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Accounting Flow

for
Purchase Orders, Receipts and Matched
Invoices in an Encumbrance Environment
An Oracle White Paper
July 2006

This document details the accounting entries that are expected for
purchase orders with Expense or Inventory destinations, receipts and
matched invoices. It also considers the two choices of accrual available
for Expense items in an encumbrance-enabled environment.
Expense items can be accrued at
a) Period-end
b) On Receipt
Inventory Items can ONLY be accrued at
a) Receipt
This document consists of the following case studies/scenarios.
Accrue on receipt: (APO)
Case 1: Expense Destination/Create, Approve, Reserve/Receive/Invoice
Case 2: Expense Destination/Create, Approve, Reserve/Invoice/Receive
Case 3: Expense Destination/Create, Approve, Reserve/Receive/Invoice
at a price greater than PO price
Case 4: Expense Destination/Create, Approve, Reserve/Receive/Invoice
at a quantity greater than PO quantity
Case 5: Inventory Destination/ Create, Approve,
Reserve/Receive/Invoice
Case 6: Inventory Destination/ Create, Approve,
Reserve/Invoice/Receive
Accrue at Period-end: (APE)
Case 1: Create PO /Receive PO /Deliver PO /Invoice/Run the period end
program
Case 2: Create PO /Invoice/Receive PO/Deliver PO/Run the period end
program
Case 3: Create PO/Receive PO/Deliver PO/Run the period end
program/Invoice
Case 4: Create PO/Receive PO/Run the Period end program/Deliver
PO/Run the
period end program/Invoice
Case 5: Create PO /Receive PO /Deliver PO /Invoice at a price greater
than PO
Price/Run the period end program

Case 6: Create PO /Receive PO /Deliver PO /Invoice at a quantity


greater than PO
Quantity/Run the period end Program
The following Pages will explain each case in detail:
LEGEND: AOR= Accrue On Receipt, APE= Accrue at Period-End

AOR-Case 1:
Assumptions:
Accrue on receipt = Y
Destination type = Expense
Item = expense Item

Action
1. PO is reserved

2. Receive the PO

3. Deliver the PO

Accounting entries
Budget a/c DR @ PO price (base + NR
tax)*
Receiving Inventory a/c DR @ PO price
(base + NR tax)++

Sequence of actions:
Create, Approve, Reserve
PO
Receive and Deliver the PO
Invoice Validation after
matching
Create Accounting for
invoice
Table in which records
exist

Flag/nature of entry

GL_BC_PACKETS

Encumbrance

RRSL/GLI/GL_JE_LINES
AP Expense accrual a/c CR @ PO price
(base+ NR tax) ^^
Expense Charge a/c DR @ PO price (base
+ NR tax)
Receiving Inventory a/c CR @ PO price
(base + NR tax)++
RRSL/GLI/GL_JE_LINES

for Invoice

Actual

Encumbrance

Budget a/c CR @ PO price (base + NR


tax)*
4. Invoice Validation REC Tax and NR tax DR @ tax amount++
AP Expense accrual a/c DR @ PO price
excluding tax and tax DR @ tax rate
5. Create Accounting separately ^^

Actual

GL_BC_PACKETS

Encumbrance

AP_AE_LINES_ALL

Actual

AP_ENCUMBRANCE_
LINES_ALL

Encumbrance

AP Liability a/c CR @ invoice price


REC Tax and NR tax CR @ tax amount++

Note:
The corresponding offsetting records have the same symbol in
order to more easily identify which debits and credits offset each
other. (^, +, *)
PO base price refers to received quantity * unit price in PO Lines.
NR tax refers to Non Recoverable Tax calculated for the (received
quantity * PO line unit price)
REC tax refers to Recoverable Tax calculated for the (received
quantity * PO line unit price)
RRSL - RCV_RECEIVING_SUB_LEDGER
GLI GL_INTERFACE

AOR-Case 2:
Assumptions:
Accrue on receipt = Y
Destination type = Expense
Item = expense Item
Sequence of actions:

