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QUESTIONS IN R12
Posted by Raju ERP
Subcomponent assets
Oracle Assets automatically runs the Journal Entry Reserve Ledger report when you run the
depreciation program for a corporate book, and the Tax Reserve Ledger report for a tax book, so
you can review the depreciation calculated.
4. Review the log files and report after the request completes.
When you retire an asset by units, Oracle Assets automatically calculates the fraction of the cost retired
When you retire an asset by cost, the units remain unchanged and the cost retired is spread evenly among
all assignment lines
Restrictions
You cannot retire assets by units in your tax books; you can only perform partial and full cost retirements
in a tax book. Also, you can only perform full retirements on CIP assets; you cannot retire them by units,
Exceptions
Oracle Assets does not retire the following types of assets, even if they are selected as part of a mass
retirements transaction:
Assets with transactions dated after the retirement date you enter
Assets that are multiply distributed and one or more values do not meet the mass retirement selection
criteria
is immediately reinstated. If you reinstate a PROCESSED retirement, Oracle Assets changes the status to
REINSTATE, and you must rerun the Calculate Gains and Losses program or run depreciation to process
the reinstatement.
When you perform a mass retirement, Oracle Assets creates PENDING retirement transactions. If you
submit a mass reinstatement before running the Calculate Gains and Losses program, Oracle Assets
immediately reinstates these assets. If you submit a mass reinstatement to reinstate PROCESSED
retirements, you must rerun the Calculate Gains and Losses program or run depreciation to process the
reinstatements.
ITC Recapture
If you retire an asset for which you took an investment tax credit (ITC) and the ITC recapture applies,
Oracle Assets automatically calculates it.
Retirement Conventions
Oracle Assets lets you use a different prorate convention when you retire an asset than when you added it.
The retirement convention in the Retirements window and the Mass Retirements window defaults from
the retirement convention you set up in the Asset Categories window. You can change the retirement
convention for an individual asset in the Retirements window before running the Calculate Gains and
Losses program.
Retirement Transactions
amounts, and Oracle Assets prorates the total amounts over the assets being retired according to each
asset's current cost.
Oracle Assets uses the following formula to prorate the proceeds of sale amount across the assets you
select:
Proceeds of Sale (per asset) = Current cost of asset/Total current cost of all selected assets X
Proceeds of Sale
Oracle Assets uses the following formula to prorate the cost of removal amount across the assets you
select:
Cost of removal (per asset) = Current cost of asset/Total current cost of all selected assets X Cost of
Removal
5. What are the various Journal Entries generated through fixed assets?
Ans)
Addition Journal
Current and Prior Period Addition
You purchase and place the asset into service in Year 1, Quarter 1.
Payables System
Account Description
Debit
Asset Clearing
4,000.00
Credit
4,000.00
Account Description
Debit
Asset Cost
4,000.00
Depreciation Expense
250.00
Credit
Asset Clearing
4,000.00
Accumulated Depreciaiton
250.00
You place an asset in service in Year 1, Quarter 1, but you do not enter it into Oracle Assets until Year 2,
Quarter 2. Your payables system creates the same journal entries to asset clearing and accounts payable
liability as for a current period addition.
Oracle Assets - PRIOR PERIOD ADDITION
Account Description
Debit
Asset Cost
4,000.00
Depreciation Expense
250.00
Credit
Asset Clearing
4,000.00
Accumulated Depreciaiton
1,500.00
Account Description
Debit
4,000.00
Depreciation Expense
1,500.00
Credit
3,000.00
1,000.00
Accumulated Depreciaiton
1,500.00
Credit
4,000.00
CIP Clearing
4,000.00
Capitalization
When you capitalize CIP assets, Oracle Assets creates journal entries that transfer the cost from the CIP
cost account to the asset cost account. The clearing account has already been cleared.
