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Introduction
A general ledger is a formal ledger that contains a companys accounting records. To make the General ledger functional, setup the chart of accounts, fiscal calendars, legal entities, and currencies. The chart of accounts is a list of main accounts and financial dimensions that are allowed by one or more account structures. Fiscal calendars specify what time period financial data is posted, while currency setup determines which currencies are available for business transactions. This course explains how to work with the chart of accounts and its multiple dimensions. These dimensions may be used to track profits, cost centers, and other important financial information. Allocation rules and methods are also defined in this course.
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Currency Setup
In Microsoft Dynamics AX, all currencies are provided by default. The currencies are loaded the first time a user opens the General ledger parameters form. To view currencies click General ledger, click Setup, click Currency, and then click Currencies.
Only one currency can represent the Triangulation currency. By default, the EUR currency is selected as the Triangulation currency. To change the Triangulation currency, you must first clear the Reference currency for triangulation check box on the EUR record in the Currencies form. Then, you can select the Reference currency for triangulation on the desired currency.
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A description of the currency. This is typically printed on checks and other documents. Examples: U.S dollar Euro Canadian dollar
Typically used on reports Example: $ The standard code of the currency as defined by the International Organization for Standardization (ISO).
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NOTE: The value in the General round-off field affects all values in all modules.
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Currency Gender
Currency Gender is used for Spanish speaking countries to define the gender printed on checks and reports. Select Feminine if the selected currency has a feminine gender and the gender is used on checks and reports. The default value for this field is Masculine, which, in effect, means no gender.
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Denomination Currencies
Add the currencies that are denominated as the triangulation currency and should be triangulated through the triangulation currency during the currency conversion process.
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Challenge Yourself!
1. Set up the South African Rand (ZAR) posting accounts and rounding options. 2. Set up the exchange rate. 3. Convert the ZAR Quotation unit to 100.
Step by Step
Perform the following steps to set up the currency rounding options: 1. Click General ledger, click Setup, click Currency, and then click Currencies. 2. Highlight the Currency ZAR.
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Both fiscal year and periods can be set up by the following measurements of time: Years Months Days
Each period (at the ledger level) can be: Closed completely or put On Hold to block transaction postings Set to enable selected users to continue an update of one or more modules
The periods and fiscal year feature is very useful for the preparation and reconciliation of periodic and yearly accounts
For example: Fixed assets may require two calendars one for auditing purposes and one for tax purposes. Having multiple calendars allows you to run parallel depreciations. Reduces the amount of setup required for each legal entity as it is possible to use the same fiscal calendar for multiple legal entities.
Before posting transactions, a new fiscal year must be divided into periods as transactions cannot post unless a period is created for the posting date. NOTE: Microsoft Dynamics AX posts transactions according to dates as opposed to periods. Accounting periods are used for reporting. Closing of accounting periods allows the user to close the sub-ledger to make sure that no additional transactions are recorded.
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NOTE: There will always be an Open and Closing period created along with the number parameters specified in the Length of the Period and the Unit fields.
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NOTE: It is also possible to create multiple closing periods. This provides the ability to track internal button external audit adjustments (for example) in separate periods. To delete period with an Operating status click the Delete button. The Delete button is not available if the selected fiscal period has a status of Opening. No warning or error message appears when an open period with transaction history is deleted. The transactions are not deleted, and the end date of the period prior to the deleted period changes to coincide with the beginning date of the next period. After making changes to periods, it is recommend to run the Recalculate ledger period functionality.
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Challenge Yourself!
Create the fiscal year calendar for 2012, which begins on July 1, 2011.
Step by Step
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Click General ledger, click Setup, and then click Fiscal Calendar. Click the New fiscal calendar button. Enter FIS-2012 in the Calendar field. Enter Fiscal Year 2012 in the Description field. In the Start of fiscal year field, enter 7/1/2011. In the End of fiscal year field, enter 6/30/2012. Enter 2012 in the Fiscal year name field. In the Length of period field, enter 1. In the Unit field, click the arrow to select Months. Click the Create button to create the year. Click Close to close the form.
