Set of Books Standard Options and Accounts

Standard Options

Each set of books has a number of flags that indicate the accounting practices you want to follow for that set of books.

Allow Suspense Posting: Allows users to post out-of-balance journal entries (debits do not equal credits), and automatically balance those journal entries by posting the offset against a suspense account. If you enable this option, you must enter a suspense account for the set of books.
If you do not allow suspense posting, you can only post journal entries that balance.

Balance Intercompany Journals: Allows users to post out-of-balance intercompany journal entries (debits do not equal credits for a particular company or balancing entity), and automatically balance intercompany journals against an intercompany account you specify. If you enable this option, you must enter an intercompany account for the set of books.
If you do not choose to balance intercompany journals, you can only post intercompany journals that balance by balancing segment (usually the company segment).

Enable Average Balances: Allows you to use the set of books for average balance processing. Once average balance processing is enabled, General Ledger automatically stores the aggregate balances that are used to calculate average and end-of-day balances.

Enable Journal Approval: Allows you to use General Ledger's Journal Approval feature in your set of books. When Journal Approval is enabled and a journal entry's journal source requires approval, the journal must be approved by the appropriate level of management before any further action can be taken. If Journal Approval is not enabled, approval is not required, even if the journal source requires approval.

Note: When you mark the Enable Journal Approval check box, General Ledger will ask whether you want to require journal approval for the Manual journal source. Choose Yes or No. Note that this option applies only to manual journals with actual amounts. To require journal approval for budget or encumbrance journals, you must set the appropriate journal source to require journal approval.

Enable Journal Entry Tax: Allows you to manually enter taxable journal entries in General Ledger. When you enable this feature for a set of books, the system will automatically calculate associated tax amounts and generate tax journal lines.


Accounts

Retained Earnings account: When you open the first period of a fiscal year, General Ledger posts the net balance of all income and expense accounts from the prior year against your retained earnings account. If you have multiple companies or balancing entities within a set of books, General Ledger automatically creates a retained earnings account for each company or balancing entity.

Suspense account: If you choose to allow suspense posting of out-of-balance journal entries, General Ledger automatically posts the difference against this account. If you have multiple companies or balancing entities within a set of books, General Ledger automatically creates a suspense account for each balancing entity.
You can also define additional suspense accounts to balance journal entries from specific sources and categories using the Suspense Accounts window.
Note that if you update the suspense account in the Set of Books window, the default suspense account is updated in the Suspense Accounts window. Likewise, if you update the default account in the Suspense Accounts window, the account in the Set of Books window is updated.

Cumulative Translation Adjustment account: This account is necessary if you choose to translate your functional currency balances into another currency for reporting. General Ledger automatically posts any net adjustments as a result of currency translation to this account in accordance with SFAS 52 (U.S.). If you have multiple companies or balancing entities within a set of books, General Ledger automatically creates a translation adjustment account for each company or balancing entity.
Set the account type of your Cumulative Translation Adjustment account to Owner's Equity to create a translation adjustment on your balance sheet. Set the account type of this account to Revenue or Expense to create a translation gain/loss on your income statement.

Intercompany account: If you choose to automatically balance intercompany journals, General Ledger ensures that all journal entries balance (debits equal credits) within a balancing entity within your set of books. If a journal entry is out-of-balance for a particular balancing entity, General Ledger automatically posts any difference against the appropriate intercompany account. If you have multiple companies or balancing entities within a set of books, General Ledger automatically creates an intercompany account for each balancing entity.
You can define additional intercompany accounts that are used to balance journal entries from specific sources and categories using the Intercompany Accounts window.
Note that if you update the intercompany account in the Set of Books window, both debit and credit default accounts are updated in the Intercompany Accounts window. Likewise, if you update the debit default account in the Intercompany Accounts window, the account in the Set of Books window is updated. However, if you update the credit account in the Intercompany Accounts window, the account in the Set of Books window is not updated.

Reserve for Encumbrance account: If you enter an out-of-balance encumbrance entry, General Ledger automatically posts the difference against the account you specify here. If you have multiple companies or balancing entities within a set of books, General Ledger automatically creates a Reserve for Encumbrance account for each balancing entity.

Net Income account: General Ledger uses this account to capture the net activity of all revenue and expense accounts when calculating the average balance for retained earnings.