Account Description
Debit
Asset Cost
4,000.00
Depreciation Expense
250.00
Credit
CIP Cost
4,000.00
Accumulated Depreciation
250.00
Credit
4,000.00
Asset Clearing
4,000.00
Retirement Journals
Current Period Retirements
Example: You place an asset in service in Year 1, Quarter 1. The asset cost is $4,000, the life is 4 years,
and you are using straight-line depreciation. In Year 3, Quarter 3, you sell the asset for $2,000. The cost to
remove the asset is $500. The asset uses a retirement convention and depreciation method which take
depreciation in the period of retirement. You retire revaluation reserve in this book.
Account Description
Debit
Accounts Receivable
2,000.00
Credit
2,000.00
Debit Credit
500.00
Account Description
Debit
Accumulated Depreciation
2,500.00
2,000.00
500.00
Revaluation Reserve
600.00
1,500.00
Asset Cost
Credit
4,000.00
2,000.00
500.00
600.00
If you enter the same account for each gain and loss account, Oracle Assets creates a single journal entry
for the net gain or loss as shown in the following table:
Book Controls window:
Accounts
Gain Loss
Proceeds of Sale
1000 1000
Cost of Removal
1000 1000
1000 1000
Debit
Credit
600.00
Asset Cost
4,000.00
500.00
Gain/Loss
600.00
Account Description
Debit
Credit
Accounts Receivable
2,000.00
2,000.00
Debit Credit
500.00
Debit
Credit
Accumulated Depreciation
2,500.00
2,000.00
500.00
2,000.00
500.00
Asset Cost
4,000.00
Depreciation Expense
250.00
Account Description
Debit
Credit
Asset Cost
4,000.00
600.00
Depreciation Expense
250.00
Accumulated Depreciation
2,750.00
2,000.00
Revaluation Reserve
600.00
Account Description
Debit
Asset Cost
4,000.00
500.00
2,000.00
Depreciation Expense
250.00
Credit
2,750.00
500.00
2,000.00
Accumulated Depreciation
2,000.00
Account Description
Debit Credit
Depreciation Expense
200.00
Bonus Expense
50.00
Accumulated Depreciation
200.00
Bonus Reserve
50.00
removal.
The effects of the revaluations are illustrated in the following table:
Period (Yr, Qtr.) Asset Cost Deprn. Expense Accum. Deprn. Reval. Reserve
Yr1,Q1
10,000.00 500.00
500.00
0.00
Yr1,Q2
10,000.00 500.00
1,000.00
0.00
Yr1,Q3
10,000.00 500.00
1,500.00
0.00
Yr1,Q4
10,000.00 500.00
2,000.00
0.00
Reval. 1 5%
10,500.00 0.00
*2,100.00
**400.00
Yr2,Q1
10,500.00 525.00
2,625.00
400.00
Yr2,Q2
10,500.00 525.00
3,150.00
400.00
Yr2,Q3
10,500.00 525.00
3,675.00
400.00
Yr2,Q4
10,500.00 525.00
4,200.00
400.00
Yr3,Q1
10,500.00 525.00
4,725.00
400.00
Yr3,Q2
10,500.00 525.00
5,250.00
400.00
Yr3,Q3
10,500.00 525.00
5,775.00
400.00
Yr3,Q4
10,500.00 525.00
6,300.00
400.00
Reval. 2 -10%
9,450.00
0.00
*5,670.00
**-20.00
Yr4,Q1
9,450.00
472.50
6,142.50
-20.00
Yr4,Q2
9,450.00
472.50
6,615.00
-20.00
Yr4,Q3
9,450.00
472.50
7,087.50
-20.00
Yr4,Q4
9,450.00
472.50
7,560.00
-20.00
Yr5,Q1
9,450.00
472.50
8,032.50
-20.00
Yr5,Q2
9,450.00
472.50
8,505.00
-20.00
Yr5,Q3
9,450.00
472.50
8,977.50
-20.00
Yr5,Q4
9,450.00
472.50
9,450.00
-20.00
Retire
0.00
0.00
0.00
-20.00
REVALUATION 1
Year 2, Quarter 1, 5% revaluation
Debit Credit
Asset Cost
500.00
Revaluation Reserve
400.00
Accumulated Depreciation
100.00
REVALUATION 2
-10% revaluation in Year 4, Quarter 1:
Account Description
Debit Credit
Revaluation Reserve
420.00
1,050.00
Account Description
Debit
Credit
9,450.00
You retire the asset in Year 5, Quarter 4, with no proceeds of sale or cost of removal.