Action

Create, Approve, Reserve


PO
Invoice Validation after
matching
Create Accounting for
invoice
Receive and Deliver the
PO

Accounting entries

Table in which
records exist

Flag/nature of entry

1. PO is reserved

Budget a/c DR @ PO price (base + NR tax) $$

GL_BC_PACKETS

Encumbrance

2. Invoice Validation

REC Tax and NR tax DR @ tax amount *


AP Expense accrual a/c DR @ PO price
excluding tax and tax DR @ tax rate separately
+++

GL_BC_PACKETS

Encumbrance

AP_AE_LINES_ALL

Actual

AP_ENCUMBRANCE
_LINES_ALL

Encumbrance

RRSL/GLI/GL_JE_
LINES

Actual

3. Create Accounting
for invoice

4. Receive the PO

AP Liability a/c CR @ invoice price


REC Tax and NR tax CR @ tax amount *
Receiving Inspection a/c DR @ PO price (base
+ NR tax) ^^^^
AP Expense accrual a/c CR @ PO price (base+
NR tax) +++

5. Deliver the PO

Expense Charge a/c DR @ PO price (base +


NR tax)
Receiving Inspection a/c CR @ PO price (base
+ NR tax) ^^^^

RRSL/GLI/GL_JE_
LINES

Actual
Encumbrance

Budget a/c CR @ PO price (base + NR tax) $$

Note:
Corresponding offsetting accounts have same symbols
PO base price refers to received quantity * unit Price in PO lines
NR tax refers to Non Recoverable Tax calculated for the (received
quantity *PO line unit price)
REC tax refers to Recoverable Tax calculated for the (received
quantity *PO line unit price)
RRSL - RCV_RECEIVING_SUB_LEDGER
GLI GL_INTERFACE
AOR-Case 3:
Assumptions:
Accrue on receipt = Y
Destination type = Expense
Item = expense Item

Action
1. PO is reserved

2. Receive the PO

3. Deliver the PO

Sequence of actions:
Create, Approve, Reserve PO
Receive and Deliver PO
Create Invoice at higher unit
price than PO
Invoice Validation
Create Accounting

Accounting entries
Budget a/c DR @ PO price (base + NR tax) ^^^^
Receiving Inventory a/c DR @ PO price (base + NR
tax) $$$
AP Expense accrual a/c CR @ PO price (base+ NR
tax) **
Expense Charge a/c DR @ PO price (base + NR
tax)
Receiving Inventory a/c CR @ PO price (base + NR
tax) $$$

Table in which
records exist

Flag/nature of
entry

GL_BC_PACKETS

Encumbrance

RRSL/GLI/GL_JE_
LINES

Actual

RRSL/GLI/GL_JE_
LINES

Encumbrance

Budget a/c CR @ PO price (base + NR tax) ^^^^


4. Invoice Validation at
higher price

REC Tax and NR tax DR @ tax amount #


IPV a/c DB @ difference in price &

Actual

GL_BC_PACKETS

Encumbrance

AP Expense accrual a/c DR @ PO price excluding


tax and tax DR @ tax rate separately **
AP_AE_LINES_ALL

AP Liability a/c CR @ invoice price

Actual

5. Create Accounting for


Invoice
IPV a/c DR @ difference in price

REC Tax and NR tax CR @ tax amount #

AP_ENCUMBRANCE
Encumbrance
_LINES_ALL

IPV a/c CR @ difference in price &

Note:
Corresponding offsetting accounts have same symbols
PO base price refers to received quantity * unit Price in PO lines
NR tax refers to Non Recoverable Tax calculated for the (received
quantity * PO line unit price)
REC tax refers to Recoverable Tax calculated for the (received
quantity * PO line unit price)
RRSL - RCV_RECEIVING_SUB_LEDGER
GLI GL_INTERFACE
AOR-Case 4:
Assumptions:
Accrue on receipt = Y
Destination type = Expense
Item = expense Item

