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Oracle SCM Accounting Reference Quickie Discrete Manufacturing Organization

Here is a quick reference of accounting events associated with a typical "Procure to Ship" Order fulfillment cycle in a
Discrete Manufacturing Organization using Average Costing. I've tried to compile key transactions and put it in a concise
way. Though this information is widely available in Oracle user guides as well as on several other sites, I use this concise
format for easy and quick reference and sharing the same with you all. I shall be sharing the same for standard costing
organization as well on The Oracle Manufacturing Blog shortly.

Event
PO Receiving for Inventory
Goods / Raw materials
PO Receiving for Fixed Assets
(Equipments / Machines /
Infrastructure items etc.)

Oracle Transaction

Account Debited (Dr)

Account Credited (Cr)

Value Basis

PO Receipt
Deliver to Inventory

PO Receiving
Inventory Valuation

AP Accrual
PO Receiving

PO Cost
PO Cost

PO Receipt

PO Receiving
AP Accrual
FA clearing (as specified
on item)
PO Receiving

PO Cost

AP Accrual

PO Cost

Deliver to Expense

PO Receiving
Expense Account (as
specified on item)

PO Receiving

PO Cost

PO Receipt
Deliver to Inventory

PO Receiving
WIP Valuation - OSP

AP Accrual
PO Receiving

PO Cost
PO Cost

Deliver to FA
PO Receiving for Expense
Items (Consumables / bulk
items)

PO Receiving for Subcontracted Items - OSP

PO Receipt

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PO Cost

PO return to supplier (against


non-compliance / defected
goods)
Inventory Transfer within
Organization
Material Overhead Charging
(on PO Receipt, WIP Assembly
completion and/or inter-org
transfers as per absorption
rule)
Material Issue / Return to Jobs

Resource / Overhead Charging


to Jobs

Return to Receiving
Return to Supplier

PO Receiving
AP Accrual

Inventory Valuation
PO Receiving

PO Cost
PO Cost

Sub-inventory Transfer

Inventory Valuation

Inventory Valuation

Average Cost

Absorption Account
(specified on Material
Overhead)

Overhead Rate

Inventory Valuation

Average Cost
Average Cost

Material Overhead
Transaction
WIP Issue

Inventory Valuation
WIP Valuation Material

WIP return

Inventory Valuation

WIP Valuation Material

Resource Transaction

WIP Valuation Resource

Absorption Account (as


specified on resource) Resource Rate

Overhead Transaction

WIP Valuation Overhead

Absorption Account (as


specified on overhead) Overhead Rate

Inventory Valuation

WIP Valuation

Accumulated job cost

WIP Valuation

Inventory Valuation

Accumulated job cost

Material Overhead Charging to


Job
WIP Assembly Completion
WIP Assembly Return

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Job Completion / Reverse


Completion

WIP Assembly Completion

Inventory Valuation

WIP Valuation

Accumulated job cost

WIP Assembly Return

WIP Valuation

Inventory Valuation

Job Closure

WIP Job Close

WIP Variance

WIP Valuation

Accumulated job cost


Unrelieved WIP
Valuation

Shipping of Finished Goods

Pick Release

Inventory Valuation

Inventory Valuation

Average Cost

Ship confirm

Deferred COGS

Inventory Valuation

WIP Assembly Scrap

Scrap Account (as


specified)

WIP Valuation

COGS Recognition Events

COGS

Deferred COGS

Misc. Receipt
Misc. Issue

Inventory Valuation
Specified Account

Specified Account
Inventory Valuation

Average Cost
Accumulated Job
Cost for scrapped
assembly
In proportion of
Revenue recognized
in AR
specified cost else
Average Cost
Average Cost

Average Cost Update

Adjustment Account (or Inventory Valuation (or


vice versa depending
vice versa depending
on adjustment)
on adjustment)
As specified

RMA Receipt
RMA Return

Inventory Valuation
COGS, Deferred COGS

Assembly Scrapping
COGS Recognition subsequent
to Revenue recognition
Miscellaneous Issue / Receipt
transactions

Average Cost Update


Return Material Authorization
(RMA without reference)

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COGS, Deferred COGS


Inventory Valuation

Average Cost
Average Cost

Direct Inter-Organization
Transfer (without intrasnit,
transfer charges)

Inter-Organization Transfer
(with In-transit) - FOB Receipt

Shipping

Inter-Organization
Receivables

Receiving

Inventory Valuation
(Receiving Org.)

Shipping

Receiving

Receiving
Inter-Organization Transfer
(with In-transit) - FOB
Shipment

Shipping

Shipping
Receiving

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In-transit Inventory
(sending Org)
Inter-Organization
Receivables (Sending
Org.)
Inventory Valuation
(Receiving Org.)
Inter-Organization
Receivables (Sending
Org.)
In-transit Inventory
(Receiving Org)
Inventory Valuation
(Receiving Org.)

Inventory Valuation
(sending org)
Inter-Organization
Payables (Receiving
Org.)

Average Cost
(sending Org)

Inventory Valuation
(sending org)

Average Cost
(sending Org)

In-transit Inventory
(Sending Org.)

Average Cost
(sending Org)

Inter-Organization
Payables (Receiving
Org.)

Average Cost
(sending Org)

Inventory Valuation
(sending org)
Inter-Organization
Payables (Receiving
Org.)
In-transit Inventory
(Receiving Org.)

Average Cost
(sending Org)

Average Cost
(sending Org)
Average Cost
(sending Org)
Average Cost
(sending Org)

Hope you found this Accounting reference quickie useful. Your suggestions and feedback are always welcome!
Regards,
Manu Singhal
Email: msinghal.iitk@gmail.com
The Oracle Manufacturing Blog

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