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2
R!A Returns
%o& can ret&rn items received into inventory thro&gh an R,A bac4 to the c&stomer &sing R,A
Ret&rns -indo-$
Cor example! yo& can send bac4 P Qret&rnR P an item that -as ret&rned by the c&stomer to yo&
+or repair$
This transaction reverses an R,A receipt$ It also mimics a sales order shipment and &pdates the
same acco&nts as a sales order shipment$
Account Debit Credit
Cost o+ Moods ?old Acco&nt AA
?&binventory acco&nts O standard cost AA
Attention: ;o not create any acco&nting entries -hen yo& ret&rn material +or an R,A +or an
expense item or expense s&binventory$
!iscellaneous Transactions
@sing the ,iscellaneo&s Transaction -indo-! yo& can iss&e material +rom a s&binventory to a
general ledger acco&nt .or acco&nt alias/ or receive material to a s&binventory +rom an acco&nt or
alias$ An acco&nt alias identi+ies another name +or a general ledger acco&nt$
Su%%estion: @se acco&nt aliases +or acco&nt n&mbers yo& &se +re6&ently$ Cor example! &se the
alias ?CRAP +or yo&r general ledger scrap acco&nt$
Iss&ing material +rom a s&binventory to a general ledger acco&nt or alias generates the +ollo-ing
acco&nting entries:
Account Debit Credit
Entered Meneral <edger Acco&nt O standard cost AA
?&binventory acco&nts O standard cost AA
Receiving material to a s&binventory +rom an acco&nt or an alias generates the +ollo-ing
acco&nting entries:
Account Debit Credit
?&binventory acco&nts O standard cost AA
Entered Meneral <edger Acco&nt O standard cost AA
Expense ?&binventories and Expense Items When yo& receive into an expense location or
receive an expense item! yo& have expensed the material$ I+ yo& &se the miscellaneo&s
transaction to iss&e +rom an expense location!
%o& can iss&e to an acco&nt or to an asset s&binventory o+ the
IN4:Allo5 E2pense to Asset Trans0er pro0ile option in Oracle In$entory is set to "es(
I+ iss&ed to an acco&nt the system ass&mes the material is cons&med at the expense
location and moves the 6&antity -itho&t any associated val&e$ I+ trans+erred to an asset
s&binventory! the material moves at its c&rrent cost$
When yo& per+orm a miscellaneo&s transaction to receive an expense item to either an asset or
expense s&binventory! no acco&nting occ&rs$ ?ince the acco&nt balance co&ld involve di++erent
costs over time! The system ass&mes that the cost o+ the expense item is &n4no-n$
=
InterOr%ani)ation Trans0ers
%o& can trans+er material +rom one inventory organi0ation to another either directly or thro&gh
intransit inventory$ Intransit inventory represents material that has not yet arrived at the receiving
organi0ation$
/sin% Intransit In$entory %o& can move material +rom the shipping organi0ation to intransit
inventory &sing the Trans+er ?&binventories -indo-$ %o& can &se the Receipts -indo- to move
material +rom intransit invenotry to the receiving organi0ation$
Issue Transaction
;epending &pon the Creight (n 8oard .C(8/ point de+ined in the inventory organi0ation
relationship! the shipment to intransit inventory creates the +ollo-ing acco&nting entries:
,O1 Point is set to Recei$in%:
Account Or%ani)ation Debit Credit
Intransit inventory acco&nt ?ending AA
?&binventory acco&nts ?ending AA
,O1 Point is set to S#ipent:
Account Or%ani)ation Debit Credit
Inter#(rgani0ation Receivable ?ending AA
?&binventory acco&nts ?ending AA
Intransit Inventory acco&nt Receiving AA
Inter#(rgani0ation Payable Receiving AA
Receipt Transaction
;epending &pon the C(8 point de+ined in the organi0ation relationship! the receipt +rom intransit
inventory creates the +ollo-ing acco&nting entries:
,O1 Point is set to Recei$in%:
Account Or%ani)ation Debit Credit
Inter#(rgani0ation Receivable ?ending AA
Intransit Inventory acco&nt ?ending AA
?&binventory acco&nts Receiving AA
Inter#(rgani0ation Payable Receiving AA
,O1 Point is set to S#ipent:
Account Or%ani)ation Debit Credit
?&binventory acco&nts Receiving AA
Intransit Inventory acco&nt Receiving AA
5"
In addition to acco&nting +or the movement o+ the material! these transactions also &pdate the
inter#organi0ation receivable and payable acco&nts$ These inter#organi0ation clearing acco&nts
represent inter#organi0ation receivables and payables +or the respective shipping and receiving
organi0ations$
Direct InterOr%ani)ation Trans0er
When yo&r organi0ation relationship is set to directly trans+er material! Inventory per+orms both
the iss&e and the receipt transaction at the time o+ the iss&e$ Any di++erence bet-een the cost o+
items in the t-o organi0ations is recogni0ed as variance in the receiving organi0ation$
The acco&nting entries created are as +ollo-s:
Account Or%ani)ation Debit Credit
Inter#(rgani0ation Receivable ?ending AA
?&binventory acco&nts ?ending AA
?&binventory acco&nts Receiving AA
Inter#(rgani0ation Payable Receiving AA
@se the Trans+er ?&binventories -indo- +or direct trans+ers$ ,aterial (verhead and Inter#
(rgani0ation Trans+ers If your item has material overhead(s/! yo& earn material overhead on
inter#organi0ation trans+ers$ The s&binventory entry is increased +or the material overhead -ith a
credit to the material overhead absorption acco&nt.s/ in the receiving organi0ation$
Account Debit Credit
?&binventory acco&nts AA
,aterial (verhead Absorption acco&nt AA
Attention: The s&binventory acco&nt is combined -ith the above entry$ The material overhead
absorption transaction adds one additional acco&nt to the entry$
The C(8 Point changes the acco&nting +or +reight$ With C(8 receiving! +reight is accr&ed on the
receipt transaction by the sending organi0ation$ With C(8 shipment! +reight is accr&ed on the
shipment transaction by the receiving organi0ation$ Cor direct trans+ers! the receipt and shipment
transaction occ&r at the same time$
When the C(8 Point is set to Receiving! the trans+er creates the +ollo-ing +reight and trans+er
charge entries at time o+ receipt:
Account Or%ani)ation Debit Credit
Inter#(rgani0ation Receivable ?ending AA
Creight Expense acco&nt ?ending AA
Inter#(rgani0ation Receivable ?ending AA
51
Inter#(rg$ Trans+er Credit ?ending AA
(rg$ ,aterial acco&nt Receiving AA
Inter#(rgani0ation Payable Receiving AA
Cor the receiving organi0ation! the inter#organi0ation payable acco&nt is increased +or +reight and
trans+er charges$ These charges are incl&ded in the comparison to the standard cost$
When the FOB Point is set to Shipment! the trans+er creates the +ollo-ing +reight and trans+er
charge entries at shipment:
Account Or%ani)ation Debit Credit
Inter#(rgani0ation Receivable ?ending AA
Inter#(rg$ Trans+er Credit ?ending AA
Intransit Inventory acco&nt Receiving AA
Creight Expense acco&nt Receiving AA
Inter#(rgani0ation Payable Receiving AA
Intransit inventory incl&des both +reight and trans+er charges$ The inter#organi0ation payable is
only increased +or trans+er charges$
E2pense Subin$entories and E2pense Ites:
When yo& receive an inter#organi0ation trans+er into an expense s&binventory or receive an
expense inventory item! yo& have expensed the material and cannot directly iss&e it$ The system
ass&mes the material cost is cons&med at the expense location$
@sing the direct or intransit method! yo& can receive material to an expense s&binventory or
receive an expense inventory item$ When yo& receive to expense locations or receive expense
inventory items! the s&binventory expense acco&nt is debited +or the receiving organi0ation!