Action
1. PO is reserved
2. Receive the PO

3. Deliver the PO

Sequence of actions:
Create, Approve, Reserve
PO
Receive and Deliver PO
Create Invoice at higher
quantity than PO
Invoice Validation
Create Accounting

Accounting entries

Table in which
records exist

GL_BC_PACKETS
Budget a/c DR @ PO price (base + NR tax) &
Receiving Inspection a/c DR @ PO price
(base + NR tax) ##
RRSL/GLI/GL_JE_
LINES
AP Expense accrual a/c CR @ PO price
(base+ NR tax) ^^^
Expense Charge a/c DR @ PO price (base +
NR tax)
Receiving Inspection a/c CR @ PO price
(base + NR tax) ##
Budget a/c CR @ PO price (base+ NR tax) &

RRSL/GLI/GL_JE_
LINES

Flag/nature of entry
Encumbrance
Actual

Actual

Encumbrance

4. Invoice Validation
for higher quantity
*See additional info
below

5. Create Accounting
for Invoice

GL_BC_PACKETS
REC Tax and NR tax DR @ tax amount ****
AP Expense accrual a/c DR @ invoice price
excluding tax and tax DR @ tax rate
separately ^^^
AP_AE_LINES_ALL

Encumbrance

Actual

AP Liability a/c CR @ invoice price


REC Tax and NR tax CR @ tax amount ****

AP_ENCUMBRANCE
_LINES_ALL

Encumbrance

Note:

Corresponding offsetting accounts have same symbols

PO base price refers to received quantity * unit Price in PO line


NR tax refers to Non Recoverable Tax calculated for the (received quantity *
PO line unit price)
REC tax refers to Recoverable Tax calculated for the (received quantity * PO
line unit price)
RRSL - RCV_RECEIVING_SUB_LEDGER
GLI GL_INTERFACE
No separate accounting entry for Quantity Variation (#4) will be seen
here

AOR-Case 5:
Assumptions:
Accrue on receipt = Y
Destination type = Inventory
Item = Inventory Item
Sequence of actions:

Action
1. PO is reserved

2. Receive the PO

Create, Approve, Reserve


PO
Receive and Deliver the PO
Invoice Validation after
matching
Create Accounting for
invoice

Accounting entries
Budget a/c DR @ PO price (base + NR tax) #
Receiving Inspection a/c DR @ PO price
(base + NR tax) **
AP Inventory accrual a/c CR @ PO price
(base+ NR tax) %%%

Table in which records


exist

Flag/nature of entry

GL_BC_PACKETS

Encumbrance

RRSL/GLI/GL_JE_LINES

Actual

Material Valuation a/c DR @ std cost


Receiving Inspection a/c DR @ PO price
(base + NR tax) **
3. Deliver the PO
PPV a/c CR/DR @ difference in price
Budget a/c CR @ PO price (base+ NR tax) #
4. Invoice Validation REC Tax and NR tax DR @ tax amount $$$$
AP Inventory accrual a/c DR @ PO price
5. Create Accounting
excluding tax and tax DR @ tax rate
for Invoice
separately %%%

Actual (Account line


type-1)
Actual (Account line
type-5)
MTL_TRANSACTION_
Actual (Account line
ACCOUNTS
type-6)
Encumbrance
(Account line type15)
GL_BC_PACKETS

Encumbrance

AP_AE_LINES_ALL

Actual

AP_ENCUMBRANCE_
LINES_ALL

Encumbrance

AP Liability a/c CR @ invoice price


REC Tax and NR tax CR @ tax amount $$$$

Note:
Corresponding offsetting accounts have same symbols
PO base price refers to received quantity * unit Price in PO line
NR tax refers to Non Recoverable Tax calculated for the (received
quantity * PO line unit price)
REC tax refers to Recoverable Tax calculated for the (received
quantity * PO line unit price)
RRSL - RCV_RECEIVING_SUB_LEDGER
GLI GL_INTERFACE

