1)

When sales order is entered, the status of sales order will be

entered and no accounting entries will be created.
2)
When sales order is booked, and then status will be booked and
no accounting entries will be created.
3)
When item is picked from inventory then status will be picked.
4)
When item is shipped then status will be shipped and
accounting entries will be created like :
Cost of goods sold A/C
TO Inventory Material A/C
5)
We need to run Workflow Back Ground process to update the
status of sales order from shipped to close.
6)
From Receivable run Auto Invoice Master Program. This will
create Invoice for the sales order in Receivable in Transaction window
with status of Complete.
7)
When Invoice is created in Receivable , the accounting entries
will be:
Receivable A/C
To Revenue A/C
To Tax A/C
To Freight A/C
8)

When receipt is entered :

Cash A/C
To Unidentified A/C
Unidentified A/C
To Unapplied A/C
Unapplied A/C
To Applied A/C
Applied A/C
To Receivable A/C
Accounting entries transferred to GL are:
Cash A/C
To Revenue A/C
To Tax A/C
To Freight A/C
Note: - In R12 from View Accounting page we can drill-down to
transaction level.

9)

Transfer to GL

Accounting Entries for Invoicing Rules/

Accounting Rules
When Bills in Advance Accounting entries are as
follow:
Accounting entries for Bills in Advance:
Receivable A/C
To Unearned Revenue A/C
Unearned Revenue A/C
To Revenue A/C
Final Entries are:
Receivable A/C
To Revenue A/C

When Bills in Arrear Accounting entries are as follow:

Unbilled Receivable A/C
To Revenue A/C
Receivable A/C
TO Unbilled Receivable A/C

Final Entries are:

Receivable A/C
To Revenue A/C

Accounting entries in Receivables

A quick re-cap of accounting entries generated in Oracle Receivables:

Invoices:
When you enter a regular invoice through the Transactions window, Receivables
creates the following journal entry:
DR Receivables
CR Revenue
CR Tax (if you charge tax)
CR Freight (if you charge freight)
If you enter an invoice with a Bill in Arrears invoicing rule with a three month fixed
duration accounting rule, Receivables creates the following journal entries:
In the first period of the rule:
DR Unbilled Receivables
CR Revenue
In the second period of the rule:
DR Unbilled Receivables
CR Revenue
In the third and final period of the rule:
DR Unbilled Receivables
CR Revenue
DR Receivables
CR Unbilled Receivables
CR Tax (if you charge tax)
CR Freight (if you charge freight)
If you enter an invoice with a Bill in Advance invoicing rule, Receivables creates the
following journal entries:
In the first period of the rule:
DR Receivables
CR Unearned Revenue
CR Tax (if you charge tax)
CR Freight (if you charge freight)
DR Unearned Revenue
CR Revenue
In all periods of the rule for the portion that is recognized.
DR Unearned Revenue
CR Revenue
Credit Memos:

When you credit an invoice, debit memo, or chargeback through the Credit
Transactions window, Receivables creates the following journal entry:
DR Revenue
DR Tax (if you credit tax)
DR Freight (if you credit freight)
CR Receivables (Credit Memo)
DR Receivables (Credit Memo)
CR Receivables (Invoice)
When you credit a commitment, Receivables creates the following journal entries:
DR Revenue
CR Receivables
When you enter a credit memo against an installment, Receivables lets you choose
between the following methods: LIFO, FIFO, and Prorate. When you enter a credit
memo against an invoice with invoicing and accounting rules, Receivables lets you
choose between the following methods: LIFO, Prorate, and Unit.
If the profile option AR: Use Invoice Accounting for Credit Memos is set to Yes,
Receivables credits the accounts of the original transaction. If this profile option is set
to No, Receivables uses AutoAccounting to determine the Freight, Receivables,
Revenue, and Tax accounts. Receivables uses the account information for on-account
credits that you specified in your AutoAccounting structure to create your journal
entries.
Receivables lets you update accounting information for your credit memo after it has
posted to your general ledger. Receivables keeps the original accounting information
as an audit trail while it creates an offsetting entry and the new entry.
Commitments:
When you enter a deposit, Receivables creates the following journal entry:
DR Receivables (Deposit)
CR Offset Account
Use the AR: Deposit Offset Account Source profile option to determine how
Receivables derives the Offset Account to credit for this deposit.
When you enter an invoice against this deposit, Receivables creates the following
journal entries:
DR Receivables (Invoice)
CR Revenue
CR Tax (if you charge tax)
CR Freight (if you charge freight)
DR Offset Account (such as Unearned Revenue)

