Journal Entry

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First Release Version: 12.0

Introduction

The journal entry is the basic transaction that is being recorded within the Oracle General Ledger.

There 6 types of journals;

• Standard Functional Actual Journals
• Foreign (Currency) Actual Journals
• Budget Journals
• Encumbrance Journals
• Statistical Journals
• Intercompany Balancing Journals

There are three main components of the journal records;

1. Batch - The larger grouping or organization of journal entries with common attributes. Batches may contain multiple Journal Entries. General Ledger will create a batch for the entry automatically if a journal is entered directly.

2. Header - Information and organization of common grouping of the individual transaction lines.

3. Line - Individual lines of the journal entry.

Subledger Accounting is a new feature which enhances the functionality in Oracle General Ledger Applications by defining how journal entries are generated from subledger transactions at the subledger application level.

Processing Journal Entry Transactions

There are three main components of the Journal Entry

1. Batch - The larger grouping or organization of journal entries with common attributes. Batches may contain multiple Journal Entries. General Ledger will create a batch for the entry automatically if a journal is entered directly.

2. Header - Information and organization of Common Grouping of the individual transaction lines.

3. Line - Individual lines of the journal entry.

There are four common ways to input a journal into Oracle General Ledger;

Direct Entry

In the direct entry method through the forms a journal is created with the three levels of information: Batch, Header, and Lines. Journals with common attributes may be grouped into a batch. Journals may have several account distribution lines

Journal Wizard

Journal Wizard is a spreadsheet based tool allowing the creation of journal entries through a spreadsheet and then interfaced up into the Oracle General Ledger Application. The Journal Wizard can quickly interface journals for, budgets, and encumbrances. The features of Microsoft Excel allow for additional capabilities in completing calculations, default values and create specific layouts for entry.

Auto Copy

A new Journal Batch can be created by copying and modifying an existing Journal Batch. Select Autocopy from the Journals window, the Batch window or the Enter Journals window to copy the journals.

Journal Import

Journal Import creates journal entries from the Oracle GL_INTERFACE table. Any financial system may populate this table automatically in the Oracle Applications and through custom applications, programmatically, for Non-Oracle systems. Journal Import functionality creates journal entries from accounting data imported from Oracle and non-Oracle ledgers and financial systems. Journals can be reviewed, changed, and posted. Journal Import supports multiple charts of accounts, ledgers, foreign currency, intercompany, statistical, budget, and encumbrance journals.

Subledger Accounting

Subledger Accounting is a new feature which enhances the functionality in Oracle General Ledger Applications by defining how journal entries are generated from Subledger transactions at the Subledger Accounting application level. The options are set up for the Primary and Secondary Ledgers only and are entered through the General Ledger's Accounting Setup Manager. A Set of Books in Release 11 is now a Ledger with its own Ledger Set in Release 12. Subledger Accounting creates the accounting like the earlier Release 11i Oracle Accounting Engine created the accounting. (Subledger Accounting)

Approving Journals

Setting up journal approval involves a number of steps:

• Set up profile options related to journal approval
• Configure Oracle Workflow
• Enabling journal approval for each set of books
• Set up Journal Sources for journal approval
• Enter employees
• Create an approval hierarchy
• Define approver authorization limits

The setup engages a workflow process for journal approval by journal source. When the journal approval functionality is enabled on a particular Journal Source, that journal entry must be approved by a manager with the appropriate authorization levels.

Journal Reconciliation

General Ledger Entry Reconciliation functionality reconciles multiple General Ledger transactions that balance to zero (examples are clearing accounts and control accounts). Reconciliation functionality may be set up at the natural account segment or for the entire accounting code combination (all segments combined). General Ledger Entry Reconciliation matches the transactions in General Ledger with other transactions through reference information fields at journal line level. When the balance for the group of reconciled referenced transactions nets to zero all corresponding transactions are marked as reconciled. Reconciliations can be accomplished manually or automatically. Reverse reconciliation functionality disassociates the previously reconciled transactions. Reversals can be uses for future transaction reconciliations.

Year End Closing

The General Ledger creates closing journals for year-end and other closing periods. The year-end closing process steps are as follows:

• Create the adjusting periods, last day of fiscal year and first day of fiscal period.
• Open the last fiscal period. The period you are closing is an "OPEN" period.
• Complete normal routine transactions through last day of month and close period.
• Close the fiscal period. The fiscal period is now an "CLOSED" period.
• Open the adjusting period. The adjusting period is now an "OPEN" period.
• Post adjustments in adjusting period.
• Define ledger sets to close multiple ledgers simultaneously.
• In the adjusting period for the last fiscal period, run Create Income Statement Closing Journals process and Create Balance Sheet Closing Journals process to transfer income and expense to retained earnings and close out year to date balance sheet accounts.
• In the adjusting period for the first fiscal period, Open the period and reverse and post the Balance Sheet closing journals.

TIP- Create a data Access set assigned to a responsibility to control running the closing journals programs against a ledger. Remember if reporting currencies are used to include access to reporting currency.

Comments

Links

• Related: Accounting Setup, Attachments to General Ledger, Auditability, Attachments to General Ledger, Budgetary Accounting, Cash Management, Chart of Accounts, Data Security, e-Business Tax, Encumbrance Accounting, Enterprise Performance Foundation, FinancialConsolidationHUB, Financial Implementation Guide , Global Intercompany, General Ledger Implementation Guide, GlobalConsolidation, Improved Processing Efficiency, Internal Control, Journal Entry, Multi-Currency, Multi-Organization, Oracle Payments, Other Minor General Ledger Features, Subledger Accounting, Federal Financials, Public Sector Financials, Public Sector Budgeting, Oracle Treasury, Oracle Loans, General Ledger Online Inquiries General Ledger Financial Reporting

This Topic Is Referenced By These Topics:
Related Links: AccountingSetup, AttachmentsGeneralLedger, AuditAbility, DataSecurity, FederalFinancials, FinancialImplementationGuide, FinancialServicesAccountingHub, GeneralLedger, GeneralLedgerImplementationGuide, GLFinancialReporting, GlobalIntercompany, GLOnlineInquiries, GlossaryE, GlossaryJK, GlossaryM, GlossaryR, InternalControl, JournalEntry, MultiOrganization, OtherMinorGLFeatures, PublicSectorFinancials, PublishDocControlReport, SubLedgerAccounting, WebStatistics

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Collaborating Authors and Reviewers: BillDaley - 20 Mar 2007