instead o+ the val&ation acco&nts$ The s&binventory expense acco&nt is charged the total
transaction val&e +rom the other organi0ation$
InterOr%ani)ation Trans0ers and Sets o0 1ooCs
The Inter#(rgani0ation ;irect Trans+er transaction also s&pports trans+ers +rom any set o+ boo4s!
even i+ the c&rrency is di++erent$ Go-ever! yo& cannot &se the Inter#(rgani0ation Intransit -ith
m<iple sets o+ boo4s$ These transactions &se receiving +&nctions +rom P&rchasing! -hich only
s&pports one set o+ boo4s$ To per+orm an inter#organi0ation intransit trans+er +rom one set o+
boo4s to another! yo& need to per+orm a combination o+ t-o transactions: a direct
trans+er and an intransit trans+er$
Subin$entory Trans0ers
This transaction increases the acco&nts o+ the To ?&binventory and decreases the Crom
?&binventory! b&t has no net e++ect on overall inventory val&e$I+ yo& speci+y the same
s&binventory as the Crom and To ?&binventory! yo& can move material bet-een locators -ithin a
s&binventory$
Account Subin$entory Debit Credit
?&binventory acco&nts To AA
?&binventory acco&nts Crom AA
5)
E2pense Subin$entories and E2pense Ites
%o& can iss&e +rom an asset to an expense s&binventory! and yo& can iss&e +rom an expense
s&binventory i+ the (racle Inventory
IN4:Allo5 E2pense to Asset Trans0er pro0ile option is set to "es(
The system ass&mes the material is cons&med at the expense location$
Internal Re@uisitions :
%o& can &se the internal re6&isitions to replenish inventory$ %o& can so&rce material +rom a
s&pplier! a s&binventory -ithin yo&r organi0ation! or +rom another organi0ation$ ;epending &pon
the so&rce yo& choose! the acco&nting entries are similar to one o+ the proceeding scenarios$
Go-ever! &nli4e inter#organi0ation trans+ers! internal re6&isitions do not s&pport +reight charges$
Cycle Count and P#ysical In$entory :
@se cycle co&nting and physical inventory to correct inventory on#hand balances$ A cycle co&nt
&pdates the acco&nts o+ the a++ected s&binventory and o++sets the ad*&stment acco&nt yo&
speci+y$
I+ yo& physically co&nt more than yo&r on#hand balance! the acco&nting sentries are:
Account Debit Credit
?&binventory acco&nts O standard cost AA
Ad*&stment acco&nt O standard cost AA
I+ yo& co&nt less than yo&r on#hand balance! the acco&nting entries are:
Account Debit Credit
Ad*&stment acco&nt O standard cost AA
?&binventory acco&nts O standard cost AA
<i4e a cycle co&nt! a physical inventory ad*&stment also &pdates the acco&nts o+ the a++ected
s&binventories and the physical inventory ad*&stment acco&nt yo& speci+y$
?&ggestion: ?ince the standard cost is not stored as yo& +ree0e the physical 6&antities! yo&
sho&ld not per+orm a standard cost &pdate &ntil yo& have ad*&sted yo&r physical inventory$
E2pense Subin$entories and E2pense Ites
The system does not record acco&nting entries +or expense s&binventories or expense items +or
either physical inventory or cycle co&nt ad*&stments$ Go-ever! the on#hand balance o+ an
expense s&binventory is corrected i+ yo& trac4 the 6&antities$
51
Wor4 in Process ?tandard Cost Transactions
The +ollo-ing cost transactions can occ&r -hen (racle Wor4 in Process is installed:
Component Iss&e and Ret&rn Transactions:
,ove Transactions:
Reso&rce Charges:
(&tside Processing Charges:
(verhead Charges:
Assembly ?crap Transactions:
Assembly Completion Transactions:
>ob Close Transactions:
Period Close Transactions:
Wor4 in Process Cost @pdate Transactions:
Coponent Issue and Return Transactions
Component iss&e and ret&rn transactions can be la&nched in a variety o+ -ays$ ?ee: Component
Iss&e and Ret&rn Transaction (ptions! (racle Wor4 in Process @ser:s M&ide and 8ac4+l&sh
Transactions! (racle Wor4 in Process @ser:s M&ide$
Costin% Issue and Return Transactions
Iss&e transactions increase the -or4 in process val&ation and decrease the inventory val&ation$
The acco&nting entries +or iss&e transactions are:
Account Debit Credit
WIP acco&nting class val&ation acco&nts AA
?&binventory elemental acco&nts AA
T#e accountin% entries 0or return transactions are:
Account Debit Credit
?&binventory elemental acco&nts AA
WIP acco&nting class val&ation acco&nts AA
?&binventory acco&nts are de+ined in the ;e+ine ?&binventories -indo- in (racle Inventory$ WIP
elemental acco&nts are de+ined in the WIP Acco&nting Classes -indo- in Wor4 in Process$ ?ee:
;e+ining ?&binventories! (racle Inventory @ser:s M&ide! ?&binventory Meneral <edger Acco&nt
Cields! (racle Inventory @ser:s M&ide! and WIP Acco&nting Classes! (racle Wor4 in Process
@ser:s M&ide$
!o$e Transactions
A move transaction moves assemblies -ithin an operation! s&ch as +rom '&e&e to R&n! or +rom
one operation to the next$ ,ove transactions can a&tomatically la&nch operation completion
bac4+l&shing and charge reso&rces and overheads$
%o& can per+orm move transactions &sing the ,ove Transactions -indo-! (pen ,ove
Transaction Inter+ace -indo-! or the Enter Receipts -indo- in P&rchasing$
5
1acC0lus# !aterial Transactions
With bac4+l&shing! yo& iss&e component material &sed in an assembly or s&bassembly by
exploding the bills o+ material! and then m<iplying by the n&mber o+ assemblies prod&ced$
,ove transactions can create operation p&ll bac4+l&sh material transactions that iss&e component
material +rom designated WIP s&pply s&binventories and locators to a *ob or repetitive sched&le$
Cor bac4+l&sh components &nder lot or serial n&mber control! yo& assign the lot or serial n&mbers
d&ring the move transaction$
When yo& move bac4-ard in a ro&ting! Wor4 in Process a&tomatically reverses operation p&ll
bac4+l&sh transactions$
The acco&nting entries +or move transactions are:
Account Debit Credit
WIP acco&nting class val&ation acco&nts AA
?&binventory elemental acco&nts AA
The acco&nting entries +or ret&rn transactions are:
Account Debit Credit
?&binventory elemental acco&nts AA
WIP acco&nting class val&ation acco&nts AA
!o$ed 1ased Resource C#ar%in%
As the assemblies yo& b&ild pass thro&gh the operations on their ro&tings! move transactions
charge all pre#assigned reso&rces -ith an a&to#charge type o+ WIP ,ove at their standard rate$
%o& can charge reso&rces based &pon a +ixed amo&nt per item moved in an operation .Item
basis/ or based &pon a +ixed lot charge per item moved in an operation .<ot basis/$ Cor reso&rces
