29 Creating Cash Basis Entries

This chapter contains the following topics:

29.1 Understanding Cash Basis Accounting

Cash basis accounting is an accounting method that recognizes revenue when monies are received and expenses when monies are paid out. This accounting method shows only cash that is actually received or disbursed during a particular accounting period. You might be required to use cash basis accounting due to a requirement in an oil well lease, venture capital, or partnership.

The timing of receipts and disbursements might differ from the period of operating activities. Therefore, the period during which cash basis transactions are recorded might differ from the period during which transactions are recorded for accrual accounting.

The system maintains accrual entries in the AA (actual amount) ledger. When you use cash basis accounting, the system generates parallel transactions from the AA ledger and updates the AZ (cash basis) ledger.

You create cash basis entries by running the Create Cash Basis Entries program (R11C850) or by activating the cash basis processing option in the General Ledger Post program (R09801). You must understand how the system creates cash basis entries for the JD Edwards EnterpriseOne General Accounting, JD Edwards EnterpriseOne Accounts Payable, and JD Edwards EnterpriseOne Accounts Receivable systems to determine the best business practice for running the program.

Note:

If you run the Create Cash Basis Entries program after you reconcile statements and accounts, set the Reconciliation code processing option in the Create Cash Basis Entries program to 1 to copy the reconciliation code and cleared date for the reconciled statements and accounts from the AA ledger to the AZ ledger.

29.1.1 Using the AZ Ledger for Mexican IETU Calculations

In some countries, you might need to maintain the AZ ledger with data that is identical to the data in the AA ledger. For example, to make the calculations necessary to report Mexico's alternative minimum tax (Impuesto Empresarial a Tasa Unica [IETU]), you maintain duplicate ledgers so that you can compare the IETU to the standard income tax. To work with the IETU, you prepare parallel calculations annually that you use to compare the IETU calculated tax amounts to other calculated tax amounts. You use the comparison to determine the income tax that you must pay.

As part of the IETU requirement, the tax recognition as fiscal credit or fiscal debit is possible only if you receive from your bank a confirmation that the receipt and the payments were accredited or debited in the bank account. You can use the bank statement and bank account reconciliation processes to track the dates that your bank confirms the debits and credits.

You can maintain a parallel data set that you can use for your IETU calculations by writing the reconciliation clear date and reconciliation flag that appears in the AA ledger to an additional ledger type, such as the AZ ledger. You specify the dates that the bank confirms receipts and payments when you reconcile bank statements, and write those dates to the Account Ledger table (F0911) for the AA ledger and the additional ledger type that you specify in processing options.

The system maintains data for the accrual accounting method in the AA ledger and maintains data for the cash basis accounting method in the AZ ledger. If you use cash basis accounting, you should specify the AZ ledger as the additional ledger to update with bank statement and bank account reconciliation information. The system creates entries in the AZ ledger when you run the Create Cash Basis Entries program (R11C850).

You must reconcile statements and accounts after running the Create Cash Basis Entries program if you specify AZ as the additional ledger type because the Create Cash Basis Entries program generates the original AZ records. The AZ ledger records cannot be updated by the bank statement and back account reconciliation programs until you create the ledger records by running the Create Cash Basis Entries program.

29.2 Understanding Accrual Entries

When you use cash basis accounting, you create transactions in the AZ ledger at the time that you receive and disburse money. Transactions involving the receipt and disbursement of money occur as receipts and payments in the JD Edwards EnterpriseOne Accounts Receivable and JD Edwards EnterpriseOne Accounts Payable systems.

For accrual entries, the system creates debits and credits to the bank account in the F0911 table for these batch types:

  • K: automatic payments

  • M: manual payments with match

  • W: manual payments without match

  • RB: receipts

The system creates the entry as one sided with a document type of PK, PN, or PT for Accounts Payable and RC or RK for Accounts Receivable. It then creates a balancing entry in the accounts payable and accounts receivable trade accounts with a document type of AE (automatic entry). Because the system creates both documents in the same batch, the batch is in balance and can be posted without error.

29.3 Understanding Cash Basis Entries

The Create Cash Basis Entries program always creates cash basis entries for Account Ledger transactions first, and then launches additional programs to create accounts payable and accounts receivable balancing entries for batches K, M, W, and RB.

29.3.1 Cash Basis Entries for Account Ledger Records

The Create Cash Basis Entries program creates cash basis entries that are based on accrual transactions in the F0911 table, regardless of batch type. The system locates transactions in the F0911 table that meet these criteria:

  • The document type is not in UDC table 00/DX (Excluded Document Types).

  • The ledger type is AA.

  • The posted code is P.

  • The GLALT6 (Cash Basis Posting Code) field is blank.