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Date Intervals
Create and manage date intervals that can be used in financial statements and reports. Date intervals allow you to create dynamic dates. When you use date intervals, you can set up predefined periods when you run financial statements. Date intervals can also be used when setting up an allocation rule.
Scenario
Ken, the Controller at Contoso Entertainment USA (CEU), runs a dimension statement every month. Instead of entering the dates every time he runs the report, he selects a date interval. The date interval automatically fills in the start date and the end date. Therefore, Ken does not have to specify the start date and the end date when he runs the dimension statement.
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Field Before Start/End +/Days, months, years and periods Calculation date Starting point After adjustment
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Reason Codes
Reason codes are standardized codes that can be used in various transaction types or changes to field values to provide background data about the transaction. For example, auditors or managers frequently want to see reasons recorded for various transactions such as reversals. When you use standard reason codes instead of transaction text, you have guidelines for which codes to select from. Standard reason codes also allow management and auditors to analyze transaction history by specific reason. Reason codes can be used with the following: General ledger Accounts payable Accounts receivable Bank
Perform the following steps to create a General ledger reason code: 1. To access the Reasons form, click General Ledger, click Setup, and then click Ledger reasons. 2. Click the New button to create a new reason. 3. Enter a unique Reason Code as identification.
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Financial Dimensions
Financial dimensions have the following characteristics: Provide a more detailed description of a transaction. Simplify the accounting process when you enable detailed analysis without the creation of a detailed Chart of Accounts. Are defined to analyze and classify financial transactions as follows: o o Financial transactions usually are organized according to voucher and account number. Additional grouping and classification options are available when you assign several dimensions to transactions.
Enable you to view the data file from different perspectives to improve the effectiveness in tracking figures across accounts. Can be used throughout the system. Add dimensions to base data such as: o o o Ledger accounts Customers Vendors
Scenario
Ken, the Controller at Contoso Entertainment USA, must analyze company figures from a perspective other than only ledger accounts. Ken wants to make reports and sales statistics inquiries based on cost centers and departments. Therefore, he decides to set up dimensions as a supplement to voucher and account numbers.
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Description Displays the financial dimension value for the dimension selected in the Dimension details form The description for the financial dimension value.
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Active to Suspended
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Companies
If Companies is selected in the Select the level of dimension value to display field, Financial Statement Formatting and Cost accounting tabs become available. The following describes how to use each of the fields in the expanded Financial Statement Formatting tab: Field Invert sign Description Select this check box to hide the minus sign on the financial statement report when this financial dimension is represented. Typically, revenue and expenses are displayed in both credit and debit balances so that credit balances have a minus sign and debit balances have no sign. When this check box is selected, the minus sign in front of revenue on the report is not displayed. Select the column number that the financial dimension is printed to when the financial statement is printed. You can define how many columns will be used to print a single column definition. For example, if you enter a 2 in the Number of columns field in the Financial statement form, for a definition that shows the current balance, the balance for this financial dimension will be printed in 2 columns. Select to print the selected financial dimension in bold type on the financial statement. Select to print the selected financial dimension in italic type on the financial statement. Select to precede the selected financial dimension with a blank line on the printout of the financial statement. Select to follow the selected financial dimension with a blank line on the printout of the financial statement. Select to underline the text when the selected financial dimension is printed on the financial statement. Select to underline the amounts when the selected financial dimension is printed on the financial statement.
Column
Bold Italics Line above Line below Underline text Underline amount
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For example, customer 4037 may be set up by department and cost center dimensions. When a sales order is created for customer 4037, the defined dimensions are populated on the sales order automatically, but the values can be changed. Throughout Microsoft Dynamic AX, you can separate data in different ways by using dimensions. For example, you can attach a department number to each transaction and then run a query that shows balances by department code.
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Challenge Yourself!
Help Phyllis enter the necessary dimension validation options for account 605110.
