Identifying Journal Entry Batches in General Ledger
Purchasing creates accrual journal entries in your general ledger when you accrue receipts. If you use encumbrance, Purchasing also creates encumbrance reversal journal entries corresponding to the receipts you accrued. Purchasing automatically names journal entry batches, headers, and lines for you. The names Purchasing uses to create batches are the following:
Period-End Accruals
Purchasing creates one batch each time you run the Receipt Accruals - Period-End process. Purchasing creates one header for each purchase order you accrue. See: Receipt Accruals - Period End Process.
Journal Entry Batches
- Batch Name: PO/Accruals/[current date and time]/Batch: [JE_BATCH_ID of the Accruals Batch]
- Debits: [Sum of all debits for all headers]
- Credits: [Sum of all credits for all headers]
Journal Entry Headers
- Header Name: Accrue/PO [PO Number-Release Number]
- Reverse to Period: [Next Period]
- Debits: [Sum of all debits for all lines]
- Credits: [Sum of all credits for all lines]
Purchasing creates two types of journal entry lines for each accrued receipt:
- Distribution Lines (one for each distribution of an accrued purchase order line)
- Accrued Receipt Lines (one for each accrued purchase order line)
Purchasing creates one line for each purchase order distribution you accrued on the purchase order. Purchasing charges each line to the charge account on the purchase order distribution. Purchasing computes the accrual amount by prorating the quantity accrued for the purchase order shipment of the distribution to the quantity ordered on the distribution.
Purchasing creates one journal entry line charged to the PO distribution accrual account (normally the expense A/P accrual account). This line corresponds to the amount accrued for a purchase order. The amount accrued for a purchase order equals the sum of all uninvoiced receipts for this purchase order multiplied by the price for the corresponding purchase order shipments. The accrued receipt journal entry line balances all the distribution journal entry lines.
Distribution Journal Entry Lines
- Account: [Charge Account for PO Distribution]
- Amount: [Shipment Price * Quantity Received for Shipment * Quantity Ordered on Distribution/Quantity Ordered on Shipment]
- Description: Purchase Order Line Description
Accrued Receipt Journal Entry Lines
- Account: [Accrual Account for PO Distribution]
- Amount: [Sum of all amounts for Distributions Journal Entry Lines for the same Header]
- Description: Accrued Liability Account
Encumbrance Reversal
Purchasing creates one batch each time you use the Receipt Accruals - Period-End process if you use encumbrance.
Note that Encumbrance Journal Entry Batches are unbalanced in General Ledger. General Ledger automatically offsets the Reserve for Encumbrance account with the balance of your encumbrance batch. You set up your Reserve for Encumbrance account when defining your set of books. See: Defining Sets of Books.
Purchasing creates one header for each purchase order you accrue.
Journal Entry Batches
- Batch Name: PO/Accruals/[current date and time]/Batch: [JE_BATCH_ID of the Encumbrance Batch]
- Credits: [Sum of all credits for all headers]
Journal Entry Headers
- Header Name: Rev Enc/PO [PO Number-Release Number]
- Encumbrance Type: Obligation
- Reverse to Period: [Next Period]
- Credits: [Sum of all credits for all lines]
Purchasing creates one line for each purchase order distribution you accrued on the purchase order. Purchasing charges each line to the account on the purchase order distribution. Purchasing computes the line amount by prorating the quantity accrued for the purchase order shipment of the distribution to the quantity ordered on the distribution.
Distribution Journal Entry Lines
- Account: [Charge Account for PO Distribution]
- Amount: [Shipment Price * Quantity Received for Shipment * Quantity Ordered on Distribution/Quantity Ordered on Shipment]
- Description: Purchase Order Line Description