-ith a basis o+ <ot! Wor4 in Process a&tomatically charges the lot cost &pon completion o+
the +irst assembly in the operation$
%o& can also enter man&al reso&rce transactions associated -ith a move! or independent o+ any
moves$ %o& can man&ally charge reso&rces to a *ob and repetitive sched&le provided the *ob and
repetitive sched&le has a ro&ting$ %o& can also transact reso&rces thro&gh the (pen Reso&rce
Transaction Inter+ace$
Resource C#ar%es
Wor4 in Process s&pports +o&r reso&rce a&tocharging methods:
,an&al! WIP ,ove! P( ,ove! and P( Receipt$
%o& can charge reso&rces at an act&al rate$
%o& can also charge reso&rce overheads a&tomatically as yo& charge reso&rces$
WIP ,ove Reso&rce Charges %o& can a&tomatically charge reso&rces at their standard rate to a
*ob or repetitive sched&le -hen yo& per+orm a move transaction &sing either the ,ove
Transactions -indo- or the (pen ,ove Transaction Inter+ace$ When yo& move assemblies +rom
the '&e&e or R&n intra operation steps +or-ard to the To move! Re*ect! or ?crap intraoperation
steps! or to the next operation! Wor4 in Process charges all pre#assigned reso&rces -ith an
charge type o+ WIP ,ove at their standard rate$ Cor reso&rces -ith a basis o+ Item! Wor4 in
Process a&tomatically charges the reso&rce:s &sage rate or amo&nt m<iplied by the
reso&rce:s standard cost &pon completion o+ each assembly in the operation$ Cor reso&rces -ith
a basis o+ <ot! Wor4 in Process a&tomatically charges the reso&rce:s &sage rate or amo&nt
m<iplied by the reso&rce:s standard cost &pon completion o+ the +irst assembly in the operation$
55
%o& can &ndo the WIP ,ove reso&rce charges a&tomatically by moving the assemblies +rom
'&e&e or R&n o+ yo&r c&rrent operation to '&e&e or R&n o+ any prior operation! or by moving the
assemblies +rom the To move! Re*ect! or ?crap intraoperation steps bac4-ard to the '&e&e or
R&n intraoperation steps o+ the same operation! or to any intraoperation step o+ any prior
operation$
Wor4 in Process applies WIP ,ove reso&rce transactions to m<iple repetitive sched&les on a
line based on ho- the assemblies being moved are allocated$ Wor4 in Process allocates moves
across m<iple repetitive sched&les based on a +irst in#+irst o&t basis$
!anual Resource C#ar%es
%o& can charge man&al reso&rces associated -ith a move transaction or independent o+ any
moves$ ,an&al reso&rce transactions re6&ire yo& to enter the act&al reso&rce &nits applied rather
than a&tocharging the reso&rce:s &sage rate or amo&nt based on the move 6&antity$ %o& can
charge reso&rces &sing that reso&rce:s &nit o+ meas&re or any valid alternate$ %o& can man&ally
charge reso&rces to a *ob or repetitive sched&le provided the *ob or repetitive sched&le has a
ro&ting$ I+ yo& &se the ,ove Transactions -indo- to per+orm moves and man&al reso&rce
transactions at the same time! Wor4 in Process displays all pre#assigned man&al reso&rces -ith
an charge type o+ ,an&al assigned to the operations completed in the move$ I+ the reso&rce is a
person#type reso&rce! yo& can enter an employee n&mber$ In addition to the reso&rces
displayed! yo& can man&ally charge any reso&rce to a *ob or repetitive sched&le! even i+ yo& have
not previo&sly assigned the reso&rce to an operation in the *ob or repetitive sched&le$
%o& can also man&ally charge reso&rces to an operation added ad hoc by entering any reso&rce
de+ined +or the department associated -ith the operation$ Wor4 in Process applies ,an&al
reso&rce transactions to the +irst open repetitive sched&le on the line$ %o& can correct or &ndo
man&al reso&rce transactions by entering negative reso&rce &nits -or4ed$
Costin% Resource C#ar%es at Resource Standard
Reso&rce charges increase -or4 in process val&ation$ The acco&nting entries +or reso&rce
transactions are:
Account Debit Credit
WIP acco&nting class reso&rce val&ation acco&nt AA
Reso&rce absorption acco&nt AA
I+ A&tocharge is set to WIP ,ove! -or4 in process and labor are charged at standard$ There are
no reso&rce rate or e++iciency variances$
The acco&nting entries +or negative ,an&al reso&rce transactions and bac4-ard moves +or WIP
,ove reso&rces are:
Account Debit Credit
Reso&rce absorption acco&nt AA
WIP acco&nting class reso&rce val&ationacco&nt AA
Costin% *abor C#ar%es at Actual
%o& can charge labor charges at act&al in t-o -ays$ %o& can enter an act&al rate +or the
employee &sing the (pen Reso&rce Transaction Inter+ace or -hen yo& de+ine employee rates$
Cor labor charges &sing an act&al or employee rate +or a reso&rce +or -hich charge standard
rate is t&rned o++! the acco&nting entries are:
Account Debit Credit
WIP acco&nting class reso&rce val&ation acco&nt AA
Reso&rce absorption acco&nt AA
57
Any di++erence bet-een the total labor charged at act&al and the standard labor amo&nt is
recogni0ed as an e++iciency variance at period close$
I+ the ?tandard Rates chec4 box is chec4ed and yo& enter an act&al rate +or a reso&rce! the
system charges the *ob or repetitive sched&le at standard$ I+ A&tocharge is set to ,an&al and
act&al rates and 6&antities are recorded! a rate variance is recogni0ed immediately +or
any rate di++erence$ Any 6&antity di++erence is recogni0ed as an e++iciency variance at period
close$
The acco&nting entries +or the act&al labor charges are:
Account Debit Credit
WIP acco&nting class reso&rce val&ation acco&nt AA
Reso&rce rate variance acco&nt .;ebit -hen act&al AA AA
rate is greater than the standard rate$ Credit -hen
the act&al rate is less than the standard rate$/
Reso&rce absorption acco&nt AA
PO Receipt and PO !o$e Transactions
%o& can receive p&rchased items associated -ith o&tside reso&rces +rom an o&tside processing
operation bac4 into -or4 in process in (racle P&rchasing$ Cor these items! Wor4 in Process
creates reso&rce transactions at the standard or act&al rate +or all o&tside reso&rces -ith
an a&tocharge type o+ P( receipt or P( move$ Cor o&tside reso&rces -ith an a&tocharge type o+
P( move! Wor4 in Process also moves the assemblies +rom the '&e&e or R&n intraoperation
step o+ the o&tside processing operation into the '&e&e intraoperation step o+ the next
operation or into the To move intraoperation step i+ the o&tside processing operation is the last
operation on the ro&ting$
I+ yo& assigned internal reso&rces to an o&tside operation -ith an a&tocharge type o+ ,an&al!
