How are transaction line amounts reduced?

The application rule set assigned to the transaction type of the debit item determines how to reduce the open line, tax, freight, and late charge amounts for both receipt and on-account credit memo applications.

If there is no application rule set assigned to the transaction type, the application process uses the application rule set assigned to Receivables system options.

An application rule set uses these application rules:

• Line First - Tax After: Apply the receipt to the open line item amount first. Apply any remaining receipt amount in the following order: tax, freight, late charges.

• Line and Tax Prorate: Apply a proportionate amount of the receipt to the open line item amount and the open tax amount for each line. Apply any remaining receipt amount to freight first and then to late charges.

• Prorate All: Apply a proportionate amount of the receipt equally to the line, tax, freight, and late charges.