Professional Documents
Culture Documents
Dr. Mangold
Exhibit 3-1
Liabilities
201 Accounts Payable
231 Notes Payable
Stockholders Equity
301 Common Stock
311 Dividends
312 Retained Earnings
Expenses
501 Rent Expense
502 Salary Expense
503 Utility Expense
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Liabilities
Accounts Payable
Notes Payable, Short-Term
Salary Payable
Wages Payable
Payroll Taxes Payable
Employee Benefits Payable
Interest Payable
Unearned Service Revenue
Notes Payable, Long Term
Stockholders Equity
Common Stock
Retained Earnings
Dividends
Revenues and Gains
Service Revenue
Interest Revenue
Gain on Sale of Land
(Building, Equipment or
Furniture)
Expenses and Losses
Salary Expense
Payroll Tax Expense
Employee Benefits Expense
Rent Expense
Insurance Expense
Supplies Expense
Bad Debt Expense
Depreciation Expense Building
Depreciation Expense Equipment
Depreciation Expense Furniture
Property Tax Expense
Interest Expense
Miscellaneous Expense
Loss on Sale of Land,
(Building, Equipment or
Furniture)
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Liabilities
Accounts Payable
Notes Payable, Short-Term
Current Portion of Bonds
Payable
Salary Payable
Wages Payable
Payroll Taxes Payable
Employee Benefits Payable
Interest Payable
Income Tax Payable
Unearned Sales Revenue
Notes Payable, Long Term
Bonds Payable
Lease Liability
Minority Interest
Stockholders Equity
Preferred Stock
Paid-in Capital in Excess of
Par Preferred
Common Stock
Paid-in Capital in Excess of
Par Common
Paid-in Capital from
Treasury Stock
Transactions
Paid-in Capital from
Retirement of Stock
Retained Earnings
Foreign Currency
Translation Adjustment
Treasury Stock
Dividends
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XX
XXX
XXXX
XXXX
XX
Company
Cost
Center
4
Account
Product
Sales
Region
3
01
01-999
01-9999
01-9999
01-99
01.100.xxxx.4000.xx
01.100.xxxx.5000.xx to 01.100.xxxx.9999.xx
01.200.xxxx.4000.xx
01.200.xxxx.5000.xx to 01.200.xxxx.9999.xx
01.xxx.xxxx.4000.01
01.xxx.xxxx.5000.01 to 01.xxx.xxxx.9999.01
01.xxx.xxxx.4000.02
01.xxx.xxxx.5000.02 to 01.xxx.xxxx.9999.02
01.xxx.xxxx.4000.03
01.xxx.xxxx.5000.03 to 01.xxx.xxxx.9999.03
01.xxx.xxxx.4000.04
01.xxx.xxxx.5000.04 to 01.xxx.xxxx.9999.04
01.xxx.xxxx.4000.05
01.xxx.xxxx.5000.05 to 01.xxx.xxxx.9999.05
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01.100.xxxx.4000.01
01.200.xxxx.4000.01
01.300.xxxx.4000.01
01.400.xxxx.4000.01
01.100.xxxx.4000.02
01.200.xxxx.4000.02
01.300.xxxx.4000.02
01.400.xxxx.4000.02
D. Departmental Reports
A company with several departments would like to know the specific expenses in each
department and the compare their actual expenses with their budgeted expenses. The
company can design the accounting flexfield to include the department segment (cost
centers) and the account segment. The accounting flexfield XX.XXX.XXXX.XXXX.XX
will include the department (cost centers) and account segments. A company can
produce departmental expense reports by retrieving all transactions containing the
department segment and their expense account code combination. A company can obtain
the detail transaction reports and summary balance reports for each department as shown
below:
R&D Department Expenses
01.xxx.1010.5000.xx
Engineering Department Expenses 01.xxx.1020.5000.xx
Manufacturing Department Expenses 01.xxx.1030.5000.xx
Marketing Department Expenses
01.xxx.1040.5000.xx
Accounting Department Expenses 01.xxx.1050.5000.xx
IT Department Expenses
01.xxx.1060.5000.xx
Receiving Department Expenses
01.xxx.1070.5000.xx
Shipping Department Expenses
01.xxx.1080.5000.xx
to 01.xxx.1010.9999.xx
to 01.xxx.1020.9999.xx
to 01.xxx.1030.9999.xx
to 01.xxx.1040.9999.xx
to 01.xxx.1050.9999.xx
to 01.xxx.1060.9999.xx
to 01.xxx.1070.9999.xx
to 01.xxx.1080.9999.xx
E. Financial Reports
The account segment contains account codes for assets, liabilities, equity, revenues and
expenses. A company can use the balances in each account to put together various
financial reports such as balance sheet, income statement and other financial reports.
