General Ledger Account

General Ledger Account: GL account master record contains the data that always needed by GL to determine how account’s function. It controls the posting of accounting transaction and processing of posting data.

           

The GL account master record creation is divided into two parts:

1. Chart of Accounts Specific area: Acct. No., Acct name, Acct Group, P&l or

                                                         B/S. short and long text                                                                                                                                                                

           

2. Company Code Area:

a.       Control data: controls the account in company code.

b.      Account Currency: Currency in which account to be kept.

·         Local Currency is given then this allows to inter any currency in to this specific account.

·         Foreign currency given then only the posting into that account in that particular currency only allowed.

c.       Balances in Local Currencies: Set this indicator for clearing accounts to clear line items in various currencies with one local currency and without posting any exchange rate differences that may occur.

d.      Tax Category

e.       Posting without Tax allowed

f.       Reconciliation account for account type: if set this then when u post to the customer or vendors account automatically this account will be updated.

g.      Open Item Management: OIM is further reconciliation function. The items in an open item account are marked as open or clear. Open item management manages GL accounts on open item basis if u needs to check, for a particular business transaction, whether an offsetting posting has already been made.

Posting to these accounts represent incomplete transactions.

E.g. GR/IR Account. (Not OIM are bank accts, Reconciliation Accts.)

h.      Line Item Display: If we manage an account with line item display, u can display all items posted to the account that have not yet been archived.

i.        Field Status Group

j.        Sort Key: Use this key to specify the sorting procedure of line items to this account.

k.      Post Automatically: When this indicator is selected, only the system can post to this account based on the configuration in the account assignment table. If you select this indicator you cannot post the transactions directly to this account.  E.g. Inventory Accounts, Material variance accounts. Like some account we have to maintain on the basis of Automatic payment, interest accounts in f.50, and depreciation accounts, such type of account the entries has to be passed automatically, not directly we need to post. Such type of accounts in order to control not to post mistakenly by the clerks, we check this box.

Note: GL accounts can be created at three levels, they are 

                        1. Chart of Accounts Level

                        2. Company Code Level

                        3. Centrally, (Both areas in one step.)

Prerequisites prior to creating GL accounts:

            1. Edit COA

            2. Assign COA to Company Code.

            3. Account Groups     

            4. Retained earnings account

            5. Field status group

Creating GL Account Manually:

a.       We can create a master record in the chart of accounts and in the company code in one step

b.      We can create the COA area first, and then create the company code specific area in second step.

Tabs in GL Creation:

a.       Type/Description

b.      Control Data

c.       Create/Bank/Interest

d.      Key work/Translate (language info.)

e.       Information COA

f.       Information Company code

Necessary fields to be filled while creating GL:

a.       Account Group

b.      Specify whether P&L account or B/S Account

c.       Short text and long text

d.      Field Status Group

e.       Sort Key