future sales of the item.
reFereNCe MAteriAl
All maintenance tasks are processed through one or more of the six maintenance windows listed
previously. The reference information for maintenance is summarized on pages 98 and 99 of the
Reference book. Read and understand the Perform Maintenance Activities Overview on page 98
of the Reference book before practicing maintenance.
5–2 CHAPTER 5 — Practice – Maintenance Activities

Chapter 5
Note
Instructions for using each of the six maintenance windows to perform the three types of maintenance
tasks are on pages 98 through 128 of the Reference book. The reference material for maintenance is less
detailed than for the other reference sections because there is a wider variety of information that may or
may not be entered or changed in each window. In this section, you will practice with the customer,
vendor, employee, and item maintenance windows shown in the Reference book, and you will practice
adding new records and changing an existing record. You will use the new records you set up in this
chapter for all of your transaction processing in the next two chapters. You will not be deleting records
in this chapter, mainly because all students will be sharing one Fabrikam company.
uNique iDeNtiFier setuP

The maintenance tasks that follow involve creating your own records in the revenue, purchasing,
and payroll processes. The records you will set up include customer, vendor, site location,
inventory item, and employee. As everyone in the class is working in the same company,
Fabrikam, you will need to use your unique identifiers to find your own customer or vendor, for
example, to use in the practice transactions in Chapters 6 and 7. It is important you follow the
specific instructions setting up each of these unique identifiers in the next section.
CHAPTER 5 — Practice – Maintenance Activities 5–3

Chapter 5
Maintenance Practice task #1 —

Add a New Customer record
When a company makes a cash or credit sale to a new customer, a new record must be created in
Microsoft Dynamics GP. You are to add a new customer record for the sample company, Fabrikam,
using the Customer Maintenance window.
CustoMer iD
It is important that you set up your master file record, in this case, a new customer, using the
numbering described below. Each master file record that you personally set up for this project
will have the same first six characters, or first two segments. The next segment will indicate the
type of master file record (customer, vendor, inventory item, etc.). The final segment is 01. Below
is our unique customer ID example and a description of the four segments.
1 2 3 4
MS – LEVE – CUST – 01
1. TWO LETTERS FOR SCHOOL — Your instructor will identify the letters to use, and ALL
students should use the same two letters for their school. In the sample case, the school is
Michigan State, so the instructor indicated that MS should be the two letters used by all
students at that school.
2. FIRST FOUR LETTERS OF LAST NAME — In this case, the student’s last name is Leverett, so
LEVE is used.*
3. CODE FOR TYPE OF MASTER FILE RECORD — CUST in this example.
4. 01
*Note: If there are two students in the class with the same first four letters, the instructor
should assign LEV1, LEV2, etc. so that the students remain in alphabetical order.
Fabrikam has a new customer to which it sells inventory.

Log in to Fabrikam and add a new customer record for the new customer using the
Reference book instructions on page 100 and the information that follows, but do not
save the new record yet. The name of the company as well as contact should be a variation
of your name. For example, using the prior sample ID noted above, the company name
is Jennifer Leverett and the contact is the same. Note: All default information is correct
for the customer unless otherwise noted below. Also remember that not all boxes in the
Customer Maintenance and related windows are applicable to this customer.

Chapter 5
r Customer ID: YOUR UNIQUE ID*

r Name: YOUR NAME
r Class ID: USA-ILMO-T1
r Address ID: PRIMARY
r Contact: YOUR NAME
r Address: 3690 Scenic Drive
St Louis, MO 63001
US (Country Code)
r Phone: 314-523-8000
r Fax: 314-523-8090
r Price Level: Retail
r Credit limit: $20,000
(use the Customer Maintenance – Options window to enter)
r G/L accounts: All default general accounts are correct for this customer.
*It is very important that you use your own unique customer ID here. Using the previous
example, it would be MS-LEVE-CUST-01.
The diagrams on pages 5-6 and 5-7 show the revised Customer Maintenance – Main, Customer
Maintenance – Options, and Customer Maintenance – Accounts windows for the new customer.
(The information on your screen will vary in terms of customer ID, company name, and contact.)
If the windows on your screen are consistent with the diagrams, save the new customer
record. If there are errors, correct them before saving the record.
Close the Customer Maintenance – Main window.

Chapter 5
Customer Maintenance – Main window
Customer Maintenance – options window

Chapter 5
Customer Maintenance – Accounts window

Chapter 5
Maintenance Practice task #2 — Add a New Vendor record
When a company makes a purchase from a new vendor, a new record must be created for the
vendor in Microsoft Dynamics GP. You are to add a new vendor record for the sample company,
Fabrikam, using the Vendor Maintenance window.
VeNDor iD
Just as you did for the previous task, it is important that you set up your Vendor ID using the
numbering described below. Each master file record that you personally set up for this project
will have the same first six characters, or first two segments. The next segment will indicate the
type of master file record (customer, vendor, inventory item, etc.). The final segment is 01. Below
is our unique vendor ID example and a description of the four segments.
1 2 3 4
MS – LEVE – VEND – 01
LEVE is used.*
3. CODE FOR TYPE OF MASTER FILE RECORD — VEND in this example.
4. 01
Fabrikam has a new vendor from which it purchases inventory.
Log in to Fabrikam (if it is not already open) and add a new vendor record using the
Reference book instructions on page 104 and the information that follows, but do not
save the new record yet. The name of the vendor as well as contact should be a different
variation of your name than you set up with the new customer. For example, using the
prior sample ID noted above, the vendor name is J. Leverett and the contact is the same.
Note: All default information is correct for the vendor unless otherwise noted on the
following page. Also remember that not all boxes in the Vendor Maintenance and
related windows are applicable to this vendor.

Chapter 5
r Vendor ID: YOUR UNIQUE ID*

r Name: YOUR NAME
r Class ID: USA-US-I
r Contact: YOUR NAME
r Address: 100 East Ave. North
Oxford, IL 45056
US (Country Code)
r Phone: 513-524-0042
r Fax: 513-524-7781
r Vendor Payment Terms: Net 30
(use the Vendor Maintenance – Options window to enter)
r G/L accounts: All default general accounts are correct for this customer.
*It is very important you use your own vendor ID here. Using the example above, it would be
MS-LEVE-VEND-01.
The diagrams below and on page 5-10 show the Vendor Maintenance – Main, Vendor Maintenance –
Options, and Vendor Maintenance – Accounts windows for your new vendor. (The information
on your screen will vary in terms of vendor ID, company name, and contact.)
If the windows on your screen are consistent with the diagrams, save the new vendor
Close the Vendor Maintenance – Main window.
Vendor Maintenance – Main window

Chapter 5
Vendor Maintenance – options window
Vendor Maintenance – Accounts window
5 – 10 CHAPTER 5 — Practice – Maintenance Activities


Chapter 5

Change information in an existing Vendor record
Often, it is necessary to change information in an existing vendor’s record. Examples include

changing a vendor’s address and changing the default general ledger accounts for a vendor. Edits
to existing records are also made using the Vendor Maintenance window.
Change the vendor record for the vendor you set up in the previous Maintenance Practice
Task using the Reference book instructions on page 107 and the following information,
but do not save the revised record yet.
Your company, now an existing vendor, added a second phone line with a toll-free phone number
800-524-0009. In addition, the vendor’s payment terms changed from “Net 30” to “2% 10 / Net
30.” (Hint: Click the Options tab. If you do not see the listing of payment terms, type 2% 10/Net
30 in the text box and the list will appear.)
The diagrams on page 5-13 show the completed Vendor Maintenance – Main and Vendor
Maintenance – Options windows for the new vendor. (The information on your screen will vary
in terms of vendor ID, company name, and contact.)
If the windows on your screen are consistent with the diagrams, save the revised vendor

Chapter 5
Vendor Maintenance – Main window
Vendor Maintenance – options window
CHAPTER 5 — Practice – Maintenance Activities 5 – 13

Chapter 5

Add a New site location record
Next, you will add a new record for site location where your inventory will be held. You will use
this site location in Maintenance Practice Task #5.
site iD
It is important that you set up your site location (Site ID) using the numbering described below.
Each master file record that you personally set up for this project will have the same first six
characters, or first two segments. The next segment will indicate the type of the master file record
(customer, vendor, inventory item, etc.). There is no fourth segment for Site ID. Below is our unique
site ID example and a description of the three segments.
1 2 3
MS – LEVE – SI
LEVE is used.*
3. CODE FOR TYPE OF MASTER FILE RECORD — SI in this example.

Log in to Fabrikam (if it is not already open) and add a new site location (Site ID) using
the information provided in the Site Maintenance window shown on the following page.
Access the Site Maintenance window through Inventory Cards Site. Again, use a
new variation of your name for the name of the Warehouse. If your window is consistent
with the diagram, click the save button. If there are errors, correct them before saving.

Chapter 5
site Maintenance window

Chapter 5

Add a New inventory item record
In addition to setting up a new vendor and site location, you will now add a new record for an
inventory item that is purchased from your unique vendor.
iteM NuMBer
It is important that you set up your Item Number using the numbering described below. Each
master file record that you personally set up for this project will have the same first six characters,
or first two segments. The next segment will indicate the type of the master file record (customer,
vendor, inventory item, etc.). The last segment is 01. Below is our unique inventory item ID
example and a description of the four segments.
1 2 3 4
MS – LEVE – ITEM – 01
LEVE is used.*
3. CODE FOR TYPE OF MASTER FILE RECORD — ITEM in this example.
4. 01
Log in to Fabrikam (if it is not already open) and add a new inventory item record using
the Reference book instructions on page 118 and the information that follows, but do not
save the new record yet. Note: All default information is correct for the item unless
otherwise noted on the following page. Also remember that not all boxes in the Item
Maintenance window is applicable.

Chapter 5
r Item Number: YOUR UNIQUE ID*

r Description: Standard Phone
r Class ID: Retail
(Select yes if it asks if you want to update the item with
information from the Retail category)
r Current Cost: $57.75
r Price List information: same as 100XLG
(Copy price level information from this existing item)
r Site ID: YOUR UNIQUE ID (Set up in Maintenance Task #4)
r U of M Schedule ID: EACH
r Vendor ID: YOUR UNIQUE ID (Set up in Maintenance Task #2)
*It is very important you use your own Inventory Item ID here. Using the example above, it
would be MS-LEVE-ITEM-01.
The diagrams below and on the following pages show the Item Maintenance – Main, the Item
Maintenance – Accounts, the Item Price List Maintenance, the Item Quantities Maintenance, the
Item Purchasing Options Maintenance, and the Item Vendors Maintenance windows for your
new inventory item.
If the windows on your screen are consistent with the diagrams, click the Save buttons.
If there are errors, correct them before saving the record.
Close the Item Maintenance – Main window.
item Maintenance – Main window

Chapter 5
item Maintenance – Accounts window
item Price list Maintenance window

Chapter 5
item quantities Maintenance window
item Purchasing options Maintenance window

Chapter 5
item Vendors Maintenance window


Chapter 5

Add a New employee record
You will now add a new employee record to Fabrikam.
eMPloyee iD
It is important that you set up your Employee ID using the numbering described below. Each
master file record that you personally set up for this project will have the same first six characters,
or first two segments. The next segment will indicate the type of the master file record being
created (customer, vendor, inventory item, etc.). The last segment is 01. Below is our unique
employee ID example and a description of the four segments.
1 2 3 4
MS – LEVE – EMPL – 01
LEVE is used.*
3. CODE FOR TYPE OF MASTER FILE RECORD — EMPL in this example.
4. 01
Log in to Fabrikam (if it is not already open) and add a new employee record using the
information on Reference pages 112 and 113 and the information that follows, but do not
save the new record yet. Use a new variation of your name for the employee. You may
also vary the birthdate, ethnic origin, and marital status, but use all other information
as given. Note: All default information is correct for the item unless otherwise noted
on the following page. Also remember that not all boxes in the Employee Maintenance
and related windows are applicable.

Chapter 5
r Employee ID: YOUR UNIQUE ID*

r Class ID: SUPP (select Yes if asked if you want to
accept information from the employee class record)
r Employee Name: YOUR NAME (new variation)
r Soc Sec Number: Assign a 9-digit number, e.g. 125-55-1212
r Hire Date: 4/7/2017
r Address: 100 Brookings Drive, Springfield, IL 62706
r County: Sangamon
r Country: USA
r Phone: 217-451-8585
r Location: Primary
r Supervisor: SUPMGR
r Birthdate: 9/22/1985 (click Additional Information button to access)
r Gender: Female
r Ethnic Origin: White
r Marital Status: Single
r Pay Code: HOUR (Hourly Pay Code)
r Pay Rate: $23.00
r Federal Filing Status: Single
r Number of Exemptions: 0
*It is very important you use your own Employee ID here. Using the example above, it would
be MS-LEVE-EMPL-01.
The diagrams on pages 5-24 and 5-25 show the Employee Maintenance, the Employee Additional
Information Maintenance, the Employee Pay Code Maintenance, and the Employee Tax
Maintenance windows for the new employee using the information provided previously. (Your
windows will vary on Employee ID and name, as well as other information you changed to make
it unique to you.)
If the windows on your screen are consistent with the diagrams, click the Save buttons.
If there are errors, correct them before saving. Close the related windows to return to the
Employee Maintenance window.
Click the Save button to save the employee record.
Close the Employee Maintenance window.

Chapter 5
employee Maintenance window
employee Additional information Maintenance window

Chapter 5
employee Pay Code Maintenance window
employee tax Maintenance window

Chapter 5
Chapter summary
After completing Chapter 5, you have now learned how to perform detailed maintenance activities
for customers, vendors, inventory items, site locations, and employees. This knowledge is essential
for the remaining chapters in the book.
There are no problems for Chapter 5. There will be questions dealing with maintenance in
subsequent chapters as you learn to process transactions. Next, you will move on to learn and
practice processing a wide variety of transactions and doing other activities in the following two
chapters, starting with expenditures cycle activities in Chapter 6.