charge the reso&rces &sing the Reso&rce Transactions -indo- or the (pen Reso&rce
Transaction Inter+ace$
I+ yo& ret&rn assemblies to the s&pplier &sing the Enter Ret&rns and Ad*&stments -indo- in
(racle P&rchasing! (racle P&rchasing a&tomatically reverses the charges to all a&tomatic
reso&rces associated -ith the operation$ %o& m&st man&ally reverse all man&al reso&rce charges
&sing the Reso&rce Transactions -indo-$ Cor o&tside reso&rces -ith an a&tocharge type o+ P(
move! (racle P&rchasing a&tomatically moves the assemblies +rom the '&e&e intraoperation
step o+ the operation immediately +ollo-ing the o&tside processing operation into the '&e&e
intraoperation step o+ yo&r o&tside processing operation$
I+ the o&tside processing operation is the last operation on the ro&ting! the assemblies
a&tomatically move +rom the To move intraoperation step to the '&e&e intraoperation step$ P(
move reso&rce transactions are applied to m<iple repetitive sched&les on a line based on ho-
the assemblies being moved are allocated$ ,oves are allocated across m<iple repetitive
sched&les on a +irst in#+irst o&t basis$ P( receipt reso&rce transactions are allocated across
sched&les on a +irst in +irst .CIC(/ o&t basis$
59
Outside Processin% C#ar%es
Wor4 in Process a&tomatically creates reso&rce transactions at the standard or act&al rate +or all
o&tside processing reso&rces -ith an charge type o+ P( Receipt or P( ,ove -hen yo& receive
assemblies +rom an o&tside processing operation bac4 into -or4 in process! &sing the Enter
Receipts -indo- in P&rchasing$ Cor o&tside processing reso&rces -ith an charge type o+ P(
,ove! Wor4 in Process also per+orms a move o+ the assemblies +rom the '&e&e or R&n
intraoperation step o+ yo&r o&tside processing operation into the '&e&e intraoperation step o+
yo&r next operation or into the To move intraoperation step i+ the o&tside processing operation is
the last operation on yo&r ro&ting$
I+ yo& assigned internal reso&rces to an o&tside operation -ith an charge type o+ ,an&al! yo& &se
the ,ove Transactions -indo- or the (pen Reso&rce Transaction Inter+ace to charges these
reso&rces$
I+ yo& ret&rn assemblies to the s&pplier! Wor4 in Process a&tomatically reverses the charges to all
a&tomatic reso&rces associated -ith the operation$ %o& m&st man&ally reverse all man&al
reso&rce charges &sing the ,ove Transactions -indo-$ Cor o&tside processing reso&rces
-ith an charge type o+ P( ,ove! Wor4 in Process a&tomatically moves the assemblies +rom the
'&e&e intraoperation step o+ the operation immediately +ollo-ing the o&tside processing
operation into the '&e&e intraoperation step o+ yo&r o&tside processing operation$
I+ the o&tside processing operation is the last operation on yo&r ro&ting! Wor4 in Process
a&tomatically moves the assemblies +rom the To move intraoperation step to the '&e&e
intraoperation step$ Wor4 in Process applies P( ,ove reso&rce transactions to m<iple repetitive
sched&les on a line based on ho- the assemblies being moved are allocated$ Wor4 in Process
allocates moves across m<iple repetitive sched&les based on a +irst in#+irst o&t basis$ Wor4 in
Process applies P( Receipt reso&rce transactions to the +irst open repetitive sched&le
on the line$
Costin% Outside Processin% C#ar%es at Standard
When yo& receive the assembly +rom the s&pplier! P&rchasing sends the reso&rce charges to
Wor4 in Process at either standard cost or act&al p&rchase order price! depending &pon ho- yo&
speci+ied the standard rate +or the o&tside processing reso&rce$
I+ the ?tandard Rates option is enabled +or the o&tside processing reso&rce being charged! the
system charges Wor4 in Process at the standard rate and creates a p&rchase price variance +or
the di++erence bet-een the standard rate and the p&rchase order price$ The acco&nting entries +or
o&tside processing items are as +ollo-s:
Account Debit Credit
WIP acco&nting class o&tside processing val&ationacco&nt AA
P&rchase price variance acco&nt .;ebit -hen the AA AA
act&al rate is greater than the standard rate$ Credit
-hen the act&al rate is less than the standard rate$/
(rgani0ation Receiving acco&nt AA
Any 6&antity or &sage di++erence is recogni0ed as an o&tside processing e++iciency variance at
period close$
52
T#e accountin% entries 0or return to supplier 0or outside processin% are:
Account Debit Credit
(rgani0ation Receiving acco&nt AA
P&rchase price variance acco&nt .;ebit -hen AA AA
act&al rate is less than the standard rate$ Credit
-hen the act&al rate is greater than the standard
rate$
WIP acco&nting class o&tside processing val&ation acco&nt AA
Costin% Outside Processin% C#ar%es at Actual Purc#ase Order Price
I+ the ?tandard Rates option is disabled +or the o&tside processing reso&rce being charged! the
system charges Wor4 in Process the p&rchase order price and does not create a p&rchase price
variance$
The acco&nting transactions +or o&tside processing charges at p&rchase order price are as
+ollo-s:
Account Debit Credit
WIP acco&nting class o&tside processing val&ation AA
acco&nt
(rgani0ation Receiving acco&nt AA
Any di++erence +rom the standard is recogni0ed as a reso&rce e++iciency
variance at period close$
O$er#ead C#ar%es
!o$e 1ased O$er#ead C#ar%in%
Wor4 in Process a&tomatically charges appropriate overhead costs as yo& move assemblies
thro&gh the shop +loor$ %o& can charge overheads directly based on move transactions or based
on reso&rce charges$ Cor overheads charged based on move transactions -ith a basis o+ Item!
