Professional Documents
Culture Documents
(Invoices, Payments)
Project Accounting
(Revenue Adjustments)
Cost Management
(WIP, Inventory Transactions)
Fixed Assets
(Depreciations)
General Ledger
Accounts Receivable
(Invoices, Cash Receipts)
Purchasing (Purchase Order
Accrual Receipts)
User
Resp
Dual Currency
GL Set of Books ID
App
Requirements
Site
Required?
Default Value
Optional
Optional
Optional
Optional Account
Optional No
Optional No
Optional No
Optional Minimal
Optional Yes
N/A
Required
Optional None
Optional No
1
July begins in 1995. If you choose the Fiscal year type, General Ledger appends 1996 to the period name
(JUL-96) because the fiscal year ends in 1996.
Using the same July to June fiscal year example, if the current date is March 15, 1995 and you choose the
Fiscal year type, General Ledger appends the year 1995 to the period name because the fiscal year ends in
1995.
ACCOUNTS TO BE DEFINED IN SET OF BOOKS
When you define your set of books, you always specify a Retained Earnings account. You also might set
up other accounts depending upon the functionality you plan to use.
Retained Earnings account: When you open the first period of a fiscal year, General Ledger posts the net
balance of all income and expense accounts from the prior year against your retained earnings account. If
you have multiple companies or balancing entities within a set of books, General Ledger automatically
creates a retained earnings account for each company or balancing entity.
Suspense account: If you choose to allow suspense posting of out-of-balance journal entries, General
Ledger automatically posts the difference against this account. If you have multiple companies or
balancing entities within a set of books, General Ledger automatically creates a suspense account for each
balancing entity.
You can also define additional suspense accounts to balance journal entries from specific sources and
categories using the Suspense Accounts window.
Note that if you update the suspense account in the Set of Books window, the default suspense account is
updated in the Suspense Accounts window. Likewise, if you update the default account in the Suspense
Accounts window, the account in the Set of Books window is updated.
Cumulative Translation Adjustment account: This account is necessary if you choose to translate your
functional currency balances into another currency for reporting. General Ledger automatically posts any
net adjustments as a result of currency translation to this account in accordance with SFAS 52 (U.S.). If
you have multiple companies or balancing entities within a set of books, General Ledger automatically
creates a translation adjustment account for each company or balancing entity.
Set the account type of your Cumulative Translation Adjustment account to Owner's Equity to create a
translation adjustment on your balance sheet.
Set the account type of this account to Revenue or Expense to create a translation gain/loss on your income
statement.
Intercompany account: If you choose to automatically balance intercompany journals, General Ledger
ensures that all journal entries balance (debits equal credits) within a balancing entity within your set of
books. If a journal entry is out-of-balance for a particular balancing entity, General Ledger automatically
posts any difference against the appropriate intercompany account. If you have multiple companies or
balancing entities within a set of books, General Ledger automatically creates an intercompany account for
each balancing entity.
You can define additional intercompany accounts that are used to balance journal entries from specific
sources and categories using the Intercompany Accounts window.
Note that if you update the intercompany account in the Set of Books window, both debit and credit default
accounts are updated in the Intercompany Accounts window. Likewise, if you update the debit default
account in the Intercompany Accounts window, the account in the Set of Books window is updated.
However, if you update the credit account in the Intercompany Accounts window, the account in the Set of
Books window is not updated.
3
Reserve for Encumbrance account: If you enter an out-of-balance encumbrance entry, General Ledger
automatically posts the difference against the account you specify here. If you have multiple companies or
balancing entities within a set of books, General Ledger automatically creates a Reserve for Encumbrance
account for each balancing entity.
Net Income account: General Ledger uses this account to capture the net activity of all revenue and expense
accounts when calculating the average balance for retained earnings.
OPENING & CLOSING OF A PERIOD
Open and close accounting periods to control journal entry and journal posting, as well as compute periodand year-end actual and budget account balances for reporting.
Accounting periods can have one of the following statuses:
Open: Journal entry and posting allowed.
Closed: Journal entry and posting not allowed until accounting period is reopened. Reporting and inquiry
allowed.
Permanently Closed: Journal entry and posting not allowed. You cannot change this period status.
Reporting and inquiry allowed.
Never Opened: Journal entry and posting are not allowed. General Ledger assigns this status to any period
preceding the first period ever opened in your calendar, or to any period that has been defined, but is not yet
future-enterable. You cannot change this period status.
Future-Entry: Journal entry is allowed, but posting is not. Your period is not yet open, but falls within the
range of future-enterable periods you designated in the Set of Books window. You cannot change this
period status without using the concurrent process to open the period.
You can open new accounting periods, close accounting periods, reopen closed accounting periods, and
open an encumbrance year (if you are using encumbrance accounting).
Note: When you define a new set of books, choose carefully the first accounting period you want to open.
Once you open your first accounting period, General Ledger does not allow you to open prior accounting
periods.
Additionally, you cannot translate account balances for the first period ever opened. Therefore, we
recommend that you open at least one period prior to the first accounting period in which you wish to enter
transactions.
To close an accounting period
1.
Navigate to the Open and Close Periods window.
General Ledger displays all accounting periods defined for your calendar with the period type of your set of
books.
2.
3.
Enter Closed to prevent entering or posting journals to that period. You can reopen a closed period
at any time.
Enter Permanently Closed to prevent entering or posting journals to that period. You cannot
reopen a permanently closed period.
4.
1.
General Ledger displays all accounting periods defined for your calendar with the period type of your set of
books.
2.
Select the period that you want to reopen. You can reopen any closed period that is not
permanently closed.
3.
4.