Chapter 6
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-3
Prepare a Purchase Order for Inventory Items . . . . . . . . . . . . . . . . 6-4
Receive Goods from a Purchase Order . . . . . . . . . . . . . . . . . . . . 6-6
Pay a Vendor’s Outstanding Invoice . . . . . . . . . . . . . . . . . . . . . . 6-9
Chapter Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 - 12
Problems Dealing with the Expenditures Cycle . . . . . . . . . . . . . . . . . . 6 - 13

Chapter 6
In Chapters 6 and 7, you will learn how to record transactions and perform other activities
commonly done in Microsoft Dynamics GP by using the computer. You will use the same company
that was used in Chapters 3 through 5 (Fabrikam) and the vendor, inventory item, site location,
and customer IDs you created, to complete these two practice chapters. For each of the
practice exercises summarized in Chapters 6 and 7, you are provided information about a
transaction or other activity and Reference book pages that provide detailed instructions to
complete the practice exercise. Windows showing the correct information are provided to help
your learning.
One of the primary purposes of these two practice chapters is for you to familiarize yourself with
using the Reference book. In these two chapters, you should carefully follow the step-by-step
guidance in the Reference book for the group of basic transactions. These transactions represent
a small subset of the many types of transactions recorded by a company. By becoming comfortable
with the Reference book in these chapters, you will be able to successfully record additional
transactions and activities.
The two practice chapters are organized by transaction cycle. The cycle approach means that
related transactions and account balances are included in the same cycle. For example, purchase
transactions, receipt of goods, and paying vendor invoices are included in the expenditures cycle.
Systems designers develop accounting systems using cycles. Similarly, auditors perform audits
following a cycle approach.
The following two cycles are included in the next two chapters:
r Chapter 6 — Expenditures cycle

r Chapter 7 — Revenue cycle
Before beginning the first practice section, you should read the introduction on pages 1 and 2
of the Reference book. Read the Suggested Way to Use the Reference Book section especially
carefully. You should do all of the practice exercises in the order listed in Chapters 6 and 7.
Throughout most of these two practice chapters, 2017 has been adopted as the business activity
year for purposes of demonstrating transaction entry and report generation. Of course, when
companies process information using Microsoft Dynamics GP in real time, the current date
usually is the proper default date for the entry window. You are given a specific date for processing
each practice transaction. Unless otherwise noted, use this same date throughout the entire
transaction.
6–2 CHAPTER 6 — Practice – Expenditures Cycle Activities

Chapter 6
introduction
First you will learn about activities in the expenditures cycle. The following three main activities
are included:
r Prepare a purchase order

r Receive goods from a purchase order
r Pay a vendor’s outstanding invoice
Note
With all transactions, be sure to use the appropriate unique user IDs you created in Chapter 5. It is
also recommended that you capture screenshots of each of your windows prior to saving or posting
(at the point of reviewing the window for accuracy), in the event your instructor wants you to turn
them in.
CHAPTER 6 — Practice – Expenditures Cycle Activities 6–3

Chapter 6
Practice transaction #1 —
Prepare a Purchase order for inventory items
reFereNCe MAteriAl
A purchase order is prepared through the Purchase Order Entry window, an example of which
is shown on page 49 of the Reference book. Read and understand the Prepare a Purchase Order
Overview on page 48 of the Reference book before processing the transaction.
Follow the instructions on pages 48 through 52 of the Reference book as you complete the
practice section. Recall from Chapter 3 that if a box is not mentioned in the Reference book,
you do not have to do anything with that box.
You are to prepare a purchase order for inventory for the sample company, Fabrikam. Keep in
mind that you can make most corrections prior to saving a purchase order by clicking the
appropriate box and correcting the error.
trANsACtioN
Process the purchase order in Microsoft Dynamics GP using the following information,
which is based on the unique IDs you created in Chapter 5, but do not save it yet.
r Type: Standard
r PO number: Accept default
r Date: April 12, 2017
r Vendor ID: Your Unique Vendor ID
r Vendor Name: Your Unique Vendor Name
r Currency: Z-US$
r Inventory ordered:
Item # U of M Qty ordered Unit Cost Description
Your Unique Item ID Each 15 $57.75 Standard phone
r SITE ID: Your Unique Site ID
The diagram on page 6-5 shows the Purchase Order Entry window with the purchase order
entered. Your information will differ by the PO number, your unique IDs, vendor, item, and site
names.
If your window is consistent with the diagram, capture a screen shot of the purchase
order and then save the purchase order. If there are errors, correct them before saving.

Chapter 6
PurChAse orDer reView

Follow the instructions on page 52 of the Reference book to review the purchase order.
When you are done reviewing the purchase order, close all inquiry windows.
Purchase order entry window

Chapter 6
receive goods from a Purchase order
reFereNCe MAteriAl
The receipt of goods from a purchase order is processed through the Receivings Transaction
Entry window, an example of which is shown on page 55 of the Reference book. Read and
understand the Receive Goods from a Purchase Order Overview on page 54 of the Reference
book before processing the transaction. Follow the instructions on pages 54 through 59 of the
Reference book as you complete the practice section.
You are to record a receipt of goods transaction for the sample company, Fabrikam, using the
purchase order you created in Practice Transaction #1. Keep in mind that you can make most
corrections prior to posting the transaction by clicking the appropriate box and correcting the
error.
trANsACtioN
Process a receipt of goods transaction in Microsoft Dynamics GP using the following
information, but do not click the Receive button yet in the Select Purchase Order Items
Window. Complete steps A through J in the Quick Reference Table on page 54 of the
Reference book. Note: Be sure to select Shipment/Invoice in the Type box or the invoice
and related liability will not be recorded.
On April 16, 2017, all goods from the purchase order you created in the first practice transaction
are received from your vendor, along with an invoice. Other details of the transaction follow:
r Type: Shipment/Invoice
r Receipt No.: Accept default RCT
r Vendor Doc. No.: Create a four-digit number
r Date: April 17, 2017
r Vendor Name: Your Unique Vendor Name
r Currency: Z-US$
r PO Number: PO number from Practice Transaction #1
r Quantity Shipped: 15
r Quantity Invoiced: 15
r Payment Terms: 2% 10/Net 30
r General ledger account information:
Dr A/C 000-1300-01 Inventory (Purch)
Cr A/C 000-2100-00 Accounts Payable (Pay)

Chapter 6
The diagrams below and at the top of page 6-8 show the Receivings Transaction Entry – Main
and Receivings Transaction Entry – Distributions windows with the receipt from the vendor
transaction entered. Your information will differ by your Unique Vendor ID and Name, the
Vendor Doc. No. (vendor invoice number), and your Receipt No.
If your windows are consistent with the diagrams, capture screenshots of your windows
and then post the transaction. (Do not save the transaction. If you do, you will receive
a message requesting a batch ID.) If there are errors, correct them before capturing the
screenshots and posting. If you receive a message saying you cannot access a report, click
OK. If you receive several report destination windows, check the screen box and click
cancel through each one.
trANsACtioN reView
Follow the instructions on page 59 of the Reference book to review the receipt of goods
transaction.
error CorreCtioN AFter PostiNg the trANsACtioN

If you discover an error after posting the receipt of goods transaction, refer to Appendix A in the
Reference book.
receivings transaction entry – Main window

Chapter 6
receivings transaction entry – Distributions window

Chapter 6
Pay a Vendor’s outstanding invoice
reFereNCe MAteriAl
Payment of a vendor’s outstanding invoice is processed through the Payables Manual Payment
Entry and Apply Payables Documents windows, examples of which are shown on page 61 of the
Reference book. Read and understand the Pay a Vendor’s Outstanding Invoice Overview on page
60 of the Reference book before processing the transaction. Follow the instructions on pages 60
through 64 of the Reference book as you complete the practice section.
You are to record a payment to the invoice received in Practice Transaction #2 from the vendor
you created. Keep in mind that you can make most corrections prior to posting the transaction
by clicking the appropriate box and correcting the error.
trANsACtioN
Process a cash disbursement in Microsoft Dynamics GP using the following information,
but do not post the transaction yet.
r Payment number: Accept default

r Date: May 1, 2017
r Currency ID: Z-US$
r Payment method: Check
r Checkbook ID: Uptown Trust
r Document No. Accept default
r Amount paid: $866.25
r General ledger account information:
Dr A/C 000-2100-00 Accounts Payable (Pay)
Cr A/C 000-1100-00 Cash (Cash)
The diagrams on pages 6-10 and 6-11 show the Payables Manual Payment Entry, the Apply
Payables Documents, and the Payables Transaction Entry Distribution windows with the practice
transaction entered. Your windows may contain different default numbers and your information
will differ by your unique IDs. Your default G/L accounts may differ slightly from the diagram.
If your windows are consistent with the diagrams, capture screenshots of your windows
and then post the cash disbursement. If there are errors, correct them before capturing
the screenshots and posting. As before, cancel any report distribution windows.

Chapter 6
trANsACtioN reView
Follow the instructions on page 64 of the Reference book to review the cash disbursement
transaction just posted.
error CorreCtioN AFter PostiNg

If you discover an error after posting the cash disbursement transaction, refer to Appendix A in
the Reference book.
Payables Manual Payment entry window
6 – 10 CHAPTER 6 — Practice – Expenditures Cycle Activities

Chapter 6
Apply Payables Documents window
Payables transaction entry Distribution window
CHAPTER 6 — Practice – Expenditures Cycle Activities 6 – 11

Chapter 6
Chapter summary
This completes practice for activities in the expenditures cycle. You have now practiced the three
transactions listed in the Introduction to this chapter. You will use the knowledge you have
gained in this chapter as you do Chapters 8 and 9. You are not, however, expected to be able to
process transactions and do other activities without the use of the Reference book. You should
plan to use the Reference book for all remaining parts of the project.
One way for you to summarize the information you have learned is to reread the brief Overview
in the Reference book for each section. This Overview emphasizes what is being accomplished
using Microsoft Dynamics GP, not how to do the activity.
You should now proceed to answer the student questions and problems in the next pages that
your instructor assigned.
6 – 12 CHAPTER 6 — Practice – Expenditures Cycle Activities

Name:
Chapter 6
Problems Dealing with the expenditures Cycle

Some of these problems require only a printout of a solution. For these, include the problem
number on the printout you hand in to the instructor. Where the problem requires you to write
an answer, do so on pages 6-13 and 6-15. It is more convenient to complete the problems if you
remove these pages now.
ProBleM 6-1. Fabrikam Practice transactions #1 through #3

Combine your screenshots from the three practice transactions into one Word file and
submit the file to your instructor. The file should include all screenshots from your purchase
order, item receipt/vendor invoice, and payment practice transactions. If you do not capture
screenshots while going through the transactions, you can use the Inquiry function in
Purchasing (Transactions by Vendor) and Cards.
ProBleM 6-2. Fabrikam

Answer the following questions using Fabrikam:
a. Using Lists, how many total January 2017 payable transactions did Fabrikam have
(Payables Transactions folder)?
b. Using Inquiry, do you get the same or a different answer if you use Purchasing
Inquiry Transaction by Document, compared to using the Lists function?
c. Which folder should you use in SmartList to arrive at the same result as when you
used Inquiry?

Name:
Chapter 6

Fabrikam, Inc., is looking to build a long-term relationship with a trucking company in the
city that ships the most product purchases within the state of Illinois. You have been asked
to identify the city in Illinois with the greatest dollars of purchase costs as the first step to
identify one or more shipping companies in that city. Fabrikam has not maintained shipping
cost details because all product purchases are FOB destination. The assumption is that the
city with the greatest amount of product purchases represents the city with the greatest
shipping and distribution costs.
Required:
Which two cities have the greatest amount of product purchases? Hints: Use the Vendors list
in SmartList. The only columns you will need are Vendor Name, State, City, and Amount
Paid YTD. Export to Excel. Prepare and print out a summary that provides the information
requested by management in an easy to read format.

Chapter 7
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-2
Practice Transaction #1 — Make a Credit Sale . . . . . . . . . . . . . . . . . . 7-3
Receive Goods on a Sales Return . . . . . . . . . . . . . . . . . . . . . . . 7-6
Collect an Outstanding Account Receivable . . . . . . . . . . . . . . . . . 7 - 10
Chapter Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 - 14
Problems Dealing with the Revenue Cycle . . . . . . . . . . . . . . . . . . . . . 7 - 15

Chapter 7
introduction
You will be processing basic revenue cycle transactions in Chapter 7. They are similar to those in
the expenditures cycle and the same approach is followed. The following types of activities are
included in the revenue cycle:
r Make a credit sale

r Receive goods on a sales return
r Collect an outstanding account receivable
7–2 CHAPTER 7 — Practice – Revenue Cycle Activities

Chapter 7
Practice transaction #1 — Make a Credit sale
reFereNCe MAteriAl
A credit sale is processed through the Sales Transaction Entry window, an example of which is
shown on page 5 of the Reference book. Read and understand the Make a Credit Sale Overview
on page 4 of the Reference book before processing the transaction.
Follow the instructions on pages 4 through 9 of the Reference book as you complete the practice
section. Recall from Chapter 3 that if a box is not mentioned in the Reference book, you do not
have to do anything with that box.
You are to record a credit sale invoice for the sample company, Fabrikam. Keep in mind that you
can make most corrections prior to posting the transaction by clicking the appropriate box and
correcting the error.
Process a credit sale invoice in Microsoft Dynamics GP using the information that follows
(and using the unique IDs you created in Chapter 5), but do not post the invoice yet. Be
sure to select Invoice in the Type / Type ID box. Note: It is likely to be more convenient if
you change the default date in the lower-left corner of the Microsoft Dynamics GP main
window to June 12, 2017. Doing so changes the date in all windows you access for this
transaction to 06/12/2017. To change the default date, click the date in the lower-left
corner of the screen and then change the date in the window that appears.
r Document No.: Use default

r Customer ID: Your Unique Customer ID
r Customer Name: Your Unique Customer Name
r Date: June 12, 2017
r Default Site ID: Your ID
r Customer PO: 63014
r Products sold:
Item # Inv. Qty. Unit Price Description Unit Cost Mkdown
Your Unique ID 10 $115.50 Std. phone $57.75 None
r General ledger account information: All default account numbers are correct.
The diagrams on pages 7-4 and 7-5 show the Sales Transaction Entry and Sales Distribution Entry
windows with Practice Transaction #1 entered. Your default G/L accounts may differ slightly from
the diagram.
If your windows are consistent with the diagrams, make screen captures of your windows
and then post the invoice. Again, cancel any report destination windows. If there are
errors, correct them before posting.
CHAPTER 7 — Practice – Revenue Cycle Activities 7–3

Chapter 7
trANsACtioN reView
Follow the instructions on page 9 of the Reference book to review your invoice.
When you are done reviewing the invoice, close all inquiry windows.
sales transaction entry window

Chapter 7
sales Distribution entry window

Chapter 7
receive goods on a sales return
reFereNCe MAteriAl
A sales return is processed through the Sales Transaction Entry window, an example of which is
shown at the top of page 22 of the Reference book. A sales return is applied to outstanding
invoices through the Apply Sales Documents window, an example of which is shown at the top
of page 23 of the Reference book. Both processing and applying sales returns are necessary for
each sales return transaction. Read and understand the Receive Goods on a Sales Return
Overview on page 20 of the Reference book before processing the transaction. Follow the
instructions on pages 20 through 27 of the Reference book as you complete the practice section.
You are to record a sales return for the sample company, Fabrikam, and apply the sales return to
an outstanding invoice. Keep in mind that you can make most corrections prior to posting the
transaction by clicking the appropriate box and correcting the error.
Follow steps A through T in the Quick Reference Table on page 20 of the Reference book
to record the following sales return in Microsoft Dynamics GP, but do not post the sales
return or apply it to the outstanding invoice yet. Note: It is likely to be more convenient
if you change the default date in the lower-left corner of the Microsoft Dynamics GP
main window to June 20, 2017. Doing so changes the date in all windows you access for
this transaction to 06/20/2017. Use the following information to record the sales return.
The practice transaction is related to the credit sale to your unique customer that you processed
in the Make a Credit Sale practice section on pages 7-3 through 7-5 (Practice Transaction #1). On
June 20, 2017, the customer returned some of the items purchased on the invoice. See below and
the top of the following page for other details of the sales return.
r Document No.: Accept default RTN

r Customer Name: Your Unique Customer Name
r Date: June 20, 2017
r Default Site ID: Your ID
r Customer sales return request number: RR5407 (in Customer PO Number box)

Chapter 7
(continued from the previous page)
r Items returned:
Qty. Returned Unit Price/ Original
Item # Returned as Unit Cost Description Markdown
Your Unique ID 2 On Hand $115.50 /$57.75 Std. phone None
The diagrams on page 7-8 show the Sales Transaction Entry and Sales Distribution Entry windows
with the practice sales return transaction entered. Your default G/L accounts may differ slightly
from the diagram.
and post the sales return. Cancel any report destination windows. If there are errors,
correct them before posting.
Close the Sales Transaction Entry window.
APPly the sAles returN

After the sales return transaction is posted, it must be applied to your original invoice using the
Apply Sales Documents window.
Follow steps V through AC in the Quick Reference Table on page 21 of the Reference book
to apply the sales return to your invoice, but do not click the OK button yet.
The diagram on page 7-9 shows the Apply Sales Documents window with the sales return
properly applied (with the Show Details button activated).
If your window is consistent with the diagram, make a screen capture of your window
and click the OK button. If there are errors, go back and correct them before clicking the
OK button.
trANsACtioN reView
Follow the instructions on page 27 of the Reference book to review the sales return.
error CorreCtioN AFter PostiNg the trANsACtioN

If you discover an error after posting or applying the sales return transaction, refer to Appendix
A in the Reference book.

