MODULE 2: CHART OF ACCOUNTS

Module Overview
General Ledger is the central application area of NAV that is used to post,
summarize and report financial information.

Two main components of the General Ledger application area are the Chart of
Accounts and G/L Budgets. The Chart of Accounts provides quick access to G/L
accounts and balances, and the budgets feature provides a comparison between actual
amounts and budgeted amounts, by using a combination of G/L accounts, periods,
and dimensions.

Note: Because G/L budgets are used in financial reporting, the setup and use
of G/L budgets is covered in the course Finance Advanced

Objectives
The objectives are:

 Explain how to use the Chart of Accounts.

 Explain the elements of the G/L Account Card.
 Explain the elements of the G/L Account Card ribbon.

Explain the elements of the Chart of Account ribbon.

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Chart of Accounts Overview
The income statement and balance sheet or two important company reports.

An account in the income statement and the balance sheet is called a G/L account,
and all the G/L accounts make up the Chart of Accounts list.

You use G/L account cards to create and edit G/L accounts.

G/L Account Card

In the Chart of Accounts list, all G/L accounts are available and can be viewed at
one time. However, there is also a G/L Account Card for each account, and this can
be accessed from the Chart of Accounts list.

The G/L account card has five FastTabs that are explained in the following section.

General FastTab
To open a G/L account card page, follow these steps.

1. In the Search box, enter Chart of Accounts, and click the related link.
2. Select the relevant account to view.
3. On the Home tab, click Edit.

Best Practice: You can also double-click the line of the relevant account to
open the G/L account card.

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FIGURE 2.1: G/L ACCOUNT CARD WINDOW

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The General FastTab contains the following fields:

 No.: The number of the G/L account.

 Name: The name or description.
 Income/Balance: Indicates whether the account is classified as an
income statement of a balance sheet account. This field is important to
determine whether an account must be closed in the fiscal year-end.
 Debit/Credit: Indicates the type of entries that will be posted to this
account. The selection made does not restrict the type of transaction
posted to the account.
 Account Type: Indicates the purpose for the account in the different
list, journals, and reports. The following options are available:
o Posting: The only account type where entries can be posted.
o Heading: Used for description and reporting purposes only.
o Total: Used to total the accounts nominated in the Totaling field.
o Begin-Total: Marks the beginning of an account range in the
Totaling field.
o End-Total: Marks the end of an account range in the Totaling
field.

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  Totaling: Specifies an account interval or a list of account numbers.
The program will total the entries of the accounts displayed in this field.
Totaling formulas are possible for G/L accounts of the account type
Total and End-Total.
 No. of Blank Lines: Determines the number of blank lines to insert
before the account is displayed in a report.
 New Page: Determines whether a new report page is printed after the
account is displayed in the report.
 Search Name: Used to search for a particular account when the
account number cannot be recalled.
 Balance: Displays the current balance of the account. Click the balance
amount to access the General Ledger Entries list.
 Reconciliation Account: Determines whether the G/L account is
included in the Reconciliation list in the general journals. Use the
Reconciliation list before posting to review the effect of posting the
accounts in the journal.
 Automatic Ext. Texts: If this is selected, extended text set up on the
accounts is automatically added to the sales and purchase
documentation in the Description field. If this is not selected, extended
text can still be set up on the account and added to documents
manually. To create the extended text, click Extended Text in
Navigate tab.
 Direct Posting: Indicates whether posting can move directly into this
account from a journal line. Be aware that this field is automatically
selected when new accounts are created. G/L accounts such as the
receivables (trade debtors) account, that are posted based on posting
groups, are usually only set up for indirect posting.
 Blocked: If you select it, this field prevents entries from posting to this
account. Accounts can be blocked and reopened as needed.
 Last Date Modified: System generated field that displays the date the
G/L account is last changed.

Posting FastTab
The Posting FastTab contains the following fields that determine how the G/L and
goods and services tax (GST) transactions are recorded.

