ERP
The purpose of this document is to provide a general discussion on all the default accounts used by the Oracle applications sub ledgers. Also discussed are major concepts involved in the definition of the new Chart of Accounts (Accounting Flexfield).
The Oracle Applications default accounts must also be included in the new Chart of Accounts structure of the organization. The default accounts are required for setup of the different sub ledgers by the Oracle System. This document describes briefly the purpose, type, and category of each default account. It is recommended to follow the Oracle Applications account naming convention for the default accounts to differentiate these accounts from the actual accounts in the new Accounting Flexfield (AFF) structure.
Details of customer accounts need not be included in the General Ledger (GL) since a detailed breakdown of information is provided in the Oracle Receivables module. Only one ‘Accounts Receivable’ control account needs to be included in the new AFF structure.
Details of suppliers’ accounts need not be included in the General Ledger (GL) since a detailed breakdown of information for each supplier is provided in the Oracle Payables module. Only one ‘Accounts Payable’ control account needs to be included in the new AFF structure.
Details of Prepayments and/or Prepayment transactions accounts need not be included in the General Ledger (GL) since a detailed breakdown of information is provided for each Prepayment made against a Supplier or employee in the Oracle Payables module. Only one Prepayments control account should be defined in the new Accounting Flexfield structure.
Details of Fixed Assets cost accounts are not required in GL as the details are maintained in the Assets sub ledger, only the total assets cost accounts by major category need to be included in the new AFF structure. For example:
 Land
 Leasehold Improvements
 Buildings
 Machinery & Equipment
 Transportation Equipment
 Furniture & Fixtures
 Office Equipment
 Computers & Software
An Accumulated Depreciation control account for every Fixed Assets major category is required. For Example:
 Accumulated Depreciation: Land
 Accumulated Depreciation: Leasehold Improvements
 Accumulated Depreciation: Buildings
 Accumulated Depreciation: Machinery &Equipment
 Accumulated Depreciation: Transportation Equipment
 Accumulated Depreciation: Furniture & Fixtures
The same concept applies for the Depreciation Expense accounts. For Example:
 Depreciation Expense: Land
 Depreciation Expense: Buildings
 Depreciation Expense: Machinery & Equipment
 Depreciation Expense: Transportation Equipment
Construction in Process (CIP) control accounts may be required in GL depending on how the organization treats the capitalization of assets. CIP accounts are transit accounts that store the cost of work in process of a certain project. Once the work is completed, the full account balance is transferred to the project asset account.
A ‘Bank Clearing Account’ is needed for each Bank and Bank account that the organization needs to reconcile in Oracle Cash Management. Oracle Payables creates the following accounting entries after payment issue:
Unreconciled payment:
Dr. AP Liability account
Cr. Bank Clearing account (account defined for each bank account).
Oracle Payables then creates the following accounting entries after payment clearing in Cash Management:
Reconciled payment:
Dr. Bank Clearing account.
Cr. Bank account.
The above mentioned notions should be taken into account while defining the new Chart of Accounts structure.
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