General Ledger

Set of Books

By Jag - September 02, 2012
Set of books are created keeping in mind the 'Accounting Structure". Setup book defines the Accounting structure of the company.

This is made up of 3 'Cs' - 
  • Chart of Accounts
  • Currency
  • Calender

Chart of accounts is made up of segments. Max of 30 Segments are allowed. 2 Segments are mandatory - Balancing and Natural

Calender - This can have a max of 365 periods (daily clendar) and a min of 1 period (Yearly calendar). Periods can be monthly, fortnightly, weekly, daily........

SOB is of 2 types - Primary and Reporting.

Primary SOB - All transactions are with functional Currency
Reporting SOB - All transactions are with foreign Currency

Prerequisites
  •    Define your period types.
  •    Define your accounting calendar.
  •    Define a transaction calendar if you plan to use average balance processing.
  •    Define or enable your functional currency.
  •    If you use Multiple Reporting Currencies, define your reporting currencies before defining your reporting sets of books.
  •    Define your account structure.
  •    If you want to create Retained Earnings, Suspense, Translation Adjustment, Intercompany, and Reserve for Encumbrance accounts as you enter     them for the set of books, allow dynamic insertion for your account segments.
 To define a set of books:
    1. Navigate to the Set of Books window.
    2. Enter a Name for your set of books. This name appears whenever you choose a set of books from a list and appears as a heading in reports.
    3. Enter a Short Name that will appear in the title bar of each window.
    4. (Optional) Enter a Description for the set of books.
    5. Enter the name of any enabled Chart of Accounts, or account structure, for this set of books.
    6. Enter the Functional Currency for your set of books. The functional currency is also known as the base currency, local currency, or primary currency.
Note: The General Ledger set of books' functional currency may or may not be the same as your accounting functional currency, as defined by SFAS #52 (U.S.). If not, and you need to report financial results in your accounting functional currency, consider using General Ledger's Multiple Reporting Currencies feature. See: Multiple Reporting Currencies Overview.

    7. Assign an Accounting Calendar and Period Type to the set of books. General Ledger uses the calendar periods that have the period type you specify for journal entry, budgeting, and reporting with this set of books.
Note: General Ledger will report an error if there are any gaps between periods in your accounting calendar or if any of your non-adjusting periods overlap.

    8. Enter the number of Future Periods to allow for journal entry within this set of books.
    General Ledger automatically assigns a status of Future Entry to accounting periods following the latest open period in your calendar, based on the number of future enterable periods you define here. If you change the number of future enterable periods for your set of books, General Ledger does not change additional period(s) to the Future Enterable status until you open a new period using the Open and Close Periods window.
Note: You can enter journal batches for a future enterable period, but you cannot post the batches until you open the period.

Suggestion: Minimize the number of future enterable periods to prevent users from accidentally entering journal entries in an incorrect period.

    9. Assign the default Retained Earnings account for your set of books. You can also assign default Suspense, Translation Adjustment, Intercompany, and Reserve for Encumbrance accounts. See:Assigning the Set of Books Accounts.
    11. Save your work.


In R12, we do not have SOB, instead we have Ledgers.
In R12, Set Of Book is replaced by Ledger. Responsibility: General Ledger Super User 
Navigation 
Financials > Setup > Accounting Manager > Accounting setup 
In R12 , we have 4 C's:  
      1. *C*hart of Accounts 
      2. *C*alendar 
      3. *C*urrency 
      4. A*C*counting Method. 
Go to General Ledger >Setup > Financials>Accounting Setup Manager. 


Following Structure is followed in r12 


           Legal Entity1            Legal Entity2 
                    !                             ! 
                    !                             ! 
                ----- Primary Ledger------- 
                                 ! 
                   --------------!----------------- 
                   !                              ! 
         Operating Unit 1       Operating Unit 2 

Points to be Noted :
  • Multiple Legal Entities can be added to One Ledger 
  • Multiple Operating Units can be added to One Ledger. 
  • Legal Entities are derived with Operating Unit attached to responsibility through Ledger attached to them. 
  • You can have multiple operating units tied to one ledger which is in turn tied with One Legal Entity. 

Thats how multiple operating Units can be mapped to one legal Entity.
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