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Advantage Salon Software and Spa Software Support Page 53

 53)Introduction to the General Ledger in Advantage Salon Software and Spa Software Management System

The General Ledger module is a double entry accounting software system found in the ADVANTAGE Salon Software and Spa Software that follows generally accepted accounting procedures, GAAP. The chart of accounts uses account numbers and can be divided up into departments for reporting purposes.  Because the other accounting modules are integrated with the general ledger, book keeping is much easier.   Before you can start using the general ledger module you will need to setup your chart of accounts and if necessary setup departments.


Proper accounting practice requires a double entry accounting software system.  This means that each value input into the system 
is a credit to one general ledger account and a debit (+) to another.  Since each entry affects two accounts by the same amount, 
debiting one and crediting another, the accounts are always in balance.  Another way to look at accounting is to view the chart 
of accounts as a row of jars lined up along a wall with a label on each jar.  The first jar might be labeled "Bank Account".  One 
further down the line might be labeled "Phone Expenses".  If a phone bill is paid the accounting system takes an amount of 
money out of the "Bank Account" jar and puts it into the "Phone Expenses" jar.  Thus it can be seen that the sum of the credits 
will always be equal to the sum of the debits meaning the books will be in balance or the sum of the debits and credits together 
will be zero.


One might wonder where the money comes from to be transferred between jars.  The point is that the jars (or accounts) start out 
empty and they stay empty to the extent that the sum of the money in the jars is always zero.  A credit to one account is offset 
by a debit to another so that we have +1-1=0.


In general 
 Asset accounts carry a debit balance (+)
  Liability accounts and owner's equity accounts carry a credit balance (-)
  Revenue accounts carry a credit balance (-)
  Expense accounts carry a debit balance (+)

Assets=-(liabilities+owner's equity)
Owner’s equity=capital input+profit
Profit=revenues+expenses (revenues are negative and expenses are positive)
assets+liabilities+capital input+revenues+expenses=zero






Advantage Salon Software and Spa Software Support Page 53

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