Balance Sheet
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01.xxx.xxxx.0001.xx to 01.xxx.xxxx.3999.xx
01.xxx.xxxx.4000.xx to 01.xxx.xxxx.9999.xx
XX
XXX
XXXX
XXX
XXX
XXX
Company
Account
Product
Product
Line
3
Subaccount
Cost
Center
3
01
01-999
01-9999
01-999
01-999
01-999
Example 3:
A Project Oriented Division might set up the flexfield to have five segments including
Company, Account, Department, Project, Project Type as in the following table.
Accounting
Flexfield
Segment
Name
Number of
Characters
Valid
numbers
XX
XXX
XXXX
XXX
XXX
Company
Department
Account
Project
Project
Type
2
01
01-999
01-9999
01-999
01-99
Code
MDSP
GL#
Owning Application
Oracle Inventory
Oracle General Ledger
10
Key#
BANK
CAT#
COST
GRD
MICG
MCAT
JOB
LOC#
SERV
GRP
PEA
POS
MKTS
RLOC
SCL
MTLL
MSTK
CT#
RES
Oracle Assets
Oracle Payroll
Oracle Assets
Oracle Payroll
Oracle Human Resources
Oracle Inventory
Oracle Inventory
Oracle Human Resources
Oracle Assets
Oracle Service
Oracle Payroll
Oracle Human Resources
Oracle Human Resources
Oracle Receivables
Oracle Inventory
Oracle Human Resources
Oracle Inventory
Oracle Inventory
Oracle Receivables
Oracle Training Administration
All key flexfield share the same features. One can define the shorthand aliases to speed
up data entry tasks. You can define flexfield value security to ensure that particular users
can enter only particular segment values and cross-validation rules to prevent users from
creating new flexfield combinations that contain values that should not coexist in the
same combination. You can allow or prevent dynamic insertion for any specific Key
Flexfield. Dynamic insertion is the creation of a new valid combination from a form
other than the Combinations Form.
Accounting Flexfield Features
The Accounting Flexfield incorporates all the generic features of key flexfields and some
features that are not found in other flexfields:
1. Multiple Rollup Groups
Multiple roll up groups are used to produce management summaries. You can define
a hierarchy of parent and child values with each segment. When you report on a
parent value, Oracle General Ledger automatically displays the total of the balances
on all the children for that parent.
2. Summary Accounts
Summary accounts provide online summary balances. Usually summary accounts are
set up so that a total for each financial account is available irrespective of region, cost
center, product, and so on. Summary accounts are useful for responding to questions
like what was our total revenue in the last period?
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California
Northern
California
Southern
California
Top-level Parent
Washington
Eastern
Washington
Westesn
Washington
Oregon
Eastern
Oregon
2nd-level Parents
Western
Oregon
Children
Exhibit 3-5 shows that western region is the parent of California, Washington and
Oregon. California is the second level parent to two children, Northern California and
Southern California. Washington is parent to Eastern Washington and Western
Washington Oregon is the parent for Eastern Oregon and Western Oregon. Three
segments are usually required to represent the region, the states and the parts of states.
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Parent-Child
Parent
Child
Child
Child
Child
Child
Child
Child
Parent
Child
Child
Child
Child
Child
Child
Child
Child
Child
Table 3-2
Parent-Child Rollup Relationship for
Region and States
Region
State
Segment
Western
1100
Washington
Montana
Oregon
Idaho
Wyoming
Utah
California
North East
1200
Pennsylvania
New York
New Jersey
Connecticut
Rhode Island
Massachusetts
Vermont
New Hamphire
Maine
Segment
1105
1110
1115
1120
1125
1130
1135
1205
1210
1215
1220
1225
1230
1235
1240
1245
In this parent-child rollup design, only one segment is needed. The character codes
distinguish the region (parent) and states. Oracle General Ledger will provide the revenue
balance for each state at any time. Oracle General Ledger also provides the revenue
balance for an entire region by rollup the balance in each state to the region parent.