Step by Step
1. Click General ledger, click Common, and then click Main accounts. 2. Select account 605110, Cleaning expense, and click the Edit button. 3. Select Companies in the Select the level of main account to display field. 4. Select CEU in the Companies field. You may have to click on the green cross icon to select the company. 5. Expand the Financial Dimensions FastTab. 6. In the Cost center field, click the arrow to select the Building maintenance account. 7. Close the form.
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Scenario
Sara, the Chief Financial Officer (CFO) at Contoso Entertainment USA (CEU), must: Analyze financial transactions based on dimensions and ledger accounts combined. For example, Sara views sales revenue for each department or country. Determine how financial transactions should be organized when users run reports and make inquiries.
To view the sales revenue for all departments in CEU, Sara decides to create a dimension set that consists of ledger accounts and departments dimensions.
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Period Allocations
Allocation is the process of distributing monetary amounts to one or more accounts or account and dimension combinations. Microsoft Dynamics AX has the ability to use predefined allocation rules to perform generated allocations. Generated allocation is the distribution of posted or fixed amounts to combinations of destination accounts and dimensions at any time, which generate new journal entries.
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Allocations also provide the ability to allocate across multiple companies, also known as Intercompany allocations.
Scenario
Phyllis, the Accounting Manager at Contoso Entertainment USA (CEU), creates a new Intercompany allocation rule for Electric Utilities to distribute overhead utility expense to each department based on fixed percentages. The rule is for the new fiscal year that begins on January 1, 2012. Because Phyllis does not want the new rule to be used until then, she enters 01/01/2012 as the start date for the rule. Because CEU typically reviews its allocation rules every fiscal year, Phyllis enters 12/31/2012 as the end date for the rule. Phyllis enters detailed notes about the basis and reasons for the allocation rule. Phyllis then selects the Microsoft Word template that was implemented when CEU experienced an audit review to document the allocation rule completely. When Phyllis has finished writing the document, she attaches a copy of it to the rule. Anyone who wants additional information about the rule can open the document or print an Allocation rules definition report.
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6.
In the Data source field, select the source of the amount to allocate: o Ledger o Fixed value
7. If Fixed value is selected in the Data source field, enter a value in the Fixed value field. 8. If Ledger is selected in the Data source field, select an arithmetic operation to apply to the source value in the Mathematical operation field.
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Scenario
Phyllis runs the Allocation rules definition report that details the allocation rules for the current year. The report contains details about each rule including the rule ID, description, From/To account number and dimension combinations, effective start and end dates, calculation method details, usage information, and other setup information.
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Scenario
Phyllis runs an allocation proposal without posting it to review the allocation results and the detailed distributions that will be created based on the allocation rule used. If the results are accurate, Phyllis posts the entry.
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Summary
The General ledger setup course describes the initial setup to start working with Microsoft Dynamics AX financials. The course provides basic introductions to set up: Currencies and exchange rates Fiscal calendars Financial dimensions and financial dimension sets Period allocations
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2. When you change the display currency, it affects all users. ( ) True ( ) False 3. Is it possible to post activity that uses a date for which a period has not been created? ( ) Yes ( ) No 4. What are reason codes?
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2.
3.
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Solutions
1. What effect does the value in the General round-off field have on the values in Microsoft Dynamics AX 2012? MODEL ANSWER: The value are used to round all amounts in all modules. 2. When you change the display currency, it affects all users. ( ) True () False 3. Is it possible to post activity that uses a date for which a period has not been created? ( ) Yes () No 4. What are reason codes? MODEL ANSWER: Reason codes are standardized codes that can be used in various transaction types or changes to field values to provide background data about the transaction. 5. What are the parts of an allocation rule? () General () Source () Destination () Offset 6. Which allocation method defines how and in what proportion the source amounts are distributed to the various destination lines, by referring to balances in other account-dimensions? () Basis ( ) Fixed percentage ( ) Fixed weight ( ) Spread even
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