Chapter 7
sales transaction entry window
sales Distribution entry window

(with Hide Details button clicked to show all G/L postings for illustration purposes only)

Chapter 7
Apply sales Documents window
Collect an outstanding Account receivable
reFereNCe MAteriAl
A collection of an account receivable is processed through the Cash Receipts Entry and Apply
Sales Documents windows, examples of which are shown on page 29 of the Reference book.
Similar to sales returns, the purpose of applying is to maintain the accounts receivable subsidiary
records. In addition, the bank deposit must be recorded as a separate process. Both processing
and applying cash receipts are necessary for each collection. Read and understand the Collect an
Outstanding Account Receivable Overview on page 28 and Make a Bank Deposit Overview on
page 44 of the Reference book before processing the transaction. Follow the instructions on
pages 28 through 31 and pages 44 through 46 of the Reference book as you complete the practice
section.
You are to record an account receivable collection for the sample company, Fabrikam, using the
unique IDs you created in Chapter 5. The collection is on the credit sale you made in Practice
Transaction #1. Recall that the receivable was reduced by the return in Practice Transaction #2.
Keep in mind that you can make most corrections prior to posting the transactions by clicking
the appropriate box and correcting the error.

Chapter 7
Record the account receivable collection for your unique customer in Microsoft Dynamics
GP using the information that follows, but do not post the transaction yet.
On July 7, 2017, your unique customer sent a check in full payment of the invoice you created in
Practice Transaction #1, which is reduced by the sales return you processed in Practice Transaction
#2. The payment was outside the discount period. Note: It is likely to be more convenient if you
change the default date in the lower-left corner of the Microsoft Dynamics GP main window to
July 7, 2017. Doing so changes the date in all windows you access for this transaction to 07/07/2017.
r Receipt: Use default

r Name: Your Unique Customer Name
r Date: July 7, 2017
r Amount: $924.00
r Checkbook ID: UptownTrust
r Check/Card Number: Create your own unique four-digit number
The diagrams on page 7-12 show the Cash Receipts Entry and Apply Sales Documents windows
with the Practice Transaction #2 entered. Again, ignore the contents of the Receipt and Document
No. Boxes in these diagrams.
and post the transaction. Cancel any report destination windows. If there are errors, go
back and correct them before posting.
Close the Cash Receipts Entry window.
MAKe A BANK DePosit

Now you are to record the bank deposit for the check received from your unique customer.
Process the bank deposit in Microsoft Dynamics GP following the instructions on pages
44 through 46 of the Reference book, but do not post the transaction yet. Note: To make
it easier to find your unique cash receipt, unmark all receipts and limit the date range to
07/03/2017 to 07/10/2017.
The diagram on page 7-13 shows the Bank Deposit Entry window with the deposit completed.
Ignore the contents of the Deposit Number box; your window may contain a different default
number.
If your window is consistent with the diagram, post the deposit. If there are errors, correct
them before posting.
7 – 10 CHAPTER 7 — Practice – Revenue Cycle Activities

Chapter 7
trANsACtioN reView
Follow the instructions on page 31 of the Reference book to review the account receivable
collection transaction just posted.
error CorreCtioN AFter PostiNg the trANsACtioNs

If you discover an error after posting either practice transaction, refer to Appendix A in the
Reference book.
CHAPTER 7 — Practice – Revenue Cycle Activities 7 – 11

Chapter 7
Cash receipts entry window — Practice transaction #3
Apply sales Documents window — Practice transaction #3

Chapter 7
Bank Deposit entry window — Practice transaction #3

Chapter 7
Chapter summary
You have now practiced the transactions listed on page 7-2. You will use the knowledge you have
gained in this chapter as you do revenue cycle transactions in Chapter 8 for Waren Sports Supply.
You are not, however, expected to be able to process revenue transactions and do other activities
without the use of the Reference book.
One way for you to summarize the information you have learned is to reread the brief Overview
in the Reference book for each revenue section activity. This Overview emphasizes what is being
accomplished using Microsoft Dynamics GP, not how to do the activity.
You should now proceed to the student problems and cases on the following pages to answer
problems that your instructor assigned.

Name:
Chapter 7
Problems Dealing with the revenue Cycle

Many of these problems require only a printout of a solution. For these, include the problem
number on the printout you hand in to the instructor. Where the problem requires you to write
an answer, do so on pages 7-15 and 7-17. It is more convenient to answer the questions if you
remove these pages now.
ProBleM 7-1. Fabrikam Practice transactions #1 through #3

Combine the screen shots from the three practice transactions into one word file and submit
to your instructor. If you did not capture screen shots while going through the transactions,
you can use the Inquiry function in Sales (Transactions by Customers).

The accounts receivable department would like a printout of all customer accounts receivable
balances in excess of $10,000 for Fabrikam. The list should be in alphabetical order by state
and include the total amount for the accounts on the list.
Required:
Print the list of accounts receivable requested. Hint: Use Administration Reports
SmartList. Click the plus sign next to Sales, the plus sign next to Customers, then click
Customer balance.

The management of Fabrikam would like a printout of all year-end accounts receivable from
three states: Michigan, Minnesota, and Wisconsin. Receivables from each state should be
separated and ordered from largest to smallest for each state. All accounts with balances less
than $2,000 should be deleted. The total of the remaining accounts receivable for each state
should be totaled, along with the combined total for all three states.
Required:
Prepare the information requested and print it. Hint: For each state, use Search to restrict
state and customer balance to no more than 1999.99. The column headings should include
only the customer account number, customer name, customer balance, and state, in that
order.

Name:
Chapter 7

Operating cash flow is a concern for the management of Fabrikam. To encourage early
payment, management offers a discount to all customers. Management has asked you to
identify the customers that do and do not take advantage of the discount and prepare a
report identifying the extent to which the discounts were taken and not taken. Exclude
customers who have no year-to-date sales.
Required:
Print a report showing the information requested. Your report should use the format shown
below, including the columns. Sort the report to show the smallest Percent Discounts Taken
to the largest. Hint: Use SmartList Customers folder and use Search to restrict Total Sales
YTD to more than 0.
Total Sales Total Discounts Percent

Customer Name YTD Taken YTD Discounts Taken

Chapter 8
options A, B, and C. This chapter has three options depending upon your
previous experience with a manual version systems project called the Systems
Understanding Aid, written by the same authors as this computerized project.
Your instructor will inform you which option you are to perform.
Option A is for students who have completed the Systems Understanding Aid
using Transactions List A (Document No. 1)
Option B is for students who have completed the Systems Understanding Aid
using Transactions List B (Document No. 1)
Option C is for students who have not used the Systems Understanding Aid before
(Chapter index on the following page)

Chapter 8
recording transactions and Adjustments and

Performing Month-end and year-end Closing Procedures
oPtioN A
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-3
Perform Maintenance for Inventory Sales Prices . . . . . . . . . . . . . . . . . 8-4
Record December 16–31 Transactions
and Perform Related Maintenance . . . . . . . . . . . . . . . . . . . . . . . 8-6
Perform December 2013 Month-end Procedures . . . . . . . . . . . . . . . . 8 - 14
Record 2013 Year-end Adjusting Entries . . . . . . . . . . . . . . . . . . . . . . 8 - 17
Print Financial Statements and Other Reports . . . . . . . . . . . . . . . . . . 8 - 21
Reports and Questions to Hand In . . . . . . . . . . . . . . . . . . . . . . . . . 8 - 22
Perform Year-end Closing Procedures . . . . . . . . . . . . . . . . . . . . . . . 8 - 22
Check Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 - 24
Questions About Waren Sports Supply . . . . . . . . . . . . . . . . . . . . . . . 8 - 29
oPtioN B
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 - 31
Perform Maintenance for Inventory Sales Prices . . . . . . . . . . . . . . . . . 8 - 32
Record December 16–31 Transactions
and Perform Related Maintenance . . . . . . . . . . . . . . . . . . . . . . . 8 - 34
Check Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 - 56
oPtioN C
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 - 63
Perform Maintenance for Inventory Sales Prices . . . . . . . . . . . . . . . . . 8 - 64
Record December 16–31 Transactions and
Perform Related Maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . 8 - 66
Check Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 - 84
8–2 CHAPTER 8 — Recording Transactions/Closing Procedures

Chapter 8
oPtioN A — introduction
In this chapter, you will record the same December 16–31, 2013, transactions for Waren Sports
Supply that you did in the Systems Understanding Aid (SUA). [Remember that date entry boxes
in Microsoft Dynamics GP default to your computer’s current date. Thus, you may need to change
them all back to 2013 dates for this project. It is suggested that you change the user date in the
lower-left corner of the Microsoft Dynamics GP main window to 12/31/13. If you forget to change
the date for a transaction, you will at least record transactions in the correct accounting period.]
You will also complete other activities commonly done with accounting software and print
several items to hand in to your instructor.
wArNiNg
An important difference in this assignment compared to previous ones is the lack of detailed
instructions for using Microsoft Dynamics GP to record transactions and perform other activities. You
should consult the Reference book carefully for each transaction and activity in this chapter. Keep in
mind that there are several transactions and activities in this chapter that you have not previously
practiced. It is in your best interest to consult the Reference book, including the detailed instructions
provided in each applicable section, as you complete this chapter. If you do not do so, you will likely
make errors that cannot be corrected without significant additional work. (See Appendix A of the
Reference book.) It is worth your time to follow the step-by-step instructions in the Reference book
for each transaction or activity.
In recording the transactions and performing the other activities for Waren Sports Supply, you
will need several things:
Optional Items from the SUA (not required; all necessary information from the SUA has
been incorporated in this chapter):
— Instructions, Flowcharts, and Ledgers book
— Journals book
— All year-end financial statements and schedules you prepared for Waren Sports
Supply in the SUA
Information in this chapter. The material instructs you what to record or do.
Reference Summary Card. Use this to locate the appropriate pages in the Reference book for
recording transactions or doing other activities.
Reference book. Open the Reference book to the appropriate pages for the transaction you
are recording or other activity you are doing and follow the instructions. Because you
cannot restore the Waren Sports Supply dataset at any time during the project, it is
imperative that you follow the detailed Reference book instructions for each transaction
or activity.
Cloud access to the Microsoft Dynamics GP software. See Chapter 1.
A printer connected to your computer.
CHAPTER 8 — Recording Transactions/Closing Procedures 8–3

Chapter 8
When you have completed this chapter, you will be asked to turn in to your instructor several
printouts and page 8-29. Certain printouts will not be handed in to your instructor, but they are
to be printed for your use to answer questions.
Jim Adams has recorded all transactions for the year ended 12/31/13 through December 15,
2013, using Microsoft Dynamics GP. This is consistent with the SUA. For this assignment, you
will do the following using Microsoft Dynamics GP:
Perform maintenance for inventory sales prices.
Record December 16–31 transactions and perform related maintenance.
Perform December 2013 month-end procedures.
Record 2013 year-end adjusting entries.
Print financial statements and other reports.
Perform year-end closing procedures.
When you are finished, the financial statements and other results will be comparable to the
correct solution for the Systems Understanding Aid.
oPtioN A —
Perform Maintenance for inventory sales Prices
The price and cost list on page 8-5, taken from the SUA, reflects the current selling prices and
costs for Waren’s thirty products. In this section, you will compare the selling price of each
product to the amounts included in Microsoft Dynamics GP and update the software for any
differences.
Browse ButtoN hiNt

For efficiency in moving through the inventory items, you may use the browse buttons at the
bottom left of the Item Price List Maintenance window. Use the browse button to the far left to
move to the first record in a list. When finished with that record, use the browse button directly
to the right of center to move to the next record in the list. If needed, the browse button directly
to the left of center moves to the previous record in the list and the one on the far right moves to
the last record in the list. These browse buttons are available in all windows involving multiple
record files.
Open Waren Sports Supply.
Perform maintenance for inventory sales prices for each inventory item, following the
guidance on page 122 of the Reference book. You will need to use the Item Price List
Maintenance window to update the sales prices. Be sure to save each inventory item
changed before proceeding to the next inventory item.
8–4 CHAPTER 8 — Option A

Chapter 8
Price and Cost list

as of December 15, 2013
Item No. Description Cost Selling Price
BA-054 Premium aluminum bat $139.00 $205.00
BA-158 Baseballs – 12 game balls 42.00 65.00
BA-199 Fielding glove 46.00 61.00
BA-281 60 lb. dry line marker 65.00 107.00
BA-445 Catcher’s mask 48.00 72.00
BA-507 Baseball equipment bag 27.00 41.00
BA-667 Ball bucket with seat – set of 3 23.00 32.00
BA-694 Batting gloves – 1 pair 24.00 33.00
BA-807 Pitching machine 164.00 240.00
BA-859 Set of bases 111.00 185.00
BB-008 Basketball 25.00 35.00
BB-019 Basketball pole pad 94.00 135.00
BB-113 Scoreboard and timer 258.00 400.00
BB-267 Goal and rim set 95.00 140.00
BB-358 Backboard 83.00 115.00
BB-399 Basketball net 10.00 14.00
BB-431 Whistle and lanyard – set of 6 25.00 35.00
BB-538 Basketball bag 26.00 42.00
BB-688 Portable inflation pump 69.00 110.00
BB-926 Trainer’s first aid kit 30.00 43.00
FB-027 Shoulder pad set 89.00 125.00
FB-091 Hip, tail, arm pad set 39.00 58.00
FB-225 Football helmet 55.00 90.00
FB-344 Football 21.00 29.00
FB-513 Portable storage locker 135.00 225.00
FB-573 Kicking tees – set of 6 16.00 25.00
FB-650 Football post pad 96.00 150.00
FB-812 Collapsible cones – set of 8 27.00 38.00
FB-874 Sideline repair kit 83.00 122.00
FB-952 Portable hand warmer 26.00 40.00
After you complete inventory sales price maintenance, the Microsoft Dynamics GP files will
contain the correct default sales price and cost for each inventory item. These sales prices and
costs are used for all purchases and sales of inventory between December 16 and December 31,
2013.
CHAPTER 8 — Option A 8–5

Chapter 8
oPtioN A — record December 16 – 31 transactions

and Perform related Maintenance
The transactions on pages 8-7 through 8-13 for December 16 through December 31 are the same
as the transactions you recorded in the SUA, except where noted. Events and information that are
not necessary to process the transactions in Microsoft Dynamics GP have been removed. In addition,
supplemental information from the SUA documents has been incorporated into the Microsoft
Dynamics GP transactions list so that you will not need the SUA transactions list or the SUA
documents to complete this section. The transactions should be dealt with in the order listed.
Some of the transactions must be recorded whereas others require only maintenance.
In dealing with each transaction or maintenance task, the information you have already learned
about Microsoft Dynamics GP during Familiarization and Practice are used. You should use the
Microsoft Dynamics GP Reference book and information from prior chapters to the extent you
need it. Also, if you want to check whether information was recorded, it is easy to determine by
using the Inquiry function. You can also compare each transaction you record in Microsoft
Dynamics GP to the result you obtained when you did the SUA, although this is not required. Use
the SUA journals book for this comparison.
Recall that most transaction entry windows in Microsoft Dynamics GP provide access to an
additional window for entering general ledger account distributions. All default general ledger
distribution accounts are correct for Waren’s December 16–31 transactions unless otherwise
noted on pages 8-7 through 8-13.

