Troubleshooting the GLS Chart of Accounts

Last reviewed: 04/10/2003
Article ID: R10814

The information in this article applies to:

GLS Version 10
GLS Version 9

Summary

The calculations performed on financial statements printed in GLS (i.e., the Balance Sheet and the Income Statement) are based on the configuration of the GLS chart of accounts. If the chart of accounts is not set up correctly, error messages and/or incorrect totaling on reports may occur. This article discusses the messages and provides examples of common problems that may occur, as well as information on resolving these problems.

More Information

This article is divided into two main sections:

Messages Regarding Unmatched Accounts
Totals on GLS Financial Statements Calculate Differently Than Expected

Messages Regarding Unmatched Accounts

If the GLS chart of accounts is not configured correctly, the following warning messages may appear when running certain reports.

Error Messages when Printing Financial Statements (i.e., the Balance Sheet or the Income Statement):: ***Unmatched Heading Accounts***; ***Unmatched Total Accounts***
Error Messages when Printing the Chart of Accounts List:: "There are more heading accounts than total accounts"; "There are more total accounts than heading accounts"

The setting in the Print Type field on the Accounts tab of the Chart of Accounts program determines, among other things, how account balances are subtotaled and totaled when financial statements are run. Each of the above warning messages indicates that the number of GLS accounts configured with a print type of Heading does not match the number of accounts configured with a print type of Total. The warning dialog box that appears when printing financial statements also includes the total number of accounts with each print type (e.g., Heading Accounts = 9; Total Account = 10). The presence of one of the above messages indicates that one or more of the figures shown on the financial statements may not be accurate.

Totals on GLS Financial Statements Calculate Differently Than Expected

If the account balances for any accounts on your Balance Sheet or Income Statement do not add up as you expect, the most likely cause is an improper chart of accounts setup. Each GLS account with a print type of Total must have a distinct corresponding Heading account. Furthermore, if any account's Detail Sort and/or Summary Sort fields are not correctly entered, or if the GLS account numbers are not correctly configured, unexpected results may occur.

When printing a Balance Sheet or an Income Statement, accounts are sorted based on the following criteria:

If the Detail option is selected as the Report Type, accounts are printed in ascending order starting with the account that has the lowest Detail Sort number. If the Summary option is selected as the Report Type, accounts are printed in ascending order starting with the account that has the lowest Summary Sort number.
Provided it is included on the report, any account that has a sort number of zero in the field associated with the report type (detail or summary) will print at the beginning of the report. If there are multiple accounts with a sort number of zero, they will all print at the beginning of the report, sorted by account number. This can cause the figures for total accounts to calculate differently than expected. For this reason, it is important to ensure that each GLS account has its own distinct sort number in both the Detail Sort and Summary Sort fields (although the detail sort and summary sort do not have to be the same for each account). Alternatively, you can configure all accounts to have the same number in the sort fields (e.g., zero), and the financial statements will sort all accounts based solely on the account numbers.

Use the following steps to run a Chart of Accounts List for use in evaluating the setup of heading and total accounts.

From the GLS menu, select Reports | Chart of Accounts List.
On the Account tab, make sure to specify a range of accounts sufficient to include at least all asset accounts, all liability accounts, all expense accounts or all advance accounts. You may prefer to print the report once for all Balance Sheet accounts (i.e., asset and liability accounts) and once for all Income Statement accounts (i.e., all income and expense accounts). Or you may prefer to simply print the list for all accounts at once.
On the Options tab, make sure the Both option is selected for the Print Type.
Select the Use a Sort Sequence Order check box. This causes the list to print using the same order financial statements will use, and allows the list to include the Lvl column.
Click OK.
Make sure a valid printer and the Print option are selected, and click OK to print the Chart of Accounts List.

The first account with a print type of heading is assigned a Level of "1". The next occurrence of the number 1 in the Lvl column designates the total account that corresponds to that first heading account. The total account will reflect the sum of all prior detail account balances, beginning with its corresponding heading account. Each of the other total accounts should have a corresponding heading account, which is easily identifiable by the matching Level number. Since levels can be nested (i.e., one or more ranges of accounts to be totaled within a larger range), level numbers are not unique on the list.