Wor4 in Process a&tomatically charges overheads &pon completion o+ each assembly in the
operation$ Wor4 in Process a&tomatically reverse these charges d&ring a bac4-ard move
transaction$
Cor overheads based on move transactions -ith a basis o+ <ot! Wor4 in Process a&tomatically
charges overheads &pon completion o+ the +irst assembly in the operation$ Wor4 in Process
a&tomatically reverses these charges d&ring a bac4-ard move transaction i+ it res<s in 0ero
net assemblies completed in the operation$
Resource 1ased O$er#ead C#ar%in%
Wor4 in Process a&tomatically charges appropriate overhead costs as yo& charge reso&rces$ %o&
can charge overheads based on reso&rce &nits or val&e$ Wor4 in Process a&tomatically reverses
overhead charges -hen yo& reverse the &nderlying reso&rce charge$
Costin% O$er#ead C#ar%es
(verhead charges increase -or4 in process val&ation$ The acco&nting entries +or overhead
charges are:
Account Debit Credit
WIP acco&nting class overhead acco&nt AA
(verhead absorption acco&nt AA
5=
%o& can reverse overhead charges by entering negative ,an&al reso&rce charges or per+orming
bac4-ard moves +or WIP ,ove reso&rces$ The acco&nting entries +or reverse overhead charges
are:
Account Debit Credit
(verhead absorption acco&nt AA
WIP acco&nting class overhead acco&nt AA
Assebly Scrap Transactions
%o& can move partially completed assemblies that yo& consider &nrecoverable to the ?crap
intraoperation step o+ that operation$ .I+ necessary! yo& can recover assemblies +rom scrap by
moving them to another intraoperation step$/ 8y moving into the ?crap intraoperation step! yo&
can e++ectively isolate good assemblies +rom bad$
Wor4 in Process considers a move into the ?crap intraoperation step +rom the '&e&e or R&n o+
the same operation as an operation completion! and th&s &pdates operation completion
in+ormation! bac4+l&shes components! and charges reso&rce and overhead costs
according to the elemental cost set&p$
%o& can also move assemblies bac4 to the ?crap intraoperation step o+ the previo&s operation +or
'&e&e or R&n i+ no -or4 has been completed at the c&rrent operation$
Costin% Assebly Scrap Transactions
When yo& de+ine Wor4 in Process parameters! yo& can speci+y -hether moves into the ?crap
intraoperation step re6&ire a scrap acco&nt$ I+ yo& enter a scrap acco&nt or alias -hen yo& move
assemblies into ?crap! the scrap acco&nt is debited and the *ob or repetitive sched&le elemental
acco&nts +or the standard cost o+ the assembly thro&gh the scrap operation are credited$ This
removes the cost o+ the scrapped assemblies +rom the *ob or repetitive sched&le$ I+ yo& do not
enter a scrap acco&nt or select an alias! the cost o+ the scrap remains in the *ob (r sched&le &ntil
*ob or period close$ I+ yo& recover assemblies +rom scrap! the scrap acco&nt is credited and the
*ob or repetitive sched&le elemental acco&nts +or the standard cost o+ this assembly thro&gh this
operation are debited$
The acco&nting entries +or scrap transactions are:
Account Debit Credit
?crap acco&nt AA
WIP acco&nting class val&ation AA
acco&ntsOstandard
T#e accountin% entries 0or re$erse scrap transactions are:
Account Debit Credit
WIP acco&nting class val&ation acco&ntsOstandard AA
?crap acco&nt AA
Assebly Copletion Transactions
@se the Completion Transactions -indo-! ,ove Transactions -indo-! and Inventory Transaction
Inter+ace to move completed assemblies +rom -or4 in process into s&binventories$ Completion
transactions relieve the val&ation acco&nt o+ the acco&nting class and charge the s&binventory
acco&nts .+or example! +inished goods/ based &pon the assembly:s elemental cost str&ct&re$
Costing Assembly Completion Transactions Completions decrease -or4 in process val&ation and
increase inventory val&ation at standard costs$
7"
The acco&nting entries +or completion transactions are:
Account Debit Credit
?&binventory elemental acco&nts AA
WIP acco&nting class val&ation acco&nts AA
Earnin% Assebly !aterial O$er#ead on Copletion
%o& can assign overheads based on Item! <ot or Total Fal&e basis$ Cor standard discrete *obs
and repetitive sched&les! yo& can earn these overheads as yo& complete assemblies +rom -or4
in process to inventory$
T#e accountin% entries 0or aterial o$er#ead on copletion transactions 0or standard
discrete 'obs and repetiti$e sc#edules are:
Account Debit Credit
?&binventory material overhead acco&nt AA
Inventory material overhead absorption AA
Acco&nt
@se non#standard expense *obs +or s&ch activities as repair and maintenance$ @se non#standard
asset *obs to &pgrade assemblies! +or teardo-n! and to prototype prod&ction$ Don#standard
discrete *obs do not earn overhead on completion$ ?ince yo& have already earned overhead to
prod&ce the assemblies as yo& are repairing or re-or4ing! Wor4 in Process prevents yo& +rom
do&ble earning material overhead on these assemblies$
T#e accountin% entries 0or aterial o$er#ead on copletion transactions 0or non
standard e2pense and nonstandard asset 'obs are:
Account Debit Credit
?&binventory material overhead acco&nt AA
WIP acco&nting class material overhead acco&nt AA
9ob Close Transactions
@ntil yo& close a *ob! or change the stat&s o+ the *ob to Complete # Do Charges! yo& can ma4e
material! reso&rce! and scrap charges to the *ob$ Closing a discrete *ob prevents any +&rther
activity on the *ob$
Costin% 9ob Close Transactions
Wor4 in Process recogni0es variances -hen yo& close a *ob$ The act&al close date yo& speci+y
determines the acco&nting period Wor4 in Process &ses to recogni0e variances$ %o& can bac4
date the close to a prior open period i+ desired$ The close process -rites o++ the balances
remaining in the WIP elemental val&ation acco&nts to the elemental variance acco&nts yo&
de+ined by acco&nting class! leaving a 0ero balance remaining in the closed *ob$
I0 t#ere is a positi$e balance in t#e 'ob at t#e end o0 t#e close& t#e accountin% entries 0or a
'ob close are:
Account Debit Credit
WIP acco&nting class variance acco&nts AA
WIP acco&nting class val&ation acco&nts AA
71
Period Close Transactions
The period close process in Inventory recogni0es variances +or non#standard expense *obs and
repetitive sched&les$ It also trans+ers the -or4 in process period costs to the general ledger$
Costin% NonStandard E2pense 9ob Period Close Transactions
%o& can close discrete *obs and recogni0e variances +or non#standard expense *obs at any time$
In addition! the period close process a&tomatically recogni0es variances on all non#standard
expense *ob charges inc&rred d&ring the period$ There+ore! open non#standard expense *obs
have 0ero WIP acco&nting balances at the start o+ a ne- period$
I+ there is a positive balance in the *ob at the end o+ the period! the acco&nting entries +or non#
standard expense *obs at period close are:
Account Debit Credit
WIP acco&nting class variance acco&nts AA
WIP acco&nting class val&ation acco&nts AA
Costin% Repetiti$e Sc#edule Period Close Transactions
