FI Accounting entries

Principles of accounts:

1. Personal Accounts
Debit the Receiver
Credit the Giver

2. Real Accounts
Debit What Comes in
Credit what goes out

3. Nominal Accounts
Debit all exp & losses
Credit all incomes & gains

Down payment:

Customer:

Dr Bills Receivable (Main a/c debtors)

Cr Customer
Offsetting entry
Dr Bank a/c (or) down payment received
Cr Bills Receivable

Vendor:

Dr Vendor a/c
Cr Bills Payable (Main a/c creditors)
Offsetting entry
Dr Bills Payable a/c
Cr Bank a/c (or) down payment made

FI-MM Integration Flow of Entries

1) Purchase Order – No Entries (ME 21N)

2) Goods Receipt – (MIGO)
Inventory A/c Dr
To GR/IR Clearing Account

3) Invoice Verification -MIRO

GR/IR Clearing A/C Dr
To Vendor A/C

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Any difference between PO and INVOICE

OPT-1 IF FULL STOCK AVAILABLE

PO Price 100
INV Price 110
PO QT 10PC

DR/GR, IR (WRX) 1000

DR/Stock (BSX) 100
CR/Vendor (KBS) 1100
OPT-2
22 PARTIAL STOCK AVAILABLE
PO Price 100
INV Price 110
PO QT 10PC
Available stock 4PC
Consumption Stock 6PC

DR/GR, IR 1000
DR/Stock (BSX) (4*10) 40
DR/Price difference (PRD BLANK) (6*10) 60
CR/Vendor (KBS) 1100

OPT-3 NO STOCK AVIALABLE

23 PO Price 100
INV Price 110
PO QT 10PC

DR/GR, IR(WRX) 1000

DR/Price Difference (PRD BALNK) (10*10) 100
CR/Vendor (KBS) 1100

1 GOODS ISSUE TO PRODUCTION ORDER (261)MM TYPE MM TYPES

DR/MAT CONSUMTION(GBB-VBR) 261
CR/STOCK(BSX)

2 GOODS ISSUE TO PRODUCTION COST CENTERS (201) MM 201

TYPE
DR/MAT CONSUMTION(GBB-VBR)
CR/STOCK(BSX)

3 GOODS ISSUE TO PROJECTS 221

DR/MAT CONSUMTION(GBB-VBR)
CR/STOCK(BSX)

4 GOODS RECEIVED FROM PO 101

DR/STOCK(BSX)
CR/COGM(GBB-AUF)

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5 PRODUCTION PRICE DIFFERENCE
DR/STOCK(BSX)
DR/PRODUCTION VARIANCE(GBB-PRF)
CR/COGM(GBB-AUF))
6 GOODS RECEIVED FROM WITHOUT PRODCT ORDER
DR/STOCK(BSX) 521 AND
531
CR/COGM(GBB-ZOF)

SUB CONTROCT ENTRIES

7 GOODS ISSUE TO SUB CONTRACT VENDOR 541
DR/MAT CONSUMPTIONRMX, RMY(GBB-VBO)
CR/STOCK(BSX)

8 PROCESS CHARGES
DR/PROCESS CHARGES (TRANSACTION KEY FRL)
CR/GRIR(WRX)

9 GOODS RECEIVED FROM SUB CONTRACT VENDOR TO STOCK 543

DR/SFG(BSX)
CR/CHANGE IN STOCK (TRANSACTION KEY BSV)

Production order
10 GOODS ISSUED TO PRODUCTION ORDER 261+E
DR/MAT CONSUMPTION(GBB-VBR)
CR/SO STOCK(BSX)

11 GOODS RECEIVED FROM SO STOCK 101+E

DR/SALES ORDER STOCK(BSX)
CR/GR IR(WRX)

12 GOODS ISSUED TO CUSTOMER 601

DR/COGS (GBB-VAX WITHOT CE, VAY WITH CE)
CR/STOCK(BSX)

13 SCROP OF THE MATERIAL 551

DR/SCROP(GBB-VNG)
CR/STOCK(BSX)