The following is an example of an excerpt from a Chart of Accounts List for a GLS Client with incorrectly configured accounts. For the purposes of this article, the example below includes color to assist you in understanding how the total and heading accounts will work together when financial statements are printed; however, the number in the optional Lvl column can also be used for this purpose.

Example: Excerpt from an Incorrectly Configured Chart of Accounts and Resulting Detail Balance Sheet


  Date: 03/06/03  Chart of Accounts in Detail Sort Sequence Order          Page: 1  
                            Burns, Jensen & Powers, P.C.  
  
                                                                     Det   Sum  
  Account # DP Description                    AT PT BT PO RO PC US  Sort  Sort Lvl  
  --------- -- -----------                    -- -- -- -- -- -- --  ----  ---- ---  
     100.00 00 Assets                         A  H  D  Y  B  0        10    10   1  
     105.00 00 Current Assets                 A  H  D  Y  B           20    20   2  
     110.01 01 Bank Account #1                A  D  D                 40    40  
     110.02 01 Bank Account #2                A  D  D                 50    50  
     110.99 00 Total Cash                     A  T  D  Y  B  1  S     60    60   2  
     115.00 00 Total Current Assets           A  T  D  Y  B  0  S     70    70   1  
     120.00 00 Fixed Assets                   A  H  D  Y  D  1        90    90   1  
     120.01 01 Furniture & Fixtures           A  D  D                100   100  
     120.05 00      (FMV $2000)               A  C  D  Y  D  0       110   110  
     120.02 01 Equipment                      A  D  D                120   120  
     120.06 00      (FMV $5150)               A  C  D  Y  D  0       130   130  
     120.03 01 Accum. Depr. - Furn & Fixtures A  D  D                140   140  
     120.04 01 Accum. Depr. - Equipment       A  D  D                150   150  
     120.99 00 Total Fixed Assets             A  T  D  Y  B  1  S    160   160   1  
     130.00 01 Miscellaneous Assets           A  D  D                170   170  
     140.00 00 Total Assets                   A  T  D  Y  B  0  D    180   180   0

In the example above, the entire asset section from a chart of accounts is included. The goal is to have the Total Assets account on the last line (account 140.00 in the example) display a total for all assets. In this example, the heading and total accounts are not set up properly, therefore the result will be very different than intended. The following are some notes about the account totaling that will result when printing financial statements for a GLS client using the chart of accounts shown in the example above.

Ideally, account 140.00, Total Assets, should reflect the total for all asset account balances. However, because the chart of accounts has not been set up properly, there are only three heading accounts ("H" in the PT column) for the four total accounts ("T" in the PT column). As a result, the figure for the Total Assets account, which is the last total account, will be calculated differently than intended (see the sample Detail Balance Sheet provided below).
Account 110.99 - Total Cash (sort number 60), is intended to reflect the sum of all detail account balances for cash accounts. However, since there is no Cash heading account, the Total Cash account will instead reflect the sum of all detail account balances beginning after the last heading account, account 105.00 - Current Assets (sort number 20).
Account 115.00 - Total Current Assets, is intended to reflect the sum of all detail account balances that print between account 105.00, the Current Assets heading account (sort number 20) and account 115.00 - Total Current Assets (sort number 70). Because the Current Assets heading account is being used to determine the figure printed for the Total Cash account, the next available heading account is the Assets heading account (sort number 10). Therefore, the figure reflected for the Total Current Assets account will be calculated differently than intended.
Account 120.99, Total Fixed Assets (sort number 160), is the only total account in this example that will accurately reflect the correct balance on a Detail Balance Sheet. This account will reflect the sum of all detail account balances beginning after account 120.00, Fixed Assets (sort number 90).

Below is an example of a partial Detail Balance Sheet printed for a GLS client using the above chart of accounts. Once again, color has been added to assist you in comparing this report to the chart of accounts depicted above.


  Date: 03/06/03      Detail Balance Sheet              Page: 1  
                 Burns, Jensen & Powers, P.C.  
    