%o& do not close a repetitive sched&le$ Go-ever! yo& do recogni0e variances on a period basis
that res< in 0ero WIP acco&nting balances at the start o+ the ne- period$ %o& sho&ld chec4 yo&r
transactions and balances &sing the Repetitive Fal&e Report be+ore yo& close a period$
When yo& de+ine Wor4 in Process parameters! yo& can speci+y -hich repetitive sched&le
variances yo& recogni0e -hen yo& close an
acco&nting period$ %o& can either recogni0e variances +or all repetitive sched&les -hen yo& close
an acco&nting period! or recogni0e variances +or those repetitive sched&les -ith stat&ses o+ either
Complete # Do Charges or Cancelled$
Ass&ming positive balances in the repetitive sched&les at the end o+ the period! the acco&nting
entries +or repetitive sched&les at period close are:
Account Debit Credit
WIP acco&nting class variance acco&nts AA
WIP acco&nting class val&ation acco&nts AA
Wor4 in Process ?tandard Cost @pdate Transactions
The standard cost &pdate process reval&es standard and non#standard asset discrete *obs and
&pdates pending costs to +ro0en standard costs$ Repetitive sched&les and non#standard expense
*obs do not get reval&ed by the cost &pdate$
The cost &pdate creates acco&nting transactions by *ob and cost element val&ation acco&nt$
Each standard and non#standard asset discrete *ob is &pdated &sing the +ollo-ing +orm&la:
Standard cost update ad'ustent A Hne5 costs in (aterial& resource& outside processin%&
and o$er#ead c#ar%es)I ne5 costs out (scrap and assebly copletion c#ar%es)J - Hold
costs in (aterial& resource& outside processin%& and o$er#ead c#ar%es) I old costs out
(scrap and assebly copletion c#ar%es)J
7)
I+ the res< o+ the cost &pdate is an increase in the standard cost o+ the *ob! the acco&nting
entries +or a cost &pdate transaction are:
Account Debit Credit
WIP acco&nting class val&ation acco&nts AA
WIP ?tandard cost ad*&stment acco&nt AA
I+ the res< o+ the cost &pdate is a decrease in the standard cost o+ the *ob! the acco&nting entries
+or a cost &pdate transaction are:
Account Debit Credit
WIP ?tandard cost ad*&stment acco&nt AA
WIP acco&nting class val&ation acco&nts AA
When the cost &pdate occ&rs +or open *obs! standards and WIP balances are reval&ed according
to the ne- standard! th&s retaining relie+ variances inc&rred &p to the date o+ the &pdate$
71
Standard Cost 4aluation
Inventory and Wor4 in Process contin&ally &pdate inventory val&e -ith each transaction$ Wor4 in
Process balances are &pdated -ith each related acco&nting transaction$ Inventory s&binventory
val&es may be reported -hen the 6&antity movement occ&rs$
4alue by Cost Eleent
Inventory or -or4 in process val&e is maintained and reported on by distinct cost element .s&ch
as material! material overhead! and so on/! even i+ yo& assign the same general ledger val&ation
acco&nt to each cost element$ %o& can also report -or4 in process val&e by cost element -ithin
speci+ic WIP acco&nting classes$
Standard Costin%
@nder standard costing! the val&e o+ inventory is determined &sing the material and material
overhead standard costs o+ each inventory item$ I+ yo& &se 8ills o+ ,aterial! Inventory maintains
the standard cost by cost element .material! material overhead! reso&rce! o&tside processing!
and overhead/$
/nliited Cost Types
%o& can de+ine an &nlimited n&mber o+ cost types and &se them -ith any inventory val&ation and
margin analysis reports$ This allo-s yo& to see the potential e++ects o+ a cost roll&pE&pdate$ %o&
can also &pdate yo&r standard costs +rom any o+ the cost types yo& have de+ined$ When yo& &se
8ills o+ ,aterial -ith Inventory! yo& can speci+y the cost type in explosion reports and report these
costs +or sim&lation p&rposes
7
In$entory and BorC in Process Standard Cost 4ariances
This section describes Inventory standard cost variances and Wor4 in Process standard cost
variances$
In$entory Standard Cost 4ariances
In general! Inventory records p&rchase price variance .PPF/ and recogni0es cycle co&nt and
physical inventory ad*&stments as variances$
Purc#ase Price 4ariance (PP4)
;&ring a p&rchase order receipt! Inventory calc&lates p&rchase price variance$ In general! this is
the di++erence bet-een -hat yo& pay the s&pplier and the item:s standard cost$ Inventory
calc&lates this val&e as +ollo-s:
PP4 A (PO unit price standard unit cost) I @uantity recei$ed(
Inventory &pdates the p&rchase price variance acco&nt -ith the PPF val&e$ I+ the p&rchase order
price is in a +oreign c&rrency! Inventory converts it into the +&nctional c&rrency o+ the inventory
organi0ation and calc&lates the p&rchase price variance$ P&rchasing reports PPF &sing the
P&rchase Price Fariance Report$ %o& distrib&te this variance to the general ledger -hen yo&
per+orm the general ledger trans+er! or period close$
In$oice Price 4ariance (IP4)
In general! invoice price variance is the di++erence bet-een the p&rchase price and the invoice
price paid +or a p&rchase order receipt$ P&rchasing reports invoice variance$ @pon invoice
approval! Payables a&tomatically records Invoice Price Fariance! to both invoice price
variance and exchange rate variance acco&nts$
Cycle Count and P#ysical In$entory
Inventory considers cycle co&nt and physical inventory ad*&stments as variance$ %o& distrib&te
these variances to the general ledger -hen yo& per+orm the general ledger trans+er or period
close$
BorC in Process Standard Cost 4ariances
Wor4 in Process provides &sage! e++iciency! and standard cost ad*&stment variances$
/sa%e and E00iciency 4ariances
@sage and e++iciency variances res< -hen the total costs charged to a *ob or sched&le do not
e6&al the total costs relieved +rom a *ob or sched&le at standard$ Charges occ&r +rom iss&es and
ret&rns! reso&rce and overhead charges! and o&tside processing receipts$ Cost relie+ occ&rs +rom
assembly completions! scrap transactions! and close transactions$
%o& can vie- these variances in the ;iscrete >ob Fal&e report! the Repetitive Fal&e report! and
by &sing the WIP Fal&e ?&mmary -indo-$
Wor4 in Process reports &sage and e++iciency variances as yo& inc&r them! b&t does not &pdate
the appropriate variance acco&nts &ntil yo& close a *ob or period$ Wor4 in Process &pdates the
standard cost ad*&stment variance acco&nt at cost &pdate$
@sage and e++iciency variances are primarily 6&antity variances$ They identi+y the di++erence
bet-een the amo&nt o+ material! reso&rces! o&tside processing! and overheads re6&ired at
standard! and the act&al amo&nts yo& &se to man&+act&re an assembly$ E++iciency variance can
75
also incl&de rate variance as -ell as 6&antity variance i+ yo& charged reso&rces or o&tside
processing at act&al$
%o& can calc&late and report &sage and e++iciency variances based on planned start 6&antity or
the act&al 6&antity completed$ %o& can &se the planned start 6&antity to chec4 potential variances
d&ring the *ob or repetitive sched&le$ %o& can &se the act&al 6&antity completed to
chec4 the variances be+ore the *ob or period close$ %o&r choice o+ planned start 6&antity or act&al