 Gen. Posting Type: Defines whether the account is used only for a
Sale or Purchase transaction or with both types of transactions. This
field is used with the GST Bus. Posting Group and GST Prod.
Posting Group fields to determine where the system will posts GST.
The following options are available:

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 o <Blank>
o Purchase
o Sale
 Gen. Bus. Posting Group: Identifies the default general business
posting group for the account. This field is used together with the Gen.
Prod. Posting Group and Gen. Posting Type fields to find the G/L
accounts to post to for sales, purchases, discount amounts, Cost of
Goods Sold (COGS), and inventory adjustments.
Because the general business posting group indicates whom you sell-to
or buy-from, the customer’s or vendor’s general business posting group
takes priority over the G/L account’s general business posting group.
When there is no customer or vendor involved in a transaction, the
program will use the G/L account’s general business posting group.
 Gen Prod. Posting Group: Identifies the default general product
posting group for the account. This field is used with the Gen. Bus.
Posting Group and Gen. Posting Type fields to find the G/L accounts
to post to for sales, purchases, discount amounts, COGS, and inventory
adjustments. The general product posting group of an item takes
priority over the G/L account’s general product posting group.
 GST Bus. Posting Group: Identifies the default GST Business Posting
Group for the account. This field is used with the GST Prod. Posting
Group and Gen. Posting Type fields to determine the GST percentage
and the GST calculation type and to find the G/L accounts where the
program posts GST. Because the GST business posting group indicates
whom you sell-to or buy-from, the customer’s or vendor’s GST
business posting group takes priority over the G/L account’s GST
business posting group. When there is no customer or vendor involved
in a transaction, the program will use the G/L account’s GST business
posting group.
 GST Prod. Posting Group: Identifies the default GST Product Posting
Group for the account. This field is used with the GST Bus. Posting
Group and Gen. Posting Type fields to determine the GST percent and
the GST calculation type and to find the G/L accounts where the
program posts GST. The GST product posting group of an item takes
priority over the G/L account’s GST product posting group.
 Default IC Partner G/L Acc. No.: Identifies the default Intercompany
(IC) G/L account number for this G/L account. When you enter this
G/L account in an intercompany general journal, the IC G/L account
specified in this field is used as the default balancing account number.

After the posting types and the posting group codes are assigned to a G/L account,
these codes are automatically inserted in a journal, sales, or purchase line when the
G/L account is selected.

Note: If the general posting groups are set up with default GST posting groups,
the GST posting group fields are automatically populated with the default values
when the general posting group(s) is selected.

Consolidation FastTab
The Consolidation FastTab contains the following fields that specify the link with
the consolidated company:

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  Consol. Debit Acc.: Specifies the number of the account in a
consolidated company that you will transfer debit balances to on this
account.
 Consol. Credit Acc.: Specifies the number of the account in a
consolidated company that you will transfer credit balances to on this
account.
 Consol. Translation Method: Contains the consolidation translation
method that will be used for the account. The translation methodology
identifies the currency translation rate to be applied to the account.

Note: For more information about the fields that appear on the Consolidation
FastTab, refer to the Help.

Reporting FastTab
The Reporting FastTab specifies how general ledger accounts will be adjusted for
exchange rate fluctuations between the local currency (LCY) and the additional
reporting currency, if you post in an additional reporting currency.

More information on the additional reporting currency is available in the Finance

Advanced in Microsoft Dynamics NAVcourseware.

Cost Accounting FastTab

The Cost Accounting FastTab specifies a cost type number to establish the cost type
that a general ledger account belongs to.

More information on cost accounting is available in the course Finance Advanced in

Microsoft Dynamics NAV.

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Create an Account in the G/L Account Card
To create an account in the G/L Account Card, follow these steps.

1. In the Search box, enter Chart of Accounts, and click the related link.
4. In the Home tab of the ribbon, click New.
5. On the General FastTab, in the No. field, enter the account number.
6. In the Name field, enter a description.
7. In the Income/Balance field, click the drop-down list and select the
relevant option.
8. In the Account Type, field, click the drop-down list and select the
relevant option.
9. If it is necessary, enter the range in the Totaling field.

Note: By running the Indent Chart of Accounts function, the Totaling field is
populated automatically.

10. If it is necessary, enter a value in the No. of Blank Lines field.

11. Enter check marks in the check boxes as is needed.
12. On the Posting FastTab, in the Gen. Posting Type field, click the drop-
down list and select the relevant option.
13. In the Gen. Bus. Posting Group field, click the drop-down list and
select the relevant option.
14. In the Gen. Prod. Posting Group field, click the drop-down list and
select the relevant option.
15. Enter information on the Consolidation, Reporting and Cost
Accounting FastTabs as necessary.
16. Click OK to close the G/L account card.

To assign a dimension to the G/L account, follow these steps.

1. In the Navigate tab of the ribbon, click Dimensions and then select
Dimensions-single.
17. In the Dimension Code field, click the drop-down list and select the
relevant dimension from the list.
18. In the Dimension Value Code field, click the drop- down list and select
the relevant dimension value from the list.
19. If there are dimension posting requirements, in the Value Posting field,
click the drop-down list and select the appropriate option.
20. Close the Default Dimension and the G/L Account Card.