REVALUATION
Date
Event
Rate
15/01/1999
15/01/1999
31/01/1999
0.8
0.8
0.78
15/02/1999
Sales
Sales
Revaluation
Reporting
Reverse
Revaluation
Collection
15/02/1999
Collection
01/02/1999
Debit
amount
10,000
8,000
200
Credit a/c
(foreign)
Inventory
Inventory
AR
Credit
amount
10,000
8,000
200
Currency
0.78
Debit a/c
(Foreign)
AR
AR
Unrealized
loss
AR
200
200
Functional
0.75
Cash
10,000
Unrealized
loss
AR
10,000
Foreign
0.75
Cash
Realized Loss
7500
500
AR
8000
Functional
Foreign
Functional
Functional
Steps of Revaluation
Note It is done for the accounts receivable and payable accounts (assets & liabilities)
1.
2.
3.
4.
5.
6.
7.
Name
Corporate
Sales Region
Division
Marketing
Division
Total Divisions
Western
Region
Eastern Region
Central Region
Total Sales
Region
Public Relation
Trade Show
Total
Marketing
Expenditure
Parent
YES
Children
Rollup Group
500-598, 600
YES
100-198, 500
Master
Budget
Corporate
900,000
600,000
Corporate
300,000
Divisions
900,000
Sales
200,000
Sales
Sales
300,000
200,000
Sales Region
200,000
150,000
YES
200-298, 510
Marketing
BUDGETING CYCLE
#
1.
2.
3.
4.
5.
6.
7.
8.
9.
Budget Amt
Action
Determine Degree of Control
Define Budget Periods
Define Budget Accounts
Create Budget Journals
Enter Budget Amounts
Post Budget Journals
Review Budgets
Freeze Budgets
Reports on Budgets
Journal
Created
Posts Straight
to Balances
NO
YES
NO
YES
NO
YES
Increments or
Replace Budget
Balances
Replace
Increment
Increment / Replace
Budget Upload
Budget Formula
Mass Budgeting
Budget Transfer
Budget Carry Forward
Budget Balance Consolidation
NO
NO
YES
YES
NO
YES
YES
YES
NO
NO
YES
NO
Increment / Replace
Replace
Increment
Increment
Increment
Increment
The Average Balance feature of Oracle General Ledger provides organizations with the ability to track
average and end-of-day balances, report average balance sheets, and create custom reports using both
standard and average balances. Average balance processing is particularly important for financial
institutions, since average balance sheets are required, in addition to standard balance sheets, by many
regulatory agencies. Many organizations also use average balances for internal management reporting and
profitability analysis.
The difference between an average and standard balance sheet is that balances are expressed as average
amounts rather than actual period-end amounts. An average balance is computed as the sum of the actual
daily closing balance for a balance sheet account, divided by the number of calendar days in the reporting
period.
With General Ledger you can maintain and report average balances daily, quarterly, and yearly. General
Ledger tracks average balances using effective dates which you enter for each of your transactions.
General Ledger stores both average and end-of-day balance amounts. These amounts can be used with
many other General Ledger features, such as translation, consolidation, multi-currency accounting, and
formula journals.
You can use General Ledger's on-line inquiry features to display information about average balances for
specified effective dates. You can also request standard average balance reports, as well as create your own
custom reports.
Day One
The following transaction is the only activity which takes place on the first day of an accounting period:
Dr. Account A . . . . . . . . . 1,000
Cr. Account B . . . . . . . . . . 1,000
The above activity yields the following results:
Period average-to-date
Quarter average-to-date
Year average-to-date
Note: General Ledger tracks average balances for actual transactions only. You cannot track average
balances for budget or encumbrance balances.
Example: Period Average-to-Date Balance
The following example illustrates how period average-to-date balances are calculated by General Ledger.
This example assumes that we are looking at the activity and balances for one account in a set of books.
The ending balance for May 31st was $100,000.
1
2
3
$335,000 / 3 days
62
63
64
Ledger's Financial Statement Generator to create a custom report using this calculation method for quarter
average-to-date.
Example: Year Average-to-Date Balance
Expanding on the previous two examples, the following example illustrates how year average-to-date
balances are calculated by General Ledger.
In this example, the ending balance for December 31st of the previous year was $50,000.
Example: Year Average-to-Date Calculation
Day
Daily Activity
Ending
Balance PTD
Agg. Bal.
QTD
Agg. Bal.
YTD
Agg. Bal.
YTD
Rng
Jan. 1 $4,000 $54,000 $54,000 $54,000 $54,000 1
Jan. 2 $2,000 $56,000 $110,000
$110,000
$110,000
2
Jan. 3 $0
$56,000 $166,000
$166,000
$166,000
3
:
:
:
:
:
:
:
:
:
:
:
:
:
:
Apr. 1 $2,000 $72,000 $72,000 $72,000 $5,711,000
91
Apr. 2 $3,000 $75,000 $147,000
$147,000
$5,786,000
92
Apr. 3 ($1,000) $74,000 $221,000
$221,000
$5,860,000
93
:
:
:
:
:
:
:
:
:
:
:
:
:
:
June 1 $5,000 $105,000
$105,000
$5,145,000
$10,784,000
June 2 $8,000 $113,000
$218,000
$5,258,000
$10,897,000
June 3 $4,000 $117,000
$335,000
$5,375,000
$11,014,000
The year average-to-date balance for June 3rd:
152
153
154
11
You can set a profile option to allow certain individuals to post transactions on non-business days.
12
Manual journals are balanced directly, since the effective date is entered at the journal level, not
for individual journal lines.
Imported journals are sorted and must be in balance by effective date within each source.
Average Balance Trial Balancedisplays standard and average balances for selected accounts, as
well as period, quarter, and year average-to-date balances, for any as-of date you specify.
Average Balance Audit Reportdisplays the detail activity used to create aggregate balances and
related average balances maintained by General Ledger.
13