The document describes accounting entries for different business scenarios including purchase requisitions, purchase orders, inventory receiving, accounts payable invoices, cash payments, and sales order processing. It outlines the accounts that would be debited and credited for each transaction along with the source of the account definitions.
The document describes accounting entries for different business scenarios including purchase requisitions, purchase orders, inventory receiving, accounts payable invoices, cash payments, and sales order processing. It outlines the accounts that would be debited and credited for each transaction along with the source of the account definitions.
The document describes accounting entries for different business scenarios including purchase requisitions, purchase orders, inventory receiving, accounts payable invoices, cash payments, and sales order processing. It outlines the accounts that would be debited and credited for each transaction along with the source of the account definitions.
The document describes accounting entries for different business scenarios including purchase requisitions, purchase orders, inventory receiving, accounts payable invoices, cash payments, and sales order processing. It outlines the accounts that would be debited and credited for each transaction along with the source of the account definitions.
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Business Flow:-
Requestor creates Purchase Requsition (PR)-->
Get it Approved --> Buyer converts Approved PR into Standard Purchase Order --> Warehouse team Receives and performs Put Away/Delivery (i.e. taking the stock into Inventory location)--> AP Team records Invoice received from Vendor--> AP team makes the payment --> Cash Management team performs Payment reconciliation
Scenario I PO Creation without Inventory Items
PR Creation No Accounting Entry gets created
PO Creation
Accounting Entry:- Source of Account
No Entry at PO Stage
PO Receipt:- Receiving AP AccrualAccount A/c for Inventory Dr Cr Receiving Options Purchasing Options
PO Deliever/Put Away
Inventory Material Value A/c Dr Inventory Org Definition (Costing Information tab) This is at Standard Cost price Difference between PO Price and Purchase Price Variance A/c (if any) Dr Standard Cost Price Receiving Account for Inventory Cr This is at PO Price
AP Invoice:- Account Code combination is derived from PO AP Accrual A/c Dr Receipt Account Code combination is derived from AP Liability A/c Cr Vendor Site Setup
AP Payment:- Account code combination is derived from AP AP Liability A/c Dr invoice Account code combination is derived from Bank Cash Clearing A/c Cr account setup
Payment Reconciliation Via Cash Management
Account code combination is derived from Bank Cash Clearing A/c Dr account setup Account code combination is derived from Bank Cash/Bank A/c Cr account setup PO Creation without Inventory Iteam and PO Scenario II Line Type :- EXPENSE
Accounting Entry:- Source of Account
PO Creation/Receiving/Delivery:- - No Entry at PO Stage and Receiving stage
AP Invoice:- In General, Charge Account is derived in PO based Charge A/c used in PO A/c Dr on PO Auto Account Generator Account Code combination is derived from AP Liability A/c Cr Vendor Site Setup
AP Payment:- Account code combination is derived from AP AP Liability A/c Dr invoice Account code combination is derived from Bank Cash Clearing A/c Cr account setup
Payment Reconciliation Via Cash Management
Account code combination is derived from Bank Cash Clearing A/c Dr account setup Account code combination is derived from Bank Cash/Bank A/c Cr account setup
Scenario III Non PO Based Invoices
Standard AP Invoice:- Account Code combination entered by user in AP AP Expense A/c Dr Invoice Distributions Account Code combination is derived from AP Liability A/c Cr Vendor Site Setup
Credit Memo/Debit Memo:-
Account Code combination is derived from AP Liability A/c Dr Vendor Site Setup Account code combination derived from AP AP Expense A/c Cr invoice to which CM/DM is matched
AP Prepayment Invoice:- Account Code combination derived from Vendor Prepayment A/c Dr Site Setup Account Code combination is derived from AP Liability A/c Cr Vendor Site Setup
Applying of Prepayment to Standard Invoice:-
Account derived from the original AP invoice to AP Liaibility A/c Dr which prepayment is applied Account derived from the Prepayment invoice Prepayment A/c Cr distribution
Standard AP Invoice with Withholding Tax:-
Original Invoice from Vendor Account Code combination entered by user in AP AP Expense A/c Dr Invoice Distributions Account Code combination is derived from AP Liability A/c Cr Vendor Site Setup
Withhilding Tax A/c Dr Account derived from Withholding tax code setup Account Code combination is derived from AP Liability A/c Cr Vendor Site Setup Business Flow:-
Sales guy raised a Sales Quote --> This is converted into
Sales Order --> SO is booked/Picked/Packed and then Shipped --> AR Invoice is created --> Revenue is recongnized --> AR Receipt --> Cash Management reconcilition (if any)
Scenario I SO Based Invoices
Accounting Entry:- Source of Account SO Booking No Accounting Entry
SO Shipping Deferred Cost of Goods Sold A/c Dr Inventory Org Parameters Inventory Valuation A/c Cr Inventory Org Parameters
AR Invoice Creation Account derived based on AR Auto Receivable A/c Dr Accounting Rules Account derived based on AR Auto Revenue A/c Cr Accounting Rules
