ACCOUNTING ENTRIES OF STANDARD CYCLES

CONTENTS

Procure to Pay Cycle .......................................................................... 1

Standard Cycle...................................................................................... 1
Accounting Entries............................................................................. 1
Order to Cash Cycle ............................................................................ 4
Standard Cycle...................................................................................... 4
Accounting Entries............................................................................. 4
Acquire to Retire Cycle ....................................................................... 7
Standard Cycle...................................................................................... 7
Accounting Entries............................................................................. 7
Procure to Pay Cycle
STANDARD CYCLE

ACCOUNTING ENTRIES FOR STANDARD INVOICE

Sl No Particulars Dr Cr Notes
1 Creation of Requisition
Created requisition of GBP 1000 No accounting No accounting

2 Creation of Purchase Order

Created Purchase Order of GBP No accounting No accounting
1000

3 Receipt
Receipt of all the items
mentioned in the PO
Receiving Inspection A/c 1000 Derived from PO Price
AP Accrual A/c 1000 Derived from PO Price

4 Delivery
Moving the items to the
Inventory
Raw Material Sub - Inventory 800 Derived from
A/c Standard Cost
 Purchase Price Variance A/c 200 PO Price - Standard
Cost
Receiving A/c 1000 Derived from PO Price

5 Invoice
Creation of AP Invoice by
matching with the PO &Receipt
AP Accrual A/c 1000 Derived PO Price
Invoice Price Variance A/c 100 Invoice Price - PO
Recoverable Tax 100 Price
Liability A/c 1200 Derived from Invoice
Price

6 Payment
Full Payment of the AP Invoice
Liability A/c 1200 Derived from Invoice
Price
Cash Clearing A/c 1200 Derived from Invoice
Price

7 Clearing of Payment
Payment has been cleared by
the bank
Cash Clearing A/c 1200 Derived from Invoice
Price
Bank/Cash A/c 1200 Derived from Invoice
Price

ACCOUNTING ENTRIES FOR CR/DR MEMO

Credit Memo and Debit Memo both are used for reducing Invoice amount in payables. The difference
arises from the source of issue.
If the supplier realizes that he has charged something extra to the customer, he issues a Credit Memo
and then it is applied to the AP Invoice to adjust the amount.
If the customer realizes that he has been charged something extra, he issues a Debit Memo and applies
the same to the AP Invoice to adjust the invoice amount.
Sl No Particulars Dr Cr Notes
1 Invoice
Creation of AP Invoice by matching with the PO
&Receipt
AP Accrual A/c 1000 Derived PO Price
Invoice Price Variance A/c 100 Invoice Price - PO
Price
Tax 100
 Liability A/c 1200 Derived from
Invoice Price

2 Credit Memo
Application of Credit Memo of value GBP 500 to
the Invoice for which Payment has been made
In this case, a Refund will be done by the supplier

Refund
Liability A/c 500
Expense 500

Payment of Cr/Dr Memo

Cash Clearing A/c 500
Liability A/c 500

ACCOUNTING ENTRIES FOR PREPAYMENTS

Sl No Particulars Dr Cr Notes
1 Prepayment Invoice
Creation of Prepayment Invoice of GBP 100
Prepaid Expenses A/c 100
Liability A/c 100

2 Payment of the Prepayment Invoice

Prepayment Invoice has been paid
Liability A/c 100
Bank Clearing A/c 100

3 Clearing of Payment
Bank Clearing A/c 100
Bank/Cash A/c 100

4 Creation of Standard Invoice

Standard Invoice of amount GBP 100 has been created
Expense A/c 100
Liability A/c 100

5 Prepayment Applied to the Std Invoice

Liability A/c 100
Prepaid Expenses A/c 100
ACCOUNTING ENTRIES FOR INVOICES WITH ‘TRACK AS ASSETS’
‘Track as Assets’ is a functionality for moving the items from Payables to Assets. It is a check box on the
Invoice Line TAB and can be enabled on Distribution Line using the Folder View option.
Following this enablement, if the program ‘Mass Addition Create Report’ is run from Payables then
items are transferred to Assets from Payables.
Sl No Particulars Dr Cr Notes
1 Standard Invoice of amount GBP 100 has been created
Creation of Standard Invoice of GBP 100
Asset Clearing A/c 100
Liability A/c 100

2 Invoice transferred to Oracle Assets

Asset A/c 100
Asset Clearing A/c 100

Order to Cash Cycle

STANDARD CYCLE

ACCOUNTING ENTRIES FOR TRANSACTION TYPE INVOICE

Sl No. Particulars Dr Cr Notes
1 Sales Order Entry
Created sales order of GBP 1000 No accounting No accounting
2 Sales Order Pick Release
Pick Released the item from Sub No accounting No accounting
Inventory to Staging
Sub- Inventory A/c 1000 Derived from
Standard Cost
Staging A/c 1000 Derived from
Standard Cost

3 Sales Order Ship Confirm

Item has been shipped
Cost of Goods Sold 1000 Comes from Master
Item/Org/Order
Type/Line
Type/Shipping
Parameters
Staging A/c 1000 Derived from PO
Price

4 AR Transaction
Creation of an AR Invoice for the
Sales Order
Receivable A/c 1200 Auto-accounting
Tax A/c 100 Auto-accounting
Freight A/c 100 Auto-accounting
Revenue A/c 1000 Auto-accounting

5 Receipt
Receipt of the payment from the
customer but not cleared by bank
Cash Clearing A/c 1200
Receivable A/c 1200

6 Clearing of Payment
Payment from the customer has
been cleared by the bank
Cash Clearing A/c 1200
Bank/Cash A/c 1200
In the above case, Receipt has been fully applied to the invoice. However, there can be cases of
Unapplied Receipts and Unidentified Receipts.