The effects of the revaluations are illustrated in the following table:
Period (Yr, Qtr.) Asset Cost Deprn. Expense Accum. Deprn. Reval. Reserve
Yr1,Q1
10,000.00 500.00
500.00
0.00
Yr1,Q2
10,000.00 500.00
1,000.00
0.00
Yr1,Q3
10,000.00 500.00
1,500.00
0.00
Yr1,Q4
10,000.00 500.00
2,000.00
0.00
Reval. 1 5%
10,500.00 0.00
0.00
*2,500.00
Yr2,Q1
10,500.00 **656.25
6,56.25
2,500.00
Yr2,Q2
10,500.00 656.25
1,312.50
2,500.00
Yr2,Q3
10,500.00 656.25
1,968.75
2,500.00
Yr2,Q4
10,500.00 656.25
2,625.00
2,500.00
Yr3,Q1
10,500.00 656.25
3,281.25
2,500.00
Yr3,Q2
10,500.00 656.25
3,937.50
2,500.00
Yr3,Q3
10,500.00 656.25
4,593.75
2,500.00
Yr3,Q4
10,500.00 656.25
5,250.00
2,500.00
Reval. 2 -10%
9,450.00
0.00
0.00
*6,700.00
Yr4,Q1
9,450.00
**1,181.25
1,181.25
6,700.00
Yr4,Q2
9,450.00
1,181.25
2,362.50
6,700.00
Yr4,Q3
9,450.00
1,181.25
3,543.75
6,700.00
Yr4,Q4
9,450.00
1,181.25
4,725.00
6,700.00
Yr5,Q1
9,450.00
1,181.25
5,906.25
6,700.00
Yr5,Q2
9,450.00
1,181.25
7,087.50
6,700.00
Yr5,Q3
9,450.00
1,181.25
8,268.75
6,700.00
Yr5,Q4
9,450.00
1,181.25
9,450.00
6,700.00
REVALUATION 1
5% revaluation in Year 2, Quarter 1:
Account Description
Debit
Asset Cost
500.00
Credit
2,500.00
Account Description
Debit
Credit
1,050.00
Revaluation Reserve
4,200.00
Account Description
Debit
Accumulated Depreciation
9,450.00
Revaluation Reserve
6,700.00
Credit
6,700.00
Asset Cost
9,450.00
Period (Yr,Qtr.) Asset Cost Deprn. Expense Accum. Deprn. Reval. Amortize Reval. Reserve
Yr1,Q1
10,000.00 500.00
500.00
0.00
0.00
Yr1,Q2
10,000.00 500.00
1,000.00
0.00
0.00
Yr1,Q3
10,000.00 500.00
1,500.00
0.00
0.00
Yr1,Q4
10,000.00 500.00
2,000.00
0.00
0.00
Reval. 1 5%
10,500.00 0.00
0.00
0.00
*2,500.00
Yr2,Q1
10,500.00 **656.25
656.25
***156.25
2,343.75
Yr2,Q2
10,500.00 656.25
1,312.50
156.25
2,187.50
Yr2,Q3
10,500.00 656.25
1,968.75
156.25
2,031.25
Yr2,Q4
10,500.00 656.25
2,625.00
156.25
1,875.00
Yr3,Q1
10,500.00 656.25
3,281.25
156.25
1,718.75
Yr3,Q2
10,500.00 656.25
3,937.50
156.25
1,562.50
Yr3,Q3
10,500.00 656.25
4,593.75
156.25
1,406.25
Yr3,Q4
10,500.00 656.25
5,250.00
156.25
1,250.00
Reval. 2 -10%
9,450.00
0.00
0.00
0.00
*5,450.00
Yr4,Q1
9,450.00
**1,181.25
1,181.25
***681.25
4,768.75
Yr4,Q2
9,450.00
1,181.25
2,362.50
681.25