AOR-Case 6:
Assumptions:
Accrue on receipt = Y
Destination type = Inventory
Item = Inventory Item
Sequence of actions:

Action
1. PO is reserved

Accounting entries
Budget a/c DR @ PO price (base + NR

Create, Approve, Reserve


PO
Invoice Validation after
matching
Create Accounting for
invoice
Receive and Deliver the PO
Table in which records
exist
GL_BC_PACKETS

Flag/nature of entry
Encumbrance

tax) ####
2. Invoice Validation REC Tax and NR tax DR @ tax amount*
AP Inventory accrual a/c DR @ PO price
excluding tax and tax DR @ tax rate
3. Create Accounting separately @@@
for invoice
AP Liability a/c CR @ invoice price

4. Receive the PO

REC Tax and NR tax CR @ tax amount*


Receiving Inspection a/c DR @ PO price
(base + NR tax) ^^^^
AP Inventory accrual a/c CR @ PO price
(base+ NR tax) @@@

GL_BC_PACKETS

Encumbrance

AP_AE_LINES_ALL

Actual

AP_ENCUMBRANCE_
LINES_ALL

Encumbrance

RRSL/GLI/GL_JE_
LINES

Actual

Actual (Account line


type-1)
Actual (Account line
Receiving Inspection a/c CR @ PO price
type-5)
MTL_TRANSACTION_
(base + NR tax) ^^^^
ACCOUNTS
Actual (Account line
PPV a/c CR/DR @ difference in price
type-6)
Budget a/c CR @ PO price (base + NR
Encumbrance (Account
tax) ####
line type- 15)
Material Valuation a/c DR @ std cost

5. Deliver the PO

Note:
Corresponding offsetting accounts have same symbols
PO base price refers to received quantity * unit Price in PO line
NR tax refers to Non Recoverable Tax calculated for the (received
quantity * PO line unit price)
REC tax refers to Recoverable Tax calculated for the (received
quantity * PO line unit price)
RRSL - RCV_RECEIVING_SUB_LEDGER
GLI GL_INTERFACE
AccrueatPeriodEnd
APE-Case 1:
Assumptions:
Accrue on receipt = N
Sequence of actions:
Destination type = Expense
Create, Approve, Reserve PO
Item = expense Item
Receive and Deliver the PO
Purchase Encumbrance type and
Invoice Validation after matching
Invoice Encumbrance type are
Create Accounting for invoice
different
Run the Period End Program

Action
1. PO is reserved

Accounting entries
Budget a/c DR @ PO price (base + NR tax)

Table in which records


exist
GL_BC_PACKETS

Flag/nature of entry
Encumbrance

*
2. Receive the PO
3. Deliver the PO

4. Invoice Validation

5. Create Accounting
for invoice

6. Run the Period end


program
7. Manual Reversal of
journal entry

No Accounting Transactions
No Accounting Transactions
Budget a/c CR @ PO price (base + NR tax)
*
REC Tax and NR tax DR @ tax amount ^^
Budget a/c DR @ invoice price excluding
NR tax-INV Enc &&&
Expense charge a/c DR @ invoice price
excluding tax and tax DR @ tax rate
separately
AP Liability a/c CR @ invoice price
including NR tax
REC Tax and NR tax CR @ tax amount ^^
Budget a/c CR @ invoice price excluding
NR tax &&&
No Accounting Transactions
Not Required since there are no accrual
entries

N/A

N/A

N/A

N/A

GL_BC_PACKETS

Encumbrance

AP_AE_LINES_ALL

Actual

AP_ENCUMBRANCE_
LINES_ALL

Encumbrance

N/A

N/A

N/A

N/A

Note:
Corresponding offsetting accounts have same symbols
PO base price refers to received quantity * unit Price in PO line
NR tax refers to Non Recoverable Tax calculated for the (received
quantity * po line unit price)
REC tax refers to Recoverable Tax calculated for the (received
quantity * po line unit price)