14 INTIAL BALANCE UPLOAD 561

DR/STOCK(BSX)
CR/INTTIAL BALANCE UPLOAD(GBB-BSA)

15 PHYSICAL INVENTORY DIFFERENCE 702

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 DR/PHYSICAL INVENTORY DIFFERENCE(GBB-INV)
CR/STOCK(BSX)

16 INVENTORY REVALUATION
DR/STOCK(BSX) 120
CR/GAIN ON LOSS INVENTORY REVALUATION(UMB) 120

STOCK TRANSFERS
17 STOCK TRANSFER ONE PLANT TO ANOTHER PLANT 301
GAIN/LOSS
DR/STOCK(2PC)100RS BSX
CR/STOCK2PC*120) BSX
CR/GAIN ON STOCK TRANSFER BETWEEN THE PLANT(AUM)

18 EXCHANGE DIFFERENCES as per PO

DR/STOCK(BSX)
CR/GR, IR(WRX)

EXCHANGE RATE DIFFERENCE in MIRO

DR/GR, IR(WRX)
DR/LOSS ON EXCHANGE DIFFERENCES(KDM)
CR/VENDOR(KBS)

Asset Entries in SAP

Depreciation: Reduction in the value of fixed asset is known as depreciation.

Accumulated Depreciation: Nothing but depreciation reserve

When asset is purchased

Asset A/C Dr
To Bank A/C

If Depreciation Run Happens then the entry is: -

Dr Depreciation A/C (exp P&L account)

Cr To Accumulated Depreciation A/C

For providing depreciation on asset at the end of the year

Dr Depreciation A/C (exp P&L account)

Cr To Asset A/C

For Transfer of Dep P&L a/c at the end of the year

P&L A/C Dr

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 To Depreciation A/C
ASSET SALE WITH CUSTOMER(F-92) Amount P.KEY
DR CUSTOMER 1000 1
CR ASSET SALE A/C 1000 50
DR ASSET SALE A/C 600 40
DR ACCUMULATIVE DPS A/C 200 70
DR LOSS SALE ON ASSET 200 40
CR ASSET 1000 75
sale of the asset without customer(ABAON)
DR ASSET SALE A/C 800 40
DR ACCUMULATED Depriciation 100 70
CR ASSET 1000 75
DR LOSS ON SALE OF ASSET 100 40
ASSET RETIREMENT SCRAP ASSET(ABAVN)
DR LOSS DUE TO SCRAPING A/C 800 40
DR ACCUMULATED DEPRECIATION 200 70
CR ASSET 1000 75
TRANSFER OF ASSET(ABUMN)
DR ASSET DEBIT IN NEW BUSINESS AREA 1000 70
CR ASSET CREDITED IN OLD BUSINESS AREA 1000 75
DR ACCUMULATED DEPRICIATION DEBIT OLD BUSINESS AREA 100
CR ACCUMULATED DEPRICIATION CREDIT NEW BUSINESS AREA 100
POST CAPITALAIZATION ASSET(ABNAN)
CREATE ASSET CLASS(AS01) WITH ACTIVATE POST CAPITALAIZATION
USE TCODE(ABNAN)
DR ASSET 1000
CR Accumulated Dep 200
CR REVENUE FROM POST CAPITALAIZATION 800

ASSET DOCUENT REVERSAL(AB08)

SUB ASSET(AS11)
CREATE MAIN ASSET(AS01)
CREATE SUB ASSET(AS11)
ASSET PURCHASE(F-90)
DR SBASSET 100
CR VENDOR 100

Internal Order for AUC

Settlement of IO to AUC asset KO88

Dr Asset
Cr P&L -IO Settlement Cr Internal order

If the asset is posted to AUC and settled to asset then the entry would be: -

Dr Original Asset A/C Dr

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 Cr To Asset Under Construction A/C