4,087.50
Yr4,Q3
9,450.00
1,181.25
3,543.75
681.25
3,406.25
Yr4,Q4
9,450.00
1,181.25
4,725.00
681.25
2,725.00
Yr5,Q1
9,450.00
1,181.25
5,906.25
681.25
2,043.75
Yr5,Q2
9,450.00
1,181.25
7,087.50
681.25
1,362.50
Yr5,Q3
9,450.00
1,181.25
8,268.75
681.25
681.25
Yr5,Q4
9,450.00
1,181.25
9,450.00
681.25
0.00
REVALUATION 1
Year 2, quarter 1, 5% revaluation
Account Description
Debit
Asset Cost
500.00
Credit
2,500.00
Oracle Assets creates the following journal entries each period to amortize the revaluation reserve:
Account Description
Debit Credit
Revaluation Reserve
158.25
Revaluation Amortization
158.25
REVALUATION 2
Year 4, quarter 1, -10% revaluation
Account Description
Debit
Credit
1,050.00
Revaluation Reserve
4,200.00
Oracle Assets creates the following journal entries each period to amortize the revaluation reserve:
Account Description
Debit Credit
Revaluation Reserve
681.25
Revaluation Amortization
681.25
Period (Yr, Qtr.) Asset Cost Deprn. Expense Accum. Deprn. Reval. Reserve
Yr1 to Yr4
Yr5,Q1
10,000.00 500.00
8,500.00
0.00
Yr5,Q2
10,000.00 500.00
9,000.00
0.00
Yr5,Q3
10,000.00 500.00
9,500.00
0.00
Yr5,Q4
10,000.00 500.00
10,000.00
0.00
Reval. 5%
10,500.00 0.00
*8,400.00
**2,100.00
Yr9,Q1
10,500.00 ***262.50
8,662.50
2,100.00
Yr9,Q2
10,500.00 262.50
8,925.00
2,100.00
Yr9,Q3
10,500.00 262.50
9,187.50
2,100.00
Yr9,Q4
10,500.00 262.50
9,450.00
2,100.00
Yr10,Q1
10,500.00 262.50
9,712.50
2,100.00
Yr10,Q2
10,500.00 262.50
9,975.00
2,100.00
Yr10,Q3
10,500.00 262.50
10,237.50
2,100.00
Yr10,Q4
10,500.00 262.50
10,500.00
2,100.00
Account Description
Debit
Asset Cost
500.00
Credit
2,100.00
Period (Yr, Qtr.) Asset Cost Deprn. Expense Accum. Deprn. Reval. Reserve
Yr1 to Yr4
Yr5,Q1
10,000.00 500.00
8500.00
0.00
Yr5,Q2
10,000.00 500.00
9000.00
0.00
Yr5,Q3
10,000.00 500.00
9,500.00
0.00
Yr5,Q4
10,000.00 500.00
10,000.00
0.00
Reval. 5%
10,500.00 0.00
*8,400.00
**2,100.00
Yr9,Q1
10,500.00 ***75.00
8,475.00
2,100.00
Yr9,Q2
10,500.00 75.00
8,550.00
2,100.00
Yr9,Q3
10,500.00 75.00
8,625.00
2,100.00
Yr9,Q4
10,500.00 75.00
8,700.00
2,100.00
Yr10 to Yr15
Depreciation Adjustment (calculated using life extension ceiling)= 2,000
Account Description
Debit
Asset Cost
500.00
Credit
2,100.00
Period (Yr,
Qtr.)