APE-Case 2:
Assumptions:
Accrue on receipt = N
Destination type = Expense
Item = expense Item
Purchase Encumbrance type and
Invoice Encumbrance type are
different

Action
1.PO is reserved

Sequence of actions:
Create, Approve, Reserve PO
Invoice Validation after matching
Create Accounting for invoice
Receive and Deliver the PO
Run the Period end Program

Accounting entries
Budget a/c DR @ PO price (base + NR

Table in which records


exist
GL_BC_PACKETS

Flag/nature of entry
Encumbrance

2.Invoice Validation

3.Create Accounting for


invoice

4.Receive the PO
5. Deliver the PO
6.Run the Period end
program
7. Manual Reversal of
journal entry

tax) ####
Budget a/c CR @ PO price (base + NR
tax) ####
REC Tax and NR tax DR @ tax
amount***
Budget a/c DR @ invoice price
excluding NR tax- INV Enc %%

GL_BC_PACKETS

Encumbrance

AP_AE_LINES_ALL

Actual

AP_ENCUMBRANCE_
LINES_ALL

Encumbrance

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Expense charge a/c DR @ invoice


price excluding tax and tax DR @ tax
rate separately
AP Liability a/c CR @ invoice price
including NR tax
Budget a/c CR @ invoice price
excluding NR tax %%
REC Tax and NR tax CR @ tax
amount***
No Accounting Transactions
No Accounting Transactions
No Accounting Transactions
Not Required since there are no accrual
entries

Note:
Corresponding offsetting accounts have same symbols.
PO base price refers to received quantity * unit Price in PO line
NR tax refers to Non Recoverable Tax calculated for the (received
quantity * po line unit price)
REC tax refers to Recoverable Tax calculated for the (received
quantity * po line unit price)
APE-Case 3:
Assumptions:
Accrue on receipt = N
Sequence of actions:
Destination type = Expense
Create, Approve, Reserve PO
Item = expense Item
Receive and Deliver the PO
Purchase Encumbrance type and
Run the Period End Program
Invoice Encumbrance type are
Invoice Validation after matching
different
Create Accounting for invoice
Action
1.PO is reserved
2.Receive the PO

Accounting entries
Budget a/c DR @ PO price (base + NR tax) $
No Accounting Transactions

Table in which
records exist
GL_BC_
PACKETS
N/A

Flag/nature of entry
Encumbrance
N/A

3.Deliver the PO

No Accounting Transactions

4.Run the Period end


program

Expense Charge a/c DR @ PO Price (base + NR tax) #


AP Expense accrual a/c CR @ PO Price (base + NR
tax) &

5.Manual Reversal of
journal entry (Both
actual and
encumbrance)
6.Invoice Validation

N/A

RRSL/GLI

Budget a/c CR @ PO price (base + NR tax) $


Expense Charge a/c CR @ PO Price (base + NR tax) #
AP Expense accrual a/c DR @ PO Price (base + NR
GL_JE_LINES
tax) &
Budget a/c DR @ PO price (base + NR tax) ++
Budget a/c CR @ PO price (base + NR tax) ++
Budget a/c DR @ invoice price excluding NR tax GL_BC_
INV Enc **
PACKETS
REC Tax and NR tax DR @ tax amount ^^

Expense charge a/c DR @ invoice price excluding


tax and tax DR @ tax rate separately
7.Create Accounting for AP Liability a/c CR @ invoice price including NR
tax
invoice
REC Tax and NR tax CR @ tax amount ^^
Budget a/c CR @ invoice price excluding NR tax **

N/A
Actual
Encumbrance
Actual

Encumbrance

AP_AE_LINES_
ALL

Actual

AP_ENCUMBR
ANCE_LINES_
ALL

Encumbrance

Note:
Corresponding offsetting accounts have same symbols.
PO base price refers to received quantity * unit Price in PO line
NR tax refers to Non Recoverable Tax calculated for the (received
quantity * po line unit price)
REC tax refers to Recoverable Tax calculated for the (received
quantity * po line unit price)
RRSL RCV_RECEIVING_SUB_LEDGER
GLI GL_INTERFACE
APE-Case 4:
Assumptions:
Accrue on receipt = N
Destination type = Expense
Purchase Encumbrance type and
Invoice Encumbrance type are
different