    The transaction has not been processed for cash basis.

Every time that you run the Create Cash Basis Entries program, the system creates cash basis entries with ledger type AZ and batch type G in a single batch in the F0911 table. The system uses the general ledger date from the originating AA ledger transaction as the general ledger date for the cash basis entry.

To prevent the system from creating cash basis entries multiple times for the same transactions, the system updates the GLALT6 field to P on the F0911 accrual records. If you delete cash basis entries before you post them, the system does not create new cash basis entries for the same records; you must manually enter AZ journal entries to re-create the cash basis entry.

When the system creates cash basis entries based on journal entries, it copies the entire transaction to the AZ ledger and assigns it a cash basis document type. As long as you create the original journal entry in balance, the system creates the cash basis entry in balance.

29.3.2 Cash Basis Entries for Units

If you work with units, the system creates unit entries in the ZU (cash basis unit) ledger unless you designate a different ledger type in the processing option of the General Ledger Post program. Units for accrual transactions are created in the AU (actual units) ledger. The unit ledgers exist only in the F0902 table, not in the F0911 table. The system updates unit ledgers when you post accrual and cash basis entries.

29.3.3 Cash Basis Entries for Accounts Payable and Accounts Receivable

The Create Cash Basis Entries program launches additional programs to create balancing entries for batch types K, M, W, and RB. The program does not create balancing entries for document types AE, DP, JT, PM, PR, PV, RA, RI, RM, and RR.

For payments and receipts, the system first processes the F0911 record for the bank account. The system excludes general ledger transactions for the corresponding expense and revenue accounts because those document types (such as PV and RI) are in UDC 00/DX. To balance the cash basis entry, the system automatically runs the Create Cash Basis Entries - A/P (R11C854) and Create Cash Basis Entries - A/R (R11C853) programs to retrieve the expense and revenue accounts.

The system locates paid vouchers from the F0414 table and paid invoices from the F03B14 table that meet these criteria:

  • The posted code is D.

  • The RNALT6 and RZALT6 fields are blank in the F0414 and F03B14 tables.

When the system locates eligible transactions, it:

  • Locates records in the F0411 and F03B11 tables to retrieve the expense and revenue accounts.

  • If the RPOBJ (Object) field has a value, uses the values in the RPMCU (Business Unit), RPOBJ, and RPSUB (Subsidiary) fields from the invoice or voucher record.

  • If the RPOBJ field is blank, locates the expense and revenue accounts from the associated F0911 record.

  • Adds the expense and revenue account information to the cash basis entry that was previously generated for the bank account, based on the F0911 payment and receipt records.

  • Uses the general ledger date from the receipt or payment as the general ledger date for the cash basis document.

Payment and receipt amounts are prorated under these conditions:

  • The payment or receipt does not fully pay the voucher or invoice.

  • The payment or receipt is for multiple vouchers or invoices.

  • The payment of receipt is for vouchers or invoices with multiple expense accounts.

To prevent the system from creating cash basis entries multiple times for the same vouchers and invoices, the system updates the RNALT6 and RZALT6 fields to P in the F0414 and F03B14 tables.

If you delete cash basis entries before you post them, the system does not create new cash basis entries for the same records; you must manually enter AZ journal entries to re-create the cash basis entry.

This table describes the differences between the JD Edwards EnterpriseOne Accounts Payable and JD Edwards EnterpriseOne Accounts Receivable cash basis entry programs:

Create Cash Basis Entries - A/P Create Cash Basis Entries - A/R
The system uses the F0414 table to locate all paid vouchers that have not been updated for cash basis. The system uses the payment number (DOCM) from the F0413 table as the cash basis document number. The system uses the F03B14 table to locate all paid invoices that have not been updated for cash basis. The system uses the general ledger document number (DOCG) as the cash basis document number.
The system uses the voucher number to locate the document in the F0411 table, and then uses the values from the OBJ and SUB fields for the expense account. The system uses the invoice number to locate the document in the F03B11 table, and uses the values from the OBJ and SUB fields for the revenue account.
If the OBJ and SUB fields are blank, the system searches the F0911 record to locate expense accounts. If the OBJ and SUB fields are blank, the system looks at the F0911 record to locate revenue accounts.
The system updates the F0911 record in the batch with expense account information from the voucher. The system updates the F0911 record in the batch with revenue account information from the invoice.
The system updates the RNALT6 field to P in the F0414 table. The system updates the RZALT6 field to P in the F03B14 table.

29.3.4 Example: How Cash Basis Entries Are Created

This example illustrates how cash basis entries are created for the JD Edwards EnterpriseOne General Accounting, JD Edwards EnterpriseOne Accounts Payable, and the JD Edwards EnterpriseOne Accounts Receivable systems.