Yr1 to Yr 2
Yr3,Q1
10,000.00 500.00
4,500.00
0.00
0.00
Yr3,Q2
10,000.00 500.00
5,000.00
0.00
0.00
Reval. *3%
10,300.00 0.00
0.00
0.00
**5,300.00
Yr3,Q3
10,300.00 ***1,030.00
1,030.00
****530.00
4,770.00
Yr3,Q4
10,300.00 1,030.00
2,060.00
530.00
4,240.00
Yr4,Q1
10,300.00 1,030.00
3,090.00
530.00
3,710.00
Yr4,Q2
10,300.00 1,030.00
4,120.00
530.00
3,180.00
Yr4,Q3
10,300.00 1,030.00
5,150.00
530.00
2,650.00
Yr4,Q4
10,300.00 1,030.00
6,180.00
530.00
2,120.00
Yr5,Q1
10,300.00 1,030.00
7,210.00
530.00
1,590.00
Yr5,Q2
10,300.00 1,030.00
8,240.00
530.00
1,060.00
Yr5,Q3
10,300.00 1,030.00
9,270.00
530.00
530.00
Yr5,Q4
10,300.00 1,030.00
10,300.00
530.00
0.00
Account Description
Debit
Asset Cost
300.00
Credit
5,300.00
Oracle Assets creates the following journal entries each period to amortize the revaluation reserve:
Account Description
Debit Credit
Revaluation Reserve
530.00
Revaluation Amortization
530.00
Ans) The fa is implemented at the business group level. Because for one business group there
will be one asset module. The Asset module for the entire operating unit is same. But the
Inventory org may different for the operating unit.
7.What is the profile used to secure asset register?
Ans) Information Standard 44 (IS44) Information custodianship, requires agencies to establish
and maintain an information asset register. An information asset register lists the existing
information assets across all of the business units within an organisation. It enables users of
information to identify the available information resources from a single source and provides
information custodians with an overview of the information assets under their care. An
information asset register ensures that agency information is identified, defined and organised in
a way that will facilitate access to and reuse of this information. A register will assist to avoid
any unnecessary duplication of information
Ans)
You can set up as many calendars as you need. Each book you set up requires a depreciation calendar and
a prorate calendar. The depreciation calendar determines the number of accounting periods in a fiscal
year, and the prorate calendar determines the number of prorate periods in your fiscal year. You can use
one calendar for multiple depreciation books, and as both the depreciation and prorate calendar for a
book.
Your corporate books can share the same calendar. A tax book can have a different calendar than its
associated corporate book. The calendar for a tax book must use the same fiscal year name as the calendar
for the associated tax book.
The depreciation program uses the prorate calendar to determine the prorate period which is used to
choose the depreciation rate. The depreciation program uses the depreciation calendar and divide
depreciation flag to determine what fraction of the annual depreciation expense to take each period. For
example, if you have a quarterly depreciation calendar, Oracle Assets calculates one-fourth of the annual
depreciation each time you run depreciation.
You must initially set up all calendar periods from the period corresponding to the oldest date placed in
service to the current period. You must set up at least one period before the current period. At the end of
each fiscal year, Oracle Assets automatically sets up the periods for the next fiscal year.
Attention: If you use this depreciation calendar in a depreciation book from which you create journal
entries for your general ledger, you must make the period names identical to the periods you have set up
in your general ledger.
You can define your calendar however you want. For example, to define a 4-4-5 calendar, set up your
fiscal years, depreciation calendar, and prorate calendar with different start and end dates, and fill in the
uneven periods. To divide annual depreciation proportionately according to the number of days in each
period, enter By Days in the Divide Depreciation field in the Book Controls window.
Prerequisites
Set up your Oldest Date Placed in Service. See: Specifying System Controls.
2.
3.
Choose Fiscal or Calendar to append either the fiscal or calendar year to get the accounting
period name. If you do not want the fiscal or calendar year automatically appended, choose None.
For example, if your fiscal year runs from June 1 to May 31, and the current date is July 15, 1995,
you are in calendar 1995 and fiscal 1996. If you specify FISCAL, your period name is JUL-96. If
you specify CALENDAR, your period name is JUL-95.
4.
Enter the Fiscal Year Name you want to use for this calendar.
5.
Enter the number of periods in the fiscal year for this calendar.
Note: You cannot enter more than 365 periods per year.
6.
7.
8.
2.
Query the calendar for which you want to change period names and scroll to the last period.
3.
From the Main menu, select Edit/Delete Record. Delete all of the periods you plan to rename.
4.
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