When you set up Payables you choose a primary and an optional secondary accounting method in the Payables Options window. The accounting method you choose determines the distributions Payables creates when you post your transactions. For each accounting method, cash or accrual, you choose a set of books to which you will to post transactions. You cannot change your primary accounting method after you post your transactions.
Set up Payables to create accounting entries in compliance with one of the following accounting methods:
- Cash Basis Accounting. You record only payments, and do not record liability information for invoices. The payment distributions typically debit your expense or asset account and credit your cash or cash clearing account. When you post payments, Payables may also create distributions for discount taken and foreign currency exchange gain or loss.
Payment distributions typically debit the liability account and credit the cash or cash clearing account. When you post payments, Payables may also create distributions for discount taken and foreign currency exchange gain or loss.
Combined basis accounting allows you to produce financial reports for either your cash or accrual set of books. For example, you may want to manage your company on an accrual basis, but require cash basis accounting information for certain regulatory reporting on a periodic basis.
Defining Your Chart of Accounts
Budgetary Control In Payables
Foreign Currency Transactions
Posting When You Use Accrual Basis Accounting
Posting When You Use Cash Basis Accounting
Setting Up Your Accounting Method
Oracle Cash Management User's Guide
Encumbrance with Combined Basis Accounting
Encumbrance with Cash Basis Accounting