Purchasing entries
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- Posts: 3
- Joined: Tue May 08, 2007 7:57 am
- Location: India
Purchasing entries
Hi All,
Please can any body send me purchasing accounting entries .
Please can any body send me purchasing accounting entries .
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- Posts: 194
- Joined: Tue May 15, 2007 7:45 am
- Location: United Arab Emirates
Hi
One Important thing I would like to hightlight and all the Purchasing entries topic miss this aspect. If you are using Encumbrance then system does generate accounting entries at the time of Purchase Requisition approval andnot at the time of receiving inventory. But these will be called as Encumbrance entry and not actual entry
At the time of PR approval
Dr PO Charge A/c
Cr Reserve for Encumbrance (Coming from GL Set of Books)
At the time PR coverted to PO and PO is approved
For PR entry it reverses the above which in turn releases the fund blocked for commitment
Dr Reserve for Encumbrance (Coming from GL Set of Books)
Cr PO Charge A/c
For PO approval it creates an Obligation entry
Dr PO charge A/c
Cr Reserve for Encumbrance A/c
When an Invoice is created and matched in AP
PO Reversal entry
Dr Reserve for Encumbrance A/c
Cr PO charge A/c
Encumbrance invoice entry
Dr PO Charge a/c Dr
Cr Reserve for Encumbrance
When the invoice is approved and Accounted
Encumbrance invoice entry reversal
Dr Reserve for Encumbrance
Cr PO Charge a/c Dr
For actual Invoice
Dr PO Charge A/c
Cr Liability A/c
The Reason for explaining the above is in most of the Interviews the interviewer asks the question does PR or PO creation generates any accounting entry and immediately most of them say "NO" which is not correct. The right approach is to say "if we use Encumbrance accounting then it does generates accounting entry and if encumbrance is not used then NO accounting entries are generated "
Hope this helps
Regards
Sivakumar
One Important thing I would like to hightlight and all the Purchasing entries topic miss this aspect. If you are using Encumbrance then system does generate accounting entries at the time of Purchase Requisition approval andnot at the time of receiving inventory. But these will be called as Encumbrance entry and not actual entry
At the time of PR approval
Dr PO Charge A/c
Cr Reserve for Encumbrance (Coming from GL Set of Books)
At the time PR coverted to PO and PO is approved
For PR entry it reverses the above which in turn releases the fund blocked for commitment
Dr Reserve for Encumbrance (Coming from GL Set of Books)
Cr PO Charge A/c
For PO approval it creates an Obligation entry
Dr PO charge A/c
Cr Reserve for Encumbrance A/c
When an Invoice is created and matched in AP
PO Reversal entry
Dr Reserve for Encumbrance A/c
Cr PO charge A/c
Encumbrance invoice entry
Dr PO Charge a/c Dr
Cr Reserve for Encumbrance
When the invoice is approved and Accounted
Encumbrance invoice entry reversal
Dr Reserve for Encumbrance
Cr PO Charge a/c Dr
For actual Invoice
Dr PO Charge A/c
Cr Liability A/c
The Reason for explaining the above is in most of the Interviews the interviewer asks the question does PR or PO creation generates any accounting entry and immediately most of them say "NO" which is not correct. The right approach is to say "if we use Encumbrance accounting then it does generates accounting entry and if encumbrance is not used then NO accounting entries are generated "
Hope this helps
Regards
Sivakumar
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- Posts: 74
- Joined: Tue Jul 10, 2007 10:02 am
- Location: India
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- Posts: 194
- Joined: Tue May 15, 2007 7:45 am
- Location: United Arab Emirates
Hi
Refer my Document published for Flow of Accounting in oracle Applications
http://oracle.anilpassi.com/flow-of-acc ... ons-3.html
"The Destination Type is showing as receiving for the first line Receive transaction type and Second Line Destination Type is showing as Inventory for deliver transaction type. The Functionality of this is as follows. The First line is created when you receive inventory in main
Inventory Organization and when you do enter Receiving Transactions; it will change it from Main Inventory Organization to Sub Inventory. It depends on the Receipt Routing what you enter in PO Receiving control form. When You set it as Direct delivery both lines will get created simultaneously and when you set it as Standard Receipt, then the first line will get created when you enter Receipt and second line will get created when you do Receiving transaction and choose the Sub inventory.
The Significance of this from Accounting Perspective is the destination type of receiving (i.e.) First line only you can view the accounting in Purchasing Module. The Second line where the Destination type is Inventory, you can view only in Inventory Module. If you Keep the Cursor in second line and click on Tools, the View Accounting is disabled.
Hope this helps
Regards
Sivakumar
Refer my Document published for Flow of Accounting in oracle Applications
http://oracle.anilpassi.com/flow-of-acc ... ons-3.html
"The Destination Type is showing as receiving for the first line Receive transaction type and Second Line Destination Type is showing as Inventory for deliver transaction type. The Functionality of this is as follows. The First line is created when you receive inventory in main
Inventory Organization and when you do enter Receiving Transactions; it will change it from Main Inventory Organization to Sub Inventory. It depends on the Receipt Routing what you enter in PO Receiving control form. When You set it as Direct delivery both lines will get created simultaneously and when you set it as Standard Receipt, then the first line will get created when you enter Receipt and second line will get created when you do Receiving transaction and choose the Sub inventory.
The Significance of this from Accounting Perspective is the destination type of receiving (i.e.) First line only you can view the accounting in Purchasing Module. The Second line where the Destination type is Inventory, you can view only in Inventory Module. If you Keep the Cursor in second line and click on Tools, the View Accounting is disabled.
Hope this helps
Regards
Sivakumar
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