PRESENT CASH SYSTEM ACCOUNTING FLOW

1) FOR TRANSFFER OF FUNDS FROM BANK TO BANK:-

RECEIVING BANK A/C DR

TO PAYINGBANK ACCOUNT

2) FOR WITHDRAWL OF CASH BY THE RECEIVING BANK:-

IMPREST A/C DR
TO RECEIVING BANK A/C

AFTER THAT CASH EXPENSES VOUCHERS IS RECEIVED BY MAIN BRANCH AND PASSING JV:-

3) FOR BOOKING THE CASH EXPENSES :-

EXPENSES A/C DR
TO IMPREST A/C

Bank Reconciliation Entries In SAP: -

For Bank Reconciliation At least One Clearing Account has to be opened.

Whenever a Payment Happens Normally entry will be as follows: -

Vendor A/C Dr
To Bank Account A/C

But now When Ever payment entry (or) when you post a payment entry through SAP

Vendor A/C Dr
To Bank Clearing Account A/C

Bank Clearing Account A/C DR

To Bank Account A/C

Normal Entry Would be:-

Bank A/C Dr
To Customer A/C

But Now When Receipt entry or when you post a receipt entry through SAP

Bank A/C Dr
To Bank Clearing Account

Bank Clearing Account Dr

To Customer Account

This Clearing Account at the time of Receipt and Payment will be knocked off when you run the
Bank Reconciliation Statement Through FF67-manual bank Statement.
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Interest Calculation:

Interest paid
Interest paid A/C (P&L exp) Dr
To Bank A/C

Interest Received
Bank A/C Dr
To Interest received A/C (P&L income)

Foreign Currency Valuation: -

Exchange rate difference

1. Realized Exchange rate diff gain /loss

When the foreign currency transaction payment has completed, and you have gained/lossed
due to that transaction is called as realized gain/loss.

Ex: Vendor 12.01.2016 invoice 60$ 1000rs 60000

20.01.2016 payment 70$ 1000rs 70000
Loss on ex. rate 10000

Entry Dr. Vendor 60000

Dr. Loss on ex. rate 10000
To Bank account 70000

FCR
2. Un realized exchange rate diff gain/Loss

Here the foreign exchange rate difference appears but not realized, because the
transaction is not cleared up.
It is during the revaluation of the open items at the month end for customer/vendor / GL
accounts.
Entries for gain
31.01.2016 – Dr. Provisional for FCR 01.02.2016 Dr. unrealized gain on FCR
Cr. Unrealized gain on FCR Cr. Provisional for FCR

Vendor Bill Discounting

1) Creation of Liability for Vendor

For Example: - Expense A/C Dr 15000

To Vendor A/C 15000

2) Entering a Bill of Exchange Payment (i.e., at the time of issuing PDC Cheque & to Post the
Discount Entry)

Vendor A/C Dr 15000

To Discount Recd A/C 500
To Vendor A/C 14500(Bills Discounting Liability A/C Credited)
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(Being The Bill Discounting Liability is created and also PDC Cheque is issued)

3) Honoring the Bill On Due Date :- F-53(Paying The PDC Amount on Due date )

Vendor A/C Dr 14500(Bill Discounting Liability will be knocked off here)

To Bank A/C 14500
(Being The Bill is honored)

Customer Bill Discounting

1) After Generating the Customers Liability Thru VF01 or Thru Direct FI Entry

Customer A/C Dr 16000

To Sales A/C 16000

2) Entering B/E Payment Thru F-36

Customer A/C Dr 16000(Creating Liability For Bills Receivable)

To Customer A/C 16000
(Being Creating a Liability for Bills Being Sent to Bank for Discounting)

3) Discounting Bills With the Bank Thru F-33(Discounting)

Bank A/C Dr 15500

Discount Allowed A/C 500
To Bill Discounting A/C 16000(Creation Of Bill Discounting Liability)
(Being Bills Discounted With the Bank)

4) Reversing The Contingent liability

Bill Discounting A/C Dr 16000(Knocking Off the Bill Discounting Liability)

To Customer A/C 16000(Knocking Of Bills Receivable Liability)

(Being the Bill Is Honored).

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