Create, Approve, Reserve


PO/Receive the PO and Run the
Period End Program
Deliver the PO and Run the
Period End Program
Invoice Validation and Create
Accounting

Sequence of Actions:
Action

Accounting entries

Table in which records


exist

Flag/nature of
entry

1.PO is reserved
2.Receive the PO

Budget a/c DR @ PO price (base + NR tax) ^


No Accounting Transactions
Expense Charge a/c DR @ PO Price (base + NR
tax) +
3.Run the Period end
AP Expense accrual a/c CR @ PO Price (base +
program
NR tax) &
Budget a/c CR @ PO price (base + NR tax) ^
Expense Charge a/c CR @ PO Price (base + NR
tax) +
4.Manual Reversal of
journal entry (Both actual AP Expense accrual a/c DR @ PO Price (base +
NR tax) &
and encumbrance)
Budget a/c DR @ PO price (base + NR tax) *
5. Deliver the PO

No Accounting Transactions

GL_BC_PACKETS
N/A

RRSL/GLI

Actual
Encumbrance

GL_JE_LINES

Actual

N/A

N/A

Expense Charge a/c DR @ PO Price (base + NR


tax) +
6. Run the Period end
RRSL/GLI
AP Expense accrual a/c CR @ PO Price (base +
program
NR tax) &
Budget a/c CR @ PO price (base + NR tax) *
Expense Charge a/c CR @ PO Price (base + NR
tax) +
7.Manual Reversal of
journal entry (Both actual AP Expense accrual a/c DR @ PO Price (base +
GL_JE_LINES
NR tax) &
and encumbrance)
Budget a/c DR @ PO price (base + NR tax) #
Budget a/c CR @ PO price (base + NR tax) #
Budget a/c DR @ invoice price excluding NR
8.Invoice Validation
GL_BC_PACKETS
tax- INV Enc /////
REC Tax and NR tax DR @ tax amount \\\\
Expense charge a/c DR @ invoice price
excluding tax and tax DR @ tax rate
separately
AP_AE_LINES_ALL
9.Create Accounting for AP Liability a/c CR @ invoice price including
NR tax
invoice
REC Tax and NR tax CR @ tax amount \\\\
AP_ENCUMBRANCE_
Budget a/c CR @ invoice price excluding NR
LINES_ALL
tax /////

APE-Case 5:
Assumptions:
Accrue on receipt = N
Destination type = Expense
Item = expense Item
Purchase Encumbrance type and
Invoice Encumbrance type are
different

Encumbrance
N/A

Actual
Encumbrance

Actual

Encumbrance

Actual

Encumbrance

Sequence of actions:
Create, Approve, Reserve PO
Receive and Deliver the PO
Create Invoice at higher price
than PO
Invoice Validation after matching
Create Accounting for invoice
Run the Period End Program

Action
1. PO is reserved

Accounting entries
Budget a/c DR @ PO price (base + NR tax)
$$

Table in which records exist

Flag/nature of
entry

GL_BC_PACKETS

Encumbrance

2. Receive the PO

N/A
N/A
No Accounting Transactions
3. Deliver the PO
N/A
N/A
No Accounting Transactions
Budget a/c CR @ PO price (base + NR tax)
$$
Budget a/c DR @ PO price excluding NR
4. Invoice Validation at tax ***
GL_BC_PACKETS
Encumbrance
higher price
Budget a/c DR @ difference in invoice
price ***
REC Tax and NR tax DR @ tax amount &
Expense charge a/c DR @ invoice price
excluding tax and tax DR @ tax rate
separately
AP_AE_LINES_ALL
Actual
5. Create Accounting AP Liability a/c CR @ invoice price
including NR tax
for invoice
REC Tax and NR tax CR @ tax amount &
AP_ENCUMBRANCE_LINES
Encumbrance
Budget a/c CR @ invoice price excluding
_ALL
NR tax
6. Run the Period end
N/A
N/A
program
No Accounting Transactions
7. Manual Reversal of Not Required since there are no accrual
N/A
N/A
journal entry
entries