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 When you use begin-total and end-total accounts, you can use the Indent Chart of
Accounts function to do the following:

 Indent the G/L accounts between the begin-total account and the end-
total account.
 Populate the totaling field of the end-total account.

To indent the new G/L account, follow these steps.

2. In the Chart of Accounts list, locate and select the new account.
21. Click Actions, point to Functions, and then click Indent Chart of
Accounts.
22. Click Yes to run the indent function.
23. Close the Chart of Accounts list.

G/L Account Card Ribbon

The G/L account card ribbon provides several functions and overviews related to the
G/L account. The following tabs are available in the ribbon:

 Home
 Actions
 Navigate
 Report

FIGURE 2.2: G/L ACCOUNT CARD RIBBON

Home Tab
From the Home tab, you can view, edit, delete, or create a new G/L account.

The following single-click accesses are also available from the Home tab:

 General Posting Setup

 GST Posting Setup
 G/L Register
 Detail Trail Balance
 Trial Balance

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Additionally, you can show information attached to the G/L account from the
following sources:

 OneNote
 Notes
 Links

Actions Tab
The Actions button provides the most relevant navigation accesses for the G/L
Account Card.

You can use the Apply Template function to create G/L accounts by using Data
Templates. Data templates are part of the Rapid Start tool. This tool is explained in
the Application Setup in Microsoft Dynamics NAVcontent.

Navigate Tab
You can use the Navigate tab to display information about the balances and
transaction amounts for the account. You can also open the set up windows for the
relevant G/L account.

The Navigate tab provides single-click access to the following functions and
overviews:

 Ledger Entries: Display all ledger entries for the account.

 Comments: Display or enter comments that relate to the account.
 Dimensions: Display or enter default dimensions for the account.
 Extended Texts: Display or enter extended test for the account.
 Receivables-Payables Overview: Provides a summary of the
following:
o Expected net operational cash flow from customers and vendors
over time.
o Open customer and vendor ledger entries sorted by their Due Date
instead of Posting Date.

This summary can be viewed by the:

o Period, such as daily, monthly, or quarterly.

o Expected cash flow movement for a period by clicking the Net
Change option.
o Expected net balance of outstanding customer and vendor balances
at any date by clicking the Balance at Date option.
 Where-Used List: Displays a list of tables where this G/L account is
used.

 G/L Account Balance: Displays the balance or net change for the G/L
account over time.
 G/L Balance: Displays the balance or net change for all G/L accounts
for a specific period.

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  G/L Balance by Dimension: Displays balance or net change
information for all accounts. The information displayed in columns and
lines can be set to one of the following views:
o G/L account
o Period
o Global dimensions 1 and 2
 General Posting Setup: Specifies which accounts will be used to post
sales, purchases, discounts, COGS, and inventory adjustments.
 GST Posting Setup: Consists of combinations of GST business posting
groups and GST product posting groups. You can set up as many
combinations that you must have and link various G/L accounts to each
combination.
 G/L Register: Contains the general ledger register that is created every
time that a general ledger entry is posted.

Report Tab
On the Report tab, you can run the following reports:

 Detail Trial Balance: Shows a detail of the entries for selected general
ledger accounts.
 Trial Balance: Shows the chart of accounts that have balances and net
changes.
 Trial Balance by Period: Shows the opening balance by general ledger
account, the movements in the selected period of month, quarter, or
year, and the resulting closing balance.
 G/L Register: Contains the general ledger register that is created every
time that a general ledger entry is posted.

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Lab 2.1: Create a Revenue Account
Scenario

A new revenue account must be created for miscellaneous sales. Because you are the
accounting manager at CRONUS International Ltd., it is your responsibility to use
the following information to set up the new account by using the G/L Account Card.

 Miscellaneous Sales, account number 6140, is an income statement

account that is used to accumulate transactions.
 You can use direct posting.
 The posting groups are as follows:
Field Value
Gen Posting Type Sale
Gen. Bus. Posting Group NATIONAL
Gen. Prod. Posting Group MISC
GST Bus. Posting Group NATIONAL
GST Prod. Posting Group GST25

Make sure that the Account Types are formatted and the hierarchy is established.

Exercise 1: Create a Revenue Account

Task 1: Create the revenue account by using the information that is
provided in the scenario.
High Level Steps
3. Open a new G/L Account Card page.
4. Complete the General FastTab by using the information that is
provided in the scenario.
5. Complete the Posting FastTab by using the information that is provided
in the scenario.
Detailed Steps
6. Open a new G/L Account Card page.
a. In the navigation pane, click Departments and then click
Financial Management.
b. In the Financial Management page, click General Ledger, and
then click Chart of Accounts.
c. In the Action Pane, select the New button.