CR Receivables (Invoice)
When you apply an invoice to a deposit, Receivables creates a receivable adjustment
against the invoice. Receivables uses the account information that you specified in
your AutoAccounting structure to create these entries.
When cash is received against this deposit, Receivables creates the following journal
entry:
DR Cash
CR Receivables (Deposit)
When you enter a guarantee, Receivables creates the following journal entry:
DR Receivables
CR Revenue
Receivables uses the Receivable Account and Revenue Account fields on this
guarantee's transaction type to obtain the accounting flexfields for the Unbilled
Receivables and Unearned Revenue accounts, respectively.
When you enter an invoice against this guarantee, Receivables creates the following
journal entry:
DR Receivables (Invoice)
CR Revenue
CR Tax (if you charge tax)
CR Freight (if you charge freight)
DR Revenue
CR Receivables
When you apply an invoice to a guarantee, Receivables creates a receivable
adjustment against the guarantee. Receivables uses the account information you
specified in your AutoAccounting structure to create these entries.
When cash is received against this guarantee, Receivables creates the following
journal entry:
DR Cash
CR Receivables (Invoice)
Receipts:
When you enter a receipt, Receivables creates the following journal entries:
DR Cash
CR Receivables
When you fully apply a receipt to an invoice, Receivables creates the following
journal entry:
DR Cash

DR Unapplied Cash
CR Unapplied Cash
CR Receivables
Note: These examples assume that the receipt has a Remittance Method of No
Remittance and a Clearance Method of Directly.
When you enter an unidentified receipt, Receivables creates the following journal
entry:
DR Cash
CR Unidentified
When you enter an on-account receipt, Receivables creates the following journal
entry:
DR Cash
CR Unapplied
DR Unapplied
CR On-Account
When your receipt includes a discount, Receivables creates the following journal
entry:
DR Receivables
CR Revenue
DR Cash
CR Receivables
DR Earned/Unearned Discount
CR Receivables
Receivables uses the default Cash, Unapplied, Unidentified, On-Account, Unearned,
and Earned accounts that you specified in the Remittance Banks window for this
receipt class.
When you enter a receipt and combine it with an on-account credit (which increases
the balance of the receipt), Receivables creates the following journal entry:
DR Cash
CR Unapplied Cash
To close the receivable on the credit memo and increase the unapplied cash balance,
Receivables creates the following journal entry:
DR Receivables
CR Unapplied Cash
When you enter a receipt and combine it with a negative adjustment, Receivables

creates the following journal entries:

DR Cash
CR Receivables (Invoice)
DR Write-Off
CR Receivables (Invoice)
You set up a Write-Off account when defining your Receivables Activity.
When you enter a receipt and combine it with a positive adjustment, Receivables
creates the following journal entries:
DR Cash
CR Receivables (Invoice)
DR Receivables (Invoice)
CR Write-Off
When you enter a receipt and combine it with a Chargeback, Receivables creates the
following journal entries:
DR Cash
CR Receivables (Invoice)
DR Receivables (Chargeback)
CR Chargeback (Activity)
DR Chargeback (Activity)
CR Receivables (Invoice)
You set up a Chargeback account when defining your Receivables Activity.
Remittances:
When you create a receipt that requires remittance to your bank, Receivables debits
the Confirmation account instead of Cash. An example of a receipt requiring
remittance would be a check before it was cashed. Receivables creates the following
journal entry when you enter such a receipt:
DR Confirmation
CR Receivables
You can then remit the receipt to your remittance bank using one of the two
remittance methods: Standard or Factoring. If you remit your receipt using the
standard method of remittance, Receivables creates the following journal entry:
DR Remittance
CR Confirmation
When you clear the receipt, Receivables creates the following journal entry:
DR Cash

DR Bank Charges
CR Remittance
If you remit your receipt using the factoring remittance method, Receivables creates
the following journal entry:
DR Factor
CR Confirmation
When you clear the receipt, Receivables creates a short-term liability for receipts
that mature at a future date. The factoring process let you receive cash before the
maturity date, and assumes that you are liable for the receipt amount until the
customer pays the balance on the maturity date. When you receive payment,
Receivables creates the following journal entry:
DR Cash
DR Bank Charges
CR Short-Term Debt
On the maturity date, Receivables reverses the short term liability and creates the
following journal entry:
DR Short-Term Debt
CR Factor
Adjustments:
When you enter a negative adjustment against an invoice, Receivables creates the
following journal entry:
DR Write-Off
CR Receivables (Invoice)
When you enter a positive adjustment against an invoice, Receivables creates the
following journal entry:
DR Receivables (Invoice)
CR Write-Off
Debit Memos:
When you enter a debit memo in the Transactions window, Receivables creates the
following journal 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
On-Account Credits:
When you enter an on-account credit in the Applications window, Receivables creates

the following journal entry:

DR Revenue (if you credit line amounts)
DR Tax (if you credit tax)
DR Freight (if you credit freight)
CR Receivables (On-account Credit)
Receivables uses the Freight, Receivable, Revenue, and Tax accounts that you
specified in your AutoAccounting structure to create these entries.
Once the on-account credit is applied to an invoice, the following journal entry is
created:
DR Receivables (On-account Credit)
CR Receivables (Invoice)