6&antity completed determines the standard re6&irements$ These standard re6&irements are
compared to the act&al material iss&es! reso&rce! o&tside processing! and overhead charges to
determine the reported variance$
Wor4 in Process calc&lates! reports! and recogni0es the +ollo-ing 6&antity variances:
!aterial /sa%e 4ariance
The material &sage variance is the di++erence bet-een the act&al material iss&ed and the
standard material re6&ired to b&ild a given assembly! calc&lated as +ollo-s:
standard aterial cost I (@uantity issued I @uantity re@uired)
This variance occ&rs -hen yo& over or &nder iss&e components or &se an alternate bill$
Resource and Outside Processin% E00iciency 4ariance
The reso&rce and o&tside processing e++iciency variances is the di++erence bet-een the reso&rces
and o&tside processing charges inc&rred and the standard reso&rce and o&tside processing
charges re6&ired to b&ild a given assembly! calc&lated as +ollo-s:
.applied reso&rce &nits A standard or act&al rate/ L .standard reso&rce &nits at standard reso&rce
rate/
This variance occ&rs -hen yo& &se an alternate ro&ting! add ne- operations to a standard
ro&ting d&ring prod&ction! assign costed reso&rces to Do # direct charge operations s4ipped by
shop +loor moves! overcharge or &ndercharge a reso&rce! or charge a reso&rce at
act&al$
!o$e 1ased O$er#ead E00iciency 4ariance
,ove based overhead e++iciency variance is the di++erence bet-een overhead charges inc&rred
+or move based overheads .overhead basis o+ Item or <ot/ and standard move based overheads
re6&ired to b&ild a given assembly! calc&lated as +ollo-s:
applied o$e based o$er#eads I standard o$e based o$er#eads
This variance occ&rs -hen yo& &se an alternate ro&ting! add operations to a standard ro&ting
d&ring prod&ction! or do not complete all the move transactions associated -ith the assembly
6&antity being b&ilt$
Resource 1ased O$er#ead E00iciency 4ariance
Reso&rce based overhead e++iciency variance is the di++erence bet-een overhead charges
inc&rred +or reso&rce based overheads .overhead basis o+ Reso&rce &nits or Reso&rce val&e/
and standard reso&rce based overheads re6&ired to b&ild a given assembly! calc&lated as
+ollo-s:
applied resource based o$er#eads I standard resource based o$er#eads
77
This variance occ&rs -hen yo& &se an alternate ro&ting! add ne- operations to a standard
ro&ting d&ring prod&ction! assign costed reso&rces to Do # direct charge operations s4ipped by
shop +loor moves! overcharge or &ndercharge a reso&rce! or charge a reso&rce at act&al$
Standard Cost Ad'ustent 4ariance
?tandard cost ad*&stment variance is the di++erence bet-een costs at the previo&s standards and
costs at the ne- standards created by cost &pdate transactions$
79
?tandard and Average Costing Compared
Cost ,anagement o++ers t-o costing methods: standard costing and average costing$
Average costing is &sed primarily +or distrib&tion and other ind&stries -here the prod&ct cost
+l&ct&ates rapidly! or -hen dictated by reg&lation and other ind&stry conventions$
Average costing allo-s yo& to:
val&e inventory at a moving average cost
trac4 inventory and man&+act&ring costs -itho&t the re6&irement o+ having prede+ined
standards
determine pro+it margin based on an Qact&alR cost method
meas&re the organi0ation:s per+ormance against historical costs
incl&de all direct costs o+ man&+act&ring an item in that item:s inventory cost
@se standard costing +or per+ormance meas&rement and cost control$ ?tandard costing
allo-s yo& to:
val&e inventory at a predetermined cost
determine pro+it margin based on pro*ected costs
record variances against expected costs
&pdate standard costs +rom any cost type
eval&ate prod&ction costs relative to standard costs
meas&re the organi0ation:s per+ormance based on prede+ined prod&ct costs
eval&ate prod&ct costs to assist management decisions
1
72
@nder average costing! yo& cannot share costs$ Average costs are maintained separately in each
organi0ation$ @nder standard costing i+ yo& &se Inventory -itho&t Wor4 in Process!yo& can de+ine
yo&r item costs in the organi0ation that controls yo&r costs and share those costs across
organi0ations$ I+ yo& share standard costs across m<iple organi0ations! all reports! in6&iries! and
processes &se those costs$ %o& are not re6&ired to enter d&plicate costs$
Dote: The organi0ation that controls yo&r costs can be a man&+act&ring organi0ation that &ses
Wor4 in Process or 8ills o+ ,aterial$ (rgani0ations that share costs -ith the organi0ation that
controls yo&r costs cannot &se 8ills o+ ,aterial$
4aluation Accounts and Cost Eleents 5it# A$era%e Costin%
The system maintains the average &nit cost at the organi0ation levelS it does not &se any
s&binventory val&ation acco&nts$ I+ yo& had separate val&ation acco&nts by s&binventory! total
inventories -o&ld balance! b&t acco&nt balances by s&binventory -o&ld not match the inventory
val&ation reports$
Dote: Cost ,anagement en+orces the same acco&nt n&mber +or organi0ation level material and
intransit acco&nts$ (ther-ise the balances o+ inventory val&ation reports do not
e6&al the s&m o+ acco&nting transactions$
C#an%in% 0ro Standard to A$era%e Costin%
(nce transactions have been per+ormed yo& cannot change the costing method o+ an
organi0ation in the (rgani0ation Parameters -indo- in (racle Inventory$
Gome
7=
Recei$ables
Acco&nting +or Transactions
This essay describes the acco&nting entries created -hen yo& enter transactions in Receivables
&sing the Accr&al method o+ acco&nting$
In$oices
When yo& enter a reg&lar invoice thro&gh the Transaction -indo-! Receivables creates the
+ollo-ing *o&rnal entry:
DR Receivables
CR Revenue
CR Tax (If you charge tax)
CR Freight (If you charge freight)
I+ yo& enter an invoice -ith a 8ill in Arrears invoicing r&le! Receivables creates the +ollo-ing
*o&rnal entry:
In t#e 0irst period o0 Rule:
DR Unbilled Receivables
CR Revenue
In all periods o0 Rule:
DR Receivables
CR Unbilled Receivables
CR Tax (If you charge tax)
CR Freight (If you charge freight)
I+ yo& enter an invoice -ith a 8ill in Advance invoicing r&le! Receivables creates the +ollo-ing
*o&rnal entries:
DR Receivables
CR Unearned Revenue
CR Tax (If you charge tax)
CR Freight (If you charge freight)
DR Unearned Revenue
CR Revenue
Receivables &ses the Creight! Receivable! Reven&e! ?&spense! Tax! @nbilled Receivable! and
@nearned Reven&e acco&nts that yo& speci+ied in yo&r A&toAcco&nting str&ct&re$
Credit !eos
When yo& credit an invoice! debit memo! or chargebac4 thro&gh the Credit ,emos -indo-!
Receivables creates the +ollo-ing *o&rnal entry:
DR Revenue
DR Tax (if you credit tax)
DR Freight (if you credit freight)
CR Receivables
9"
When yo& credit a commitment! Receivables creates the +ollo-ing *o&rnal entries:
DR Revenue
CR Receivables
When yo& enter a credit memo against an installment! Receivables lets yo& choose bet-een the
+ollo-ing methods: <IC(! CIC(! and Prorate$
When yo& enter a credit memo against an invoice -ith invoicing and acco&nting r&les!