Chapter 8
wAreN sPorts suPPly

trANsACtioNs For DeCeMBer 16–31, 2013
Record each of the following transactions (#1 through 16) using Microsoft Dynamics GP.
Hints are provided in boxed areas like this.
Use care in recording each transaction. At a minimum, you should follow each step in the
Quick Reference Table for each transaction, but we encourage you to also read the detailed
instructions that follow the window illustrations in the applicable Reference book section. It
may take slightly more time, but it will almost certainly help you avoid serious errors. Find the
appropriate Quick Reference Table for each transaction or other activity by using the Reference
Summary Card.
trans. # December
1 16 Prepare a purchase order: Ordered the following inventory on account from

Velocity Sporting Goods using purchase order No. 328. The goods will be
received at the warehouse at a later date. The purchase order total is $19,750.
Units Item # Description
115 BB-019 Basketball pole pad
60 BB-538 Basketball bag
70 BB-688 Portable inflation pump
85 BB-926 Trainer’s first aid kit
2 16 Receive a miscellaneous cash receipt and make a bank deposit: Borrowed and
deposited $80,000 from First American Bank & Trust by issuing a two-year
note payable. Check No. 545 for $80,000 was received and deposited.
The credit portion of the transaction should be posted to account

#21000, Notes Payable.
After recording the cash receipt, record the deposit into the bank on
the same day using the Bank Deposit Entry window (see pages 44
through 46 of the Reference book).

Chapter 8
trans. # December
3 19 Make a credit sale: Received customer purchase order No. ST3107 in the

mail from Clayborn University, approved their credit, prepared invoice
No. 731 totaling $15,025, and shipped the goods from the warehouse. The
following goods were shipped (only 45 shoulder pad sets were available for
shipment out of the 60 that were ordered):
25 BB-267 Goal and rim set
20 BB-358 Backboard
45 FB-027 Shoulder pad set
40 FB-225 Football helmet
4 20 Change an employee record (employee maintenance): Increased employee

salary and wage rates, effective December 16. Recall that for hourly
employees, overtime is paid at 1.5 times the regular hourly rate. There
were no changes in filing status or withholding allowances.
Employee New Salary/Wage Rate
Ray Kramer $3,600, semimonthly
Jim Adams $22.00 per hour
Nancy Ford $18.00 per hour
Remember to use the Go To menu in the Employee Maintenance

window to access the Employee Pay Code Maintenance window.
When asked, “Do you want to roll down this rate change to all pay
codes based on this pay code?”, click Yes for hourly employees and No
for salaried employees.
Remember to use the browse buttons to move through the employee
records.

Chapter 8
trans. # December
5 23 Receive goods from a purchase order: Received merchandise from Velocity

Sporting Goods as listed on purchase order No. 328, along with invoice
#34719. The payment terms on the invoice are 2/10, Net 30. All merchandise
listed on the purchase order was delivered in good condition and in the
quantities ordered, except that only 100 basketball pole pads (Item
No. BB-019) were received. The total of the invoice is $18,340. The goods
were placed immediately in the inventory warehouse.
Be sure to select “Shipment/Invoice,” not “Shipment,” in step B of the

Quick Reference Table.
Be sure to do step G, click the Auto-Rcv button.
If you receive a message about a reports dictionary, you can ignore it
by clicking OK.
6 23 Collect an outstanding account receivable and make a bank deposit: Received

check No. 28564 for $1,622.88 from Branch College for payment in full of
sales invoice No. 730, and deposited the check. The early payment discount
taken by Branch College was $33.12.
7 23 Write off an uncollectible account receivable: Received legal notification from

Benson, Rosenbrook, and Martinson, P.C., attorneys at law, that Stevenson
College is unable to pay any of its outstanding debts to its suppliers. The
$2,900 balance remaining on invoice #719 should therefore be written off
as uncollectible. Recall that Waren uses the allowance method for recording
bad debt expense.

Chapter 8
trans. # December
8 24 Receive goods on a sales return: Eastern Wisconsin University (EWU)

returned 8 basketball pole pads and 6 scoreboard and timer sets that were
originally purchased on invoice No. 729. The goods are to be returned to
On Hand status. Waren previously authorized EWU by phone to return
the goods for credit against their account balance. EWU’s return request
#R8034 was received with the goods. Sales return document CM 42 was
issued for $3,480 and applied to invoice No. 729.
Remember to apply sales return document CM 42 to invoice No. 729.

See steps V through AC in the Quick Reference Table.

and deposited check No. 49326 for $9,000 from Eastern Wisconsin University
in partial payment of the remaining amount (after sales return) on invoice
No. 729.
10 24 Purchase goods or services without a purchase order: Received freight bill No.
26425 for $483.00 from Interstate Motor Freight and immediately issued
check No. 1152 for payment in full. The freight bill relates to the merchandise
received from purchase order No. 328. The payment terms on the freight
bill are Net 30.
Be sure to enter the payment information for check No. 1152. See step I
in the Quick Reference Table.
8 – 10 CHAPTER 8 — Option A

Chapter 8
trans. # December
11 24 Make a cash sale and make a bank deposit: Received and deposited check
No. 7403 for $9,165 and customer purchase order No. 94772 in the mail
from Andover University for a cash sale. The goods were shipped from the
warehouse and the cash sale was processed and recorded using invoice
No. C-30. All goods ordered were shipped as follows:
150 BB-008 Basketball
30 FB-091 Hip, tail, arm pad set
75 FB-344 Football
Do not forget steps R through X in the Quick Reference Table (enter

customer’s payment information) or you will not be able to deposit the
check.
After recording the cash sale, record the deposit into the bank on the
same day using the Bank Deposit Entry window (see pages 44 through
46 of the Reference book).
12 26 Receive goods from a purchase order: Received, and recorded as an expense,

office supplies from Chicago Office Supply as listed on purchase order
No. 327, which is shown as an open purchase order in Microsoft Dynamics GP.
Chicago Office Supply’s vendor invoice No. 2378 was received with the
goods, totaling $559.15 including sales tax of $31.65. The payment terms
on the invoice are “Upon receipt.” All supplies ordered on purchase order
No. 327 were received in good condition and taken to the warehouse.

Remember to enter the sales tax amount in the Tax box (step M in the
Quick Reference Table).
by clicking OK.
CHAPTER 8 — Option A 8 – 11

Chapter 8
trans. # December
13 30 Pay a vendor’s outstanding invoice: Issued check No. 1153 for $17,973.20 to

Velocity Sporting Goods for payment in full of invoice No. 34719 for goods
received December 23. The early payment discount taken by Waren was
$366.80.
14 31 Pay employees: Finished the payroll for the semimonthly pay period
December 16–31, 2013, and issued checks No. 1154 through 1156. There
were 12 days in the pay period. Regular and overtime hours for hourly
employees were as follows:
Regular Overtime
Employee Hours Hours
Jim Adams 96 8.73
Nancy Ford 96 5.09
Follow all steps in the Quick Reference Table on pages 72 and 73

carefully.
Read the hints on page 73 of the Reference book before processing the
December 31, 2013, payroll checks.
15 31
maintenance: Received two laptop computers from Chicago Office Supply
ordered on Waren’s purchase order No. 325, which is shown as an open
purchase order in Microsoft Dynamics GP. Also received vendor’s invoice
No. 2423 from Chicago Office Supply, totaling $4,558 including sales tax
of $258. The payment terms on the invoice are “Upon receipt.” The
computers were received in new and undamaged condition in the
warehouse. The estimated useful life is 5 years with no salvage value. After
they were unpacked and tested, they were taken directly to the office. They
were not paid for. See hint box on the following page.

Chapter 8
trans. # December
15 31 (continued from the previous page)

Remember to enter the sales tax amount in the Tax box (step M).
You must now change the general ledger account for the cost of the
computers ($4,300) at the Item Detail level. Click the Item Detail tab,
then type [10800] in the Purchases Account box in the middle of the
window. Click Yes when asked if you want to update the account for
this line item. Then click Save.
Next, click the Distributions tab. You must now enter account #10800,
Fixed Assets for the Tax debit (Type = TAX).
After recording the receipt of the computers, you must now add a fixed
asset record for the computers using the instructions on page 124 of
the Reference book. Use an Asset ID of 0005 and a Class ID of OFFICE
when adding the record.
by clicking OK.
16 31 Purchase goods or services without a purchase order: Received vendor invoice

No. 72654 for $1,100 from the University Athletic News for advertisements
Waren ran during the Christmas season and immediately issued check
No. 1157 for payment in full. The payment terms on the invoice are “Upon
receipt.”

Chapter 8
oPtioN A —
Perform December 2013 Month-end Procedures
Because many of Waren’s month-end procedures are done automatically by Microsoft Dynamics
GP, the only month-end procedures you will need to perform are:
Accrue monthly unemployment taxes.

Prepare the December bank reconciliation.
Post December 16–31 transactions to the general ledger.
Perform accounts receivable aging and print a customer monthly statement.
ACCrue MoNthly uNeMPloyMeNt tAXes

Recall from the SUA that only one of Waren’s employees, Nancy Ford, remains subject to federal
and state unemployment taxes as of December 2013. Microsoft Dynamics GP calculates both
SUTA and FUTA automatically when monthly payroll reports are run. Complete the following
steps to record the monthly SUTA and FUTA entry for Waren:
Click HR & Payroll Reports Period-End to access the Period-End Payroll Reports
window.
Select Month in the Type box.
Select December in the Month box.
Click both the FUTA Tax and SUTA Tax check boxes in the Post Liabilities portion of the
window so that both check boxes are marked.
Click the Process button in the lower-right corner of the window.
Click Yes twice when asked if you are sure you want to post the liabilities. Several
processing windows will flash across the screen during the unemployment tax
calculations.
When the last processing window disappears, review and then close the Screen output
windows for both the Monthly FUTA Posting Register and the Monthly SUTA Posting
Register.
PrePAre the DeCeMBer BANK reCoNCiliAtioN
Check Figure for Your Cash Balance
Before starting the December bank reconciliation, be sure that your cash balance is correct by
completing the steps on the following page:

Chapter 8
Click Financial Inquiry Checkbook Register to open the Checkbook Register Inquiry
window.
Select FIRST (First American Bank & Trust) in the Checkbook ID box.
Review the contents of the Current Balance box. The balance should be $108,932.43. If it is not,
the first thing to check is whether you remembered to record a bank deposit for transactions #2,
6, 9, and 11. If you forgot to record any or all bank deposits, record them now following the
Reference book instructions on pages 44 through 46.
If you have recorded all bank deposits and your cash balance is still wrong in the Checkbook
Register Inquiry window, return to the December 16–31 transactions to locate and correct any
other errors before starting the bank reconciliation. When your cash balance is correct, continue
with the requirements that follow.
Bank Reconciliation Information, Process, and Printing
As you process through the December reconciliation steps (computer symbols), do them in order
and do not click on the Reconcile button until told to do so. You will need to print some reports
first, and those reports will not be available after you click on the Reconcile button.
The following information is taken from the December bank statement and the November bank
reconciliation, neither of which is included in these materials:
The December 31, 2013, bank statement balance is $123,376.53.

The following checks have not cleared the bank as of December 31: check numbers 1118,
1143, 1152, 1153, 1154, 1155, 1156, and 1157.
The December 24 cash receipts from Eastern Wisconsin University and Andover
University have not cleared the bank as of December 31.
A service charge of $27.50 is included on the December bank statement. Note: The bank
service charge should be posted to account #41000 – Other operating expense.
Prepare the December bank reconciliation, but do not click the Reconcile button yet
(step S in the Quick Reference Table on page 90 of the Reference book) because you need
to print the reconciliation first. The cutoff date for the bank reconciliation is December 31,
2013.
When the reconciliation is correct, click the Print button to open the Print Reconciliation
Reports window.
Remove the check marks next to the following reports so that they do not print: Bank
Adjustments Edit List and Marked Transactions Report. Then click the OK button. A
Report Destination window will open for the first checked report, Reconciliation Edit
List.

Chapter 8
Select Standard as the Report Type (if that option is not already selected), make sure
that only the Screen box is checked, and then click OK. Next you will get the Report
Destination window for the Outstanding Transactions Report.
Select Standard as the Report Type (if that option is not already selected), make sure that
only the Screen box is checked, and then click OK. This will bring up the screen output
for the first report selected, Reconcile Journal.
Click the print button in the top-left corner of this window to print the reconciliation.
Click OK when asked if you trust the application to print to your printer. Then print a
hard copy of the report. Close the screen output window.
Repeat the previous step for the next output screen to come up, Outstanding Transactions
Report.
Review your printed output for accuracy and acceptability. You will hand in these
reports to your instructor along with year-end reports.
Click the Reconcile button in the Select Bank Transactions window (step S in the Quick
Reference Table on page 90 of the Reference book).
Post DeCeMBer 16–31 trANsACtioNs to the geNerAl leDger

Waren’s accountant posted all transactions to the general ledger through December 15, 2013.
You are to post the December 16–31 transactions to the general ledger.
Post the December 16–31 transactions using the instructions in the Reference book on
pages 136 through 138. Although you have not practiced posting, it is easy to do when
following the Reference book.
Age ACCouNts reCeiVABle AND PriNt CustoMer MoNthly stAteMeNt

Before customer monthly statements can be prepared, you must perform the Microsoft Dynamics
GP aging routine for accounts receivable. Before you do so, read the Age Accounts Receivable
and Print Customer Monthly Statements Overview on page 140 of the Reference book.
Complete the accounts receivable aging process as of 12/31/13 for Waren (steps A through
E in the Quick Reference Table on page 140).
At the end of each month, Waren sends monthly statements to all customers with an outstanding
balance. For this section, you are to print a hard copy of the December monthly statement for
Clayborn University.
Print a hard copy of the December monthly statement for Clayborn University, using the
Reference book instructions on pages 142 and 143 (steps F through N in the Quick
Reference Table on page 140). You will hand in this statement to your instructor along
with year-end reports.