After Running Revenue recognition and COGS
Recoginition programs Cost of Goods Sold A/c Dr Inventory Item used in Sales Order
Deferred Cost of Goods Sold A/c Cr Sales Order type/Inventory Org Parameters
Receipt with Remittance
AR Receipt Receipt Confirmation A/c Dr Receipt Class Unidentified Receipt A/c Cr Receipt Class
Unidentified Receipt A/c Dr Receipt Class
Unapplied Receipt A/c Cr Receipt Class
Unapplied Receipt A/c Dr Receipt Class
From the Invoice against which receipt is Receivable A/c Cr created
Payment Reconciliation Via Cash Management
Cash/Bank A/c Dr Bank Account setup Receipt Confirmation A/c Cr Receipt Class
AR Credit Memo Account derived based on AR Auto Revenue A/c Dr Accounting Rules Account derived based on AR Auto Receivable A/c Cr Accounting Rules
AR Debit Memo Account derived based on AR Auto Receivable A/c Dr Accounting Rules Account derived based on AR Auto Revenue A/c Cr Accounting Rules
AR Chargeback Account derived based on AR Auto Receivable A/c Dr Accounting Rules Account derived from Chargeback Chargeback Clearing A/c Cr Receivable Activity
Account derived from Chargeback
Chargeback Clearing A/c Dr Receivable Activity Receivable account of the invoice against Receivable A/c Cr which Chargeback invoice is created
AR Deposit Account derived based on AR Auto Receivable A/c Dr Accounting Rules Account derived based on AR Auto Deposit A/c Cr Accounting Rules
AR Guarantee Account derived based on AR Auto Unbilled Receivable A/c Dr Accounting Rules Account derived based on AR Auto Unearned Revenue A/c Cr Accounting Rules
Invoicing Rules - In Advance - 3 Month Fixed Duration
Scenario II Rule Account derived based on AR Auto Receivable A/c Dr 3000 Accounting Rules Account derived based on AR Auto Unearned Revenue A/c Cr 3000 Accounting Rules
Account derived based on AR Auto
Unearned Revenue A/c Dr 1000 Accounting Rules Revenue A/c Cr Account derived based on AR Auto 1000 Accounting Rules
At the start of second month
Account derived based on AR Auto Unearned Revenue A/c Dr 1000 Accounting Rules Revenue A/c Cr Account derived based on AR Auto 1000 Accounting Rules
At the start of Third month
Account derived based on AR Auto Unearned Revenue A/c Dr 1000 Accounting Rules Revenue A/c Cr Account derived based on AR Auto 1000 Accounting Rules
Account derived based on AR Auto Unbilled Receivable A/c Dr 1000 Accounting Rules Revenue A/c Cr Account derived based on AR Auto 1000 Accounting Rules
At the start of second month
Account derived based on AR Auto Unbilled Receivable A/c Dr 1000 Accounting Rules Revenue A/c Cr Account derived based on AR Auto 1000 Accounting Rules
At the start of Third month
Account derived based on AR Auto Unbilled Receivable A/c Dr 1000 Accounting Rules Revenue A/c Cr Account derived based on AR Auto 1000 Accounting Rules
Receivable A/c Dr 3000 Unbilled Receivable A/c Cr 3000 Business Flow:-
AP Team records the invoice (Note:- It
can be PO based Invoice) --> Validate and Account the invoice -> Run Mass Additions program to push the data to FA --> run Prepare Mass Additions process in FA and Post which will create FA Asset --> Run Depreciation --> Close the period
Accounting Entry:- Source of Account
AP Invoice:- Asset Clearing A/c Dr Account Code combination manually entered by user AP Liability A/c Account Code combination is derived from Vendor Cr Site Setup
AP Payment:- AP Liability A/c Dr Account code combination is derived from AP invoice Account code combination is derived from Bank Cash Clearing A/c Cr account setup
Payment Reconciliation Via Cash
Management Cash Clearing A/c Account code combination is derived from Bank Dr account setup Cash/Bank A/c Account code combination is derived from Bank Cr account setup
Asset Addition (after Mass Additions
Process) Account Code combination derived from Asset Asset Cost A/c Dr Category setup Account Code combination derived from Asset Asset Clearing A/c Cr Category setup
After running of Depreciation Process
Account Code combination derived from Asset Depreciation A/c Dr Assignment level of Asset Account Code combination derived from Asset Accumulated Dep A/c Cr Category setup
CIP Asset Addition
CIP Asset Cost A/c Account Code combination derived from Asset Dr Category setup CIP Asset Clearing A/c Account Code combination derived from Asset Cr Category setup
AP Invoice:- (For adding ot CIP Assets)
CIP Asset Clearing A/c Dr Account Code combination manually entered by user AP Liability A/c Account Code combination is derived from Vendor Cr Site Setup
Capitalizing of CIP Assets
Asset Cost A/c Account Code combination derived from Asset Dr Category setup CIP Asset Cost A/c Account Code combination derived from Asset Cr Category setup
Retirement of Assets Proceeds of Sale Clearing Account Account code combination is derived from Book Dr Controls Account Code combination derived from Asset Accumulated Depreciation Dr Category setup Account code combination is derived from Book Cost of Removal Dr Controls Account code combination is derived from Book Balancing Net Book Value Retired Dr Controls Figure Account Code combination derived from Asset Asset Cost Cr Category setup Account code combination is derived from Book Proceeds of Sale Cr Controls Account code combination is derived from Book Cost of Removal Clearing Account Cr Controls
Create AR Receipt Bank A/c Dr Proceeds of Sale Clearing Account Cr
Create AP Invoice Cost of Removal Clearing Account Dr AP Liability A/c Cr
