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GL Part 3

The general ledger is the central repository for a company's financial transactions and accounting information. It records activity and produces reports to help decision makers inside and outside the organization. The general ledger accounting cycle includes opening and closing periods, creating and posting journal entries, reviewing balances, and running accounting reports. A set of books determines the functional currency, chart of accounts, and accounting calendar for a company. Journal entries include manual, reversing, recurring, and mass allocation entries used for various accounting purposes like adjustments, reclassifications, and expense allocations. Foreign currency concepts involve converting, revaluing, and translating transactions between functional and foreign currencies.

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23 views

GL Part 3

The general ledger is the central repository for a company's financial transactions and accounting information. It records activity and produces reports to help decision makers inside and outside the organization. The general ledger accounting cycle includes opening and closing periods, creating and posting journal entries, reviewing balances, and running accounting reports. A set of books determines the functional currency, chart of accounts, and accounting calendar for a company. Journal entries include manual, reversing, recurring, and mass allocation entries used for various accounting purposes like adjustments, reclassifications, and expense allocations. Foreign currency concepts involve converting, revaluing, and translating transactions between functional and foreign currencies.

Uploaded by

PSW1983
Copyright
© © All Rights Reserved
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Download as DOC, PDF, TXT or read online on Scribd
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Few Concepts on General Ledger

What is General Ledger?


The Oracle General Ledger is the central repository of accounting information. The
main purpose of a general ledger system is to record financial activity of a company
and to produce financial and management reports to help people inside and outside
the organization make decisions.
General Ledger Accounting Cycle:
1.
Open period
2.
Create/reverse journal entries
3.
Post
4.
Review
5.
Revalue
6.
Translate
7.
Consolidate
8.
Review/correct balances
9.
Run accounting reports
10.
Close accounting period
What are Set of Books?
A set of books determines the functional currency, account structure, and accounting
calendar for each company or group of companies. It is replaced by the Ledger Sets
in R12.
Set of Books consists of the following Three elements

Chart of Accounts: COA can be designed to match the Organizational


Structure and dimensions of the business.

Currency: GL enables to define one currency as Functional Currency and use


other currencies for transactions.

Calendar: Calendar has to be defined to control the accounting year and its
periods.
Types of Journal Entries:
Within Oracle General Ledger, you can work with the following types of journal
entries:
Manual Journal Entries
The basic journal entry type is used for most accounting transactions. Examples
include adjustments and reclassifications.
Reversing Journal Entries
Reversing journal entries are created by reversing an existing journal entry. You can
reverse any journal entry and post it to the current or any future open accounting
period.
Recurring Journal Entries
Recurring journal entries are defined once, then are repeated for each subsequent
accounting period you generate. You can use recurring journal entries to define
automatic consolidating and eliminating entries. Examples include intercompany
debt, bad debt expense, and periodic accruals.
Mass Allocations
Mass Allocations are journal entries that utilize a single journal entry formula to
allocate balances across a group of cost centers, departments, divisions or other
segments. Examples include rent expense allocated by headcount or administrative
costs allocated by machine labor hours.

Foreign Currency Concepts:


The three key foreign currency concepts in Oracle General Ledger are:
Conversion
Conversion refers to foreign currency transactions that are immediately converted at
the time of entry to the functional currency of the set of books in which the
transaction takes place.
Revaluation
Revaluation adjusts liability or asset accounts that may be materially understated or
overstated at the end of a period due to a fluctuation in the exchange rate between
the time the transaction was entered and the end of the period.
Translation
Translation refers to the act of restating an entire set of books or balances for a
company from the functional currency to a foreign currency.

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