Chapter 8
PriNt A geNerAl leDger triAl BAlANCe For

CheCK Figures Prior to yeAr-eND ADJustiNg eNtries
The trial balance on pages 8-24 and 8-25 shows the correct balances in all general ledger accounts
after the December month-end procedures are completed.
Select a general ledger trial balance (Summary) for Waren and print a hard copy of the
12/31/13 balances using the Reference book instructions on pages 144 through 148 and
the Select Reports section of the Reference Summary Card. Note: Due to the width of
this report, you may not be able to view the entire report on the screen prior to printing.
Compare the amounts on your printed trial balance with those on pages 8-24 and 8-25. If any
amounts are different, return to the December 16–31 transactions and the month-end procedures
you processed in Microsoft Dynamics GP and make the necessary corrections. See Appendix A
in the Reference book for error correction instructions. When all errors are corrected, print a
corrected trial balance.
You can also compare the amounts on your printed trial balance with those included in the SUA
year-end unadjusted trial balance (part of the year-end worksheet). All account balances should
agree if your solution to the SUA was correct except cash, payroll-related accounts, and inventory-
related accounts. Cash and payroll-related accounts will have some differences between the SUA
and Microsoft Dynamics GP, but these can be ignored for practical purposes. Inventory-related
account balances do not agree because of the use of different inventory methods. The balances
will agree after adjusting entries are completed. See pages 8-17 through 8-21 for discussions of
the inventory methods used in the SUA and in the Microsoft Dynamics GP project.
When your balances agree with those on pages 8-24 and 8-25, go to the next section where you
will record year-end adjusting entries.
oPtioN A — record 2013 year-end Adjusting entries

The next step at the end of an accounting year before printing output is to record year-end
adjusting entries. The following are the types of year-end adjustments required for Waren:
Physical inventory adjustment

Depreciation expense (calculated by Microsoft Dynamics GP)
Accrued interest payable
Bad debt expense and allowance
Cost of goods sold
Federal income taxes

Chapter 8
Each of the year-end adjustments is explained in a section that follows. Perform the procedures
in the order listed.
ADJust PerPetuAl iNVeNtory reCorDs

Recall that in the SUA you were provided with the ending dollar balance in inventory and you
adjusted to that total. That system was a periodic inventory system. Microsoft Dynamics GP
permits the use of a perpetual system, which provides a current inventory balance after each
transaction. At year-end, a physical count is taken to adjust for obsolescence, theft, or accounting
errors.
The physical count taken on December 31 indicated that there were disagreements between the
physical count and the perpetual records for certain items. Management is concerned about
these inventory differences, but knows that the physical count is accurate. Thus, the current
perpetual records must be adjusted as follows to agree with the physical count:
Quantity on Quantity per
Item No. Description Perpetual Records Physical Count
BB-019 Basketball pole pad 119 122
FB-027 Shoulder pad set 89 77
BA-158 Baseballs – 12 balls 156 162
Record the inventory adjustments in Microsoft Dynamics GP following pages 86 through

89 in the Reference book.
DePreCiAte FiXeD Assets, PerForM other FiXeD Asset ProCeDures,

AND Post trANsACtioNs to the geNerAl leDger
Depreciation expense is calculated automatically by Microsoft Dynamics GP through the
Depreciation Process Information and the General Ledger Interface windows. Do not be concerned
if there are minor differences between the depreciation expense you calculated in the SUA and
Microsoft Dynamics GP’s calculations. The formulas used in Microsoft Dynamics GP use the
actual number of days in the life of an asset rather than the number of years. Although you
haven’t practiced depreciating fixed assets in Microsoft Dynamics GP, the process is not difficult.
Click Financial Setup Company to open the Fixed Assets Company Setup window.
Select CORP in the Corporate Book box.
Click the Accounts button to open the Default Accounts window. If there are general
ledger accounts already included in the window, skip this step. If there are no general
ledger accounts in the window, select GENERAL in the Asset Group ID box and click OK.
Click OK in the Fixed Assets Company Setup window.
The previous four steps are necessary prior to starting the actual depreciation procedures detailed
in the Reference book. DO NOT SKIP THESE FOUR STEPS OR YOU WILL RECEIVE
MULTIPLE ERROR MESSAGES DURING THE PROCESS.

Chapter 8
Complete steps A through Q in the Quick Reference Table on page 130 of the Reference
Book to depreciate Waren’s fixed assets for the year 2013.
After the depreciation calculations are completed, you must perform a year-end close for the
fixed asset subsidiary records. This process calculates all gains and losses for the year, as well as
prepares the subsidiary records for the following year.
Complete steps R through V in the Quick Reference Table on page 130 of the Reference
Book to perform year-end closing procedures for fixed assets.
After performing the year-end closing procedures for fixed assets, post the inventory
adjustment, depreciation expense, and other fixed asset year-end entries to the general
ledger through the Series Posting window (see pages 136 through 138 of the Reference
book). Note: This step is not necessary for the remaining year-end adjustments because
they are all prepared using the Transaction Entry window, which posts directly to the
general ledger.
After the inventory, depreciation, and other fixed asset year-end adjusting entries are posted to
the general ledger, you should record the remaining four year-end adjusting entries through the
Transaction Entry window. Treat each entry as a separate transaction.
Record each of the remaining four year-end adjusting entries by preparing a general
journal entry in Microsoft Dynamics GP (see Reference book pages 82 through 85) using
the information provided in the next four sections.
ACCrueD iNterest PAyABle

Recall from transaction #2 on page 8-7 that Waren has a $80,000 two-year note payable to First
American Bank & Trust dated December 16, 2013. The stated annual interest rate on the note is
6%. The terms of the note payable call for the following payments:
$4,800 interest payments on 12/16/14 and 12/16/15

$80,000 principal payment on 12/16/15
Recall from the SUA that interest accruals are calculated using a 365-day year with the day after
the note was made counting as the first day. General ledger account numbers for the journal
entry are: #40800 (Interest expense) and #20900 (Interest payable). Either show your calculation
on page 8-29 or obtain the amount from the SUA general journal if your entry was correct.
BAD DeBt eXPeNse AND AllowANCe

Bad debt expense is estimated once annually at the end of each year as 1/4 of one percent (0.0025)
of net sales and is recorded in the general journal as of December 31. The “allowance” method of
recording bad debt expense is used. General ledger account numbers for the journal entry are:
#40900 (Bad debt expense) and #10300 (Allowance for doubtful accounts). Either show your

Chapter 8
calculation on page 8-29 or obtain the amount from the SUA general journal if your entry was
correct there.
Use the Reports function in Microsoft Dynamics GP to determine annual net

sales from the income statement. Be sure the current date on the Microsoft
Dynamics GP main window is 12/31/13 before opening the report window
(click on date, then change date on pop-up window).
Cost oF gooDs solD

Microsoft Dynamics GP automatically debits cost of goods sold and credits inventory for the
product cost for each sale. The inventory account is also automatically updated for inventory
purchases and purchases returns. Therefore, the Microsoft Dynamics GP data does not include
the following accounts from the SUA: Purchases (#30500) and Purchases Returns and Allowances
(#30600). Waren treats purchase discounts taken and freight-in as a part of cost of goods sold,
but records them in separate accounts during the accounting period. Therefore, these two
accounts must be closed to cost of goods sold (account #30400): purchases discounts taken
(#30700) and freight-in (#30800).
Before preparing the general journal entry, use the Inquiry function in
Microsoft Dynamics GP to determine the balance in each account being closed
to cost of goods sold (Financial Inquiry Summary, then review the contents
of the Total box for each account to be closed).
FeDerAl iNCoMe tAXes

Recall that corporate income tax rates for 2013 are: 15% of the first $50,000 of income, plus 25%
of the next $25,000, plus 36% of all income over $75,000. General ledger account numbers for the
journal entry are: #40700 (Federal income tax expense) and #20700 (Federal income taxes
payable). Because there may be minor differences in depreciation expense and gain or loss on the
sale of fixed assets between the SUA and Microsoft Dynamics GP, you must calculate federal
income tax expense using pre-tax income as processed in Microsoft Dynamics GP. Show your
calculation on page 8-29.
After all other adjusting entries are recorded, use the Reports function in
Microsoft Dynamics GP to determine pre-tax income from the income
statement for the calculation of federal income tax expense. Be sure the current
date on the Microsoft Dynamics GP main window is 12/31/13 before opening
the report window.

Chapter 8
PriNt A geNerAl leDger triAl BAlANCe

For CheCK Figures AFter yeAr-eND ADJustiNg eNtries
after the year-end adjusting entries are recorded.
12/31/13 balances. You will hand in this report to your instructor along with year-
end reports.
Compare the balances on your printed trial balance with those on pages 8-26 and 8-27. If the
amounts on your printed trial balance are different, return to the year-end adjusting entries and
make the necessary corrections before printing a corrected trial balance. See Appendix A in the
Reference book for error correction instructions. When all errors are corrected, print a corrected
trial balance.
year-end adjusted trial balance (part of the year-end worksheet). All account balances should
agree if your SUA solution was correct, except for the minor potential differences noted previously
for payroll-related accounts, fixed asset-related accounts, and federal income tax expense.
will print financial statements and other reports.
All entries have now been recorded.
oPtioN A — Print Financial statements and other reports

All of these are to be handed in to your Instructor.
Print the following standard reports using the Reference Summary Card. For the two
financial statements, be sure the current date is 12/31/13 before requesting the report.
1. Balance sheet
2. Statement of income and retained earnings
3. General journal (cross-reference report by journal entry) for December
4. Account receivable aged trial balance
5. Accounts payable aged trial balance
6. Inventory stock status report as of 12/31/13
7. Employee earnings register for 2013
8. Depreciation ledger

Chapter 8
You can compare the reports printed using Microsoft Dynamics GP to the manual reports you
prepared in the SUA. The following differences exist:
Minor differences in December salaries and wages, withholdings, and net pay.
Minor potential differences in accounts noted previously.
oPtioN A — reports and questions to hand in

Hand in the following to your course instructor:
All eight reports listed on the previous page
Bank reconciliation report
Customer monthly statement for Clayborn University
Summary trial balance after year-end adjustments that you printed previously
Questions on page 8-29.
oPtioN A — Perform year-end Closing Procedures

After all reports are printed, the next step is to close the general ledger for the current year. The
closing process in Microsoft Dynamics GP closes all income statement accounts to the retained
earnings account and sets up the new fiscal year for Waren.
After all output is printed and determined to be satisfactory, complete the year-end
closing procedures described in the Reference book on pages 150 through 153. Keep in
mind that after you perform closing procedures, you can make corrections only to
balance sheet accounts.
All procedures are now complete for this chapter.


Chapter 8
oPtioN A — Check Figures
waren sports supply

triAl BAlANCe suMMAry For 2013
( s)
geNerAl leDger
Acct. Description Beg. Balance Net Change Ending Balance
10100 Cash $0 11,025.19) $0,097,879.74) $0,108,904.93)
10200 Accounts Receivable 11,065.00) 34,457.00) 45,522.00)
10300 Allowance for Doubtful Accounts (3,250.81) 4,400.00) 1,149.19)
10400 Inventory 101,681.00) 97,149.00) 198,830.00)
10600 Marketable Securities 0.00) 24,000.00) 24,000.00)
10800 Fixed Assets 320,665.00) 11,925.00) 332,590.00)
10900 Accumulated Depreciation (81,559.50) 0.00) (81,559.50)
20100 Accounts Payable (11,279.35) 2,512.20) (8,767.15)
20300 Federal Income Taxes Withheld (1,326.76) (442.29) (1,769.05)
20400 State Unemployment Taxes Payable (281.17) 189.56) (91.61)
20500 Federal Unemployment Taxes Payable (83.31) 56.17) (27.14)
20600 FICA Taxes Payable (1,593.30) (689.74) (2,283.04)
20700 Federal Income Taxes Payable (29,797.00) 29,797.00) 0.00)
21000 Notes Payable 0.00) (80,000.00) (80,000.00)
26000 Common Stock (225,000.00) 0.00) (225,000.00)
29000 Retained Earnings (90,264.99) 0.00) (90,264.99)

Chapter 8
waren sports supply

(
geNerAl leDger (continued)
30100 Sales $00,000.00) $(1,588,571.00) $(1,588,571.00)
30200 Sales Returns and Allowances 0.00) 61,111.00) 61,111.00)
30300 Sales Discounts Taken 0.00) 15,405.82) 15,405.82)
30400 Cost of Goods Sold 0.00) 1,016,361.00) 1,016,361.00)
30700 Purchases Discounts Taken 0.00) (16,650.40) (16,650.40)
30800 Freight-in 0.00) 24,642.69) 24,642.69)
31200 Miscellaneous Revenue 0.00) (825.00) (825.00)
40100 Rent Expense 0.00) 57,600.00) 57,600.00)
40200 Advertising Expense 0.00) 21,905.00) 21,905.00)
40300 Office Supplies Expense 0.00) 5,621.45) 5,621.45)
40500 Wages and Salaries Expense 0.00) 141,334.14) 141,334.14)
40600 Payroll Tax Expense 0.00) 11,543.91) 11,543.91)
41000 Other Operating Expense 0.00) 29,287.75) 29,287.75)
Total Accounts: 29
grand totals: 0.00) 0.00) 0.00)

Chapter 8
waren sports supply

(
geNerAl leDger
10100 Cash $011,025.19) $0,097,879.74) $0,0108,904.93)
10300 Allowance for Doubtful Accounts (3,250.81) 619.86) (2,630.95)
10400 Inventory 101,681.00) 96,615.00) 198,296.00)
10800 Fixed Assets 320,665.00) 16,483.00) 337,148.00)
10810 Fixed Assets Clearing Account 0.00) (4,558.00)

$332,590 { (4,558.00)
10900 Accumulated Depreciation (81,559.50) (35,109.50) (116,669.00)
20700 Federal Income Taxes Payable (29,797.00) (22,333.59) (52,130.59)
20900 Interest Payable 0.00) (197.26) (197.26)
21000 Notes Payable 0.00) (80,000.00) (80,000.00)
26000 Common Stock (225,000.00) 0.00) (225,000.00)

Chapter 8
waren sports supply

(
30100 Sales $000,000.00) $(1,588,571.00) $(1,588,571.00)
30700 Purchases Discounts Taken 0.00) 0.00) 0.00)
30800 Freight-in 0.00) 0.00) 0.00)
40100 Rent Expense 0.00) 57,600.00) 57,600.00)
40400 Depreciation Expense 0.00) 35,109.50) 35,109.50)
40700 Federal Income Tax Expense 0.00) 52,130.59) 52,130.59)
40800 Interest Expense 0.00) 197.26) 197.26)
40900 Bad Debt Expense 0.00) 3,780.14) 3,780.14)
Total Accounts: 35
grand totals: 0.00) 0.00) 0.00)


Name:
Chapter 8
questions About waren sports supply

Interest accruals are calculated using a 365-day year with the day after the note was made
counting as the first day. General ledger account numbers for the journal entry are: #40800
(Interest expense) and #20900 (Interest payable). Show your calculation below:

Bad debt expense is estimated once annually at the end of each year as 1/4 of one percent
(0.0025) of net sales and is recorded in the general journal as of December 31. The
“allowance” method of recording bad debt expense is used. General ledger account numbers
for the journal entry are: #40900 (Bad debt expense) and #10300 (Allowance for doubtful
accounts). Show your calculation below:

Assume that corporate income tax rates for 2013 are: 15% of the first $50,000 of income,
plus 25% of the next $25,000, plus 36% of all income over $75,000. General ledger account
numbers for the journal entry are: #40700 (Federal income tax expense) and #20700
(Federal income taxes payable). Show your calculation below:
COPYRIGHTED MATERIALS

Chapter 8
oPtioN B — introduction
In this chapter, you will record the same December 16–31, 2013, transactions for Waren Sports
Supply that you did in the Systems Understanding Aid (SUA). [Remember that date entry boxes
in Microsoft Dynamics GP default to your computer’s current date. Thus, you may need to change
them all back to 2013 dates for this project. It is suggested that you change the user date in the
lower-left corner of the Microsoft Dynamics GP main window to 12/31/13. If you forget to change
the date for a transaction, you will at least record transactions in the correct accounting period.]
You will also complete other activities commonly done with accounting software and print
several items to hand in to your instructor.
wArNiNg
An important difference in this assignment compared to previous ones is the lack of detailed instructions
for using Microsoft Dynamics GP to record transactions and perform other activities. You should consult
the Reference book carefully for each transaction and activity in this chapter. Keep in mind that there
are several transactions and activities in this chapter that you have not previously practiced. It is in your
best interest to consult the Reference book, including the detailed instructions provided in each
applicable section, as you complete this chapter. If you do not do so, you will likely make errors that
cannot be corrected without significant additional work. (See Appendix A of the Reference book.) It is
worth your time to follow the step-by-step instructions in the Reference book for each transaction or
activity.
Optional Items from the SUA (not required; all necessary information from the SUA has
been incorporated in this chapter):
— Instructions, Flowcharts, and Ledgers book
— Journals book
— All year-end financial statements and schedules you prepared for Waren Sports
Supply in the SUA
or activity.
CHAPTER 8 — Option B 8 – 31

Chapter 8
Jim Adams has recorded all transactions for the year ended 12/31/13 through December 15,
2013, using Microsoft Dynamics GP. This is consistent with the SUA. For this assignment, you
will do the following using Microsoft Dynamics GP :
When you are finished, the financial statements and other results will be comparable to the
correct solution for the Systems Understanding Aid.
oPtioN B —
The price and cost list on page 8-33, taken from the SUA, reflects the current selling prices and
costs for Waren’s thirty products. In this section, you will compare the selling price of each
product to the amounts included in Microsoft Dynamics GP and update the software for any
differences.
Browse ButtoN hiNt

record files.
8 – 32 CHAPTER 8 — Option B

Chapter 8
Price and Cost list

BA-158 Baseballs – 12 game balls 42.00 65.00
BA-859 Set of bases 111.00 185.00
BB-358 Backboard 83.00 115.00
FB-344 Football 21.00 29.00
2013.