P2P Cycle
SR.
NO
1

PARTICULARS

DR

CR

SPL NOTES

ACCOUNT IS
PULLED FROM

SPECIFIC

At PO Price

Receiving Option
Setup

ORG

At PO Price

Inventory Org Setup

ORG

Creation of
Requisition
No Accounting

Creation of
Purchase Order
No Accounting

Receipt
Receiving A/c

100

AP Accrual A/c
4

100

Devlivery
Raw Material Sub
Inventory A/c

80

At Standard
Cost

Sub-inventory Material
A/c Setup

SUB-INV

PPV A/c

20

Diff between
PO - Stnd

Inventory Org Setup

ORG

At PO Price

Receiving Option
Setup

ORG

100

At PO Price

Receiving Option
Setup

ORG

10

Diff between
Invoice - PO

Inventory Org Setup

ORG

AT INV Price

Financial
Options/Supplier Site

At Invoice
Price

Financial
Options/Supplier Site

At Invoice
Price

Bank A/c Setup

Receiving A/c

100

Invoice matching
with PO
AP Accrual Liability
A/c
Invoice Price
Variance A/c
AP Liability A/c

110

On making Payment
Liability A/c

110

Cash

110

If we have reconcilation with Cash Management then we have one more entry as follows:
Step 6:
Dr Liability A/C
Cr . Cash Clearing A/c ( Receipt Method)
Step 7:
DR Cash Clearing A/C
CR Cash

STANDARD INVOICE:
DEBIT
Expense / Item Expense / Misc. Expense

100

Supplier / Liability
PAYMENT:
Supplier / Liability

100
100

Bank / Cash / Cash Clearing

TOTAL

CREDIT

100
200

200

PREPAYMENTS / ADVANCES:
DEBIT
Prepaid Expense / Advance Paid

70

Supplier / Liability
PAYMENT:
Supplier / Liability

70
70

Bank / Cash / Cash Clearing

STANDARD INVOICE:
Expense / Item Expense / Misc. Expense

70
100

Supplier / Liability
PREPAYMENT APPLIED TO STANDARD
INVOICE:
Supplier / Liability

100

70

Prepaid Expense / Advance Paid

TOTAL

CREDIT

70
310

310

DEBIT

CREDIT

INVOICE with WITHHOLDING TAX (say 6%):

Expense / Item Expense / Misc. Expense

100

Supplier / Liability
Payment with Withholding Tax :
Supplier / Liability

100
100

Bank / Cash / Cash Clearing

94

Withhodling Tax

WITHHOLDING TAX INVOICE (Usually Auto Generated)

WHT Expense

WHT Payables (NBP or SBP)

TOTAL

6
106

106

Expense Item Accounting Entries

1) In PO module there is no Accounting Entries

2) When Invoice is generated accounting entries are
Expense Item A/C
To Expense AP Accrual
Expense AP Accrual A/C
To Cash Clearing
Cash Clearing A/C
To Cash/Bank
Final Entry:
Expense Item A/C
To Cash/ Bank

Foreign Invoice Accounting Entries

1) When Invoice is created for 1000/- (1$ = 40/-) and while doing invoice payment 1$ =
42/-. For this accounting entries are:
Charge A/C
To AP Liability
AP Liability A/C
Realized Loss A/C
To Cash Clearing

Foreign
1000
1000
1000
1000

Functional
1000 * 40
1000 * 40
1000 * 42
1000 * 2
42000

2) When Invoice is created for 1000/- (1$ = 40/-) and while doing invoice payment 1$ =
38/-. For this accounting entries are:
Charge A/C
To AP Liability

1000

1000 * 40

1000

1000 * 40

AP Liability

1000

To Realized Gain

2000

To Cash Clearing

1000 * 38

P 2 P Cycle Accounting Entries

1)
2)
3)
4)
5)
6)

1000 * 40

Requisition
RFQ
Receiving Requisition
Analyzing Requisition
Purchase Order
Receiving Goods (Direct Receiving)
Inventory Material A/C
To Inventory AP Accrual
Standard Receiving
Receiving Control A/C
To Inventory AP Accrual
Inventory Material A/C
To AP Liability
AP Liability A/C
To Cash Clearing
Cash Clearing A/C
To Cash / Bank

Future Dated Payment

When Payment is in issue status, accounting entries are:

AP Liability A/C
To Future Dated Payment

Future dated Payment A/C

To Cash/ Bank

When advance is applied to invoice then accounting entries are:

AP Liability A/C
To Prepayment

What is the difference between Manual Payment and Quick Payment?

manual payments are meant to record manual check payments.
quick payment are computer generated payments. we can stop quick
payments only once they are formatted. for quick payments even though
a check is voided we can reissue the same check since it is a computer
generated payment.
for quick payments only interest invoices are generated, but not for
manual payments

The FA accounting entries are as below.

1. when asset has been added
Asset a/c Dr.
To Asset clearing a/c
2. For depreciation
Depreciation a/c Dr.
To accumulated depreciation a/c
3. When asset retired

Accumulated Depreciation a/c Dr.

Cost of removal of asset a/c Dr.
Loss or gain on sale of asset Dr. (if loss)
Proceeds of sale a/c Dr.
To asset a/c
To Loss or gain on sale of asset (if gain)