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 |