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Master Data 55

• Assets are what the company owns, such as cash, inventory of
materials, land, buildings, and money owed to the company by its
customers (receivables).

• Liabilities are what the company owes to others, including money
owed to vendors (payables) and loans from fi nancial institutions.
• Owner’s equity refers to the owner’s share of the company’s assets.

• Revenues are the monies the company earns by selling its products
and services
• Expenses are the costs associated with creating and selling those
products and services.
GBI has created a custom COA—GL00—which it uses as the operative
COA for all the companies in its enterprise. GBI currently does not utilize
a country-specifi c or group COA. A complete listing of all the accounts in
GL00 is provided in Appendix 3A of this chapter. A detailed explanation of
these accounts is beyond the scope of this book. Instead, we discuss relevant
accounts in the various process chapters.
The fi nal data element in the COA segment is the account group,
which groups together accounts with similar characteristics. For example, all
bank and cash accounts are consolidated in one account group called liquid
assets. Accounts within each group are numbered within a specifi ed number
range. For example, accounts in the liquid assets group are located between
100000 and 110300. Further, accounts in different account groups require dif-
ferent types of data when they are used in a company’s general ledger. The
data contained in account groups can include dates, tax-related data, and orga-
nizational data. These data can be designated as either required, optional, dis-
play only, or hidden when the accounts are created.

Demo 3.1: Review chart of accounts

Although the accounts in a COA can be used by more than one company, each
company uses the account in different ways. For example, the currency used
and the tax-related data in different countries can be different. Therefore, the
general ledger account requires certain company code-specifi c data in addition
to the COA data. The typical company code data in general ledger accounts
consist of the following elements (refer back to Figure 3-4)
• Account currency
• Tax-related data
• Field status groups

• Open item management
• Line item display
• Reconciliation account data

Account currency determines the currency in which all the transactions
are recorded. For example, GBI US uses US$ (USD) as the account currency,

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