24. Complete the General FastTab by using the information that is

provided in the scenario.

In the General FastTab enter the following:

a. In the No. field, enter 6140.
d. In the Name field, enter Sales, Miscellaneous.
e. Make sure that the Income/Balance field displays Income

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 Statement.
f. Make sure that the Account Type field displays Posting.
g. Make sure that a check mark is in the Direct Posting field.

25. Complete the Posting FastTab by using the information that is provided
in the scenario.

In the Posting FastTab enter the following:

a. In the Gen. Posting Type field, click the drop-down list and select
Sale.
h. In the Gen. Bus. Posting Group field, click the drop-down list and
select NATIONAL.
i. In the Gen. Prod. Posting Group field, click the drop-down list
and select MISC.
j. Press Enter or Tab. The GST posting group fields are
automatically populated based on the general posting group
selections.
k. Close the G/L Account Card.
Task 2: Run the function to align the account display.
High Level Steps
7. Run the Indent Chart of Accounts function.
Detailed Steps
8. Run the Indent Chart of Accounts function.
a. In the Chart of Accounts list, in the Home tab of the ribbon, click
Indent Chart of Accounts.
l. Click Yes to run the indent function.
m. Review the new account; notice that it is indented with the other
sales accounts in the same range.

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Chart of Accounts
The Chart of Accounts page contains the same fields that are on the G/L Account
Card page but here they are in a table format. In addition to the information on the
individual account cards, the Chart of Accounts list displays the current Net Change
and Balance information for the accounts.

FIGURE 2.3: CHART OF ACCOUNTS WINDOW

Chart of Accounts Page

The Chart of Accounts page contains a ribbon with options that resemble the G/L
Account Card:

 Home
 Actions
 Navigate
 Report

FIGURE 2.4: CHART OF ACCOUNT HOME TAB

To use the options for an account in this page, select the line and then select one of

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 the options.

Note: Because most of the functions of the Chart of Accounts ribbon resemble
those that are on the G/L Account Card ribbon, only those that are different will be
explained in the following section.

Home Tab
Compared with the G/L Account Card, the Home tab of the Chart Of Accounts
contains the following additional functions:

 Indent Chart of Accounts: Indents the accounts according to the

defined hierarchy. Establishes the hierarchy by using the account types
Begin-Total and End-Total. Account numbers within this range are
included in the end-total range in the Totaling field.
 Show as List: Shows the page as a list. This is the default layout for all
list locations.
 Show as Chart: Shows the page as a chart. This is done by selecting
a measure and a dimension. The following example shows the net
change of the end-total accounts.

FIGURE 2.5: CHART OF ACCOUNTS IN THE CHART

OVERVIEW

Actions Tab
The Find function helps you find accounts by searching on the fields displayed in the
chart of accounts. The columns added with the Choose Columns function will also
become available in the Find function.

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Navigate Tab
Compared with the G/L Account Card, the Navigate tab of the Chart Of Accounts
contains following additional functions:

 Dimensions:
o Dimensions - Single - The same function as the Dimensions
function on the account card.
o Dimensions - Multiple - Used to assign the same default
dimensions to multiple accounts.

Because the Chart of Accounts page is a list of accounts, you can

assign the same default dimensions to several accounts by selecting
the relevant account lines. Therefore, reducing the entry time is
needed for setting up default dimensions.
 Chart of Accounts Overview: Displays the Chart of Accounts with
different levels of detail. Use the expand and collapse feature to view
only header and footer accounts, or all the accounts in between.

Assign the Same Dimensions to Multiple G/L Accounts

To assign the same dimensions to multiple G/L Accounts, follow these steps.

9. In the Chart of Accounts page, select all the accounts to assign

dimensions to.
26. Click the Home tab, click Dimensions and then click Dimensions -
Multiple.
27. Click New to create a new dimension.
28. Fill in the Dimension Code, Dimension Value Code, and Value
Posting fields.
29. Close the Default Dimension-Multiple page.
30. Verify that the dimension is assigned to multiple accounts by selecting
an account, clicking Dimensions, and then Dimensions – Single in the
Home tab.
31. Close the Default Dimension page and repeat step 5 for a different
account.

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Lab 2.2: Assign a Dimension to Multiple Accounts
Scenario

All sales should be posted to the DEPARTMENT dimension SALES. This should be
a mandatory dimension and dimension value, where SALES is the only possible
dimension value.