  Reporting Period: Mar 03  
  Department: 1 To 99  
                                                        Current  
  Account # Dept Description                            Balance  
  --------- ---- -----------                            -------  
            Assets  
            Current Assets  
     110.01  01  Bank Account #1                        100,000  
     110.02  01  Bank Account #2                          4,000  
                                                        -------  
            Total Cash                                  104,000  
  
                                                        -------  
            Total Current Assets                        104,000  
  
            Fixed Assets  
     120.01  01  Furniture & Fixtures                     3,000  
                      (FMV $2000)  
     120.02  01  Equipment                                7,000  
                      (FMV $5150)  
     120.03  01  Accum. Depr. - Furn & Fixtures               0  
     120.04  01  Accum. Depr. - Equipment                     0  
                                                         ------  
            Total Fixed Assets                           10,000  
  
     130.00  01  Miscellaneous Assets                     1,000  
                                                         ------  
            Total Assets                                 11,000  
                                                         ======

In the partial Detail Balance Sheet illustrated above, errors in the chart of accounts have caused the figure for the Total Assets account to be calculated differently than expected. The following are some notes about the balances shown on the report:

The Total Cash account reflects the sum of all detail account balances printed before it, beginning after the Current Assets heading account. This is not the intended result, since there should be a Cash heading account after the Current Assets heading account. However, the simple chart of accounts example represented above does not have any other detail accounts between Current Assets and Total Cash, so the balance reflected for this account (i.e., 100,000 + 4,000 = 104,000) is correct despite the improper setup.
The Total Current Assets account reflects the sum of all detail accounts printed before it, beginning after the Assets heading account and including the Total Cash account. This is not the intended result, since the Total Current Assets should reflect the sum of only those prior detail account balances after the Current Assets heading account. However, since there are no detail accounts printed between the Assets heading account and the Total Current Assets account, the balance reflected for this account (i.e., $104,000) is correct despite the improper setup.
The Total Fixed Assets account reflects the sum of all prior detail account balances, beginning after the Fixed Assets heading account (i.e., 3,000 + 7,000 + 0 + 0 = 10,000). This is the only total account on the report that prints its balance as intended.
The figure for the Total Assets account has been calculated differently than intended. This account should reflect the sum of all prior detail account balances, beginning after the very first heading account, Assets. Since that heading account is being used with the Total Current Assets account, there is no corresponding heading account available for the Total Assets account. In the example above, this account reflects the sum of all prior detail account balances, beginning after the Fixed Assets heading account. The resulting figure (3,000 + 7,000 + 0 + 0 + 1,000 = 11,000) is much less than the correct total for all asset accounts. If the chart of accounts had been set up correctly, the Total Assets account would reflect a balance of 115,000, as demonstrated in the example of the corrected Detail Balance Sheet below.

Example: Fixing the Chart of Accounts Illustrated Above

In the example Chart of Accounts List illustrated above, the problems demonstrated can be resolved by simply adding a correctly configured heading account. This section of the article demonstrates how to fix the problems described above.

In the example above, there is no heading account for the Cash section of the chart of accounts, and as a result there are more total accounts than heading accounts. Adding a Cash heading account with the correct sort numbers can resolve the situation.

In the sample Chart of Accounts List provided below, account 110.00 (the new Cash heading account) has been added with both sort numbers set to 30. Once again, color has been added to the report for this article, to make it easier to distinguish the relationships between the heading and total accounts. Notice the effect on the numbers in the Lvl column now that there are an equal number of heading and total accounts. It is easy to see that the Assets heading account now matches up with the Total Assets account because both accounts are assigned a Level of "1".


  Date: 03/06/03  Chart of Accounts in Detail Sort Sequence Order          Page: 1  
                            Burns, Jensen & Powers, P.C.  
  
