6 Replies Latest reply on Dec 29, 2008 3:58 PM by 607731

    Purchasing accounting entries-clarification

    276356
      I have setup purchasing and followed the following process

      Created a Requisition---Approved it---Created a Po---Approved it---Receiving step (Say this is for Stationery items purchased)

      When entries were transferred to GL the entries were as follows.

      Inventory Receiving A/c Dr
      Purchasing Expense Accrual A/c Cr

      When Invoice is raised in AP and when I match it the distribution a/c is automatically created (Which is the purchasing expense accrual a/c. The follwoing entry is generated when invoice is entered and matched with Po in AP

      Purchasing Expense Accrual A/c Dr
      AP Liability A/c

      From the above the Purchasing Expense Accrual A/c gets nullified.

      My question is
      Where is the charge a/c entry i.e When does the stationery a/c get dr
      Am I following the correct procedure

      Thanks
      Ninad
        • 1. Re: Purchasing accounting entries-clarification
          634095
          Hi Ninad,

          FYR,
          Entries for Receiving Goods:
          Inventory Receiving A/c Dr
          Purchasing Expense Accrual A/c Cr

          Entries for Delivering Goods:
          PO Charge a/c Dr
          Inventory Receiving A/c Dr

          Entries for Matching Invoice:
          Purchasing Expense Accrual A/c Dr
          AP A/c Cr

          Best Regards,
          • 2. Re: Purchasing accounting entries-clarification
            276356
            If Accrue Expense Items=Period End
            Then
            For e.g. I raise a PO on 15-dec 08 and receive the goods on 20 dec 08 (There are no inventory items in this)
            The invoice is received on 22/12/08. I enter the invoice and match the PO

            The only entry generated is

            PO charge a/c DR
            Ap liability a/c

            Am i right in the above case

            Another scenario PO raised on 15 dec 08 goods recd on 10 jan 09 and invoice received on 10 jan 09
            What entries are generated now. Also what processes do I run on dec 08 month end

            Thanks
            Ninad
            • 3. Re: Purchasing accounting entries-clarification
              634095
              Hi Ninad,

              Maybe you can createa test po in your test environment to check the accounting entries.
              To check the entries for receiving transactions.

              You will see these entries as bleow for purchasing expense items.

              Transaction Type: Receiving
              Inventory Receiving A/c Dr
              Purchasing Expense Accrual A/c Cr

              Transaction Type: Deliver
              PO Charge a/c Dr
              Inventory Receiving A/c Dr

              Entries for Matching Invoice:
              Purchasing Expense Accrual A/c Dr
              AP A/c Cr

              In the end of month, you have to transfer all entries to GL.

              You can check Oracle Purchasing User's Guide/Overview Receipt of Accounting for furthur information.
              Best Regards,

              Edited by: user631092 on Dec 17, 2008 1:49 PM
              • 4. Re: Purchasing accounting entries-clarification
                Mike F -Oracle
                Hi,

                Note 467584.1 may be of some assistance with your questions.

                Take care,

                Mike
                • 5. Re: Purchasing accounting entries-clarification
                  607731
                  Ninad,
                  The entries you are getting when matching the invoice are right..
                  • 6. Re: Purchasing accounting entries-clarification
                    607731
                    Ninad,
                    i would like to add one more test to checking accounting entries, that is checking the encumbrances soon after creating the requisition/PO. At the time of submission for approval, I can reservce the document and the message shows 'Reserved successfully', I would like to know if it correctly reserved the funds in GL, but I need to know which account to check the funds before and after the reservation. I could not locate the encumbrance account either from Document Types or Purchasing options in Purchasing module, is it the same account as Charge account in distribution, though the message shows funds reserved successfully, when I actually enquired this account I did not see any funds in it not even encumbrance amounts.

                    Did you happened to do it? or do you know how to check for this?

                    Best Regards,