As the accounting manager, it is your responsibility to set up the default dimension

by using the following criteria:

 G/L accounts 6100 to 6955.

 The SALES dimension value of the DEPARTMENT dimension should
be assigned.

Use the value posting to make the dimension and dimension value mandatory.

Exercise 1: Assign a Dimension to Multiple Accounts

Task 1: Select the Sales G/L Accounts

High Level Steps

1. Open the chart of accounts page, locate and select the sales G/L
accounts.
Detailed Steps
10. Open the chart of accounts page, locate and select the sales G/L
accounts.
a. In the navigation pane, click Departments, and then click
Financial Management.
n. In the Financial Management page, click General Ledger, and
then click Chart of Accounts.
o. Select the lines of accounts 6100 to 6955.

Task 2: Assign a Default Dimension

High Level Steps

1. Open the Default Dimensions-Multiple page and assign the default
dimension.
Detailed Steps
11. Open the Default Dimensions-Multiple page and assign the default
dimension.
a. In the Navigate tab, click Dimensions, and click Dimensions-
Multiple.
p. In the Home tab, click New.
q. In the Dimension Code field, click the drop-down list and select
DEPARTMENT.
r. In the Dimension Value Code field, click the drop-down list and
select SALES.
s. In the Value Posting field, click the drop-down list and select
Same Code.

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t. Click OK.

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Module Review
Module Review and Takeaways

As the core component of a company, the Chart of Accounts lesson covered the G/L
Account Card and the Chart of Accounts page, and the process for creating G/L
accounts. This lesson also covered additional functions such as, indenting the chart of
accounts, and assigning default dimensions to multiple accounts.

Understanding the Chart of Accounts is essential when users are working in

Microsoft Dynamics NAV.

Test Your Knowledge

Test your knowledge with the following questions.

1. What function is used to create default G/L account setups for accounts that are
frequently created, such as expenses?

( ) Assign Template

( ) Enter Template

( ) Import Template

( ) Apply Template

2. In the G/L Account Card, what field is used to determine which accounts are
closed during the fiscal year end closing process?

( ) Reconciliation Account

( ) Debit/Credit

( ) Account Type

( ) Income/Balance

3. What is true about the chart of accounts page?

( ) You cannot change the name of an account, using the chart of accounts
page.

( ) You cannot set up a graphical overview of all the G/L accounts with a
negative balance, using the chart of accounts page.

( ) You can create new G/L accounts from the chart of accounts page.

( ) You cannot export the chart of accounts to Word and Excel.

4. How do you define a G/L account as a sales account?

( ) By selecting the Sales Account check mark.

( ) By assigning a general business posting group that is linked to a sales

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 account.

( ) By assigning a general product posting group that is linked to a sales

account.

( ) By linking the combination of the general business posting group and

general product posting group to a sales account.

( ) By selecting Sale in the Gen. Posting Type field.

5. Direct posting is typically not enabled for G/L accounts on which only system-
generated transactions are posted. For which of the following G/L account would
you not select direct posting?

( ) Receivables account

( ) Cash account

( ) Office supplies account

( ) Inventory Finished Goods account

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Test Your Knowledge Solutions
Module Review and Takeaways
1. What function is used to create default G/L account setups for accounts that are
frequently created, such as expenses?

( ) Assign Template

( ) Enter Template

( ) Import Template

(√) Apply Template

2. In the G/L Account Card, what field is used to determine which accounts are
closed during the fiscal year end closing process?

( ) Reconciliation Account

( ) Debit/Credit

( ) Account Type

(√) Income/Balance

3. What is true about the chart of accounts page?

( ) You cannot change the name of an account, using the chart of accounts
page.

( ) You cannot set up a graphical overview of all the G/L accounts with a
negative balance, using the chart of accounts page.

(√) You can create new G/L accounts from the chart of accounts page.

( ) You cannot export the chart of accounts to Word and Excel.

4. How do you define a G/L account as a sales account?

( ) By selecting the Sales Account check mark.

( ) By assigning a general business posting group that is linked to a sales

account.

( ) By assigning a general product posting group that is linked to a sales

account.

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 ( ) By linking the combination of the general business posting group and
general product posting group to a sales account.

(√) By selecting Sale in the Gen. Posting Type field.

5. Direct posting is typically not enabled for G/L accounts on which only system-
generated transactions are posted. For which of the following G/L account would
you not select direct posting?

(√) Receivables account

( ) Cash account

( ) Office supplies account

( ) Inventory Finished Goods account

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