How Accounting Entries for Cash Advances Are Distributed

When a cash advance is paid to an employee, the amount to be reclaimed is tracked in the Cash Advance Clearing account.

When the cash advance is applied to an expense report, the amount is reversed from the clearing account.

The following table shows an example of a cash advance of 500 USD and an expense report with a total amount of 500 USD.

Document	Amount
Cash Advance	500 USD
Expense Report	700 USD

Data in the preceding table is used in subsequent sections to illustrate how accounting entries are distributed when each document is processed.

Setting That Affects Accounting Entries

The setting that affects accounting entries for cash advances is the Cash Advance Clearing account on the Manage Expenses System Options page. This setting can only be implemented for a business unit.

The clearing account for each cash advance is derived by overlaying the natural account from the Cash Advance Clearing account on the Default Expense account of the employee.

How Accounting Entries are Distributed

After a cash advance is approved and audited, it is processed to Oracle Payables as a payment request.

The following table summarizes the accounting distribution that is generated when the cash advance is processed in Payables.

Account	Debit	Credit
Cash Advance Clearing	500 USD	Not applicable
Employee Liability	Not applicable	500 USD

The following table summarizes the accounting distribution that is generated when the cash advance is applied to the expense report and the expense report is processed in Payables.

Account	Debit	Credit
Cash Advance Clearing	Not applicable	500 USD
Employee Liability: Reclaim cash advance	500 USD	Not applicable
Employee Liability: Expense report	Not applicable	700 USD
Expense	700 USD	Not applicable