                                                                     Det   Sum  
  Account # DP Description                    AT PT BT PO RO PC US  Sort  Sort Lvl  
  --------- -- -----------                    -- -- -- -- -- -- --  ----  ---- ---  
     100.00 00 Assets                         A  H  D  Y  B  0        10    10   1  
     105.00 00 Current Assets                 A  H  D  Y  B           20    20   2  
     110.00 00 Cash                           A  H  D  Y  D  1        30    30   3  
     110.01 01 Bank Account #1                A  D  D                 40    40  
     110.02 01 Bank Account #2                A  D  D                 50    50  
     110.99 00 Total Cash                     A  T  D  Y  B  1  S     60    60   3  
     115.00 00 Total Current Assets           A  T  D  Y  B  0  S     70    70   2  
     120.00 00 Fixed Assets                   A  H  D  Y  D  1        90    90   2  
     120.01 01 Furniture & Fixtures           A  D  D                100   100  
     120.05 00      (FMV $2000)               A  C  D  Y  D  0       110   110  
     120.02 01 Equipment                      A  D  D                120   120  
     120.06 00      (FMV $5150)               A  C  D  Y  D  0       130   130  
     120.03 01 Accum. Depr. - Furn & Fixtures A  D  D                140   140  
     120.04 01 Accum. Depr. - Equipment       A  D  D                150   150  
     120.99 00 Total Fixed Assets             A  T  D  Y  B  1  S    160   160   2  
     130.00 01 Miscellaneous Assets           A  D  D                170   170  
     140.00 00 Total Assets                   A  T  D  Y  B  0  D    180   180   1

Below is an example of how a Detail Balance Sheet would look using the chart of accounts illustrated above. As with previous sample reports, color is added to this example to aid in understanding the relationship between the accounts included on the report.


  Date: 03/06/03      Detail Balance Sheet              Page: 1  
                  Burns, Jensen & Powers, P.C.  
  
  Reporting Period: Mar 03  
  Department: 1 To 99  
                                                        Current  
  Account # Dept Description                            Balance  
  --------- ---- -----------                            -------  
  
            Assets  
            Current Assets  
  
            Cash  
     110.01  01  Bank Account #1                        100,000  
     110.02  01  Bank Account #2                          4,000  
                                                        -------  
            Total Cash                                  104,000  
  
                                                        -------  
            Total Current Assets                        104,000  
  
            Fixed Assets  
     120.01  01  Furniture & Fixtures                     3,000  
                      (FMV $2000)  
     120.02  01  Equipment                                7,000  
                      (FMV $5150)  
     120.03  01  Accum. Depr. - Furn & Fixtures               0  
     120.04  01  Accum. Depr. - Equipment                     0  
                                                         ------  
            Total Fixed Assets                           10,000  
  
     130.00  01  Miscellaneous Assets                     1,000  
                                                        -------  
            Total Assets                                115,000  
                                                        =======

In the Detail Balance Sheet excerpt illustrated above, the errors that were previously present in the chart of accounts have been fixed, and the Total Assets account now reflects the correct balance.

In Conclusion

Although the examples used in this article involve asset accounts (i.e., balance sheet accounts), the principles illustrated also apply to the configuration of liability accounts as well as income and expense accounts (i.e., Income Statement accounts).

Another example of a problem that you might experience regarding totaling on financial statements is failure to set up a Profit/Loss heading account and/or a corresponding Total Profit/Loss account. This would result in having an unexpected amount or no amount at all print for the bottom line of your income statement.

In conclusion, when setting up the GLS chart of accounts, it is important to make sure that there are an equal number of accounts with a print type of heading and a print type of total. It is also important to provide the accounts with Detail Sort and Summary Sort values and/or account numbers designed to produce the desired totals on the Balance Sheet and Income Statement. Printing a Chart of Accounts List using a sort sequence order provides an overview of the layout of heading and total accounts so you can see how things will add up on financial statements.

THE INFORMATION PROVIDED IN THE SOFTWARE TECHNOLOGY, INC. KNOWLEDGE BASE IS PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND. SOFTWARE TECHNOLOGY, INC. DISCLAIMS ALL WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL SOFTWARE TECHNOLOGY, INC. OR ITS SUPPLIERS BE LIABLE FOR ANY DAMAGES WHATSOEVER INCLUDING DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL, LOSS OF BUSINESS PROFITS OR SPECIAL DAMAGES, EVEN IF SOFTWARE TECHNOLOGY, INC. OR ITS SUPPLIERS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES SO THE FOREGOING LIMITATION MAY NOT APPLY.