Purchases Linked Accounts window

The Purchases Linked Accounts window enables you to change the Linked Accounts assigned to your purchases.

These accounts are automatically linked when you create a new company file using the New Company File Assistant. You may want to change the linked accounts to suit your business needs.

Field Descriptions

Liability Account for Tracking Payables

Enter or select a liability account that tracks the money you owe vendors for purchases.

This account is credited whenever you enter purchases on account using the Purchases window. This account is debited whenever you enter a payment for a vendor using the Pay Bills window. This account is referred to as your linked payables account.

tip : You can use the Company Data Auditor to compare the total of your purchases with the linked payables account balance.

 

Bank Account for Paying Bills

Enter or select an account for tracking payments to and refund cheques from vendors. This account is referred to as your payables bank account and is usually a Bank account type.

When you enter a bill payment, this account is credited by the amount of the transaction, and your linked Liability Account for Tracking Payables is debited.

I can receive items without a vendor bill—Liability Account for Item Receipts

If you select the I can receive items without a vendor bill option, the Liability Account for Item Receipts field appears. Enter or select an account for tracking the cost of items you’ve received into your inventory, but for which you haven’t yet received a bill.

This is also known as your linked A/P Accrual - Inventory account.

I pay freight on purchases—Expense or Cost of Sales Account for Freight

If you select the I pay freight on purchases option, the Expense or Cost of Sales Account for Freight field appears. Enter or select an account that tracks the money you spend for the transport of items you purchase. This account is referred to as your freight paid account.

This account enables you to see how much of your gross purchases amount is actually goods or services, and how much is payment for shipping. This account appears on the Trial Balance, the Profit and Loss Statement and other reports.

If your vendors don’t ship goods to your company, you do not need to select an account here.

I track deposits paid to vendors—Asset Account for Vendor Deposits

If you select the I track deposits paid to vendors option, the Asset Account for Vendor Deposits field appears. This field allows you to enter an account that tracks deposit amounts you pay for purchase orders.

This account is referred to as your linked vendor deposits account.

The amount is considered an asset for your company until the purchase actually is made, because all or a portion of the deposit will have to be returned to you if the purchase isn’t made. This account appears on the Trial Balance, the Profit and Loss Statement and other reports.

If you never make deposits on purchase orders, you do not need to select an account.

I take discounts for early payment—(or Contra) Account for Discounts

If you select the I take discounts for early payment option, the (or Contra) Account for Discounts field appears. Enter or select an account that tracks discount amounts that you’ve received from vendors for paying your bills early. This account is referred to as your linked vendor discounts account.

This account is used to track the discounts you take for early payment, based on the credit terms your vendors have extended to you. When you enter payments using the Pay Bills window, the discount amount you’re eligible for appears as a default entry and is tracked using the linked (or Contra) Account for Discounts.

If you don’t take early-payment discounts to your customers, you do not need to select an account.

I pay charges for late payment—Expense Account for Late Charges

If you select the I pay charges for late payment option, the Expense Account for Late Charges field appears. Enter or select an account for tracking finance charges that you’ve paid to vendors.

This account is referred to as your linked vendor late charges account.

This account is used to track the fees you pay when a bill payment is past due, or if you are charged a finance fee on unpaid balances. This account is updated when you enter an amount in the Finance Charge field in the Pay Bills window.

If you aren’t required to pay late charges, you do not need to enter an account.

Terms

Click to open the Credit Terms window, where you can create a set of default credit terms for all vendors in your company file and specify a default tax code.

The terms and tax code you select will be automatically applied to every new vendor record you add to the Card File. If you want, you can change these details for an individual vendor in the Buying Details view of the Card Information window.

OK

Click to save your changes and close the window.

Tips for this window

Related topics

■	Enter account opening balances

■	Set up purchases