ACCOUNTING ENTRIES FOR UNAPPLIED RECEIPT

Sl No Particulars Dr Cr Notes
1 Unapplied Receipt
Created a receipt of GBP 100 and it has not been applied
Cash A/c 100
Unapplied Cash A/c 100

2 Receipt application to an Invoice

Receipt has been applied to an invoice of amount GBP 100
Unapplied Cash A/c 100
Receivable A/c 100

ACCOUNTING ENTRIES FOR UNIDENTIFIED RECEIPT

Sl No Particulars Dr Cr Notes
1 Unidentified receipt creation
Unidentified receipt of value GBP 100 has been created
Cash A/c 100
Unidentified Receipt A/c 100

2 Receipt Application
Receipt has been applied to an Invoice
Unidentified Receipt A/c 100
Receivable A/c 100

ACCOUNTING ENTRIES FOR TRANSACTION TYPE CR MEMO, DR MEMO &

CHARGEBACKS
Sl No Particulars Dr Cr Notes
1 Transaction type Invoice
Creation of AR Invoice of amount GBP 100
Receivable A/c 100
Revenue A/c 80
Tax A/c 10
Freight A/c 10

2 Transaction Type Credit Memo

Creation of AR Credit Memo of amount GBP 50
Revenue A/c 40
Tax A/c 5
Freight A/c 5
Receivable A/c 50
3 Credit Memo Applied to the Invoice
Receivable A/c 50
Revenue A/c 40
Tax A/c 5
Freight A/c 5

ACCOUNTING ENTRIES FOR REMITTANCE

Sl No Particulars Dr Cr Notes
1 Receipt created that requires Remittance
A receipt of GBP 100 has been created which requires
remittance
Confirmation A/c 100
Receivable A/c 100

2 If Remittance is done using Standard Method of

Remittance
Remittance A/c 100
Confirmation A/c 100

3 Receipt being Cleared

Bank/Cash A/c 100
Remittance A/c 100

4 If Remittance is done using Factoring Method of

Remittance
Factor A/c 100
Confirmation A/c 100

5 When receipt is cleared, a short liability gets created

Bank/Cash A/c 100
Short term debt A/c 100

6 On maturity of the short-term liability

Short term debt A/c 100
Factor A/c 100

ACCOUNTING ENTRIES FOR TRANSACTION TYPE DEPOSITS

Sl No Particulars Dr Cr Notes
1 Creation of Deposit Invoice
Deposit Invoice of GBP 100 has been created
Receivable A/c 100
Unearned Revenue A/c 100
2 Creation of Sales Invoice
Sales Invoice of GBP 100 created
Receivable A/c 100
Revenue A/c 100

3 Deposit adjusted with the Sales Invoice

Unearned Revenue A/c 100
Receivable A/c 100

Acquire to Retire Cycle

STANDARD CYCLE

ACCOUNTING ENTRIES FOR FIXED ASSETS

Sl No Particulars Dr Cr Notes
1 Asset Depreciation
Current period depreciation expense of GBP 100
Depreciation Expense A/c 100
Accumulated Depreciation A/c 100

2 Asset Addition (Current and Prior Period)

The recoverable cost is GBP 4,000 and the method
 is straight-line for 4 years. Purchased and placed
the asset into service in Year 1, Quarter 1.
Asset Clearing A/c 4000 Comes from Asset
Category setup
Asset Payables Liability A/c 4000 Comes from
vendor site setup

Asset Cost A/c 4000 Comes from Asset

Category setup
Depreciation Expense A/c 250 Comes from Asset
assignment level
of asset
Accumulated Depreciation A/c 250 Comes from Asset
Category setup
Asset Clearing A/c 4000

Asset placed in service in Year 1 Quarter 1 but not

transferred to Oracle Assets till Year 2 Quarter 2
Asset Cost A/c 4000
Depreciation Expense A/c 250
Depreciation Expense A/c 1250
Asset Clearing A/c 4000
Accumulated Depreciation A/c 1500

3 Merge Mass Addition

Oracle Assets adds the asset cost of the mass
addition that you are merging to the asset account
of the mass addition you are merging into.
Asset Cost A/c (Mass Addition of 2 asset cost 4000
account)
Asset Clearing A/c (mass addition #1 accounts 3000
payable clearing account)
Asset Clearing A/c (mass addition #2 accounts 1000
payable clearing account)

4 Construction in Process (CIP) Addition

Added a CIP asset of value GBP 4000. (CIP assets
are not depreciated)
CIP Cost 4000
CIP Clearing 4000

5 Capitalization
Once the CIP asset is complete, it is capitalized
Asset has been capitalized in the same period it has
been added
CIP Clearing 4000 Comes from Asset
Category setup
 Accounts Payable Liability 4000

Asset Cost A/c 4000

Depreciation Expense A/c 250
CIP Clearing A/c 4000
Accumulated Depreciation A/c 250

Asset is capitalized in a period after the period it

has been added
Asset Cost A/c 4000
Depreciation Expense A/c 250
CIP Cost A/c 4000 Comes from Asset
Category setup
Accumulated Depreciation A/c 250

6 Asset Type Adjustments

Asset type changed from Capitalized to CIP
CIP Cost A/c 4000
Asset Clearing A/c 4000

7 Asset Reinstatement
Current period reinstatement of the asset
Asset Cost A/c 4000
Cost of Removal Clearing A/c 500 Comes from Asset
book
Gain/Loss A/c 600 Comes from Asset
book
Depreciation Expense A/c 250
Accumulated Depreciation A/c 2750
Proceeds of Sale Clearing 2000 Comes from Asset
book
Revaluation Reserve 600