Note:
Corresponding offsetting accounts have same symbols.
PO base price refers to received quantity * unit Price in PO line
NR tax refers to Non Recoverable Tax calculated for the (received
quantity * po line unit price)
REC tax refers to Recoverable Tax calculated for the (received
quantity * po line unit price)

APE-Case 6:
Assumptions:
Accrue on receipt = N
Destination type = Expense
Item = expense Item

Purchase Encumbrance type and


Invoice Encumbrance type are
different
Sequence of actions:

Create, Approve, Reserve PO


Receive and Deliver the PO
Create Invoice at higher quantity
than PO
Action
1. PO is reserved
2. Receive the PO
3. Deliver the PO

Invoice Validation after matching


Create Accounting for invoice
Run the Period End Program

Accounting entries
Budget a/c DR @ PO price (base + NR tax)
##
No Accounting Transactions
No Accounting Transactions
Budget a/c CR @ PO price (base + NR tax)
##

Budget a/c DR @ PO price excluding NR tax


4. Invoice Validation at $$
higher quantity

5. Create Accounting
for invoice

6. Run the Period end


program
7. Manual Reversal of
journal entry

Table in which records


exist

Flag/nature of entry

GL_BC_PACKETS

Encumbrance

N/A

N/A

N/A

N/A

GL_BC_PACKETS

Encumbrance

Budget a/c DR @ additional invoice price


-INV enc $$
REC Tax and NR tax DR @ tax amount ////
Expense charge a/c DR @ invoice price
excluding tax and tax DR @ tax rate
separately
AP_AE_LINES_ALL
AP Liability a/c CR @ invoice price
including NR tax
REC Tax and NR tax CR @ tax amount ////
Budget a/c CR @ PO price excluding NR tax
AP_ENCUMBRANCE_LI
^^^^
NES_ALL
Budget a/c CR @ additional invoice price
with encumbrance line type as QV ^^^^
No Accounting Transactions
Not Required since there are no accrual
entries

Actual

Encumbrance

N/A

N/A

N/A

N/A

Note:
Corresponding offsetting accounts have same symbols.
PO base price refers to received quantity * unit Price in PO line
NR tax refers to Non Recoverable Tax calculated for the (received
quantity * po line unit price)
REC tax refers to Recoverable Tax calculated for the (received
quantity * po line unit price)
Important Notes:

1.Accrual entries will be generated /created ONLY when the Received


quantity > Billed quantity at the time of running Receipt AccrualsPeriod end program.
2. Under the cases mentioned above under the Period-end Section,
manual reversal of journal entries are not required except for Case 3
and Case 4 since there are NO accrual entries created /generated.
3. For all these cases the account records from receiving will also be
inserted into GL_BC_PACKETS, along with the other subledger tables
mentioned above. These records in GL_BC_PACKETS can be viewed by
querying the max(packet_id), as there are no REFERENCE fields
populated for receiving records.
4. Liability a/c which is recorded at invoice price will also include the
recoverable and non-recoverable tax rates.

Accounting Flow against Purchase Orders, Receipts and Matched Invoices.


JULY 2006
Authors: Manighandan Venkatraman & Asha Ravada
Oracle Corporation
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Redwood Shores, CA 94065
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Worldwide Inquiries:
Phone: +1.650.506.7000
Fax: +1.650.506.7200
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Copyright 2006, Oracle. All rights reserved.
This document is provided for information purposes only and the
contents hereof are subject to change without notice.
This document is not warranted to be error-free, nor subject to any
other warranties or conditions, whether expressed orally or implied
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