Review the following entry in the AA ledger in the F0911 table:

  • JE 1234

  • G/L Date 06/08/10

  • Bank Fee 300

Based on the above entry in the AA ledger, when you run the Create Cash Basis Entries program (R11C850), the system creates a new G batch #445 and the following entry in the AZ ledger in the F0911 table:

  • JE 1234

  • G/L Date 06/08/10

  • Bank Account -300

  • Bank Fee 300

Review the following entry in the AA ledger in the F0911 table:

  • PK 111

  • G/L Date 06/13/10

  • Bank Account -400

Based on the above entry in the AA ledger, the system creates the following entry in the AZ ledger in the F0911 table:

  • PZ 111

  • G/L Date 06/13/10

  • Bank Account -400

Review the following entry in the AA ledger in the F0911 table:

  • RC 32143

  • G/L Date 06/23/10

  • Bank Account 600

Based on the above entry in the AA ledger, the system creates the following entry in the AZ ledger in the F0911 table:

  • RZ 32143

  • G/L Date 06/23/10

  • Bank Account 600

Cash basis entries are not created for document types PV:

  • PV 45666

  • G/L Date 06/01/10

  • Expense Account 400

Cash basis entries are not created for document types RI:

  • RI 3342

  • G/L Date 05/27/10

  • Expense Account 600

Based on the previous example, for Batch Type G, Batch Number 445, the system makes the following cash basis entry in the JD Edwards EnterpriseOne Accounts Payable:

  • PZ 111

  • G/L Date 06/13/10

  • (R11C850) Bank Account: - 400

  • (R11C854) Expense Account: 400

Based on the previous example, for Batch Type G, Batch Number 445, the system makes the following cash basis entry in the JD Edwards EnterpriseOne Accounts Receivable system:

  • RZ 32143

  • G/L Date 06/23/10

  • (R11C850) Bank Account: 600

  • (R11C853) Expense Account: -600

29.4 Running the Cash Basis Program from the Menu

This section provides overviews of when to run the cash basis program from the menu and of multithreaded job queues and discusses how to:

  • Run the Create Cash Basis Entries program from the menu.

  • Set processing options for Create Cash Basis Entries.

29.4.1 Understanding When to Run the Cash Basis Program from the Menu

When you first use cash basis accounting, you should run the Create Cash Basis Entries program from the menu instead of from the General Ledger Post program. All transactions that were previously entered must be processed for cash basis accounting; therefore, the program requires additional processing time and might run more efficiently during off-peak hours.

If you create cash basis entries periodically, such as weekly, monthly, or quarterly, you can control when to create cash basis entries by running the Create Cash Basis Entries program from the menu.

29.4.2 Understanding Multithreaded Job Queues

If your system is set up for multithreaded job queues, you can simultaneously run more than one job for the Create Cash Basis Entries program. Subsequent jobs can be the same version or different versions of the same program. Running multiple jobs enables you to process a high volume of transactions more efficiently.

When you run multiple jobs, the Create Cash Basis Entries program checks the Cash Basis Status field (CBP) in the F0011 table for each batch to ensure that no batch is processed more than one time. Therefore, it is not necessary for each job to have unique data selection.

A batch can have one of these statuses:

  • blank: The batch has not been reserved or processed by the Create Cash Basis program. The system selects the batch and sets the flag to 1. Subsequent jobs ignore batches with status 1.

  • The batch has been reserved or processed by the Create Cash Basis program. The system skips the batch and moves on to the next one.

29.4.3 Running the Create Cash Basis Entries Program from the Menu

Select Cash Basis Accounting (G09314), Create Cash Basis Entries.

29.4.4 Setting Processing Options for the Create Cash Basis Entries Program (R11C850)

Use these processing options to create cash basis entries.

29.4.4.1 Process Tab

This processing option specifies whether to post the cash basis entries.

1. G/L Post (general ledger post)

Specify whether to post cash basis entries to the F0911 table.

2. Reconciliation code

Specify how to populate the Reconciliation Code field (RCND) in the F0911 table for the AZ ledger. Values are:

Blank: Write R as the reconciliation code in the AZ ledger.

1: Copy the reconciliation code from the AA ledger to the records for the AZ ledger.

29.4.4.2 Defaults Tab

This processing option specifies whether to use journal entry or audit information for the cash basis entries.

1. 'AZ' Journal Entry Explanation

Specify whether to use the journal entry explanation from the AA ledger record for the AZ ledger entries. If you leave this processing option blank, the system uses audit information.

29.4.4.3 Versions Tab

This processing option specifies the post version for the cash basis entries.