Chapter 8
oPtioN B — record December 16 – 31 transactions

The transactions on pages 8-35 through 8-46 for December 16 through December 31 are the
same as the transactions you recorded in the SUA, except where noted. Events and information
that are not necessary to process the transactions in Microsoft Dynamics GP have been removed.
In addition, supplemental information from the SUA documents has been incorporated into the
Microsoft Dynamics GP transactions list so that you will not need the SUA transactions list or the
SUA documents to complete this section. The transactions should be dealt with in the order
listed. Some of the transactions must be recorded whereas others require only maintenance.
Microsoft Dynamics GP Reference book and information from prior chapters to the extent you
need it. Also, if you want to check whether information was recorded, it is easy to determine by
using the Inquiry function. You can also compare each transaction you record in Microsoft
Dynamics GP to the result you obtained when you did the SUA, although this is not required. Use
the SUA journals book for this comparison.

Chapter 8
wAreN sPorts suPPly

Record each of the following transactions (#1 through 27) using Microsoft Dynamics GP.
Summary Card.
trans. # December
1 16 Prepare a purchase order: Ordered the following inventory on account

from Velocity Sporting Goods using purchase order No. 328. The goods
will be received at the warehouse at a later date. The purchase order total
is $19,750.
2 16 Receive a miscellaneous cash receipt and make a bank deposit: Borrowed

and deposited $80,000 from First American Bank & Trust by issuing a
two-year note payable. Check No. 545 for $80,000 was received and
deposited.


Chapter 8
trans. # December
No. 731 totaling $15,025, and shipped the goods from the warehouse. The
following goods were shipped (only 45 shoulder pad sets were available for
shipment out of the 60 that were ordered):
20 BB-358 Backboard
4 20 Change an employee record (employee maintenance): Increased employee salary

and wage rates, effective December 16. Recall that for hourly employees,
overtime is paid at 1.5 times the regular hourly rate. There were no changes
in filing status or withholding allowances.


records.

Chapter 8
trans. # December

quantities ordered, except that only 100 basketball pole pads (Item No.
BB-019) were received. The total of the invoice is $18,340. The goods were
placed immediately in the inventory warehouse.

by clicking OK.


as uncollectible. Recall that Waren uses the allowance method for recording
bad debt expense.

Chapter 8
trans. # December



and deposited check No. 49326 for $9,000 from Eastern Wisconsin
University in partial payment of the remaining amount (after sales return)
on invoice No. 729.
10 24 Purchase goods or services without a purchase order: Received freight bill

No. 26425 for $483.00 from Interstate Motor Freight and immediately
issued check No. 1152 for payment in full. The freight bill relates to the
merchandise received from purchase order No. 328. The payment terms
on the freight bill are Net 30.

Chapter 8
trans. # December
warehouse and the cash sale was processed and recorded using invoice No.
C-30. All goods ordered were shipped as follows:
75 FB-344 Football

check.
12 24 Make a credit sale: Made a special promotional sale on account to

Rosemont University, using invoice No. 732, totaling $6,247.50. For the
promotion, Waren agreed to a 15% reduction in the selling prices of the
items sold. Rosemont University did not submit a purchase order for the
sale. The following goods were shipped from the warehouse for this sale:
30 BA-054 Premium aluminum bat
5 BA-807 Pitching machine
Use the Markdown expansion button to record the reduction in the

sales price for the inventory items sold.

Chapter 8
trans. # December

No. 327, which is shown as an open purchase order in Microsoft Dynamics GP.
Chicago Office Supply’s vendor invoice No. 2378 was received with the
goods, totaling $559.15 including sales tax of $31.65. The payment terms
on the invoice are “Upon receipt.” All supplies ordered on purchase order
No. 327 were received in good condition and taken to the warehouse.

by clicking OK.
14 26 Retire a fixed asset record through maintenance and prepare a general

journal entry: Sold bookshelves to an employee, Nancy Ford, for $300.
Nancy will pay this amount to Waren in January of 2014. The bookshelves
were purchased for a cost of $1,000 on September 30, 2007. The bookshelves
were fully depreciated at the end of 2013. Note: Microsoft Dynamics GP
automatically calculates the gain or loss on the sale of fixed assets when you
perform other fixed asset annual procedures. Do not calculate the gain or
loss now.
Follow the instructions in the table on page 128 of the Reference book

to retire the fixed asset record before preparing the general journal
entry. The Asset ID is 0001, office furniture.
The receivable from Nancy Ford should be posted to account #10210 –
Accounts Receivable from Employees and the noncash proceeds
should be posted to account #10810 – Fixed Assets Clearing Account.

Chapter 8
trans. # December
15 26 Receive a miscellaneous cash receipt and make a bank deposit: Received

check No. 4014 from Central Brokerage for $1,200 of dividend income.
The dividends were earned on various common stocks in the marketable
securities general ledger account.

#31100, Interest/Dividend Income.
$366.80.
check No. 14002 for $6,122.55 from Rosemont University in payment of
invoice No. 732 (see transaction #12 on page 8-39 for the original sale
transaction). The early payment discount taken by Rosemont University
was $124.95.
Remember to apply the cash receipt to invoice No. 732.


Chapter 8
trans. # December
Regular Overtime
Jim Adams 96 8.73
Nancy Ford 96 5.09

carefully.
19 31 Receive goods from a purchase order and add a fixed asset record through
No. 2423 from Chicago Office Supply, totaling $4,558 including sales tax
of $258. The payment terms on the invoice are “Upon receipt.” The
were not paid for.

Chapter 8
trans. # December

You must change the general ledger account for the cost of the
Fixed Assets, for the Tax debit (Type = TAX).
After recording the receipt of the computers, you must add a fixed
by clicking OK.

receipt.”

Chapter 8
trans. # December
21 31 Purchase goods or services without a purchase order: Purchased 200 shares

of Redhawk Corporation common stock for $22.00 per share plus
commission of $90. Immediately issued check No. 1158 payable to Central
Brokerage. Either recompute the amounts for this transaction now, or
obtain the correct information from the SUA general journal.
Since no document number exists, type [STOCK] in the Document

Number box.
The debit portion of the transaction should be posted to account
#10600, Marketable Securities.
22 31 Prepare a general journal entry: The Board of Directors declared a $2.25

per share dividend on the 3,000 shares of $75 par value common stock
outstanding. The dividends will be payable on January 31, 2014, to all
stockholders of record as of January 25, 2014. Either recompute the amounts
for this transaction now, or obtain the correct information from the SUA
general journal.
Use the following accounts for the general journal entry: #29010 –
Dividends Declared and #20800 – Dividends Payable.
23 31 Purchase goods or services without a purchase order: Issued check No. 1159
to First American Bank & Trust for $10,000 for partial payment on the
bank note, which included no payment for interest. The terms on the back
of the bank note stipulate that prepayments such as this one can be made
without early payment penalty. For purposes of your year-end adjusting
journal entry for interest, note that this payment will not reach the bank
until January 2, 2014.
Type the loan number, 6X-28941, in the Document Number box.


Chapter 8
trans. # December
24 31 Purchase goods or services without a purchase order: Issued check No. 1160

for $4,800 to First Security Insurance for the premium on Waren’s six-
month liability insurance policy. The policy period runs from December 1,
2013, to June 1, 2014. First Security’s invoice number was #6822.
The expense portion of the transaction should be posted to account
#41000, Other Operating expenses, while the prepaid portion of the
transaction should be posted to account #10500, Prepaid Expenses.
25 31 Receive a miscellaneous cash receipt and make a bank deposit: Sold 150
shares of Sohn Corporation common stock for $27.00 per share. The shares
were originally purchased on July 11, 2013, for $21.00 per share plus a
commission of $60. Central Brokerage retained a commission of $70 on
the sale and forwarded check No. 4289 for the net sale proceeds to Waren
of $3,980. Either recompute the amounts for this transaction now or obtain
the correct amounts from the SUA cash receipts journal.
The following accounts should be used for this transaction: #10100

(Cash), #10600 (Marketable Securities), and #31000 (Gain/Loss on
Sale of Marketable Securities).

Chapter 8
trans. # December
26 31 Purchase goods or services without a purchase order: Loaned $8,000 to Maple

Valley Electric by issuing a four-year note receivable with a stated annual
interest rate of 8%. The funds were loaned by issuing check No. 1161.
Interest payments of $640 are due on December 31 of each year, beginning
in 2014, and no interest is receivable at 12/31/13. The entire principal is
due four years from December 31, 2013.
Since no document number exists, type [Note] in the Document

Number box.
#11000, Notes Receivable.
27 31 Receive a miscellaneous cash receipt and make a bank deposit: The company
signed an agreement to sublease an office in its building to Basso &
Associates at a monthly rental rate of $1,200. In connection with the
sublease, Waren received a $3,600 check from Basso & Associates covering
rent for the first quarter of 2014.

#21100, Unearned Revenue.

Chapter 8
oPtioN B —

Recall from the SUA that only one of Waren’s employees, Nancy Ford, remains subject to federal
and state unemployment taxes as of December 2013. Microsoft Dynamics GP calculates both
SUTA and FUTA automatically when monthly payroll reports are run. Complete the following
steps to record the monthly SUTA and FUTA entry for Waren:
window.
processing windows will f lash across the screen during the unemployment tax
calculations.
Register.

completing the following steps:
window.

Chapter 8
6, 9, 11, 15, 17, 25, and 27. If you forgot to record any or all bank deposits, record them now
following the Reference book instructions on pages 44 through 46.

1143, 1152, 1153, 1154, 1155, 1156, 1157, 1158, 1159, 1160, and 1161.
The following deposits have not cleared the bank as of December 31:
1. The December 24 account receivable collection from Eastern Wisconsin University.
2. The December 24 cash sale proceeds from Andover University.
3. The December 26 deposit of dividend income
4. The December 30 account receivable collection from Rosemont University.
5. The December 31 deposit from the Sohn Corporation stock sale.
6. The December 31 deposit of rent from Basso & Associates.
2013.
Reports window.
List.

Chapter 8
only the Screen box is checked, and then click OK. Next you will get the Report
Report.
Click the Reconcile button in the Select Bank Transactions window (step R in the Quick

Waren’s accountant posted all transactions to the general ledger through December 15, 2013. You
are to post the December 16–31 transactions to the general ledger.

Print a hard copy of the December monthly statement for Clayborn University, using
the Reference book instructions on pages 142 and 143 (steps F through N in the Quick

Chapter 8

12/31/13 balances using the Reference book instructions on pages 144 through 148 and the
Select Reports section of the Reference Summary Card. Note: Due to the width of this
report, you may not be able to view the entire report on the screen prior to printing.
You can also compare the amounts on your printed trial balance with those included in the SUA year-
end unadjusted trial balance (part of the year-end worksheet). All account balances should agree if
your solution to the SUA was correct except cash, payroll-related accounts, inventory-related accounts,
fixed assets, and gain or loss on the sale of fixed assets. Cash and payroll-related accounts will have
some differences between the SUA and Microsoft Dynamics GP, but these can be ignored for
practical purposes. Inventory-related account balances do not agree because of the use of different
inventory methods. The inventory-related balances will agree after adjusting entries are completed.
See pages 8-50 through 8-53 for discussions of the inventory methods used in the SUA and in the
Microsoft Dynamics GP project. The fixed assets account and the related gain/loss account will not
agree because Microsoft Dynamics GP hasn’t yet calculated the gain or loss on the sale of the
bookshelf from transaction #14. The balances will agree after adjusting entries are completed,
except for minor differences in calculation methods between the SUA and Microsoft Dynamics GP.
oPtioN B — record 2013 year-end Adjusting entries

Depreciation expense (calculated by Microsoft Dynamics GP )
Cost of goods sold

Chapter 8

Recall that in the SUA you were provided with the ending dollar balance in inventory and you
adjusted to that total. That system was a periodic inventory system. Microsoft Dynamics GP
permits the use of a perpetual system, which provides a current inventory balance after each
transaction. At year-end, a physical count is taken to adjust for obsolescence, theft, or accounting
errors.
The physical count taken on December 31 indicated that there were disagreements between the
physical count and the perpetual records for certain items. Management is concerned about
these inventory differences, but knows that the physical count is accurate. Thus, the current
perpetual records must be adjusted as follows to agree with the physical count:


Depreciation Process Information and the General Ledger Interface windows. Do not be
concerned if there are minor differences between the depreciation expense you calculated in the
SUA and Microsoft Dynamics GP’s calculations. The formulas used in Microsoft Dynamics GP use
the actual number of days in the life of an asset rather than the number of years. Although you
haven’t practiced depreciating fixed assets in Microsoft Dynamics GP, the process is not difficult.

Chapter 8
general ledger.


Recall from the SUA that interest accruals are calculated using a 365-day year with the day after
the note was made counting as the first day. General ledger account numbers for the journal entry
are: #40800 (Interest expense) and #20900 (Interest payable). Either show your calculation on
page 8-61 or obtain the amount from the SUA general journal if your entry was correct.

#40900 (Bad debt expense) and #10300 (Allowance for doubtful accounts). Either show your

Chapter 8
calculation on page 8-61 or obtain the amount from the SUA general journal if your entry was
correct there.

Cost oF gooDs solD

product cost for each sale. The inventory account is also automatically updated for inventory
purchases and purchases returns. Therefore, the Microsoft Dynamics GP data does not include the
following accounts from the SUA: Purchases (#30500) and Purchases Returns and Allowances
(#30600). Waren treats purchase discounts taken and freight-in as a part of cost of goods sold, but
records them in separate accounts during the accounting period. Therefore, these two accounts
must be closed to cost of goods sold (account #30400): purchases discounts taken (#30700) and
freight-in (#30800).
to cost of goods sold (Financial Inquiry Summary, then review the
contents of the Total box for each account to be closed).

Recall that corporate income tax rates for 2013 are: 15% of the first $50,000 of income, plus 25%
payable). Because there may be minor differences in depreciation expense and gain or loss on the
sale of fixed assets between the SUA and Microsoft Dynamics GP, you must calculate federal
income tax expense using pre-tax income as processed in Microsoft Dynamics GP. Show your
calculation on page 8-61.
the report window.

