Cash clearing account on receiable receipts

[Shashi_k]

Hi,


I would like to know how the cash clearing account works in Receivable (R12). At what event accounting entries are generated and what are accounting entries.


Regards,

Shashi.

[rmanchu]

Hi,

In receivables the Cash Clearing account will be used as ur remittance account.


Thanks,
Manchu.

[ebserp]

Reconciliation with Automatic Clearing
You have set up an automatic receipt for 100 FJD, with an exchange rate of 4 FJD to 1
USD. On its clearing date, the Automatic Clearing program clears the receipt for 100
FJD (25 USD). The Receipt Class for this receipt has the following options:
Creation Method: Automatic ,Require Confirmation: No,Remittance Method: No Remittance
Clearance Method: By Automatic Clearing
Your bank statement shows that the receipt cleared for 100 FJD, with an exchange rate
of 2 FJD to 1 USD, representing a gain in your ledger currency of 25 USD.
When you transfer your receipt information to Oracle General Ledger, Journal Import
creates a journal entry to record the reconciled receipt along with the realized gain.
The following table shows the reconciling of automatically cleared receipts:
Activity Accounting Entries

Enter invoice for 100 FJD
(exchange rate: 4 FJD = 1 USD)
DR Accounts Receivable 100 FJD (25 USD)
CR Revenue 100 FJD (25 USD)

Enter receipt for 100 FJD
(exchange rate: 4 FJD = 1 USD)
DR Remittance account 100 FJD (25 USD)
CR Accounts Receivable 100 FJD (25 USD)

Clear receipt using Automatic Clearing
DR Cash 100 FJD (25 USD)
CR Remittance account 100 FJD (25 USD)

Reconcile receipt with bank statement
DR Cash 0 FJD (25 USD)
CR Exchange Gain 0 FJD (25 USD)

Reconciling a Ledger Currency Receipt
You enter an invoice for 100 US Dollars (USD) and receive a payment from your
customer for 100 USD. You create a receipt for that amount, with a Receipt Class that
has the following options:
Creation Method: Manual ,Require Confirmation: No,Remittance Method: No Remittance
Clearance Method: By Matching
When you post the invoice and receipt, Oracle Receivables transfers the accounting
entries to Oracle General Ledger, and the Journal Import function creates a journal
entry in your ledger currency.
Accounting Entries

Enter invoice for 100 USD
DR Accounts Receivable 100 USD
CR Revenue 100 USD

Enter receipt for 100 USD
DR Remittance account 100 USD
CR Accounts Receivable 100 USD

Reconcile receipt with bank statement,including bank charges of 2 USD.
DR Cash 98 USD
DR Bank Charges 2 USD
CR Remittance account 100 USD
Reconciling a Foreign Currency Receipt
You enter an invoice for 120 Fiji dollars (FJD), with a corporate exchange rate.
The exchange rate on the date you enter the invoice is 2:1. When you post the invoice,
Oracle Receivables transfers journal information in both your foreign currency (120 FJD)
and your ledger currency (60 USD) and Journal Import creates a journal entry in your
ledger currency.

You receive a payment from your customer for 120 FJD. You create a receipt for that
amount, with a Receipt Class that has the following options:
Creation Method: Manual, Require Confirmation: No, Remittance Method: No Remittance
Clearance Method: By Matching
The reconciling of a foreign currency receipt: This example assumes that you post from Receivables to General Ledger after each activity.

Accounting Entries
Enter invoice for 120 FJD
(exchange rate: 2 FJD = 1 USD)
DR Accounts Receivable 120 FJD (60 USD)
CR Revenue 120 FJD (60 USD)

Enter receipt for 120 FJD
(exchange rate: 3 FJD = 1 USD)
DR Remittance account 120 FJD (40 USD)
DR Exchange Loss 0 FJD (20 USD)
CR Accounts Receivable 120 FJD
(60 USD)

Reconcile receipt with bank statement,
including bank charges of 4 FJD (exchange
rate: 4 FJD = 1 USD)
DR Cash 116 FJD (29 USD)
DR Bank Charges 4 FJD (1 USD)
DR Exchange Loss 0 FJD (10 USD)
CR Remittance account 120 FJD (40 USD)

[stalinvstalin@gmail.com]

Hi ebserp,

Thank you for great job but i am little bit confused.
1) If possible can you explain with functional currency with diffent receipt class methods.
2) what are the accounting entries created for bank charges by cash management module in both receivables and payables(like check book charges,interst charges)

Thanks and regards,
stalin

[ebserp]

Hi stalin

Receipt classes determine how Oracle Receivables processes receipts, by specifying:
Entry method
Remittance method
Clearance method
Payment method
You can define one or many payment methods to use for a receipt class.

Defining Receipt Classes

Creation Method:
Manual: Standard, quick, and lockbox receipts
Automatic: Automatic and credit card receipts

Remittance Method:
No Remittance: Receipts that are not remitted
Standard: Regular remittance
Factoring: Short term debt (automatic receipts only)
Standard and Factoring: Both types in a batch

Clearance Method:
Direct: Clears receipt status as soon as the receipt is entered
By Automatic Clearing: Runs a program to clear receipts
By Matching: Clears receipts by reconciling them in Oracle Cash Management

Payment methods determine the automatic receipt attributes.
One or more payment methods are associated with each receipt class.
Each payment method can be associated with more than one bank account.
Each bank account determines the GL accounts for a receipt.

=============
Cash Clearing Account and clearing account in AR?

If you are using Oracle Cash Management, you need to define

Bank Errors Account
Bank Charges Account
Cash Clearing Account
That mean for each bank account you plan on reconciling by using Cash Management. If you use Payables, you can override these accounts for
each payment document you define.Right.

If you set up Oracle Receivables to account for payments at clearing time, enter the cash clearing account you are associating with a bank account. When you create accounting entries for your unreconciled invoice payments, you credit your cash clearing account using this account. After you reconcile your invoice payments using Oracle Cash Management, when you create accounting entries for the cleared payments, you debit this cash clearing account and credit this bank account?s cash account. The account you enter here defaults to the Cash Clearing Account field in the GL Accounts region of the Payment Documents window.

DR Receivables
CR Clearing Account

DR Clearing Account
CR Cash

Net Entry in GL
============
Receivables
============
Debit Cash ? 1110

Credit Payables Clearing ? 2220

Payables
=========
Invoice

Debit Payables Clearing ? 2220

Credit Liability ? 2210

Payment

Debit Liability ? 2210

Credit Cash ? 1110

Thanks
ebserp.