1. G/L Post (R09801) Version

Specify the version of the General Ledger Post program in which to process cash basis entries. If you leave this processing option blank, the system uses version ZJDE0001.

29.5 Running the Cash Basis Program from the Post

This section provides an overview of when to run the cash basis program from the General Ledger Post program and discusses how to:

  • Run the Cash Basis Entries program from the General Ledger Post program.

  • Set processing options for General Ledger Post.

29.5.1 Understanding When to Run the Cash Basis Program from the Post

After you create cash basis entries, you can ensure that your AZ ledger has the most up-to-date information as cash is received or disbursed by activating a processing option in the General Ledger Post program. To activate the cash basis processing option, designate the version of the Create Cash Basis Entries program to run.

You can activate the cash basis processing option in versions of the General Ledger Post program for these batch types only:

  • G: general ledger

  • K: automatic payments

  • M: manual payments with match

  • W: manual payments without match

  • RB: receipts

29.5.2 Running the Cash Basis Entries Program from the General Ledger Post Program (R09801)

Select Journal Entry, Inquiries, & Reports (G0911), General Ledger Post.

29.5.3 Setting Processing Options for General Ledger Post (R09801)

The section discusses the processing options for the General Ledger Post program that are specific to cash basis accounting.

29.5.3.1 Cash Basis Tab

1. Units Ledger Type

Specify the units ledger type for the system to use for cash basis entries. You must enter a valid ledger type from the Ledger Type Master Setup program (P0025). If you leave this processing option blank, the system uses a default ledger type of ZU.

2. Create Cash Basis Entries Version

Specify which version of the Create Cash Basis Entries program to run. If you leave this processing option blank, the system does not create cash basis entries.

29.6 Reviewing Exception Reports

When the system creates cash basis entries, it can generate up to three exception reports for the JD Edwards EnterpriseOne General Accounting, JD Edwards EnterpriseOne Accounts Payable, and JD Edwards EnterpriseOne Accounts Receivable systems. If an exception report does not contain detail information under the heading, no errors occurred when cash basis entries were created. Examples of errors in exception reports include:

Applicable JD Edwards EnterpriseOne System Description
General Accounting, Accounts Payable, Accounts Receivable A cash basis document type is not defined. A message appears on the report, but it does not prevent the system from creating the cash basis entry.
Accounts Payable only These errors prevent the system from creating cash basis entries:
  • The original voucher record is not found.

  • The voucher distribution record is not found.

Accounts Receivable only These errors prevent the system from creating cash basis entries:
  • The original invoice record is not found.

  • The invoice distribution record is not found.


If an accounts payable or accounts receivable error occurs, the system does not update the cash basis posting code and the message No records written appears on the report. Errors continue to appear on subsequent exception reports until you correct them.

In most cases, errors that prevent the system from creating cash basis entries for the revenue or expense accounts do not prevent the system from creating the entry for the bank account. When the system creates the entry for the bank account but not the revenue or expense account, the transaction and batch are out of balance. When you correct errors and create cash basis entries again, the next batch for the expense and revenue accounts are out of balance by the same amount, with the opposite sign. The net effect is that the two batches combined are in balance; however, you must post each of them out of balance.

29.7 Reviewing Cash Basis Entries

This section describes how to review cash basis entries by printing the Unposted Cash Basis Report.

29.7.1 Setting Data Selection for Unposted Cash Basis Report

To print a report that shows only cash basis batches, set the data selection for ledger type to AZ.

29.7.2 Printing the Unposted Cash Basis Report

Select Cash Basis Accounting (G09314), Unposted Cash Basis Report.

If you do not post cash basis entries automatically when you run the Create Cash Basis Entries program, you can print this report and review, revise, and approve your cash basis batches before you post them.

29.8 Posting Cash Basis Entries

After you create cash basis entries, you must post them to the F0902 table. You can post cash basis entries in one of two ways:

  • Post cash basis entries as a separate process by not setting the processing option for the Create Cash Basis Entries program.

    If you choose to review cash basis batches prior to posting them, you must run the General Ledger Post program to post cash basis batches as a final step. You post cash basis batches exactly as you would post general ledger batches.

  • Post cash basis entries as an automatic process by setting a processing option for the Create Cash Basis Entries program.

    Regardless of whether you create cash basis entries by setting a processing option in the General Ledger Post program or by running the Create Cash Basis Entries program from the menu, you must set the G/L Post processing option in the Create Cash Basis Entries program. It must be set for the system to launch the General Ledger Post program automatically after it creates cash basis entries. You also specify the version of the post program in a processing option.

    Note:

    Any cash basis entries that are created out of balance (one sided) must be posted out of balance.