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January 31, 2016

1/31/2016 06:56:00 PM
What is charge account or rather why we use charge account?

Ans: The charge account in your PO distributions will be used as the Debit account during your PO Delivery process.
For example if you are receiving and delivering an Inventory Item the charge account would typically default
from Sub-inventory or organization material account.

This is the balance sheet account that will be charged after inventory is capitalized.
Setup
Look at the Material Account on the destination inventory organization, or (if specified), destination sub inventory.
Inventory: Setup/Organizations/Parameters or Sub inventories

If you are dealing with an expense item, the charge account could default from your sub-inventory or organization or item expense account
If the destination type is expense, you can specify this account (provided it is not project related) and override any defaults.
This account will be either an asset clearing account that will be included on the balance sheet or an expense account
that will be included on the income statement. This  account is either created or specified when you create a purchase order.

Purchase Orders, and Releases windows, the Account Generator constructs the account when you navigate into the distribution Charge Account field,
or when an explicit or implicit commit anywhere in the window provides enough information for Oracle Purchasing to create a distribution.
For Shop Floor destinations, the code is constructed when you enter all required data in the Outside Processing region
and either return to the document distributions region or commit.

For all windows, the build sequence is:

1. Charge
2. Budget
3. Accrual
4. Variance

Charge account defaulting rules depend on
a) Type of Item
b) Destination Type
c) Destination Sub-inventory.

There are 3 kinds of Items used in Purchasing.

Expense Items - Referred to as Item A
Inventory Expense Items - Referred to as Item B
Inventory Asset Items - Referred to Item C


1) Expense Items - Referred to as Item A.
These items normally have the following item attributes

INVENTORY_ASSET_FLAG = N
PURCHASING_ITEM_FLAG = Y
INVENTORY_ITEM_FLAG = N

2) Inventory Expense Items - Referred to as Item B
These items normally have the following Item Attributes

INVENTORY_ASSET_FLAG = N
PURCHASING_ITEM_FLAG = Y
INVENTORY_ITEM_FLAG = Y


c) Inventory Asset Items - Referred to Item C
These items have the following Item attributes

INVENTORY_ASSET_FLAG = Y
PURCHASING_ITEM_FLAG = Y
INVENTORY_ITEM_FLAG = Y
COSTING_ENABLED_FLAG = Y

2. DESTINATION TYPE :
The Destination type determines the final destination of the
items.
This can be of two types
a) EXPENSE
b) INVENTORY -

3. DESTINATION Sub inventory:
When an Item is being received into Inventory , a sub-inventory
needs to be specified. A subinventory can be
a) ASSET subinventory
b) EXPENSE sub-inventory


The sql below will help in identifying what type of a
subinventory , the item is being delivered INTO.

The sql below will help in identifying what type of a
subinventory , the item is being delivered INTO.


select
substr(EXPENSE_ACCOUNT,1,6) Exp_act ,
substr(ENCUMBRANCE_ACCOUNT,1,7) Enc_act ,
ASSET_INVENTORY,
substr(SECONDARY_INVENTORY_NAME,1,15) S_name,
substr(DESCRIPTION,1,15) descrip,
substr(SOURCE_ORGANIZATION_ID,1,8) s_o_id
from
MTL_SECONDARY_INVENTORIES
where
SECONDARY_INVENTORY_NAME = '&destination_subinventory';

pass the value of DESTINATION_SUBINVENTORY
from PO_DISTRIBUTIONS_ALL.DESTINATION_SUBINVENTORY

if the value of ASSET_INVENTORY = 1 then this is an ASSET subinventory.
if the value of ASSET_INVENTORY = 2 then this is NOT an ASSET subinventory.

3.Keeping in view of the types of Items and the destination mentioned above
These are the destination types that can be possible against each type of item

Item A can have ONLY one destination- EXPENSE

Item B can have the destination of
a) EXPENSE
b) INVENTORY -- ASSET subinventory
c) INVENTORY -- EXPENSE subinventory

Item C can have the destination of
a) EXPENSE
b) INVENTORY -- ASSET subinventory
c) INVENTORY -- EXPENSE subinventory



Defaulting Rules for
1) Item A --- Defaults from the Expense a/c defined against the ITEM in the Receiving Organization.( Organization Items)

=======================================================================
2) Item B--- EXPENSE -Defaults from the Expense a/c defined against the ITEM in the
in the Receiving Organization.( Organization Items)

2) Item B ---INVENTORY--- ASSET Subinventory .... charge account comes from
a) EXPENSE a/c of the ASSET SUBINVENTORY in the RECEIVING Organization.
(This is ONLY if the PO Distribution , contains the Subinventory Information)

b) If the PO distribution DOES NOT have a SUBINVENTORY information
Expense a/c defined in the Organizational Parameters of the Receiving Organization.
========================================================================
3) Item B ---INVENTORY--- EXPENSE subinventory -- comes from
a) EXPENSE a/c of the EXPENSE SUBINVENTORY in the RECEIVING Organization.
(This is ONLY if the PO Distribution , contains the Subinventory Information)

b) If the PO distribution DOES NOT have a SUBINVENTORY information
Expense a/c defined in the Organizational Parameters of the Receiving Organization.

========================================================================
4) Item C --- EXPENSE -Defaults from the Expense a/c defined against the ITEM in the
in the Receiving Organization.( Organization Items)

5) Item C ---INVENTORY---ASSEST Subinventory .charge account comes from

a) Material a/c defined against the ASSET SUBINVENTORY /of the RECEIVING Organization.
(This is ONLY if the PO Distribution , contains the Subinventory Information)

b) Material a/c defined in the Organizational Parameters of the Receiving Organization.

6) Item C ---INVENTORY --EXPENSE Subinventory -- comes from
a) Expense a/c defined against the EXPENSE Subinventory in Receiving Organization.
(This is ONLY if the PO Distribution , contains the Subinventory Information)

b) If the PO distirbution DOES NOT have a SUBINVENTORY information
Material a/c defined in the Organizational Parameters of the Receiving Organization.

For more information On Oracle Purchasing
Refer Oracle Purchasing Blog

For Purchasing Receiving Inventory Account
Refer Oracle Applications :Purchasing Receiving Inventory Account



 
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