Chapter 8

CheCK Figures AFter yeAr-eND ADJustiNg eNtries
end reports.
Reference book for error correction instructions. When all errors are corrected, print a corrected
trial balance.
year-end adjusted trial balance (part of the year-end worksheet). All account balances should
agree if your SUA solution was correct, except for the minor potential differences noted previously
for payroll-related accounts, fixed asset-related accounts, and federal income tax expense.
will print financial statements and other reports.
oPtioN B — Print Financial statements and other reports

financial statements, be sure the current date is 12/31/13 before requesting the
report.
1. Balance sheet

Chapter 8
You can compare the reports printed using Microsoft Dynamics GP to the manual reports you
prepared in the SUA. The following differences exist:
Minor differences in December salaries and wages, withholdings, and net pay.
Minor potential differences in other accounts noted previously.
oPtioN B — reports and questions to hand in

All eight reports listed on the previous page
Questions on page 8-61
oPtioN B — Perform year-end Closing Procedures


Chapter 8
oPtioN B — Check Figures
waren sports supply

(excludes Debit and Credit columns)
geNerAl leDger

10100 Cash $ 11,025.19) $ 85,492.29) $ 96,517.48)
10210 Accounts Receivables from Employees 0.00) 300.00) 300.00)
10400 Inventory 101,681.00) 92,159.00) 193,840.00)
10500 Prepaid Expenses 0.00) 4,000.00) 4,000.00)
10800 Fixed Assets 320,665.00) 11,925.00) 332,590.00)
10810 Fixed Assets Clearing Account 0.00) (300.00) (300.00)
11000 Notes Receivable 0.00) 8,000.00) 8,000.00)
20800 Dividends Payable 0.00) (6,750.00) (6,750.00)
21000 Notes Payable 0.00) (70,000.00) (70,000.00)
21100 Unearned Revenue 0.00) (3,600.00) (3,600.00)

Chapter 8
waren sports supply


26000 Common Stock $(225,000.00) $ 0.00) $ (225,000.00)
29010 Dividends Declared 0.00) 6,750.00) 6,750.00)
30100 Sales 000,000.00) (1,594,818.50) (1,594,818.50)
30700 Purchases Discounts Taken 0.00) (16,650.40) (16,650.40)
30800 Freight-in 0.00) 24,642.69) 24,642.69)
31000 Gain/Loss on Sale of Marketable Securities 0.00) (770.00) (770.00)
31100 Interest/Dividend Income 0.00) (1,200.00) (1,200.00)
40100 Rent Expense 0.00) 57,600.00) 57,600.00)
Total Accounts: 38
grand totals: 0.00) 0.00) 0.00)

Chapter 8
waren sports supply

geNerAl leDger

10100 Cash $011,025.19) $0,085,492.29) $0,096,517.48)
10210 Accounts Receivables from Employees 0.00) 300.00) 300.00)
10300 Allowance for Doubtful Accounts (3,250.81) 604.56) (2,646.25)
10400 Inventory 101,681.00) 91,625.00) 193,306.00)
10500 Prepaid Expenses 0.00) 4,000.00) 4,000.00)
10800
10810
Fixed Assets
Fixed Assets Clearing Account
320,665.00)
0.00)
15,483.00)
(4,558.00)
$331,590
{ 336,148.00)
(4,558.00)
11000 Notes Receivable 0.00) 8,000.00) 8,000.00)
20800 Dividends Payable 0.00) (6,750.00) (6,750.00)
20900 Interest Payable 0.00) (197.26) (197.26)
21000 Notes Payable 0.00) (70,000.00) (70,000.00)
21100 Unearned Revenue 0.00) (3,600.00) (3,600.00)
26000 Common Stock (225,000.00) 0.00) (225,000.00)

Chapter 8
waren sports supply


29010 Dividends Declared $000,000.00) $(0,006,750.00) $(0,006,750.00)
30100 Sales 0.00) (1,594,818.50) (1,594,818.50)
30700 Purchases Discounts Taken 0.00) 0.00) 0.00)
30800 Freight-in 0.00) 0.00) 0.00)
30900 Gain/Loss on Sale of Fixed Assets 0.00) (300.00) (300.00)
31000 Gain/Loss on Sale of Marketable Securities 0.00) (770.00) (770.00)
31100 Interest/Dividend Income 0.00) (1,200.00) (1,200.00)
40100 Rent Expense 0.00) 57,600.00) 57,600.00)
40400 Depreciation Expense 0.00) 35,109.50) 35,109.50)
40700 Federal Income Tax Expense 0.00) 53,062.00) 53,062.00)
40800 Interest Expense 0.00) 197.26) 197.26)
40900 Bad Debt Expense 0.00) 3,795.44) 3,795.44)
Total Accounts: 44
grand totals: 0.00) 0.00) 0.00)


Name:
Chapter 8




Chapter 8
oPtioN C — introduction
In this chapter, you will record transactions for an existing company, Waren Sports Supply for
December 16–31, 2013. [Remember that date entry boxes in Microsoft Dynamics GP default to
your computer’s current date. Thus, you may need to change them all back to 2013 dates for this
project. It is suggested that you change the user date in the lower-left corner of the Microsoft
Dynamics GP main window to 12/31/13. If you forget to change the date for a transaction, you
will at least record transactions in the correct accounting period.] You will also complete other
activities commonly done with accounting software and print several items to hand in to your
instructor.
wArNiNg
An important difference in this assignment compared to previous ones is the lack of detailed instructions
for using Microsoft Dynamics GP to record transactions and perform other activities. You should consult
the Reference book carefully for each transaction and activity in this chapter. Keep in mind that there
are several transactions and activities in this chapter that you have not previously practiced. It is in your
best interest to consult the Reference book, including the detailed instructions provided in each
applicable section, as you complete this chapter. If you do not do so, you will likely make errors that
cannot be corrected without significant additional work. (See Appendix A of the Reference book.) It is
worth your time to follow the step-by-step instructions in the Reference book for each transaction or
activity.
or activity.
CHAPTER 8 — Option C 8 – 63

Chapter 8
Waren Sports Supply is a distributor of sporting goods to colleges and universities in the
Midwest. Waren’s accountant has recorded all transactions for the year ended 12/31/13 through
December 15, 2013, using Microsoft Dynamics GP. For this assignment, you will do the following
using Microsoft Dynamics GP :
oPtioN C —
The price and cost list on page 8-65 reflects the current selling prices and costs for Waren’s thirty
products. Waren purchases all products for resale from one vendor, Velocity Sporting Goods.
Waren sells each inventory item at the same price to all customers. A new price and cost list is
prepared each time there is a change in an item’s cost or selling price.
In this section, you will compare the selling price of each product to the amounts included in
Microsoft Dynamics GP and update the software for any differences.
Browse ButtoN hiNt

record files.

8 – 64 CHAPTER 8 — Option C

Chapter 8
Price and Cost list

BA-158 Baseballs - 12 game balls 42.00 65.00
BA-859 Set of bases 111.00 185.00
BB-358 Backboard 83.00 115.00
FB-344 Football 21.00 29.00
2013.

Chapter 8
oPtioN C — record December 16 – 31 transactions

The transactions on pages 8-68 through 8-74 for December 16 through December 31 should be
dealt with in the order listed. Some of the transactions must be recorded whereas others require
only maintenance.
Reference book and information from prior chapters to the extent you need it. Also, if you want
to check whether information was recorded, it is easy to determine by using the Inquiry function.
The following is background information that you will need to record Waren’s December 16–31
transactions.
BANK
Waren uses only one bank, First American Bank & Trust, for all deposits and checks, including
payroll.
CreDit terMs For wAreN sPorts suPPly

Waren requires most of its customers to prepay for goods ordered. For these cash sales, the
customer sends a check with its purchase order and Waren ships the merchandise. All trade
discounts are already factored into the price list. Only a few favored customers who have long-
standing relationships with Waren and who buy larger quantities are granted credit. These
favored customers receive the following cash discount for early payment: 2/10, Net 30.
Waren receives a similar cash discount from its main inventory supplier, Velocity Sporting
Goods (2/10, Net 30). No cash discount is offered by Chicago Office Supply, whose invoices are
payable upon receipt. All discount terms have already been included as default information in
Microsoft Dynamics GP.

Chapter 8
sAles tAX For wAreN sPorts suPPly

Waren Sports Supply makes only wholesale sales, which are exempt from state sales tax. Because
Waren purchases all of its inventory items for resale, there is also no sales tax on its inventory
purchases. Sales tax of six percent applies to office supplies and fixed asset purchases. The correct
sales tax percentages have already been included as default information in Microsoft Dynamics GP.
iNVeNtory MethoD
Waren uses the perpetual inventory method. All purchases of inventory are debited directly to
the inventory account. Cost of goods sold for each sale is calculated automatically by Microsoft
Dynamics GP. Waren conducts a year-end physical inventory count and adjusts the perpetual
inventory records as necessary. You will make those adjustments later.

Chapter 8
wAreN sPorts suPPly

Record each of the following transactions (#1 through 16 ) using Microsoft Dynamics GP.
Summary Card.
trans. # December
1 16 Prepare a purchase order: Ordered the following inventory on account from

Velocity Sporting Goods using purchase order No. 328. The goods will be
received at the warehouse at a later date. The purchase order total is $19,750.
2 16 Receive a miscellaneous cash receipt and make a bank deposit: Borrowed and
deposited $80,000 from First American Bank & Trust by issuing a two-
year note payable. Check No. 545 for $80,000 was received and deposited.


Chapter 8
trans. # December

No. 731 totaling $15,025, and shipped the goods from the warehouse. All
goods ordered were shipped as follows:
20 BB-358 Backboard
4 20 Change an employee record (employee maintenance): Increased employee

salary and wage rates, effective December 16. For hourly employees,
overtime is paid at 1.5 times the regular hourly rate. There were no changes
in filing status or withholding allowances.

records.

Chapter 8
trans. # December

quantities ordered, except that only 100 basketball pole pads (Item
No. BB-019) were received. The total of the invoice is $18,340. The goods
were placed immediately in the inventory warehouse.
Be sure to select “Shipment/Invoice,” not “Shipment” in step B of the

by clicking OK.


as uncollectible. Recall that Waren uses the allowance method for
recording bad debt expense.

Chapter 8
trans. # December



and deposited check No. 49326 for $9,000 from Eastern Wisconsin
University in partial payment of the remaining amount (after sales return)
on invoice No. 729.
10 24 Purchase goods or services without a purchase order: Received freight bill No.
26425 for $483.00 from Interstate Motor Freight and immediately issued
check No. 1152 for payment in full. The payment terms on the freight bill
are Net 30.

Chapter 8
trans. # December
warehouse and the cash sale was processed and recorded using invoice
No. C-30. All goods ordered were shipped as follows:
75 FB-344 Football

check.

No. 327, which is shown as an open purchase order in Microsoft
Dynamics GP. Chicago Office Supply’s vendor invoice No. 2378 was
received with the goods, totaling $559.15 including sales tax of $31.65. The
payment terms on the invoice are “Upon receipt.” All supplies ordered on
purchase order No. 327 were received in good condition and taken to the
warehouse.

by clicking OK.

Chapter 8
trans. # December

$366.80.
Regular Overtime
Jim Adams 96 8.73
Nancy Ford 96 5.09

carefully.
15 31 Receive goods from a purchase order and add a fixed asset record through
No. 2423 from Chicago Office Supply, totaling $4,558 including sales
tax of $258. The payment terms on the invoice are “Upon receipt.” The
were not paid for. See hint box on the following page.

Chapter 8
trans. # December

You must change the general ledger account for the cost of the
Fixed Assets, for the Purchases debit (Type = PURCH) and once for
the Tax debit (Type = TAX).
After recording the receipt of the computers, you must add a fixed
by clicking OK.

receipt.”

Chapter 8
oPtioN C —


Unemployment taxes for Waren’s employees are imposed on the first $7,000 of wages paid during
the year. The state unemployment rate (SUTA) is 2.7% and the Federal unemployment rate
(FUTA) is 0.8%. As of December 2013, only one of Waren’s employees, Nancy Ford, remains
subject to unemployment taxes. Microsoft Dynamics GP calculates both SUTA and FUTA
automatically when monthly payroll reports are run. Complete the following steps to record the
monthly SUTA and FUTA entry for Waren:
window.
processing windows will flash across the screen during the unemployment tax
calculations.
Register.

completing the steps on the following page:

Chapter 8
window.
6, 9, and 11. If you forgot to record any or all bank deposits, record them now following the
Reference book instructions on pages 44 through 46.

1143, 1152, 1153, 1154, 1155, 1156, and 1157.
The December 24 cash receipts from Eastern Wisconsin University and Andover
University have not cleared the bank as of December 31.
2013.
Reports window.
List.

Chapter 8
only the Screen box is checked, and then click OK. Next you will get the Report
Report.
Click the Reconcile button in the Select Bank Transactions window (step S in the Quick

Waren’s accountant posted all transactions to the general ledger through December 15, 2013. You
are to post the December 16–31 transactions to the general ledger.

Print a hard copy of the December monthly statement for Clayborn University, using
the Reference book instructions on pages 142 and 143 (steps F through N in the Quick

Chapter 8

12/31/13 balances using the Reference book instructions on pages 144 through 148 and the
Select Reports section of the Reference Summary Card. Note: Due to a small font size,
you may not be able to view the trial balance numbers on the screen before printing.
Due to the width of this report, you may not be able to view the entire report on the
screen prior to printing.
oPtioN C — record 2013 year-end Adjusting entries

Depreciation expense (calculated by Microsoft Dynamics GP )
Cost of goods sold

The physical count taken on December 31 indicated that there were disagreements between
the physical count and the perpetual records for certain items. Management is concerned
about these inventory differences, but knows that the physical count is accurate. Thus, the
current perpetual records must be adjusted as follows to agree with the physical count (see top
of next page):

Chapter 8



Depreciation Process Information and the General Ledger Interface windows. Although you
haven’t practiced depreciating fixed assets, the process is not difficult.
general ledger.

Chapter 8


(Interest expense) and #20900 (Interest payable). Show your calculation on page 8-89.

#40900 (Bad debt expense) and #10300 (Allowance for doubtful accounts). Show your calculation
on page 8-89.

Cost oF gooDs solD

product cost for each sale. Waren treats purchase discounts taken and freight-in as a part of cost
of goods sold, but records them in separate accounts during the accounting period. Therefore,
these two accounts must be closed to cost of goods sold (account #30400): purchases discounts
taken (#30700) and freight-in (#30800).
to cost of goods sold (Financial Inquiry Summary, then review the
contents of the Total box for each account to be closed).

Chapter 8

Assume that corporate income tax rates for 2013 are: 15% of the first $50,000 of income, plus 25%
payable). Show your calculation on page 8-89.
the report window.

CheCK Figures AFter yeAr-eND ADJustiNg eNtries
end reports.
Reference book for error correction instructions. When your balances agree with those on
pages 8-86 and 8-87, go to the next section where you will print financial statements and other
reports.