Receivables lets yo& choose bet-een the +ollo-ing methods:
<IC(! Prorate! and @nit$
I+ the pro0ile option /se In$oice Accountin% 0or Credit !eos is set to "es! Receivables
credits the acco&nts o+ the original transaction$ I+ t#is pro0ile option is set to No! Receivables
&ses A&toAcco&nting to determine the Creight! Receivables Reven&e! and Tax acco&nts$
Receivables &ses the acco&nt in+ormation +or on#acco&nt credits thatyo& speci+ied in yo&r
A&toAcco&nting str&ct&re$ Receivables let yo& &pdate acco&nting in+ormation +or yo&r credit
memo a+ter it has posted to yo&r general ledger$
Receivables 4eeps the original acco&nting in+ormation as an a&dit trail -hile it creates an
o++setting entry and the ne- entry$
Coitents
Deposits
When yo& enter a deposit! Receivables creates the +ollo-ing *o&rnal entry:
DR Receivables (Deposit)
CR Unearned Revenue
These acco&nts come +rom the deposit:s transaction type$ When yo& enter an invoice against this
deposit! Receivables creates the +ollo-ing *o&rnal entries:
DR Receivables (Invoice)
CR Revenue
CR Tax (If you charge tax)
CR Freight (If you charge freight)
DR Unearned Revenue
CR Receivables (Invoice)
When yo& apply an invoice to a deposit! Receivables creates a receivable ad*&stment against the
invoice$ Receivables &ses the acco&nt in+ormation yo& speci+ied in yo&r A&toAcco&nting
str&ct&re$ When cash is received against this deposit! Receivables creates the
+ollo-ing *o&rnal entry:
DR Cash
CR Receivables (Deposit)
91
.uarantees
When yo& enter a g&arantee! Receivables creates the +ollo-ing *o&rnal entry:
DR Unbilled Receivables
CR Unearned Revenue
These acco&nts come +rom the g&arantee:s transaction type$When yo& enter an invoice against
this g&arantee! Receivables creates the +ollo-ing *o&rnal entry:
DR Receivables (Invoice)
CR Revenue
CR Tax (If you charge tax)
CR Freight (If you charge freight)
DR Unearned Revenue
CR Unbilled Receivables
When yo& apply an invoice to a g&arantee! Receivables creates a receivable ad*&stment against
the g&arantee$ These acco&nts come +rom yo&r g&arantee:s transaction type$
When cash is received against this g&arantee! Receivables creates the +ollo-ing *o&rnal entry:
DR Cash
CR Receivables (Invoice)
Receipts
When yo& enter a receipt and +&lly apply this receipt to an invoice! Receivables creates the
+ollo-ing *o&rnal entry:
DR Cash
CR Receivables
When yo& enter an &napplied receipt! Receivables creates the +ollo-ing *o&rnal entry:
DR Cash
CR Unapplied
When yo& enter an &nidenti+ied receipt! Receivables creates the +ollo-ing *o&rnal entry:
DR Cash
CR Unidentified
When yo& enter an on#acco&nt receipt! Receivables creates the +ollo-ing *o&rnal entry:
DR Cash
CR OnAccount
When yo&r receipt incl&des a disco&nt! Receivables creates the +ollo-ing *o&rnal entry:
DR Receivables
CR Revenue
DR Cash
CR Receivables
DR Earned/Unearned Discount
CR Receivables
9)
Receivables &ses the de+a< Cash! @napplied! @nidenti+ied! (n#Acco&nt! @nearned! and Earned
acco&nts that yo& speci+ied in the Remittance 8an4s -indo- +or this receipt class$ When yo&
enter a receipt and combine it -ith an on#acco&nt credit! Receivables creates the +ollo-ing
*o&rnal entry:
DR Cash
CR Receivables (Invoice)
DR OnAccount
CR Receivables (Invoice)
When yo& enter a receipt and combine it -ith a negative ad*&stment! Receivables creates the
+ollo-ing *o&rnal entries:
DR Cash
CR Receivables (Invoice)
DR WriteOff
CR Receivables (Invoice)
%o& set &p a Write # (++ acco&nt -hen de+ining yo&r Receivables Activity$
When yo& enter a receipt and combine it -ith a positive ad*&stment! Receivables creates the
+ollo-ing *o&rnal entries:
DR Cash
CR Receivables (Invoice)
DR Receivables (Invoice)
CR WriteOff
When yo& enter a receipt and combine it -ith a Chargebac4! Receivables creates the +ollo-ing
*o&rnal entries:
DR Cash
CR Receivables (Invoice)
DR Receivables (Chargeback)
CR Receivables (Invoice)
DR Chargeback
CR Receivables (Chargeback)
%o& set &p a Chargebac4 acco&nt -hen de+ining yo&r Receivables Activity$
Remittances
When yo& create a receipt that re6&ires remittance to yo&r ban4! Receivables debits the
Con+irmation acco&nt instead o+ Cash$ An example o+ a receipt re6&iring remittance -o&ld be a
chec4 be+ore it -as cashed$ Receivables creates the +ollo-ing *o&rnal entry -hen yo& enter s&ch
a receipt:
DR Confirmation
CR Receivables
%o& can then remit the receipt to yo&r remittance ban4 &sing one o+ the t-o remittance methods:
?tandard or Cactoring$ I+ yo& remit yo&r receipt &sing the standard method o+ remittance!
Receivables creates the +ollo-ing *o&rnal entry:
91
DR Remittance
CR Confirmation
When yo& clear the receipt! Receivables creates the +ollo-ing *o&rnal entry:
DR Cash
DR Bank Charges
CR Remittance
I+ yo& remit yo&r receipt &sing the +actoring remittance method! Receivables creates the +ollo-ing
*o&rnal entry:
DR Factor
CR Confirmation
When yo& clear the receipt! Receivables creates a short term liability +or receipts -hich mat&re at
a +&t&re date$ The +actoring process let yo& receive cash be+ore the mat&rity date! and ass&mes
that yo& are liable +or the receipt amo&nt &ntil the c&stomer pays the balance on mat&rity
date$ When yo& receive payment! Receivables creates the +ollo-ing *o&rnal entry:
DR cash
DR Bank Charges
CR Short Term Debt
(n the mat&rity date! Receivables reverses the short term liability and creates the +ollo-ing
*o&rnal entry:
DR Short Term Debt
CR Factor
Ad'ustents
When yo& enter a negative ad*&stment against an invoice! Receivables creates the +ollo-ing
*o&rnal entry:
DR WriteOff
CR Receivables (Invoice)
When yo& enter a positive ad*&stment against an invoice! Receivables creates the +ollo-ing
*o&rnal entry:
DR Receivables (Invoice)
CR WriteOff
Debit !eos
When yo& enter a debit memo in the Transaction -indo-! Receivables creates the +ollo-ing
*o&rnal entries:
DR Receivables
CR Revenue (If you enter line amounts)
CR Tax (If you charge tax)
CR Freight (If you charge freight)
DR Receivables
CR Finance Charges
9
OnAccount Credits
When yo& enter an on#acco&nt credit in the Credit ,emo or the Transaction -indo-! Receivables
creates the +ollo-ing *o&rnal entry:
DR Revenue (If you credit line amounts)
DR Tax (If you credit tax)
DR Freight (If you credit freight)
CR Receivables
Receivables &se the Creight! Receivable! Reven&e! and Tax acco&nts that yo& speci+ied in yo&r
A&toAcco&nting str&ct&re$
Gome
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