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Checking
Accounts
Checking
Account in
Bank 1
Checking
Account in
Bank 2
Savings
Account
Checkingt
Account in
Bank 3
Savings
Account in
Bank 1
Top-level Parent
Money
Market
Accounts
Money
Market
Account in
Bank 4
2nd level
Parent
Money
Market
Account in
Bank 5
Exhibit 3-6 shows that the Cash and Cash Equivalents account is the top level parent for
three children - Checking accounts, Savings account and Money Market accounts. These
three accounts are children of the Cash and Cash Equivalents account and they are also
the second level parent accounts. Checking Accounts have three children - Checking
Account in bank 1, 2 and 3. Savings account has one child Savings Account in Bank 1.
Money Market Accounts has two children - Money Market Account in Bank 4 and
Money Market Account in Bank 5.
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Chil
dren
Account
Cash &
Cash Eq.
Account
Checking
Accounts
Child
Child
Child
Parent
Child
Savings
Accounts
ChildParent
Money
Market
Accounts
Child
Child
Account
Account
Code
10000
Account
Code
Account
Code
10100
Checking
Account
in Bank 1
Checking
Account
in Bank 2
Checking
Account
in Bank 3
Savings
Account
in Bank 1
Money
Market
Account
in Bank 4
Money
Market
Account
in Bank 4
10110
10115
10120
10400
10410
10500
10510
10515
The first digit 1 corresponds to parent account Cash and Cash Equivalents. The second
and third digits refer to the second level parent Checking Accounts (01), Saving Accounts
(04), Money Market Accounts (05). The fourth and fifth digits refer to the child
accounts, Checking Account in Bank 1 (10), Checking Account in Bank 2 (15), and
Checking Account in Bank 3 (20). This accounting flexfield code combination
incorporates the logical parent-child relationships. Oracle General Ledger will provide
the balance in each child account. Oracle General Ledger will also provide balance for
any parent level accounts.
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California
Sales Report
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Western
Sales
Region
Report
Company
Sales
Reports for
All Regions
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Engineering
Department
Budget and
Expense
Report
Research &
Development
Department
Budget and
Expense
Report
Production
Department
Budget and
Expense
Report
Each country and countries in a particular region can produce their own financial reports
and local tax reports. Parent company can produce consolidated financial statements.
The sales offices in each country or region can produce their sales reports or expense
reports. A company can produce project based financial reports. Reports of
manufacturing costs can be produced for factories over the world. Using different
combinations of Accounting Flexfields, a company can design and generate an unlimited
number of customized reports a company needs. This is a significant advantage of large
financial reporting system such Oracle Financial Applications.
Accounting Flexfield Design
Before an organization sets up its Accounting Flexfield, it should carefully plan its
organizational needs. It is easier to build flexibility into the account structure during
setup than to try to change the account structure later. Consider future expansion, and
possible change in the organization and reporting needs. Also consider the other
applications you will be using now and in the future, because an incorrectly defined
Accounting Flexfield can adversely affect its accounting data, chart of accounts structure,
and other features. It also is difficult to change the Accounting Flexfield after it has been
frozen and has been used to capture data through transaction processing. Changing the
account structures after the fact may create data inconsistencies that could impact the
behavior of the application or require a complex conversion program.
A company should put considerable thought into the design and structure of its
Accounting Flexfield before beginning the setup of Oracle General Ledger. Many
companies put together a special project team to come up with a new chart of accounts
structure before the implementation project. Companies use the implementation of the
Oracle E-Business Suite as a catalyst for introducing a new chart of accounts or a
common chart of accounts across their entire organization.
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Define an account structure large enough to reflect the important aspects o the
organization, but small enough to be manageable and meaningful.
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The designer should assign each item type as a separate segment and avoid having more
than one meaning for each segment.
Company
xxx
Region
xx
Products &
Project
xxxx
Consolidating
Segments
(HQ Control)
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Nonconsolidating
Segments
(Local Control
Conslidating
Segments
(HQ Control)
19
Region parent
Posting level
Company
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Division
Region
Office
Account
20
Dependent Segment
A segment that is linked to an independent
segment
Example:
Account: 1100 Subaccount: 001
Account: 2200 Subaccount: 001
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Table 3-4
Business
Company
Account
Cost Center or Department
Product Distribution
Channel
Region or district
Intercompany
Project
Tax code
Nonbusiness
Fund
Account
Program
Funding vehicle
Appropriate year
23
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