Chapter 8
oPtioN C — Print Financial statements and other reports

financial statements, be sure the current date is 12/31/13 before requesting the report.
1. Balance sheet
oPtioN C — reports and questions to hand in

All eight reports listed above
Questions on page 8-89
oPtioN C — Perform year-end Closing Procedures



Chapter 8
oPtioN C — Check Figures
waren sports supply

geNerAl leDger
10100 Cash $0 11,025.19) $0,097,879.74) $0,108,904.93)
10400 Inventory 101,681.00) 97,149.00) 198,830.00)
10800 Fixed Assets 320,665.00) 11,925.00) 332,590.00)
21000 Notes Payable 0.00) (80,000.00) (80,000.00)
26000 Common Stock (225,000.00) 0.00) (225,000.00)

Chapter 8
waren sports supply

30100 Sales $ 0.00 $(1,588,571.00) $(1,588,571.00)
30200 Sales Returns and Allowances 0.00 61,111.00 61,111.00
30300 Sales Discounts Taken 0.00 15,405.82 15,405.82
30400 Cost of Goods Sold 0.00 1,016,361.00 1,016,361.00
30700 Purchases Discounts Taken 0.00 (16,650.40) (16,650.40)
30800 Freight-in 0.00 24,642.69 24,642.69
31200 Miscellaneous Revenue 0.00 (825.00) (825.00)
40100 Rent Expense 0.00 57,600.00 57,600.00
40200 Advertising Expense 0.00 21,905.00 21,905.00
40300 Office Supplies Expense 0.00 5,621.45 5,621.45
40500 Wages and Salaries Expense 0.00 141,334.14 141,334.14
40600 Payroll Tax Expense 0.00 11,543.91 11,543.91
41000 Other Operating Expense 0.00 29,287.75 29,287.75
Total Accounts: 29
grand totals: 0.00 0.00 0.00

Chapter 8
waren sports supply

geNerAl leDger
10100 Cash $ 11,025.19 $0,097,879.74 $0,0108,904.93
10200 Accounts Receivable 11,065.00 34,457.00 45,522.00
10300 Allowance for Doubtful Accounts (3,250.81) 619.86 (2,630.95)
10400 Inventory 101,681.00 96,615.00 198,296.00
10600 Marketable Securities 0.00 24,000.00 24,000.00
10800 Fixed Assets 320,665.00 16,483.00 337,148.00
10810 Fixed Assets Clearing Account 0.00 (4,558.00)

$332,590 { (4,558.00)
20100 Accounts Payable (11,279.35) 2,512.20 (8,767.15)
20400 State Unemployment Taxes Payable (281.17) 189.56 (91.61)
20500 Federal Unemployment Taxes Payable (83.31) 56.17 (27.14)
20900 Interest Payable 0.00 (197.26) (197.26)
21000 Notes Payable 0.00 (80,000.00) (80,000.00)
26000 Common Stock (225,000.00) 0.00 (225,000.00)
29000 Retained Earnings (90,264.99) 0.00 (90,264.99)

Chapter 8
waren sports supply

30100 Sales $ 0.00 $(1,588,571.00) $(1,588,571.00)
30200 Sales Returns and Allowances 0.00 61,111.00 61,111.00
30300 Sales Discounts Taken 0.00 15,405.82 15,405.82
30400 Cost of Goods Sold 0.00 1,024,887.29 1,024,887.29
30700 Purchases Discounts Taken 0.00 0.00 0.00
30800 Freight-in 0.00 0.00 0.00
31200 Miscellaneous Revenue 0.00 (825.00) (825.00)
40100 Rent Expense 0.00 57,600.00 57,600.00
40200 Advertising Expense 0.00 21,905.00 21,905.00
40300 Office Supplies Expense 0.00 5,621.45 5,621.45
40400 Depreciation Expense 0.00 35,109.50 35,109.50
40500 Wages and Salaries Expense 0.00 141,334.14 141,334.14
40600 Payroll Tax Expense 0.00 11,543.91 11,543.91
40700 Federal Income Tax Expense 0.00 52,130.59 52,130.59
40800 Interest Expense 0.00 197.26 197.26
40900 Bad Debt Expense 0.00 3,780.14 3,780.14
41000 Other Operating Expense 0.00 29,287.75 29,287.75
Total Accounts: 35
grand totals: 0.00 0.00 0.00


Name:
Chapter 8




Chapter 9
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-2
Controls Over Processing Transactions . . . . . . . . . . . . . . . . . . . . . . . 9-3
Automatic Entry Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-3
Automatic Calculation and Posting Controls . . . . . . . . . . . . . . . . . 9-3
Complete Data Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-3
Valid Data Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-4
Exceeded Limits Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-4
Accounts Receivable Hold and Inactivate Controls . . . . . . . . . . . . . 9-4
Error Correction Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-4
Access Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-4
Adding and Deleting Users. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-4
Separation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-5
Restricting Access Using Security Roles . . . . . . . . . . . . . . . . . . . 9-5
Restricting Access to Parts of a Series . . . . . . . . . . . . . . . . . . . . 9-5
Restricting Access to System Changes . . . . . . . . . . . . . . . . . . . . 9-5
Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-7

Chapter 9
introduction
There are many internal controls included in Microsoft Dynamics GP software to minimize the
likelihood of errors and fraud. In this chapter, a few of these controls are introduced to help with
the understanding of internal controls.
Two important categories of controls are those applicable to processing transactions and those
that restrict access to certain windows, applications, or the entire system. The next section
discusses controls applicable to processing transactions. Access controls are covered on pages
9-4 and 9-5.
9–2 CHAPTER 9 — Internal Controls

Chapter 9
Controls over Processing transactions

Microsoft Dynamics GP includes many controls to minimize errors and reduce the time it takes
to enter data. To keep the amount of time needed to complete the chapter reasonable, only a
sample of processing controls are included. The controls discussed include: automatic entry
controls, automatic calculation and posting controls, complete data controls, valid data controls,
exceeded limits controls, accounts receivable hold and inactivate controls, and error correction
controls.
AutoMAtiC eNtry CoNtrols

Automatic entry controls automatically enter information after receiving a cue from the person
entering the data. These controls reduce data-entry time and reduce the likelihood of data-entry
errors. An example of an automatic entry control is the default information that appears in the
Payables Manual Payment Entry window after the Vendor ID is selected during the processing
of a payment to a vendor. Other examples include drop-down lists and lookup buttons. There are
hundreds of automatic entry controls in Microsoft Dynamics GP.
AutoMAtiC CAlCulAtioN AND PostiNg CoNtrols

Automatic calculation and posting controls automatically calculate or post information after the
person entering data has entered other information or clicked certain buttons. These controls
reduce the time required to process and record transactions, as well as decrease the likelihood of
errors. An example of an automatic calculation control is the computation of gross pay,
withholdings, and net pay through the Calculate Payroll Checks window. Automatic posting
controls are used throughout Microsoft Dynamics GP. Transaction information is automatically
posted to subsidiary records and later to the general ledger through the use of the Post button in
various windows.
You have encountered many automatic entry controls and automatic calculation and posting
controls when you entered data in previous assignments.
CoMPlete DAtA CoNtrols

Complete data controls inform the person entering data into the system that information needed
to process transactions has been omitted. When these controls are not met, the software provides
an error message on the screen informing the user that certain information is missing. You have
likely encountered one or more of these controls as you entered data in previous assignments. An
example of a complete data control occurs in the Transaction Entry Window when the system
will not let a user post a general journal entry without entering equal debit and credit amounts.
CHAPTER 9 — Internal Controls 9–3

Chapter 9
VAliD DAtA CoNtrols

Valid data controls minimize the likelihood of entering incorrect data into the system. Similar
to complete data controls, Microsoft Dynamics GP provides an error message when invalid data,
such as an incorrect year, is entered into a window. You may have encountered valid data controls
as you entered data in previous assignments.
eXCeeDeD liMits CoNtrols

Exceeded limits controls inform the person entering data that the transaction is not authorized
due to such things as a sale exceeding a customer’s credit limit or a sale when there is insufficient
inventory on hand to fill the order.
ACCouNts reCeiVABle holD AND iNACtiVAte CoNtrols

An accounts receivable hold control is used when an authorized person decides not to sell
additional products or services to a customer without specific approval of management. When
Hold is activated, the customer can still make payments on its account receivable or receive
other credits. An accounts receivable inactivate control is used when management decides it will
no longer sell to a customer, normally because of previous collection problems or other conflicts.
error CorreCtioN CoNtrols

An important control in Microsoft Dynamics GP that is absent in less sophisticated accounting
software is the inability of users to discard a transaction after it has been posted. This enhances
internal control by preventing elimination of transactions from the system without leaving an
audit trail. The downside to this control is the inconvenience to users by requiring additional
procedures to correct wrongly entered and posted information.
Access Controls
An important type of internal control in computer systems is limiting who has access to the
software. Microsoft Dynamics GP permits restricting access to all systems, certain companies, or
divisions, as well as specific functions within the software. Different types of access controls are
demonstrated throughout the remainder of this chapter.
ADDiNg AND DeletiNg users

A company’s system administrator typically has access to parts of the software that other users
do not. For example, the system administrator in Microsoft Dynamics GP is the only user who
can add or delete other users and select the companies the users have access to.
9–4 CHAPTER 9 — Internal Controls

Chapter 9
sePArAtioN oF Duties
An internal control closely related to access controls and of concern in many companies is
adequate separation of duties such that no single employee can both perpetrate and conceal
errors or fraud. Safeguarding assets and data is a significant concern in a computer environment.
To separate duties, the system must be designed to control access to modules and series, such as
accounts receivable, accounts payable, and inventory. Without these controls, the ability to
separate duties and responsibilities would be impossible. To accomplish separation of duties
through access controls in Microsoft Dynamics GP, users are assigned to a class and the respective
class of user is assigned access to specific modules.
restriCtiNg ACCess usiNg seCurity roles

When you set up a new user in Microsoft Dynamics GP, the program is designed so that the new
user has no privileges. After setting up a new user, you must grant that user the appropriate
privileges. This approach is in contrast to the approach taken in some other software programs,
which start by allowing new users all privileges and require you to limit privileges by restricting
access to certain windows.
restriCtiNg ACCess to PArts oF A series

Sometimes it is appropriate to limit a user’s access to only those parts of a series that are necessary
to perform the user’s assigned tasks. For example, the clerk who records bank deposits should
not have access to the entire financial series in Microsoft Dynamics GP, including bank
reconciliations.
restriCtiNg ACCess to systeM ChANges

The use of passwords helps prevent people who are not involved with the software from having
access to the system. A related concern is unauthorized changes in the system by people with
access to the computer. Users of the accounting system need to be prevented from changing the
system setup such that they have an inappropriate access to certain modules or functions.
You should now proceed to the requirements your instructor has assigned in the following pages.


Name:
Chapter 9
requirements
requireMeNt 9-1. Fabrikam

Open Fabrikam, Inc., using your unique User ID. To illustrate the two types of
processing controls discussed on page 9-3, you are to process the following cash sale
transaction for Fabrikam, but do not save or post the invoice.
As you process the transaction, list automatic entry controls and automatic calculation
controls included in the processing of the transaction. Use the lines below for your answer.
Cash sale
r Date of shipment: July 6, 2017
r Customer Name: Crawfords, Inc.
r Customer Number: CRAWFORD0001
r Customer PO: 4261P
r Document Number: use default invoice number
Item # U of M Qty. Unit Price Unit Cost
HDWR-CIM-0001 Each 2 $6,589.95 $3,290.55
r Sales Commission: 3%
r Sales Tax - State: 6%
r Sales Tax - City: 1%
Automatic Entry Control

( Hint: Defaults ) Automatic Calculation Control
1. Example: Document type 1. Example: Automatic extension
default — Invoice of Unit Price x Quantity
2. 2.
3. 3.
4. 4.
5. 5.
Close the Sales Transaction Entry Window and delete the document when asked.

Name:
Chapter 9

For the next transaction, follow the instructions exactly as stated in the first and second
column of the table below for a $30,000 bank loan from First Bank, deposited in the First
Bank account. In the third column of the table, indicate an ( E ) for any error, followed by a
( C ) for a violation of a complete data control, or (V ) for violation of a valid data control.
Also, write the error message that appears on the screen, if there is one. If there is an error,
but no message, describe the error and write “No message.”
Record the bank loan transaction using the instructions in the table below. Refer to
the Quick Reference Table (QRT ) on page 38 of the Reference book.
Because the purpose of this exercise is to demonstrate internal controls, follow the steps
in the order listed, not in the order shown in the Reference book.
Step Instruction Error and Error Message
A Follow procedure in QRT N/A
D Enter 11/26/19 Example: E, V — A fiscal period for this date has not been set up.
D Enter 01/36/2017
D Enter 01/03/2017
H Enter 30,000
E Select FIRST BANK ( First Bank )
G Type [Check ]
I Follow procedure in QRT
J Follow procedure in QRT
B Select “Enter Receipt” Example: No error, but a message asks if you want to change the option
and click Continue to Receipt. Choosing “Continue” allows the change.
I Follow procedure in QRT
K Enter 124-0000-00 in the

Account box for the next
general ledger account
Click Cancel
K Enter 000-2910-00 to replace

previous account
K Enter 25,000 as an amount in the

Credit column, then click Post
Click the to close the Bank Transaction Entry Window and select Continue.

Name:
Chapter 9

Attempt to record a credit sale to Alton Manufacturing on 7/16/17 for 5 units of
HDWR-PRO-4862. Make up additional information to process the transaction.
What is the message on the screen indicating an exceeded limits control exception?

Delete the row that the item is on and then delete the transaction after receiving the
error message.
Attempt to record a credit sale to Holling Communications, Inc., on 7/20/17 for
25 units of HDWR-PNL-0001. Make up additional information to process the
transaction.
Write what happened that indicated an exceeded limits control exception.
Click the Show Details button and change the number of units to 1. Delete the
transaction.
CHAPTER 9 — Internal Controls 9 – 11

Name:
Chapter 9

Management has decided to put a hold on your unique customer ID as of 7/22/17 because of
concern about declining credit rating. On 7/28/17, your unique customer ID tried to purchase
1 unit of Item #4.5HD.
To put a hold on the account, first click Sales Cards Customer.

Select your unique ID for the Customer ID, check the Hold box, click Save, and close
the window.
Process the preceding collection and sale, making up additional information as
needed to complete the transactions.
Write the message that appears on the screen for the sales transaction.
Click Cancel when you receive the message, then delete the transaction.

Management has decided to inactivate Breakthrough Telemarketing because of their lawsuit
against Fabrikam for an alleged product deficiency.
Attempt to put the inactivate restriction on Breakthrough Telemarketing.

Write the error message that appears on the screen.
Close the current window, but don’t save the changes.
CHAPTER 9 — Internal Controls 9 – 13


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08/19/2014 - RS0000000000000000000000016547 (Joel Helquist) - Computerized Accounting in the

Navigate to https://dynaa.dynamicscloud.com/GP/Views/LogOn.aspx. The following

1 – 10 CHAPTER 1 — Introduction and Software Instructions

08/19/2014 - RS0000000000000000000000016547 (Joel Helquist) - Computerized Accounting in the

CHAPTER 1 — Introduction and Software Instructions 1 – 11

08/19/2014 - RS0000000000000000000000016547 (Joel Helquist) - Computerized Accounting in the

The following Microsoft Dynamics GP main window opens.

1 – 12 CHAPTER 1 — Introduction and Software Instructions

08/19/2014 - RS0000000000000000000000016547 (Joel Helquist) - Computerized Accounting in the

Record your reset GP login password here

CHAPTER 1 — Introduction and Software Instructions 1 – 13

08/19/2014 - RS0000000000000000000000016547 (Joel Helquist) - Computerized Accounting in the

sign out of Microsoft Dynamics gP and

sign Back in to the system